Sitting of 7 December 1994

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

    BCCI
    Mr. Vaz: To ask the Secretary of State for Scotland if he will make a statement on when Scottish local authorities which lost money in the collapse of BCCI will receive compensation.
    The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart): The Scottish local authorities that lost money in BCCI are in no different a position from the other creditors of the bank. I accordingly have nothing to add to the statements made by my hon. Friend the Minister of State, Treasury on 27 October in response to a question from the hon. Gentleman about this matter.
    Mr. Vaz: The Minister is aware that Scottish local authorities and other depositors in Scotland have been waiting since 5 July 1991 for compensation. As the Government are aware that a new compensation package has been agreed, will the Minister give an undertaking that he will write—either himself or through the Foreign Secretary–to the Sheikh of Abu Dhabi asking for $1.8 billion to be transferred immediately, and that, once it is received, it should be transferred to those Scottish local authorities and others who have suffered enormous hardship because of this unfortunate incident?
    Mr. Stewart: It is always a great pleasure to welcome an English Labour Back Bencher to Scottish questions.
    Mr. Norman Hogg: My hon. Friend is a Front Bencher on the Back Benches.
    Mr. Stewart: The House knows of the long-standing interest and involvement of the hon. Member for Leicester, East (Mr.Vaz) in the matter. However, the payment of BCCI creditors, which it is public knowledge is reported to be 30 to 40 per cent. of their loss, is entirely a matter for the liquidators, the majority shareholders and the creditors.
    Mr. John Marshall: Does my fellow St. Andrean agree that it would be quite wrong for taxpayers who lost money through BCCI to be asked to pay higher taxes to bail out short-sighted Scottish local authorities that had money on deposit with BCCI?
    Mr. Stewart: There is no question of taxpayers bailing out the local authorities involved. My hon. Friend is correct. My right hon. Friend the Secretary of State granted Western Isles islands council consent to borrow £24 million—the BCCI loss of £23 million plus anticipated interest of £1 million-and Ross and Cromarty district council consent to
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    borrow £1.8 million to help it cope with its losses. My hon. Friend may be referring to allegations that the Scottish Office did a secret deal to compensate Western Isles islands council. I am happy to reassure the House that such allegations are complete nonsense.
    Mr. McMaster: Does the Minister agree that BCCI is a financial success story compared with the record of the Secretary of State? First, the right hon. Gentleman gambles and loses £30 million on Health Care International, then he stands idly by watching the Scottish budget be slashed and axed and, finally, last night he led his own side into glorious defeat in the Lobby on VAT on fuel. Is it not time that he said sorry?
    Mr. Stewart: I congratulate the hon. Gentleman on his ingenuity in raising those questions, but he is entirely wrong on HCI, as he well knows. My right hon. Friend's public expenditure statement is extremely fair for Scotland, in relation, for example, to local government expenditure. The hon. Gentleman, who is experienced in local government, will know that, on any measure, local government in Scotland receives far more help from the taxpayer of the United Kingdom than local government in England or Wales. Opposition Members should bear that fact in mind.

    Violent Crime
    Mr. Eric Clarke: To ask the Secretary of State for Scotland what new initiatives he has considered to curb the increase in crimes of violence involving firearms.
    The Secretary of State for Scotland (Mr. Ian Lang): Very strict controls are already in place regarding the acquisition and possession of firearms, but provision to increase the maximum penalties for certain firearms offences is contained in the Criminal Justice and Public Order Act 1994. Those will be brought into force on a Great Britain basis early next year. With the assistance of the firearms consultative committee, the Government keep firearms control under continual review.
    Mr. Clarke: I am disappointed by not only that answer but the answer in the letter that I received from Lord Fraser of Carmyllie, the Minister in the other place. I asked for an amnesty because in Bonnyrigg, in my constituency, Mr. Dunn, an innocent bystander, was shot and killed during a bank robbery in which all three of the bank robbers had sidearms. The use of sidearms in such crimes is escalating throughout the United Kingdom, and I ask, first, for an amnesty and, secondly, that after that amnesty people in possession of illegal arms be severely dealt with, with further penalties for anyone who has criminal intent. The people of Bonnyrigg, Midlothian and the rest of Scotland are asking the Government for action.
    Mr. Lang: I understand about the tragic case in Bonnyrigg in the hon. Gentleman's constituency, and I offer both him and those involved my sympathy. Nevertheless, we should keep such matters in perspective. The question of an amnesty is one for the police; it is essentially an operational matter. There was an amnesty in 1988, and I do not think that it would be a good idea to have them too often. However, I am sure that the police will always bear the possibility in mind. I deplore any such use of guns as much as the hon. Gentleman does, and I also deplore the alleged increase in use, but it is important to realise that statistics show that only two in 1,000 cases of

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    all crimes and offences recorded in Scotland in recent years have involved the use of firearms. In many ways, using a number of Acts of Parliament, the Government have determinedly toughened sentences and other procedures in connection with firearms.
    Mr. Bill Walker: Does my right hon. Friend agree that the problem is not those who hold firearms properly, with licences, but those who hold firearms illegally and use them? So long as there is no deterrent such as capital punishment, it will be difficult to prevent such activity from growing, because of the international dimension.
    Mr. Lang: We should certainly always continue to seek ways of reducing that serious threat. The maximum penalty for possession of a firearm with intent to commit an indictable offence or to resist arrest is life imprisonment. We have increased the sentences for the unlawful possession of a firearm, including a sawn-off shotgun, and the sentences for the possession of a prohibited firearm. In those and in every other way open to us we shall continue to fight the growth in the use of firearms. I acknowledge that it is a serious potential threat.

    NHS Bed Provision
    Mr. Canavan: To ask the Secretary of State for Scotland what assessment he has made of the adequacy of the provision of NHS beds for frail elderly people.
    The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton): National health service provision for the frail elderly will vary from health board to health board, depending on the local assessment of need in each area. The aim always is to match local national health service and social work services to need.
    Mr. Canavan: Will the Minister arrange to visit Lochgreen hospital, which is threatened with closure, and Bellsdyke hospital, where 155 beds for frail elderly people are similarly threatened, so that he can see for himself the high standard of patient care that is provided by the dedicated staff there? Will he intervene to stop the closures, especially in view of the increasing population of elderly people and the fact that the Government's so-called community care programme is so inadequate? If he does not, many frail elderly people will be deprived of the hospital beds that they require.
    Lord James Douglas-Hamilton: I shall certainly pass on to the Minister of State the hon. Gentleman's request for a visit. I have made inquiries about the two hospitals, and I understand that the board proposes to offer patients currently resident at Lochgreen hospital a choice in 1995. They will be able to transfer either to alternative NHS accommodation or to a suitable nursing home. The consultation will finish in January. We also look forward to seeing the board's strategy for mental health, which I understand will include proposals for Bellsdyke hospital involving the reprovision of care.
    The board will go out to public consultation, and the strategy will require ministerial approval. I undertake that approval will be given only if Ministers are satisfied that the changes will lead to a higher standard of care for patients in
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    more homely settings. I am sure that if the hon. Gentleman wishes to ask specific relevant questions, the Minister of State will be prepared to see him.
    Mr. Gallie: Is my hon. Friend aware of the proposal made by Ayrshire and Arran health board to close the accident and emergency unit at the new Ayr hospital? Given the considerable investment made by the national health service in that hospital, is my hon. Friend not glad to join me in commending the trust management, who will fight this move tooth and nail?
    Lord James Douglas-Hamilton: Trust status has brought many benefits to many hospitals. Closures of key services, such as those my hon. Friend mentioned, have to be put to the Minister for approval before they can be agreed. The matter will be looked at in great depth.
    Mr. McAvoy: Does the Minister recall that a long-planned and long-awaited national health service hospital for the elderly in my constituency was cancelled? It was removed from the plan and care of the frail elderly was turned over to Takare, a private health firm. Bearing in mind the fact that the reason for that decision was an alleged lack of cash for Greater Glasgow health board to build the hospital and bearing in mind the public money that the Secretary of State for Scotland put into HCI, does the Minister agree that the decision to transfer care of the frail elderly to a private company in my constituency was a disgrace?
    Lord James Douglas-Hamilton: There are two considerations. First, the decision to invest in HCI was an inward investment decision that had nothing to do with funds provided for the national health service. Secondly, Greater Glasgow health board and its partners are seeking to improve care and facilities for vulnerable elderly people and to provide better alternatives, not to withdraw care. It is very important that, before patients are discharged, the proper support arrangements are put correctly in place. Any breakdown in those arrangements is contrary to official policy and should be followed up speedily so that mistakes do not recur.
    Mr. Kirkwood: Will the Minister acknowledge that there is a great deal of concern about the definition of treatment and the definition of care for the frail elderly? Is he aware of the difference between people who are able to get treatment within the national health service and those who are decanted out of NHS beds because they are deemed only to require care, and who are then assessed in the context of social work, which requires their means to be tested? What steps is the Minister taking to clarify the definition of the two classifications? What steps is he taking to advertise the fact that if people are decanted out of free NHS beds, they may have to pay, using their meagre resources, to get the treatment that they require in the community?
    Lord James Douglas-Hamilton: Before patients are discharged, the care agencies must have been involved in a full assessment of all the needs of the patients concerned in terms of health, social welfare and housing. It must be ensured that all necessary support facilities are in place. Social work authorities have discretionary charging powers for day and domiciliary care. The principle that individuals

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    should not pay more than they can afford is applied to discretionary charges and charges for residential care. There is considerable discretion for local authorities.
    Mr. Ian Bruce: What is the increase in national health service resources in Scotland? How much extra has gone into care in the community through local government, and how do the figures compare with those for the rest of the United Kingdom?
    Lord James Douglas-Hamilton: Resources have increased considerably, by about 53 per cent. The total for health boards in 1994–95 was £3,234 million, which shows high spending. Spending per head on health is, of course, far higher north of the border than it is south of the border for a number of reasons. The health needs are more pressing in certain respects—the incidence of heart disease, for example, is far higher. We can readily justify the higher figure.
    Mr. George Robertson: Is the Minister aware that all over Scotland today, thousands of frail elderly people, in hospitals and out of them, will cheer the news that the second phase of the increase in VAT has now been scrapped because they were worried sick by the prospect? Is it not true that the Chancellor snubbed and ignored the views of the Secretary of State for Scotland and Scottish Office Ministers on this issue? Will the Minister take the opportunity to welcome the fact that Parliament did what Ministers could not? Does he agree that scrapping the second iniquitous increase in VAT on fuel is extremely good news for Scotland?
    Lord James Douglas-Hamilton: Votes in the House of Commons have to be respected and, as the hon. Gentleman knows, the Chancellor will make a full statement tomorrow, but I can say that compensation for the first stage of VAT on fuel and power will most certainly remain. That includes 50p cash compensation, which was given in April, and the uprating due next April. I can also confirm that the extra funds for the home energy efficiency scheme will certainly not be scrapped.

    Homelessness
    Mr. Welsh: To ask the Secretary of State for Scotland what further measures he is taking to tackle the issue of homelessness in Scotland; and if he will make a statement.
    Lord James Douglas-Hamilton: Local housing authorities are well resourced to tackle homelessness. It is one of the four key priorities that we have set them for the use of their housing capital allocations, which total £552 million in the current year. In addition, the supplementary capital allocations, which I announced on 13 October, included £2.6 million for about 15 new homelessness projects.
    Mr. Welsh: As more than a quarter of Scottish households are affected by dampness, condensation or mould and a record 43,000 households were registered as homeless last year, why are the Government cutting the housing finance budget by 20 per cent. in real terms over the next three years? The Conservative party says that it cares for the family. Is this not a betrayal of families in the most dire need?
    Lord James Douglas-Hamilton: No, more than £2.8 billion will be made available for housing over the next three years—at least £900 million a year. Scottish Homes
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    has a target to provide 2,500 housing units for the homeless in 1994–95 and some 8,000 new and improved houses, which will assist with the problem of dampness. The capital allocations of housing authorities total £552 million. Homelessness and dampness are two of the four key national priorities that local authorities are taking very seriously.
    Mr. Galloway: Last Friday evening, with about 200 others, I slept outside on the ground in St. Aloysius college in my constituency to raise funds for the Simon Community to help the homeless in Glasgow. I have been ill ever since. Has the Minister any idea how long a night sleeping outside on the ground really is, how cold it is, how damp it is and how miserable it is? What message does he have, from the vastness of his many-roomed mansions, for the thousands of Scottish families who do not have a home this Christmas?
    Lord James Douglas-Hamilton: It is top priority for all authorities in Scotland that nobody should be without a roof. Of course, there is a very great distinction between rooflessness and homelessness. The hon. Gentleman asked if I had slept out. I have done so with the Cameronians in the Army, and when it is pouring with rain it is a thoroughly disagreeable experience. Homeless persons officers—such as those at the Hamish Allen centre in the hon. Gentleman's district council—provide an extremely useful, valuable service in assisting applicants with problems in finding accommodation.
    Mr. McAllion: Will the Scottish housing Minister explain why, when he faces a worsening housing crisis, with record levels of homelessness, he has remained silent and inactive while the Scottish housing budget has been slashed and plundered to pay for future tax cuts to save the Tories' electoral skins? Is he not ashamed that the most common sight on the streets of Scotland this Christmas will not be red-suited Santas, but young people, desperate, with no roof over their Heads, selling the Big Issue? Does he not understand that a party that describes as fair a settlement that leaves tens of thousands of Scots homeless deserves to be rated a contemptible 12 per cent. in this morning's opinion poll in Scotland? The Conservative party is not fit to govern, and it is seen by Scots as not fit to govern.
    Lord James Douglas-Hamilton: Local authorities have strategic responsibility for dealing with homelessness. As well as their mainstream allocation, we have provided £29 million in special allocations for more than 200 special homelessness projects in Scotland, which have been of assistance. As for funding, I have mentioned that £2.8 billion will be available over the next three years. Of course, we expect local authorities to give top priority to dealing with that pressing issue in their plans and in their workings every day.

    Highlands and Islands
    Mr. Macdonald: To ask the Secretary of State for Scotland if he will make a statement on the economy of the highlands and islands.
    Mr. Lang: Good progress is being made in promoting economic regeneration and diversification of industry throughout the highlands and islands. The area is well

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    placed to take full advantage of the wider economic recovery that is now under way as a result of the Government's prudent economic policies.
    Mr. Macdonald: Will the Secretary of State confirm that objective 1 status was conferred upon the highlands and islands because of the region's problems of persistent high unemployment, the sparsity of population, the remoteness of communities and poor communications? Does he agree that those factors should be the criteria by which objective 1 funding is allocated within the highlands and islands? Is he surprised to learn that the programme partnership is yet to devise a formula to ensure that that happens? Will he therefore urge the partnership to produce such a formula as early as possible to ensure that aid is effectively targeted?
    Mr. Lang: I certainly hope that progression of the entitlement to objective 1 status is carried forward quickly. The highlands and islands obtained objective 1 status because, although the area did not meet all the criteria for objective 1 status as laid down, the Scottish Office persuaded the European Commission that the case deserved to be met under those criteria. As a result, £240 million will go to the highlands and islands over five years.
    I am sure that the hon. Gentleman will be as encouraged as I am by the fact that unemployment in the highlands and islands fell by between 5 and 6 per cent. last year and that it now stands at below the Scottish average, which, in turn, is below the United Kingdom average. That is a reflection of the strength of the regeneration of the economy of the highlands and islands, which was set in train by the Government.
    Mrs. Ray Michie: I understand that the Northern Ireland Office is about to approve the spending of £5.2 million on the necessary infrastructure to establish a ferry link between Ballycastle in Northern Ireland and Campbeltown in my constituency. Will the Secretary of State urgently consider seeking Treasury and Highlands and Islands Enterprise approval for the necessary spending for the Campbeltown end, which, at £2.2 million, will cost much less? Crucial decisions must be made very soon. The right hon. Gentleman will agree that the link would give a tremendous boost to Kintyre, Argyll and Scotland.
    Mr. Lang: I shall certainly look at any details that the hon. Lady cares to send me. I hope that she will be encouraged by the fact that, under the recent public expenditure announcement, the Government were able to find an extra £1.6 million to help the shipping and infrastructure of ferry services to the islands, the northern isles and the western isles. I hope, too, that she will welcome the announcement today that a new vehicle ferry service across the Sound of Harris has been approved and should go ahead for tenders to start construction next April.

    Economy
    Mr. Salmond: To ask the Secretary of State for Scotland when he next intends to meet representatives of
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    the Scottish Council (Development and Industry) to discuss the current state of the Scottish economy; and if he will make a statement.
    Mr. Lang: I look forward to meeting members of the Scottish Council (Development and Industry) before long, when I expect the current state of the Scottish economy to be among the topics of discussion.
    Mr. Salmond: Was this morning's interest rate rise an act of petulance by a discredited Chancellor, or does the Secretary of State claim that it was justified by economic conditions? Is the Secretary of State seriously telling the House that the Scottish economy is overheating? If it is not, is it not intensely damaging to have two consecutive interest rate rises without reference to Scottish economic conditions? Does the right hon. Gentleman have any role in interest rate determination, or did the Chancellor pay as much attention to his views on interest rates as he did to his views on the second tranche of VAT on fuel?
    Mr. Lang: My right hon. and learned Friend the Chancellor, who is responsible for deciding upon the level of interest rates in consultation with the Governor of the Bank of England, has my full support on that policy, as he has my support for his Budget.
    I am sure that my right hon. and learned Friend will reflect upon the success of the Scottish economy. For the first time since statistics have been kept, unemployment in Scotland is lower than in the rest of the United Kingdom. Scottish manufacturing output increased by 5 per cent. last year and is at an all-time high; exports increased by 19 per cent. last year and are at an all-time high; productivity increased by 5 per cent. last year and is at an all-time high; inward investment is at an all-time high and employment has increased in the last decade by about 150,000.
    The Scottish economy is in fundamentally better shape now than it has been in living memory. That is something that even the Scottish National party should welcome.
    Mr. Raymond S. Robertson: Does my right hon. Friend agree that it is quite shameful for the hon. Member for Banff and Buchan (Mr. Salmond) to speak in the way that he does, given that the economy of Grampian—an area which we are both privileged to represent—is leading the Scottish economy, the Scottish economy is leading the United Kingdom economy and the UK economy is leading European economies? As Scots, we should be proud of that record. We should not create fabrications to talk down Scotland and her achievements.
    Mr. Lang: My hon. Friend is absolutely right. I was delighted to hear the news from Amerada Hess today of an oil discovery named "Dauntless" in block 21.11, located 140 km east of Aberdeen.
    Dr. Reid: In the months since the last Scottish Question Time, has the Secretary of State had time to reflect upon my accusation that in the awarding of the Samsung project to Britain he was outflanked, undermined and outwitted by his colleague the President of the Board of Trade? Will he accept and admit that up to £10 million of Government money was made available through English Partnerships from the Department of the Environment under a scheme presided over by Mr. Peter

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    Walker, an ex-colleague of the President of the Board of Trade and present adviser on inward investment to the Board of Trade?
    How should we regard the Prime Minister's pledges that Lanarkshire will offset its disadvantages by special treatment when his colleague and possible leadership contender, the President of the Board of Trade, undermines those pledges with Government money in order to ensure that the biggest project to come to Britain in the last two decades did not go to Scotland but to the north of England?
    Mr. Lang: Scotland's offer to the Samsung electronic group was every bit as good as the offer from the north of England. The regional selective assistance component was identical.
    Whilst we cannot win every inward investment case that comes to the United Kingdom, the fact is that Scotland has won proportionately far more than its share. In the past five years we have won almost 350 different inward investment decisions, bringing in investment of between £2 billion and £3 billion and creating and safeguarding up to 47,000 jobs. That level of achievement reflects the confidence that the rest of the world has in the management of the United Kingdom's economy and Scotland's economy under a Conservative Government.
    Mr. Wallace: Does the Secretary of State accept that increasing interest rates at this stage of economic recovery, when unemployment in Scotland is still more than 220,000, is a real indictment of past failures of Government policy—not least their failure to invest in skills and in education and capital investment? What effect will the latest interest rates increase have upon the Scottish economy in the next six to 12 months?
    Mr. Lang: I believe that it will restore confidence which must have been shaken by the behaviour of the Opposition parties in the Division Lobby last night.
    Unemployment in Scotland decreased by 18,000 last year and long-term unemployment fell by 9 per cent. My public expenditure statement made good provision, through the budgets of Scottish Enterprise, Highlands and Islands Enterprise and in other ways, for continuing to build on our success in the training area. I believe that we have every reason to hope and expect that the Scottish economy will continue to outperform that of the United Kingdom.
    Mr. McFall: Does the Secretary of State think that the Scottish Council (Development and Industry) will agree that gains from the national lottery pale into insignificance compared with the multi-million pound gains made by Mr. John Mather and his three Clydeport directors? At a time when the Scottish economy desperately needs a kickstart—not least for the benefit of the 220,000 unemployed—how can it be fair that that chief executive stands to gain more than £5 million from his £75,000 investment in a public trust company? In light of cases such as that, does the Secretary of State agree that when the Government talk about economic development in Scotland, the public perception is that they are more concerned with the prospects of a few privileged individuals rather than the nation as a whole?
    Mr. Lang: The Government have been concerned in all their privatisation programmes to release the talent and quality of Scottish enterprise and of British enterprise,
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    which has been constrained and suppressed by nationalised state ownership, introduced by the Labour party. Not a single utility or industry has not suffered drastically as a result of nationalisation. The electricity industry, the gas industry, the airlines industry and any of the other industries that have been privatised have been able to raise money in the markets, invest in modern plant and develop new prosperity and jobs.

    Local Government Reform
    Mr. David Shaw: To ask the Secretary of State for Scotland if he will make a statement on local government reforms in Scotland.
    Mr. Stewart: As the House knows, the Local Government etc. (Scotland) Bill received Royal Assent on 3 November. I am delighted that the Convention of Scottish Local Authorities has rescinded its previous policy of non-co-operation on the Bill. I look forward to all those involved working closely to deliver new councils which will provide stronger, more effective and more accountable local government.
    Mr. Shaw: I thank my hon. Friend for that reply. Can he tell me whether many people in Scotland will be pleased by the proposed abolition of Monklands district council? Is he aware that in the Airdrie and Coatbridge Advertiser recently it was stated that a letter had been sent by Councillor Brookes and other Labour councillors seeking to cover up and call a halt to my investigations into wrongdoing in Monklands district council? Is he aware that that letter was conveyed to the Privileges Committee of the House of Commons by two Members of Parliament with Monklands constituencies? Should not they be stopped from trying to cover up the wrongdoing on that council?
    Mr. Stewart: I answer my hon. Friend's more general point by saying that in the course of receiving many representations from throughout Scotland about the reorganisation of local government, we were not exactly inundated with representations to the effect that Monklands district council should be one of the new unitary authorities. The single-tier system will enable a higher degree of accountability than the complexities of the two-tier system. That was acknowledged by the Wheatley Commission and, in principle, by all political parties.
    I do not always read the Airdrie and Coatbridge Advertiser because many newspapers attract my attention. As my hon. Friend knows, the hon. Member for Monklands, West (Mr. Clarke) has for a long time been a close personal and political associate of Councillor Jim Brookes. That is public knowledge.
    Mrs. Liddell: Does the Minister agree that, given the interest of his hon. Friend the Member for Dover (Mr. Shaw) in activities in my constituency and the constituency of my hon. Friend the Member for Monklands, West (Mr. Clarke), it is absolutely reprehensible that the hon. Member for Dover has failed to make available to Professor Robert Black, who is chairing the independent inquiry, the 20 pages of information that he claims to have about those activities?

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    Does the Minister agree that the bluff of the hon. Gentleman has been comprehensively called? He should put up or shut up.
    Mr. Stewart: I recall that during the Monklands, East by-election the hon. Lady did a massive U-turn and made public her own allegations about spending bias by Monklands district council. Perhaps she will put her evidence to Professor Black.
    Mrs. Fyfe: Given that Government support to councils will be cut by £133 million in real terms next year, is there not a risk that there will be fewer, not more, nursery schools in Monklands and elsewhere in Scotland while such provision is still not a statutory duty? What happened to the Prime Minister's promise of more nursery schools and what reassurance can the Minister give to parents of children with special needs? Having disrupted local government, will he give us his word that, whoever suffers disruption in the months to come, it will not be children with special needs?
    Mr. Stewart: As I said in answer to the hon. Lady's hon. Friend the Member for Paisley, South (Mr. McMaster), the settlement is extremely fair for local government, which in Scotland spends far more per head of population than is spent in England or Wales, for reasons that I continue to find incomprehensible. Details of provision are a matter for each local authority. I hope and believe that the hon. Lady's fears will be unfounded and I repeat my pleasure that local authorities in Scotland have shown excellent common sense in co-operating with reorganisation, against the wishes of the Labour Front-Bench team.

    Community Care
    Ms Rachel Squire: To ask the Secretary of State for Scotland if he will outline his proposals for the development of community care over the next 12 months.
    Lord James Douglas-Hamilton: Considerable progress has been made in establishing the framework for the successful development of community care policy. During the next 12 months implementation work will continue in order to secure the policy objectives set out in the White Paper, "Caring for People". In particular, community facilities will be developed for those leaving long-stay hospitals, support for carers will be encouraged and a flourishing mixed economy of care promoted.
    Ms Squire: Does the Minister agree that, in the next 12 months, it is his intention to use local government reorganisation to break up existing community care arrangements and replace direct council services with contracting out and privatisation? Does he further agree that last night's Government defeat on value added tax on fuel was the best news for community care, because lower fuel costs will enable people to stay in their own homes and be cared for in the community?
    Lord James Douglas-Hamilton: I do not agree with the second point. Even after the first stage of VAT on fuel and power, gas and electricity prices are lower in real terms than they were two years ago and, as compensation will remain in place, people will already be better off. On community care, we want maximum continuity during the transition in local government arrangements and substantial resourcing has been made available. Resources
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    available to housing authorities for community care will increase next year from £25 million to between £45 million and £50 million. Spending for Scottish Homes will rise from £78 million to £82.5 million in 1994–95 and for social care—providing for community care and other matters-it will increase from £345 million to £390 million. Total new resources for authorities will increase from £170 million to £241 million—a rise of 40 per cent.—so we take seriously the problems that could arise during transition by giving strong resourcing.
    Dr. Godman: In relation to so-called community care, does the Minister agree that the care of elderly and frail people is too often left to unscrupulous owners of private residential and nursing homes? In a small handful of cases those owners double up as the residents' general practitioner. Will he give an assurance that that disgraceful doubling up of roles in relation to the care of elderly people will be halted as soon as possible, in the interests of those people?
    Lord James Douglas-Hamilton: I shall look into the matter that the hon. Gentleman mentioned, but discretionary charging has been in place under successive Governments and that will continue. Obviously we must look into the matter with great care—sensitivity must be applied.
    Dr. Spink: Is my hon. Friend satisfied that Scottish local authorities have been able to manage their budgets properly over the 12-month period?
    Lord James Douglas-Hamilton: If I understand my hon. Friend correctly, I believe that local authorities will manage their budgets properly. We have a strong incentive to make certain that that happens, and the arrangements will be properly monitored. My right hon. Friend the Minister of State will issue guidelines where necessary if there are any doubts as to the best recommended practices.
    Mr. Michael J. Martin: On the question of proper care for the elderly, will the Minister ensure that more resources go to Alzheimers Scotland? The organisation does an excellent job in supporting those carers—many of whom are elderly themselves—who are looking after loved ones with a difficult illness, with the result that the carers sometimes get only three or four hours' sleep. The organisation should be given every assistance and support by the Government.
    Lord James Douglas-Hamilton: There is, of course, a mental illness grant of £14 million which has been made available, and I will look into that particular point. I am sure that my right hon. Friend the Minister is well aware of the organisation. In the brief period during which I was responsible for the community charge, I exempted those suffering from Alzheimer's disease from the charge, as did ministerial colleagues from south of the border.

    Local Government Reform
    Mr. Kynoch: To ask the Secretary of State for Scotland what representations he has received from Scottish local authorities with regard to area structure plans in the light of local government reform.
    Mr. Stewart: My right hon. Friend has received representations from three local authorities about structure plan areas. These representations have been taken into

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    account in preparing a consultation paper, setting out our proposals for structure plan areas, which should be published within the next few days.
    Mr. Kynoch: Is my hon. Friend aware of the planning chaos in my constituency which has been brought about by the failure of the Labour and subsequent Liberal-Scottish National party administrations of Grampian regional council to submit an area structure plan, thus blocking discussions on local district plans? Is he further aware that the consequent random planning applications from developers throughout the area are causing grave concern to my constituents? In light of the imminent advent of the single-tier authority, which is much welcomed in my area, will my hon. Friend reassure me that, before Grampian region's plan—whenever it is submitted—is finally adopted, it will be submitted for local consultation?
    Mr. Stewart: I fully appreciate my hon. Friend's concerns about Grampian's structure plan. As he rightly said, the situation has been chaotic, although I cannot comment on the merits of the proposed strategies. We are keen to see an up-to-date structure plan for Grampian region in place as soon as possible, and I believe that that is in everyone's interests. We are encouraging the region to bring forward its proposals without further delay. I can certainly give my hon. Friend the assurance that he seeks regarding consultation on the Grampian structure plan—when it is submitted—before my right hon. Friend reaches his conclusions on the matter.
    Mr. Darling: Following local government reorganisation, does the Minister propose to ensure that there is a co-ordinated local authority response to the Government's plans to build another road bridge across the Forth, with its motorway network to the west of Edinburgh and its highly damaging environmental impact on the city of Edinburgh? Does the fact that the head of the roads directorate at the Scottish Office has now left signify that, at long last, Ministers have woken up to the fact that they are being taken for a very expensive ride by their own civil servants?
    Mr. Stewart: The hon. Gentleman's latter comment is beneath contempt. In relation to his general point, my right hon. Friend will be making a statement on the matter in due course.

    Solvent Abuse
    Mr. Malcolm Bruce: To ask the Secretary of State for Scotland how many people in Scotland have died as a result of solvent abuse in each of the last five years for which figures are available.
    Lord James Douglas-Hamilton: The General Register Office for Scotland recorded 12 deaths from solvent abuse in 1989, 10 in 1990, 19 in 1991, seven in 1992 and seven in 1993.
    Mr. Bruce: Does the Minister acknowledge that solvent abuse is killing more young people than all other forms of drug abuse combined? More serious than that is evidence that the abuse of solvents is much more widespread than is generally known. The Minister will be aware that the Secretary of State received a letter from me following representations from my constituent Lorraine Morrice, whose son Colin tragically died after
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    inhaling lighter fuel. Can the Minister assure the House that he will be making representations to increase awareness among young people of the risks of solvent abuse? Will he ensure that lighter fuel manufacturers put a proper warning on cans, and that shopkeepers are properly prosecuted if they sell solvents when they know that they are to be used for abusive purposes?
    Lord James Douglas-Hamilton: First, let me assure the hon. Gentleman that we send our deepest sympathy to his constituent who sustained that tragic loss.
    The hon. Gentleman has a considerable constituency interest in the charity Re-Solv. Meetings have taken place with my right hon. Friend the Minister of State about the possibility of its receiving a grant; a statement will be made soon, and the matter is being viewed sympathetically.
    I sympathise with the hon. Gentleman's aim in regard to warning labels. There is, however, a danger that an interest in solvents could be aroused in young persons. We are considering the issue, and a report will be published by the prevention working group of the Advisory Council on the Misuse of Drugs, whose recommendations we shall examine immediately and carefully. We also have many educational programmes, including videos, to increase awareness of the problem. "Solvents: A Parent's Guide" was published earlier this year, along with "Drugs and Solvents: You and Your Child". We are doing all that we can to get the dangers across to those concerned through the medium of education.
    Mr. David Marshall: Can the Minister say how successful the Solvent Abuse (Scotland) Act 1983—taken through the House by the hon. Member for Glasgow, Shettleston—has been in dealing with the serious problem of solvent abuse among young people? How much priority does his office give that worrying problem?
    Lord James Douglas-Hamilton: I congratulate the hon. Member for Glasgow, Shettleston (Mr. Marshall) on taking the Bill through the House. I believe that it has had an effect: the figures are clearly much too high, but they have fallen in recent years. We must build on that with a strong programme of educational measures. The "Drugwise 2" educational package for 10 to 14-year-olds has been distributed free of charge to all primary and secondary schools in Scotland.
    Lady Olga Maitland: Does my hon. Friend agree that solvent abuse is not unique to Scotland? Nationally, two children a week die from it, and three quarters of a million are known to be experimenting with solvents. Does my hon. Friend agree that industry too has a role to play, and that it should be encouraged to carry out research into suitable solvent substitutes that are safe?
    Lord James Douglas-Hamilton: It is certainly very desirable for industries that make solvents that could be misused to conduct research, and to act as responsibly as possible. If the hon. Member for Gordon (Mr. Bruce)—or anyone else— has any information about shopkeepers who sell youngsters substances for which they can have no legitimate use, he should bring that information to the attention of the police so that the appropriate steps can be taken.

    Water Authorities
    Mr. Worthington: To ask the Secretary of State for Scotland how he will require the new water authorities to take into account the ability of consumers to pay.
    Mr. Stewart: Methods of charging for water and sewerage services will be a matter for the new authorities. Their charges schemes will need to be approved by the Customers Council or, failing that, by my right hon. Friend the Secretary of State.
    Mr. Worthington: That is simply not good enough. At present, ability to pay is taken into account by reference to reduced council taxes and the size of people's houses. In England and Wales, by Government diktat, it is not possible to take council tax information into account in setting charge levels. Unless the new water authorities are given access to such information, they will not be able to take ability to pay into account. That will mean that the water charges of the lowest-paid workers—the worst off in the country—will double. What will the Secretary of State do to prevent that from happening?
    Mr. Stewart: I can reassure the hon. Gentleman on that subject. Where the new councils are required to collect household charges in Scotland, as is proposed in the first year, the arrangements will mirror those for council tax, including the single-person discount. I believe that that makes practical and administrative sense and will ensure an easy and efficient form of collection, and I am glad to be able to reassure not only the hon. Gentleman but the whole House on that important point.
    Mr. Graham: Is the Secretary of State aware of a recent university research study that shows that Inverclyde has one of the worst poverty rates and is one of the worst deprivation areas? Will he ensure that none of the constituents of my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) and myself is cut off from the life-giving supply of water or the ability to clean with water?
    Mr. Stewart: I can make it absolutely clear yet again to the House, as my hon. Friend the Member for Dumfries (Sir H. Monro), the Parliamentary Under-Secretary of State, has made clear, that water and sewerage authorities in Scotland have no power to disconnect water supplies because of non-payment. The new legislation, which has been passed by the House, affirms that position in relation to the new water and sewerage authorities.
    Mr. Gallie: Is my hon. Friend aware that, in the past 30 years, Strathclyde regional council has failed to supply my constituents in Ayr with adequate sewerage facilities? If, at this late stage, the council proposes new capital schemes, will my hon. Friend give an assurance that those schemes are called in by the Scottish Office pending the taking over of the water authorities by the new water and sewerage boards?
    Mr. Stewart: My hon. Friend anticipates the answer to his question No. 20, and he will receive that in writing later this afternoon. I say to him at this stage that, first, I entirely appreciate his anxiety on that issue, which I think is absolutely genuine. However, it is, in the first instance,
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    for Kyle and Carrick district council, as planning authority, to determine Strathclyde regional council's application.
    Mr. George Robertson: Is the Minister aware that his refusal to guarantee that Scottish water bills will not climb to the astronomic levels being experienced in England and Wales is a revealing giveaway of the real agenda involved in quangoising Scotland's water? Given that the Chancellor has not yet said how he will fill the humiliating hole in his finances caused by the Government's defeat last night on VAT on fuel, and given that the Prime Minister himself would not rule out, in a letter to me in June, the possibility of putting VAT on water bills, will the Minister, this afternoon, give an absolute guarantee that VAT will not be put on Scottish water bills—or will that be yet another of the new Tory taxes from which we are already suffering?
    Mr. Stewart: I have to say to the hon. Gentleman, as I have made clear on many occasions, that, as a result of the need for new investment in water and sewerage—which was widely recognised as necessary—in Scotland water bills will have to increase.
    In general terms, however, I must say to the hon. Gentleman, in relation to the Local Government etc. (Scotland) Act 1994, that he told the public that the Bill would be stopped because he was the master of the Maastricht rebels; he was wrong in that. He said that the Bill would not get through; he was wrong about that. He said that implementation of the Bill would be delayed; he was wrong about that.
    The hon. Gentleman is wrong again. In fact, the only difference between the hon. Gentleman and the grand old Duke of York is that the grand old Duke of York led his men up to the top of the hill before marching them down. The hon. Gentleman could not get his team half way up the hill before they slipped down.

    Driftnet Fishing
    Mr. Bellingham: To ask the Secretary of State for Scotland what recent representations he has received in respect of driftnet fishing for salmon off the east coast; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Scotland (Sir Hector Monro): Representations from angling and conservation interests continue to be received against the salmon driftnet fishery off the north-east coast of England.
    Mr. Bellingham: When the Minister leaves the Chamber will he go to the Ministry of Agriculture, Fisheries and Food and tell his colleagues that they are procrastinating? Surely the time has come to ban, with compensation, the north-east driftnet fishery and all driftnetting in European waters. That is the only way to stop illegal Irish netting off the west coast of Scotland. Surely salmon that migrate into Scottish rivers should be allowed to go through to those rivers to benefit the local communities.
    Sir Hector Monro: I appreciate the strength of my hon. Friend's feeling—he ensures that he makes it known every Question Time. The Minister of Agriculture, Fisheries and Food is aware of the strong views held by Scottish Office Ministers because of the effect of salmon returning to Scottish rivers to spawn and the economic

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    impact on Scottish towns where angling is carried out. That is why we are so concerned that the right decision—with the scientific evidence to back it up—should be taken. The number of licences has been reduced to 114 through the net limitation order, and we are having
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    continuing discussions. The driftnet fishery in the Bay of Biscay and off the south-west approaches is being discussed by the European Union fishing committee and will be a matter for discussion at the next meeting later this month.

Bosnia
3.30 pm
The Secretary of State for Foreign and Commonwealth Affairs (Mr. Douglas Hurd): With permission, Madam Speaker, I should like to make a statement on Bosnia.
The situation on the ground deteriorated over the past month. Around the Bihac pocket, Bosnian Government forces launched an attack, but were then forced back by the Bosnian Serbs. The Bosnian Serbs, with support from Croatian Serb forces and rebel Bosnian Muslims, have taken the fighting into the United Nations safe area. That contravention of Security Council resolutions led the commanders of the United Nations force and NATO to call for and carry out air strikes to deter attacks against the safe area.
The fighting has also intensified in central Bosnia, with Bosnian Government forces making gains against the Bosnian Serbs. In the safe areas of Sarajevo, Gorazde and Srebrenica, the civilian populations and the United Nations contingents are short of supplies as convoys have been held up. More than 400 United Nations troops had their movements limited by the Bosnian Serbs. Some were effectively held hostage.
That was the situation which faced the Ministers of the Contact Group when we met on 2 December. The Contact Group countries—Britain, France, Germany, Russia, and the United States—united in calling for an immediate ceasefire in the Bihac pocket, including the withdrawal of Bosnian Serb and Croatian Serb forces from the safe area. We also called for talks to begin on a comprehensive agreement to cease hostilities throughout Bosnia.
The Contact Group supported the United Nations Protection Force's—UNPROFOR' s—mission, and demanded immediate freedom of movement for UNPROFOR and for humanitarian supplies throughout the country. Only once those steps have been taken and the Bosnian Serbs have accepted the Contact Group plan as the basis for a settlement can negotiations continue.
At the meeting last Friday night, the Contact Group reaffirmed the plan that we adopted last July. Under this plan, the integrity of Bosnia-Herzegovina would be preserved. The Bosnian Serbs would withdraw and hold 49 per cent. of the territory rather than more than 70 per cent., as they do today. The Bosnian Federation of Croats and Muslims would hold 51 per cent. whereas it holds less than 30 per cent. now.
We reiterated that the territorial proposal—the map of the 51 per cent. and 49 per cent—could be adjusted by mutual agreement between the parties. Constitutional arrangements agreeable to the parties would also need to be drawn up—they would preserve the integrity of Bosnia-Herzegovina and allow equitable and balanced arrangements for the Bosnian-Croat federation and the Bosnian-Serb entity.
We agreed that our officials would help the parties to reach a settlement on those issues. We did not discuss the lifting of the arms embargo or any change in the arrangements for the use of NATO air power in support of the UN.
Our purpose at that meeting was to re-launch the political process following agreement, which we hope will come soon, on a ceasefire. To carry this forward, I went to Belgrade with my French colleague, Mr. Juppé for
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talks with President Milosevic. Mr. Milosevic welcomed the clarifications we were able to provide. He said that they would help him to put again to the Bosnian Serb Assembly the case for accepting the peace plan which he has accepted for some months.
The next day, Monday, more than 20 members—or more than a quarter—of the Bosnian Serb Assembly saw Mr. Milosevic in Belgrade, and afterwards they put out a statement saying that, in the light of the clarifications made to the Contact Group plan, the Pale Assembly should consider accepting it and entering negotiations on the map and the constitution to reach a final settlement. It is an encouraging step forward, but it is not enough, because the Bosnian Serb leadership has yet to accept the plan.
At the CSCE summit which my right hon. Friend the Prime Minister and I attended in Budapest on 5 and 6 December, I met President Izetbegovic of the Bosnian Federation, President Tudjman of Croatia and the Secretaries-Generals of the UN and NATO.
The three Presidents all accept the Contact Group plan for Bosnia; they accept the continued presence of the UN force, and are all willing in principle to agree to a ceasefire throughout Bosnia—as are the Bosnian Serbs—although there remains a disagreement over its duration. We hope that the UN special representative, Mr. Akashi, will be able to make progress on a ceasefire this week.
Her Majesty's Government want the UN force to be able to continue its mission and the British contingent to continue to play a major part, but we must be clear about its role. It is not there to impose solutions on unwilling parties, it cannot fight on one side, and it does not defend one army's territories against the attacks of another. It is there to support the impressive aid effort—much of it British—to buttress ceasefires where they exist and, within its limitations, to underpin the safe areas and exclusion zones designated by the UN and NATO.
Withdrawal would be a difficult operation in itself, and the consequences for the civilians whom the forces are there to protect would be severe, but UNPROFOR can continue its mission only if it can do so without unacceptable risk, and if it can continue to fulfil its mandate. As with all military operations, planning is in hand to cover many possible events, including withdrawal, and the plans are constantly updated. The Government are not considering a unilateral withdrawal of the British contingent; we are working with our partners in NATO and the UN.
Our preferred way forward is clear, and I hope it commends itself to the House: first, a ceasefire in the Bihac safe area and throughout Bosnia; secondly, agreement on the free movement of UNPROFOR and for aid convoys; thirdly, resumption of urgent negotiations for a peace settlement on the basis of the Contact Group plan; fourthly, once agreement has been reached, withdrawal by the Bosnian Serbs from the land they hold to the new lines agreed.
Finally, I welcome some progress on agreement between the Croatian Government and the Croatian Serbs. Last week, they signed an economic agreement which provides for the resumption of oil, water and electricity links between the Serb-held areas of Croatia and the rest of the country, and reopening the highway between

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Zagreb and Belgrade. This was achieved after months of patient diplomacy between Lord Owen and Mr. Stoltenberg.
I hope that the agreement can be implemented soon. It improves the prospects for negotiations leading to a lasting political settlement in Croatia and for normalisation of ties between Croatia and Serbia.
Mr. Robin Cook: May I first express our appreciation for the fortitude and persistence which continues to be shown by all British troops in Bosnia? The whole House can take pride that, in the face of increasing tension, our troops have demonstrated the resolve to maintain aid to 2 million Bosnians who depend on the UN presence for food and fuel, and whose lives would be at risk if that presence was withdrawn in the worst of winter. May I also welcome the fact that both the European and the US members of the Contact Group now appear to be working to a common plan?
The Foreign Secretary, however, must be aware that the events of the past months have sharpened questions about the nature and the purpose of UN intervention in Bosnia. Will the Foreign Secretary recognise that the assault on Bihac has exposed the inability of the UN to defend safe havens which the UN itself has designated?
The Foreign Secretary's statement refers to action being taken to underpin the safe havens. I put it to the right hon. Gentleman that what is required is action to ensure that the remaining safe havens do not go the same way as Bihac. Does the Contact Group have any proposals to demilitarise the remaining safe havens so that they do not invite the same fate as Bihac? Does the United Nations have any plans to reinforce the troops around safe havens? Does the Foreign Secretary agree that critics in the US Congress and Senate would carry more authority if they were prepared to commit a single service man to defend those safe havens?
On the wider role of UNPROFOR, is the Foreign Secretary not concerned at the evident loss in authority of the UN's military presence? Does he understand the public frustration that soldiers of the world community can apparently be held to ransom by Bosnian Serbs with a total population of barely 1 million? Does it not encourage Bosnian Serbs to treat the UN presence with contempt rather than respect if they discover that hostage-taking is rewarded with concessions? Is that not the surest way to guarantee that hostage-taking will increase?
The Foreign Secretary will also be aware that public revulsion at the conflict in Bosnia is so strong because it is a war waged against the civilian population. Can we therefore be satisfied that only one person has yet been indicted before the UN war crimes tribunal, two years after it was set up in response to the horrors of ethnic cleansing and mass rape? Is there not a danger that the tedious progress of that tribunal is one more signal to the Bosnian Serbs that the world community will acquiesce in whatever outcome they can achieve by force of arms?
The Foreign Secretary will recall that, in the debate on the Queen's Speech, I expressed our view that any lasting, just peace must be based on the integrity of Bosnia's borders and the right of refugees to return to the areas from which they have been expelled. Therefore, will the Foreign Secretary clarify what is meant in his statement by
"equitable and balanced arrangements for the … Bosnian-Serb entity"?
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Is he aware that the press have reported that as some form of confederation with Serbia? Would he himself recognise that any offer of association between Bosnian Serbs and the state of Serbia that compromised the sovereignty of Bosnia will be seen as an admission by the west that it has given up on trying to restore Bosnia as an independent state?
What future does the Foreign Secretary now see for the Muslim population of Bosnia? What equitable and balanced arrangements are now available to them, and can they have a viable future if they are confined to a broken state covering only a third of the former Bosnia and almost entirety surrounded by greater Serbia, in reality if not in name?
I began by saying that the House can take pride in our troops in Bosnia who have shown firmness and dedication. However, no hon. Member can be proud of the response to the crisis in Bosnia of the world community which has shown indecision and division. Let us at least ensure that any settlement should not sanction the conquest of territory by force of arms, should not isolate the Muslim communities of Bosnia, and should not weaken the authority of the UN to intervene the next time one of its members is the victim of aggression.
Mr. Hurd: I thank the hon. Gentleman for what he said about our troops. I am also glad that he pointed out one truth which has not always been so. I have had a strong feeling in the past few weeks that we are working together more completely with the US Administration on Bosnia than we have been for a long time. For example, a statement such as President Clinton's in Budapest two days ago that no one will win a military victory there, so we must work for a negotiated settlement, has, when we have made it in the past, sometimes been attacked. It is a good thing that that comes from the President of the United States, and is backed up by what United States diplomacy is doing.
I entirely share the hon. Gentleman's concern and the public frustration about which he talked. I also share his concern about the UN's loss of authority. All members of the UN, but particularly those who are troop contributors, have all the time to review and assess whether the difficulties, which the hon. Gentleman is undoubtedly accurate in describing, outweigh the good that can be done. If they do, and if the risks become unacceptable, the troops should be withdrawn; but, as I said, we do not believe that we have reached that point.
My right hon. and learned Friend the Secretary of State for Defence has just returned, and he tells me that, in central Bosnia, where most of our troops are, and where there is not much news because there is not much disaster, the situation has improved considerably. Thanks to our troops and to the UN, 90 per cent. of the towns in that part of the country now have electricity, running water and basic medical facilities, and roads that used to be blocked are now open, with supplies flowing freely along them. That would not have happened without our forces, and it would probably be at risk if they were withdrawn. That is the balance that we have to strike.
The hon. Gentleman is right to draw attention to the war crimes tribunal. Such matters always move slowly; he will understand that from his knowledge of the profession. But, as he rightly says, there is already one case, and evidence is being collected for others.

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As for the constitutional arrangements, the hon. Gentleman will know that it has already been agreed in principle that the federation—that is, Muslims and Croats combined—could have a special relationship with Croatia. That was agreed in Washington in February. We are saying that it may be possible for the parties to agree that there should be a fair, balanced and equal relationship between the Bosnian Serbs and Serbia.
That has to be agreed; it cannot be imposed. We are not suggesting for the Bosnian Serbs anything that is not available for the Croats and Muslims, but it may not be possible to agree on that. We are talking not about a confederation but about constitutional arrangements within the integrity of Bosnia-Herzegovina.
There are certainly lessons to be drawn from all this, and when the war is over they will have to be drawn. I could easily detain the House for a long time talking about what they are, but our first priority must be to do what we can from the outside, which is limited. We must do what we can to create the ideas and pressures by which a negotiated settlement can be reached—meanwhile, so long as we can, saving lives and keeping some kind of life flowing and continuing in the parts of Bosnia that we can reach.
Mr. David Howell: Does my right hon. Friend accept that, as the Opposition spokesman, the hon. Member for Livingston (Mr. Cook), said, there is indeed deep and widespread admiration both for our troops and for General Rose, who is trying to perform his duties in an agonisingly difficult situation? However, if the UN cannot defend its own safe areas and if UN personnel are being taken hostage, it is true that the time may rapidly come when the position becomes impossible and we have to prepare for withdrawal. I am glad that the preparatory arrangements are always in hand.
Does my right hon. Friend also accept that, whatever is decided in Bosnia, it does not justify the tearing down and the destruction of NATO? Will he explain to his American opposite numbers and to some members of the American Congress that what their magnificent forebears and predecessors built up with us over 40 years for the security of the Atlantic and of Europe should not be idly torn down simply because there are disagreements over Bosnia?
Mr. Hurd: My right hon. Friend is entirely right. NATO is a collective security organisation, and its whole basis is that an attack on any one of us is an attack on all of us. That has to continue, because we continue to live in a dangerous world. Last week, in the NATO Council, we were devising ways in which that stability and assurance could be extended eastward to countries such as Poland and Hungary, while keeping or building up a partnership with Russia. That is the next NATO task.
What NATO is doing in Bosnia is trying to help the UN—enforcing a no-fly zone, which it has done, and seeking, as it has also done, to deal with the problems of heavy weapons—but always in consultation with the UN. That is a task that NATO has assumed in Bosnia, but it is not central to the continuation of the organisation.
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NATO is there as a collective security organisation, binding the two sides of the Atlantic together, and in our view it is essential that that should continue.
Mr. Menzies Campbell: Arising out of meetings that the Secretary of State has had in the past week, especially those with senior members of the Clinton Administration, can he confirm that, if the withdrawal of our troops becomes necessary, there will be available to them the full and unstinted resources of NATO, including those of the United States?
The Foreign Secretary was right to draw attention to the entirely sensible observations of his right hon. and learned Friend the Secretary of State for Defence about the fact that, away from Bihac, substantial good work can still be done. Can the Foreign Secretary confirm that, as long as that work can be done and as long as the mandates of the United Nations can be substantially, even if not completely, implemented, British troops will remain? Indeed, can he confirm that the British Government will neither withdraw unilaterally nor argue for such a withdrawal?
Mr. Hurd: American participation in the withdrawal of the UN force would be essential; that is accepted in principle by the United States Administration. As I have said, the actual planning is in hand; I do not think that I can go further than that. The hon. and learned Gentleman is correct: we are not talking about and we are not contemplating unilateral withdrawal, as I said in my statement.
Mr. Patrick Cormack: Will my right hon. Friend accept that, in the three years in which aggressive conquest has been building in greater Serbia, the international community in general, and the UN and NATO in particular, have had their credibility severely damaged? Now that everyone concerned, except the Bosnian Serbs, accepts the Contact Group's plan, should we not stop pretending to be impartial between the fire brigade and the fire? Would it not be appropriate for the Bosnian Serbs to be told that there will be massive retaliatory action from the air if they damage any further the concept of the safe area?
Mr. Hurd: NATO and the UN have worked out together ways in which NATO air power can be used to protect UN forces, to deal with heavy weapons in or around the safe areas and to enforce the no-fly zone. That has to be done with co-operation between NATO and the UN, because the UN is the responsible commander on the ground and only the UN can assess the impact on the ground of any particular action. That sometimes causes impatience among observers who especially favour stronger NATO action, but it is a reality which has to be accepted. That is compatible with the use of air power, as we have seen.
My hon. Friend, who has followed this matter with care and with fervent opinion through the years, somewhat exaggerates in his question the possible role of air power. Air power has its role, and I have just described what that role could be. The idea, however, that one can use air power to alter the policy of a Government or to bring recalcitrant people to the conference table is misguided, and has often proved to be misguided in the past.
Mr. John Home Robertson: The Secretary of State may be aware that, during the summer

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recess, I spent four weeks driving a lorry in a relief convoy in central Bosnia. Does he accept that it would be absolutely impossible to deliver essential supplies to 3 million people living in the area without the protection and support of UNPROFOR and without the peace that UNPROFOR has achieved between the Bosnian Government and the Bosnian Croats?
Does he acknowledge that it would be reckless if all those achievements were jeopardised by the premature withdrawal of UNPROFOR as a result of statements by American politicians who understand little about what is happening on the ground in Bosnia? Has the Secretary of State had any indication from the Americans that they are prepared to deploy troops on the ground, or do they seriously think that they can solve the problem with air power?
Mr. Hurd: No, I have had no indication that the Americans would be prepared to put troops on the ground. The hon. Member, who speaks from experience, is right about what is being achieved in central Bosnia. My right hon. and learned Friend the Secretary of State for Defence confirms that. At the moment, convoys do not need military escorts because the roads are clear, but if the UN forces withdrew, those convoys would be at risk. That is one of the factors, although not the only one, that we have to weigh up.
The situation in Sarajevo is another. Last year, 1,500 shells daily landed in Sarajevo; they are now very rare. Sarajevo is not back to normal life by any manner of means—it is a skeleton town—but at least people are not being shelled and bombarded every day as they were before. Again, that is something that we must weigh up.
Mr. Michael Alison: Will my right hon. Friend further confirm the Government's full support and approval, in spite of American criticisms, for the key role being played by General Sir Michael Rose in Bosnia? Does my right hon. Friend agree that General Rose's combination of patience, courage and deep humanitarian concern is in the very highest traditions of British military prowess being deployed in the cause of peace?
Mr. Hurd: I am grateful to my right hon. Friend. I entirely agree with what he says. I saw the transcript of one particularly unjustified attack on General Rose yesterday morning by the Bosnian ambassador to the UN. I do not think that anyone will think the worse of General Rose because of that sneering attack. The only person of whom we may think worse is the person who uttered it.
I hold no brief for the Bosnian Serbs—they have shown themselves barbarous, brutal and often murderous—but the indignation and frustration at what they do, which builds up in all of us, especially, obviously, in their victims on the ground, should not lead us into rhetoric and illusion, let alone into attacking in words those who are doing their best to save lives in Bosnia.
Mr. Calum Macdonald: The response of the Contact Group to every Serbian advance or attack is simply to revise the Contact Group plan to make it more acceptable to the Serbs. Will the Foreign Secretary explain how that can give the Serbs an incentive to negotiate meaningfully? Surely they will not negotiate
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until they suffer military reversals themselves. Should not the western community be thinking about how to inflict such reversals on them?
Mr. Hurd: I do not know what the hon. Gentleman means by introducing new concessions to the Bosnian Serbs. We have not done that—[Hon. MEMBERS: "Yes."] No, we have not. We are on the same map, and we are talking as we did in the summer. The phrase about balanced arrangements, about which the hon. Member for Livingston (Mr. Cook) questioned me, was there in the summer.
We are not claiming any privileged position for the Bosnian Serbs. We are talking about equitable and balanced arrangements inside Bosnia-Herzegovina, with its present frontiers. We are simply trying to find ways in which to put this, of persuading the Bosnian Serbs that they will not have a settled or accepted future simply by trying to hang on by force to the villages and towns which they now hold. President Milosevic is trying to do the same.
My own feeling is that this situation will turn in the right direction once President Milosevic brings, in one way or another, his fellow Serbs across the border of Bosnia-Herzegovina to accept, as he has accepted, that the only bright or durable future for them lies in accepting our plan.
Sir Peter Fry: Would my right hon. Friend say a little more about the approaches that he has had from President Milosevic? From the outside, it appears that greater Serbia is nearer to reality today than it has been, perhaps, for many years. Therefore, is my right hon. Friend satisfied in his own mind that President Milosevic is not co-operating merely to see the sanctions against Serbia further reduced and because he has abandoned the idea of a greater Serbia? What does my right hon. Friend think?
Mr. Hurd: President Milosevic has his own reasons. Undoubtedly, the imposition of sanctions is one of them, and he is seeking greater relief. The French Foreign Minister and I made it clear to him that we saw no prospect of further relief of sanctions against Serbia simply because Serbia accepts the Contact Group plan. He has had a bit of relief, as my hon. Friend knows. Belgrade airport is open and certain events which were prevented are now possible; but the main bulk of sanctions cannot be lifted—we have made this clear to him—until the Bosnian Serbs have accepted the plan and until this agreement, which I mentioned at the end of my statement and which is very important, between the Croatian Serbs and the Croatian Government, is implemented.
Mr. Dennis Skinner: When is the Foreign Secretary going to realise that Britain, with its so-called grandeur of an imperial past, cannot poke its nose into the civil wars going on around the world? There are more than 25 going on at the present time. Why should any Serb, or a Muslim fighting another Muslim, believe that they have to listen to the authority of a broken-backed Government who cannot even control their own rebels, who have lost their majority, and who cannot raise their

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taxes? One thing the Government want to be sure of is that, if they came forward with any legislation, the chances are that they would lose that as well.
Mr. Hurd: That is the kind of utterance to which I am accustomed from Mr. Karadzic rather than from hon. Members.
Mr. John Wilkinson: Did my right hon. Friend detect any significant change in attitude on the part of the Russians, particularly at the meeting in Budapest of the conference on security and co-operation in Europe? Was there not some difficulty in concluding an agreed communiqué with them? If that was the case, does that extend to their attitude to Serb ambitions in the former Yugoslavia, and could it be an impediment to peace in Bosnia?
Mr. Hurd: We spent several hours on Friday night with the Russians in the Contact Group. The Prime Minister saw President Yeltsin on the first morning of the conference in Budapest. I had an hour and a half with Mr. Kozyrev, some of it alone, yesterday. I am perfectly clear that the Russians are working, like the Americans, French, Germans and ourselves, for a negotiated settlement on the basis of a 51 per cent./49 per cent. split in the map and what we agreed in the rest of the document.
The Russians believe that President Milosevic is entitled now to further relief on sanctions than the international community has given him. That is the main difference between us. They know that that is not realistic at the moment. They are working, therefore, for the success of the international effort that I have described.
Mr. Robert N. Wareing: Why is it that, in 1991, the British Government, along with the German Government, were not prepared to respect the integrity of the former Yugoslavia, yet now we are told that we must defend the integrity of a state, Bosnia, which is not viable and which really requires partitioning so that the Croats and the Serbs can have a special relationship with Croatia proper and Serbia proper? Why was it right in one case to defy the integrity of an internationally recognised state, whereas now it is not?
Mr. Hurd: I will not go back to the history of 1991, which I have often debated with the hon. Gentleman. If we look at the ethnic map of Bosnia, we see that it is really not practicable—in my view, at any rate—to think of a partition plan. Leaving aside the morality of it, I do not think that it is simply practicable in effect, because of the way in which the communities are interspersed.
I do not accept the hon. Gentleman's thesis. I have much sympathy with what the Bosnian Government in Sarajevo say about the matter. For years and years, those people lived together in the former Yugoslavia, with all its faults, under the kings and under the communists. They joined the same professions, and they served in the same army. They were not hating and killing each other.
Now that has disintegrated, but it has to be reintegrated. That is why I believe that it is right to say that there should be a country called Bosnia-Herzegovina and that
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those are its frontiers, but, inside it, there have to be arrangements in which the three communities can live together.
Sir Jim Spicer: I thank my right hon. Friend for his remarks about the use of air power. Will he refer all those who call for massive air strikes back to other occasions when we have had that ability—for example, the Ardennes and Korea—when a beaten army on the ground was still able to inflict massive casualties on our armed forces? There is no solution that way. My right hon. Friend knows it, and we all know it.
My right hon. Friend said that there was no military solution. All rational people in this House, and indeed throughout the world, know that that is the case, but can my right hon. Friend say that the same will apply on the ground? We are not dealing with armies that are working on a control system. They are operating of their own volition. It is a case of order, attack, disorder, counter-attack and attack again. In those circumstances, what chance can there ever be of our achieving anything? For once, I agree with the hon. Member for Bolsover (Mr. Skinner)—that, at the end of the day, the matter must be sorted out by the people on the ground.
Mr. Hurd: In answer to my hon. Friend's first point, there is a long history of over-optimism about air power. To the examples that my hon. Friend gave I simply add Iraq. We bombed Saddam Hussein intensively for a long time using the latest technology, but it was not sufficient to force him to withdraw from Kuwait. There is a long history of wishful thinking about air power, and it is sad that it has surfaced again, even among people whose experience should have taught them otherwise.
I agree with my hon. Friend's final point—indeed, I have made it often enough, and been accused of being an appeaser and a defeatist for doing so. The fighting will cease when those who are doing the fighting decide to stop and when there are no longer military leaders whispering in the ears of Bosnian politicians: "Don't compromise, don't talk, just give me a few more months and I will really smash the enemy." That advice has been listened to too often, and it is always wrong.
My hon. Friend is correct when he describes the intermingling and sometimes chaotic nature of commands and forces, and therefore the difficulty of having a tidy ceasefire. That is what the United Nations and the forces concerned frequently discuss and occasionally achieve. To a substantial extent, it has been achieved in the area where most of the British troops are deployed—in central Bosnia.
Mr. John Hutton: Whilst accepting that all the units which have contributed to the UNPROFOR mission in the former Yugoslavia have performed their tasks extremely well, does the Foreign Secretary accept that this miserable and depressing episode reveals a deficiency in the way that the United Nations considers deploying force in support of Security Council resolutions? What thoughts and proposals does the Foreign Secretary have about finding a way to improve the delivery of force to support United Nations

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Security Council resolutions? What consideration has he given to the permanent convening of the Military Staff Committee of the United Nations?
Mr. Hurd: I think that the Military Staff Committee—which was set up in 1945 in quite different circumstances—is not the right body to deal with the matter.
The hon. Member is quite right, and I will send him details of the proposals that we have made precisely for the establishment of a proper general staff at the UN, so that all the efforts which the hon. Member for Bolsover (Mr. Skinner) scorns so mightily will have a chance of success.
Some efforts have failed, and some have succeeded, but problems will continue to arise, particularly in the form of savage civil wars in independent countries. The United Nations has to be better equipped with preventive diplomacy—that is the first thing—and, where that fails, with the quicker and more effective deployment of a force.
Mr. Iain Duncan Smith: Does my right hon. Friend agree that we face a problem in that we seem to be straddling two stools of humanitarian aid delivery and, to some degree, limited peacekeeping? As British forces are being taken hostage and our forces consistently come under fire, I press him to define slightly more clearly what he means by "unacceptable risk", given that the definition shifts continually and we must then change our sights each time.
Mr. Hurd: At the moment no British contingents are being held by the Bosnian Serbs or being prevented from moving, although other United Nations forces are currently in that situation. At the moment, the situation with our own forces has eased somewhat, although my hon. Friend knows that the problem might recur.
He knows the difficulty of defining "unacceptable risk". My right hon. and learned Friend the Secretary of State for Defence, his advisers and the whole Cabinet have to review it and weigh it constantly. We always tell the House the results of our striking the balance on each occasion.
Mr. David Winnick: Is it not obvious that the Serbian warlords—many of them outright war criminals—are daily humiliating the United Nations and its authority, knowing full well that member Governments do not have the political will to resist what is happening in safe areas? Having listened to some of the exchanges in the House today, if one were to change the word "Bosnia" to "Czechoslovakia", it is easy to imagine what it must have been like in the House of Commons in 1938. The air of Munich pervades this place, which is very unfortunate when it comes to resisting aggression in other countries.
Mr. Hurd: That is a frequent but ludicrous comparison. I do not know whether the hon. Gentleman comments out of ignorance, but he grotesquely over-simplifies the situation. He speaks of the "Serbian warlords". Is he talking about President Milosevic, who had a heavy responsibility for starting and abetting the war, but who is now seeking to prevent it? Or is he just talking about Mr. Karadzic, in which case I join with him?
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The comparison with Czechoslovakia and Munich is way out of line. We are seeking to get away from the type of illusion which the hon. Gentleman has, sincerely, promoted for a long time. Unless he shares the illusion about air power, he has never answered the question how the objective that he has stated is to be realised without the intervention of a huge semi-imperial army to impose a particular solution on the ground.
Mr. Quentin Davies: Does my right hon. Friend agree that two potential disasters must be avoided at all costs? One is a devastating humiliation of international law, and the other is a devastating humiliation of NATO. Does he agree that it does not make much sense to signal to the Serbs that the worse they behave, the more likely it is that United Nations forces, which act as some constraint on their behaviour, will be withdrawn? Is it not a fact that it is an act of war to capture or take hostage troops of another power? Is it not about time that we made it clear to the Serbs that we make that interpretation of their recent behaviour?
Mr. Hurd: The job of the UN force has been clearly defined. It is defined in the Security Council resolutions, and it has been frequently defined by General Rose. He holds to that definition. People in relatively secure positions are always urging on him this tactic or the other. When he started, he gained a reputation for being tough with the Serbs. He gained ground in that way. Now he is being accused, wholly unfairly, of being over-soft and not doing all he could with the resources at his disposal.
The UN commanders are using to the best effect the resources at their disposal. I wish that there were more resources on the ground. I wish that the appeal which was made in resolution 836 and others had been listened to by more countries. I am glad that we and the French are the two main countries to have contributed. I hope that we can continue to do so.
I do not believe in changing the mandate so as to render the task impossible. I believe in maintaining the mandate and enabling those on the ground to maintain their work as best they can, which will not be perfectly, so long as they believe that the good that they are doing and the lives that they are saving outweigh the loss of authority that they are suffering.
Mr. Max Madden: Does the Foreign Secretary understand that his latest statement reeks of further betrayal of the people of Bosnia-Herzegovina, and of further appeasement of the Serbs of Pale and Belgrade? Does he understand that the advent of a greater Serbian confederation would be the final reward for aggression, genocide and ethnic cleansing? Does he understand that, if UNPROFOR is withdrawn, the troops will have to walk out, leaving behind their weapons and equipment, and that their humiliation will be entirely the responsibility of politicians in the UN, NATO and the European Union, who have consistently refused the people of Bosnia-Herzegovina the means of their self-defence?
Mr. Hurd: As far as I can tell from the hon. Gentleman's question, he suggests lifting the arms embargo and keeping UNPROFOR in place. He criticises both parts of our policy. His suggestion is wholly unreal.

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The idea that the west should start supplying one side in the war with arms yet seek to maintain a peacekeeping force in the middle of the war is completely unreal.
Mr. Harold Elletson: Does my right hon. Friend agree that events in Bihac have shown two facts which are uncomfortable for many hon. Members? They are, first, that those who claimed that United Nations safe havens were being used as launch pads for Bosnian Muslim aggression and should be demilitarised as quickly as possible have been proved right; and secondly, that talk of lifting the arms embargo has merely encouraged the Bosnian Government to continue fighting, much to their disadvantage, and scuppered the chance for peace.
Mr. Hurd: On the first question, the Security Council's resolutions on safe areas, resolution 836 in particular, did two things—appealed for more troops and, in a crisis, declared areas safe. In an orderly and logical world, one would wait until one had the troops before one declared the area safe, but the world was not logical. Bosnia was in crisis and the Security Council thought that it was important to do something at that stage to help and so it did that.
Of course it would have been better, and the situation on the ground would be more secure, if there were a fully equipped and organised United Nations force in Bihac, instead of 1,400 Bangladeshis and ditto in the other areas. Our troops are in Gorazde and the Dutch are in Srebrenica, but the response to the UN Secretary-General's appeal has never been sufficient.
On my hon. Friend's second point, no Government are pressing for the lifting of the arms embargo. There have been times when that moment approached, and times when the Bosnians pressed hard for it, but when they realised that it would mean the withdrawal of UNPROFOR, they said, "No, we don't want an immediate lifting of the embargo. We would rather put it off until the spring and see what can be done meanwhile." Although there is still support in principle for the lifting of the embargo, no Government are pressing for that immediately, and for very good reason.
Ms Joyce Quin: May I press the Foreign Secretary on what he said about the future of the safe areas? What future does he think there is in Bihac? Will he respond to the questions that my hon. Friend the Member for Livingston (Mr. Cook) asked on what is being done to make the remaining safe areas safer for the future? Finally, can he give us assurances about the security and availability of supplies to our troops during the winter? We know from the long history of this situation that that is a difficult time for the troops and the civilian population. I am sure that we would all welcome reassurances on that score.
Mr. Hurd: As regards Bihac, there has been no significant change during the past few days, as fighting continues around the outskirts of the town, and Bosnian Government forces are still in the town. There has been some shelling around the outside of the town, and fighting continues in the rest of the Bihac pocket. The United Nations is seeking to get convoys through. I think that a convoy reached Bihac the day before yesterday, and a British convoy got through to Gorazde. That is part of the
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essential process of keeping supplies moving for the United Nations forces and the civilian population, which is especially important as winter approaches, as the hon. Lady said.
Several hon Members rose—
Madam Speaker: Order. We must now move on.

Points of Order
4.17 pm
Mr. Tam Dalyell: On a point of order, Madam Speaker. This House operates on the basis that debates are answered by a Minister with ministerial, or at least departmental, responsibility. I do not want to make a party point of this, because I know that the situation would be exactly the same under a Labour Government, but the Crown Office has not been able to answer debates in this House for many years.
That becomes a very serious matter when, in the biggest case of murder in the western world, the lead Department, along with the Foreign Office, is the Crown Office. On Tuesday 13 December 1994, on the motion for the Adjournment of the Scottish Grand Committee, under Standing Order No. 94H(6), you have given me leave to raise the subject of the Crown Office in relation to the Lockerbie investigation.
I do not wish to be disparaging about him in any way, but, under the present set-up, the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) will be the Minister to respond. To be frank—I am not in any way using pejorative language about him personally—he is a messenger in that matter. The Scottish Office has little, if any, direct responsibility for matters of the Crown Office.
Mr. Robin Cook: None at all.
Mr. Dalyell: As my hon. Friend says: that is precisely the situation. The Crown Office goes to endless lengths to say how separate it is from the Scottish Office, and that is indeed the position.
My point of order is that there is a very grey area, which I will raise under the new dispensation. The usual channels believed that part of the reason for the reforms of the Scottish Office and the Scottish Grand Committee was precisely that the Crown Office could answer directly for itself, and make statements. It can make statements, but surely Departments which can make statements can also answer Adjournment debates.
Has there been any approach to allow the Crown Office to answer the debate? If there were such an approach from the Scottish Office and from the Government, would you cast a benevolent eye on it?
Madam Speaker: The hon. Gentleman raised this matter in the House with me only last week, and I can only refer him to what I said on that occasion. The Standing Orders, which were agreed by this House only recently, do not allow the Lord Advocate to respond to Adjournment debates. That is what the hon. Gentleman is seeking.
As I told the hon. Gentleman last week, he must find a way to amend Standing Orders if he wishes the Lord Advocate to respond to an Adjournment debate.
Mr. Ian Bruce: On a point of order, Madam Speaker. In columns 243 and 245 of yesterday's Hansard, it is reported that I voted both for and against the Opposition amendment, while the hon. Member for Gordon (Mr. Bruce) is recorded as being absent from both Lobbies. Could this be put right, or—in view of the fact that the authorities appear not to have been able to record
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the votes correctly—could we have a re-run? We would then at least be able put the interest rate increases back in the bag.
Madam Speaker: The error has been noted, and an amendment has been made.
Mr. William Cash: On a point of order, Madam Speaker. Under article 11 of the own resources decision, which we are about to debate with respect to—
Madam Speaker: Order. The hon. Gentleman will realise that that matter will be dealt with in Committee by the Chairman of Ways and Means. We shall now go into Committee, if the House will allow me to proceed. I must inform the House that I have not selected the instruction.

European Communities (Finance) Bill
Considered in Committee.
[MR. MICHAEL MORRIS in the Chair]

Clause 1

  EXTENDED MEANING OF "THE TREATIES" AND " THE COMMUNITY TREATIES"
  Motion made, and Question proposed, That the clause stand part of the Bill.
  4.23 pm
  Mr. Andrew Smith: On a point of order, Mr. Morris. First, may I welcome you to the Chair for our deliberations? It is quite like old times, and there are many familiar faces here from the debates on the Maastricht Bill. We now have an extra party, over and above what we had then, but that can only enliven our deliberations.
  Have you received any indication of the Government's intention to make a statement as to which of the new clauses that you have selected for debate represent essential matters of the Bill and which—in the Prime Minister's understanding—represent matters of confidence and which do not? If the House is to vote to bring down the Government, it perhaps ought to know when it is doing so.
  The Chairman of Ways and Means (Mr. Michael Morris): The Chair welcomes the initial comment from the hon. Gentleman, and also welcomes the prospect of getting on with the new clauses.
  The Paymaster General (Mr. David Heathcoat-Amory): Further to that point of order, Mr. Morris. It may assist the House if I point out that the Government attach the highest importance to the passage of the Bill, and have asked my right hon. and hon. Friends to attend accordingly. My right hon. Friend the Prime Minister said that the Bill must pass in all its essentials. That clearly refers to the clause 1 stand part debate which we will have shortly, and also to the Third Reading of the Bill.
  Mr. William Cash: On a point of order, Mr. Morris. Article 11 of the decision that we are to discuss within the context of the Bill says that the decision shall enter into force on the first day of the month following the receipt of the last of the notifications received from the member states in accordance with their respective constitutional requirements. It adds that the decision shall take effect on 1 January 1995.
  It is crystal clear that the Dutch Parliament has no chance whatever of managing to complete its procedures by 1 January 1995; indeed, that may well not happen until the end of February. I should therefore be glad if some consideration could be given to the effect on the requirement of an overriding European legal position by virtue of the decision that the measure must come into effect on 1 January 1995 to be effective.
  The Chairman: The hon. Gentleman will recognise that that is a matter of argument. My responsibilities are to the United Kingdom Parliament.
  Mr. Alex Salmond: On a point of order, Mr. Morris. It seems to have been made clear that
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  votes on clause 1 stand part and Third Reading will in effect be votes of confidence, presumably with the full authority of the Government Front Bench—whatever that may be now. Does that mean that other votes, if they take place, will not be votes of confidence? I am sure that that is of great interest to Conservative Members. Is it absolutely clear that two votes will be votes of confidence—according to the Government Front Bench—while the others will not be?
  The Chairman: As an experienced Member of Parliament, the hon. Gentleman will know that it is not for me to judge how many votes take place.
  Mr. David Winnick: On a point of order, Mr. Morris. My hon. Friend the Member for Oxford, East (Mr. Smith) made a passing reference to the debates that you chaired with such distinction during the Maastricht proceedings. My point concerns timing. Would it be correct to say that whether this debate continues after 10 pm is entirely up to the Government? It seems rather odd that it may do so, given that the Leader of the House is constantly telling us of the virtues of the Jopling report and saying that we should not -sit through the night because people outside misunderstand. It would be useful if the Government would tell us now whether the 10 o'clock motion will be moved.
  The Chairman: The hon. Gentleman has asked me a question to which the answer is yes: whether the motion is moved is entirely up to the Government.
  Question put and agreed to.
  Clause 1 ordered to stand part of the Bill.
  Clause 2 ordered to stand part of the Bill.
  Mr. Dennis Skinner: On a point of order, Mr. Morris. When you put the Questions on clauses 1 and 2, several voices—including mine—said "No". My hon. Friends the Members for Worsley (Mr. Lewis) and for Liverpool, Garston (Mr. Loyden) both shouted "No". You completely ignored those three voices. There should have been a Division. It looks to me as if you are siding with the two Front Benches.
  The Chairman: The hon. Gentleman's point of order was made distinctly; I could hear it clearly. I did not, however, hear a clear "No" from the hon. Gentleman, or from the hon. Members sitting next to him. Let me issue a plea to the hon. Gentleman that in future he speaks with his usual clarity—
  Mr. Skinner: I did.
  The Chairman: I regret to say that the hon. Gentleman did not.

New clause 1

  ENTRY INTO FORCE (OWN RESOURCES)
  'This Act shall come into force only when the House of Commons has come to a resolution on a motion tabled by a Minister of the Crown as to the measures the Government intends to take in order to implement Article 8(2) of the Council Decision of 31st October 1994 on the system of the European Communities' own resources.'.—[Mr. Andrew Smith.]
  Brought up, and read the First time.
  Mr. Andrew Smith: I beg to move, That the clause be read a Second time.
  The Chairman: With this, it will be convenient to discuss also the following: New clause 4—Own resources calculation: annual reports—

  '.—(1) In implementing the provisions of Articles 2, 4 and 10 of the Council decision of 31st October 1994 ("the Decision") on the system of the European Communities' own resources, Her Majesty's Government shall lay a report before Parliament in each year to the end of 1999, on the operation of the system set out in Article 10 of the Decision in respect of the United Kingdom; and each such report shall include an analysis of—

  (a) the revenue which the United Kingdom would be required to provide as own resources entered in the budget of the Communities as compared to the revenue required be provided by other Member States, by reference to the percentages of annual GNP set out in Article 2 of the Decision;

  (b) the methods of calculating the GNP of the United Kingdom and each other Member State and their accuracy; and

  (c) the effects on the United Kingdom, were it to be implemented, of any re-examination made in any year by the Commission, under Article 10 of the Decision, of the correction of budgetary imbalances granted to the United Kingdom.

  (2) Each annual report made to Parliament under the provisions of subsection (1) of this section shall be subject to approval by a resolution of each House of Parliament.'.

  New clause 12—Annual report to Parliament—
  'Each year Her Majesty's Government shall make an annual report to Parliament concerning the operation of the Decision in section 1 (e) above in respect of the preceding financial year, which shall include:

  (a) a general presentation in text and tables of the financing and expenditure of the European Economic Communities in sterling equivalent and any common unit, which shall include comparable tables of income derived from each member state and expenditure therein in respect of each principal category of expenditure;

  (b) an account of rebate mechanisms applicable to any member state;

  (c) the operation of each article of the Decision;

  (d) action taken by Her Majesty's Government in respect of financial discipline;

  (e) the text of any regulation, directive or financial regulation relating to the operation of the Decision to which Her Majesty's Government has given its assent.'.

  Mr. Smith: I will begin with new clause 1. The article to which I referred—article 8(2)—states:
  "Without prejudice to the auditing of the accounts and to checks that they are lawful and regular as laid down in Article 188c of the Treaty establishing the European Community, such auditing and checks being mainly concerned with the reliability and effectiveness of national systems and procedures for determining the base for own resources accruing from VAT and GNP and without prejudice to the inspection arrangements made pursuant to Article 209(c) of that Treaty, the Council shall, acting unanimously on a proposal from the Commission and after consulting the European Parliament, adopt the provisions necessary to apply this Decision and to make possible the inspection of the collection, the making available to the Commission and payment of the revenue referred to in Articles 2 and 5."
  That raises several important matters of concern to the House.
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  4.30 pm
  We have emphasised time and again our anxiety, which is widely shared both in the country and in the House, about the inadequacy of present arrangements in the European Union for the detection or elimination of fraud and waste, and about the shortcomings in the working of the common agricultural policy. We have said especially that the common agricultural policy is wasteful and economically and environmentally damaging. We have also said that the Government have not done nearly enough to combat waste and fraud in the European Union budget.
  As recently as last weekend, there were disturbing reports in the press of the way in which Ministers appear to have gone along with the cut of £3.9 million in the budget to counter fraud in the European Union. That was a matter of enormous concern to many hon. and right hon. Members because, if fraud is to be properly eliminated and the people responsible for it properly brought to account, the mechanisms have to be in place and they have to be properly enforced in each of the member states of the European Union. The fact that the Government accepted that cut calls into question the assurances given on Second Reading about the Government's commitment to eliminating fraud. I ask the Minister to reply specifically to that argument when he replies to the debate.
  We believe that the House of Commons has a right and a duty to the people of Britain to scrutinise and, as appropriate, to amend the very important measure before us. We believe that the Government have sought, by the confidence motion and the other pressures that they have brought to bear, effectively to curtail the right of the House to determine the way in which money is paid to Europe, the uses to which that money is put and the extent of waste and fraud in its application. The new clause therefore seeks to insist that the Government bring a motion before the House showing the way in which article 8(2) would be implemented.
  Article 8(2) mentions many important subjects. One of those touches on the United Kingdom abatement, because the article refers to articles 2 and 5 of the decision. I shall now mention an important issue. When we discussed the matter in European Standing Committee B, as long ago as 15 December 1993, I asked why papers were not available in the Vote Office setting out details of the United Kingdom abatement. In replying to my question, the former Paymaster General said something interesting. He said:
  "The working methods paper"—
  the paper governing the operation of the United Kingdom abatement—
  "is a Commission document that gives detailed examples of how the UK abatement is calculated. The current paper was produced in 1988 following the own resources decision … in that year. It is still extant. It was the subject of an explanatory memorandum on 1 July 1988."
  He continued:
  "The Commission is working on a new working methods paper. So far no copy is available so we could not lay it before the Committee. As soon as we receive a copy, we shall do so."— [Official Report, European Standing Committee B, 15 December 1993; c. 7.]
  I understand that there is now extant a paper SEC(92)/1412/final, dated Brussels 22 July 1992, about the United Kingdom abatement. Will the Paymaster

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  General say whether that paper updates the one to which the former Paymaster General referred in European Standing Committee B? Was it presented to the Committee for discussion in line with the undertaking that I was then given?
  An interesting aspect of the working paper which will be of concern to hon. Members is its reference to a number of changes, described as technical changes, in the operation of the UK abatement. Page 11 of the working paper states:
  "Taking into account the combined effect of these changes which should reduce the abatement by over—1 billion ecus in 1997 from the 'No change' scenario, the Commission's proposals should thus contribute towards a diminution of the UK abatement relative to the EC budget. The size of the abatement would fall from around 5 per cent. to under 4 per cent. of the budget by 1997."
  That raises an important question to which the House should have a full and comprehensive reply from the Minister. The working papers on the UK abatement are certainly complex and dense to wade through, as anyone who has sought to do so will confirm. If discussions and negotiations—even if they are described as technical— have been taking place about the UK abatement, that must greatly concern hon. Members in the light of the assurances that they have been given on the abatement and the importance of safeguarding the abatement. The Government should make the position clear.
  Our new clause has other implications. Before the Act can be ratified, the House of Commons must pass a Government resolution on a motion setting out what steps the Government intend to take to ensure that the United Kingdom has the mechanisms to calculate accurately its contributions. Article 8(2) states that each country should have the mechanisms to calculate accurately its own contributions according to the terms set out in articles 2 and 5 of the decision. Those articles refer to gross national product at market prices and VAT—the VAT harmonised base—so that each country calculates its own GDP and VAT base in the same way as other member countries.
  The question has been asked before as to how far variations in the adequacy of the arrangements in different member states affect the contributions that each member state is asked to pay. We can all think of examples of European Union member states where the arrangements for properly calculating the level of liability to VAT payments, the way in which they are collected and the measurement of gross national product are not so reliable as they are in this country. The system misses the operation of the informal economy, which is not properly recorded in the official statistics.
  Will the Paymaster General tell us what discussions he has had with his counterparts in the other European Union states to ensure that common and high standards are applied to the measurement and assessment of those matters, which have an important bearing on the contributions that this country has to make to the European Union budget?
  Mr. Eddie Loyden: Returning to his earlier remarks about what is happening in Europe and the concerns that have been expressed about certain practices in member states, does my hon. Friend believe that the weakness is within European legislation or within the member states?
  Mr. Smith: There are clearly weaknesses in the operation of the regulation and the law both at European
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  Union level and in member states. Clearly, procedures are more satisfactory in some member states than in others. Equally, there is a need for a binding convention in European law for fraudulent acts against the European Union budget to be contrary to the law in each member state.
  A dual approach is necessary to tackle such a serious problem. We need to ensure both that there are proper arrangements in place in each member state and that European law is able adequately to cover the situation. We have advocated that the convention currently being discussed by the European Union should be enacted into United Kingdom law properly to tighten up on procedures and to bring those engaged in fraud to account.
  We have also suggested that, where it can be shown that lax procedures operated by individual member states are responsible for shortcomings, fraud and waste, either because the basis for calculating payments has not been properly assessed, or because receipts of money from the Union have not been properly applied, it would be entirely appropriate to have a proper penalty regime which would require member states to pay money back, either by an addition to their required contributions or by a deduction from the revenues they receive.
  Mr. Christopher Gill: The hon. Gentleman will be aware that many Opposition Members and many of my hon. Friends have stood at the Dispatch Box and solemnly promised the House that they would get a grip on fraud, and are constantly talking about altering the mechanisms to do so. Has it occurred to the hon. Gentleman that much of the fraud cannot be eliminated without eliminating the system on which that fraud is founded?
  The Chairman: Order. Before the Committee goes any further, the next group of amendments—new clause 3 and the new clauses grouped with it—is specifically about fraud. It would be appropriate to develop the arguments on that point when we get there.
  Mr. Smith: I am, as ever, guided by your ruling, Mr. Morris, but the hon. Member's point is relevant to new clause 1. We are proposing the opportunity for the House, on a Government motion, to have further and proper discussion of the implementation of the decision in article 8(2).
  That would give us the opportunity further to develop the case for precisely the reforms to which the hon. Gentleman was referring and, as we have emphasised, the crucial importance of reform of the common agricultural policy. Notwithstanding the agreements which have been reached in Europe and such reforms as have received commitments from member states, expenditure under the CAP continues to bang up against the ceiling that was agreed at the Edinburgh summit and which forms the basis for the Bill that we are discussing. It can come within the ceiling only by using the devices agreed at Edinburgh, whereby differences in the charges to the CAP accounted for by currency fluctuations allow dipping into Community reserves to provide extra resources for the agricultural guarantee fund. Nobody can be satisfied with that; it perpetuates waste, with all the examples that we shall discuss in the next group of amendments which is

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  concerned specifically with fraud and waste and which worries so many Members of the House and members of the public.
  Mr. Hugh Dykes: Bearing in mind the fact that the Labour party has in recent years changed its view and become more enthusiastic about the European Union, does the hon. Gentleman share my concern that, given the primitive nationalism about Europe that one sees in Britain, particularly in the press, there is an attempt to negate the validity of the concept of the European Union and the Community having its own resources—money that belongs to the Community, having been passed over by member states under these complicated formulae? The suggestion is often made in some anti-European journals here that it is our money and we should have it back, notwithstanding that we are the only ones to benefit from the rebate. Will he assert categorically that Labour is very much in favour of the concept of own resources and that the Community budget remains a modest proportion of the total public spending, allowing for all the large amounts in the member states, and that that concept should be developed for the common good of everyone in the Union?
  4.45 pm
  Mr. Smith: We recognise the importance of the European Union having the resources that it requires to do its job, and there is important work to be done at European level. I shall not return to all the arguments on the Maastricht treaty, and I would be out of order if I attempted to do so, but we made it clear that in today's world, with the extent of interdependence of economies and peoples in Europe, it is clearly appropriate to have institutions, policies and resources operating at a European level for the common benefit of all European Union members.
  I wish to make two important points about that principle. First, it should be governed thoroughly by the principle of subsidiarity. Government works best when it is closest to the people and some enthusiasts for the European Union endeavour have in the past overstated the case for those measures which need to be taken centrally. Proper subsidiarity should operate in that the conduct and implementation of policy should be carried out at the level which is most effective and closest to the people.
  Secondly, nothing undermines people's confidence in common action throughout the European Union and its institutions more than the extent of the fraud, waste and the unnecessary bureaucracy to which the European Union Court of Auditors' report so frequently draws our attention. If those charged with those responsibilities in Brussels, in the European Union or in the European Parliament let too wide a gap open up between the project in which they see themselves engaged and the perception of the ordinary citizens in different member states and their experience of the European Union, as we saw in the reaction to the Maastricht treaty, not just in Britain and in Denmark but also in Germany, France and elsewhere, it sets up a reaction that is damaging to the concept of European co-operation.
  We need to emphasise what can be achieved by popular co-operation which engages people in trade, visits and cultural and sporting exchanges which bring practical benefit to people in their day-to-day lives. The £20 a week extra that the average family in the country is paying to
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  keep the common agricultural policy going and the extent of waste from food mountains, wine lakes and tobacco subsidies is unacceptable. Britain needs to assert that and to be much more forceful in pressing for change and reform. It needs to build alliances with others within the European Union who think similarly so that we can get the European Union on to a more sensible course which will benefit people in this country and in other member states.
  I repeat from the Dispatch Box Labour's commitment to European co-operation and our concern to see that the European Union works properly in the interests of the people of Britain and throughout Europe. The new clause, which addresses the important issues that I have raised, would give the House, on a motion tabled by the Government, the opportunity more fully to consider the issues. I commend it to the House.
  Several hon. Members rose—
  The Chairman: Order. I remind hon. Members again that this debate is essentially about own resources, so they should resist the temptation to talk about fraud until we reach the next group of new clauses.
  Mr. Cash: First, I want to follow up the arguments that have just been put to us by the hon. Member for Oxford, East (Mr. Smith) regarding the implications of article 8(2) of the Council decision on own resources. The hon. Gentleman said that that is based on the Edinburgh agreement, but that is not strictly true.
  The decision arises out of what has been described as an international commitment by the Prime Minister, but it was taken only on 31 October 1994 and in what could be described as extraordinary circumstances, not least of which is that it was taken only 10 days after the Chancellor of the Exchequer was summoned somewhat peremptorily by the commissars in Brussels in order to get him to give in to the Italian blackmail perpetrated as a result of the fraud that the Italians had committed for which they were to be fined.
  The consequences of giving in to that blackmail have tainted the Bill with the fraud to which we capitulated by remitting a degree of the penalty in order to get through the own resources decision. That is a great pity. We all want to ensure that we can prevent fraud. I hope that we will have some interesting and useful observations from the Prime Minister through the Minister when he replies and that we will have some reassurance that the British taxpayer will have better value for money as a result of proper investigations into the way in which own resources are dealt with, most particularly with regard to the United Kingdom.
  There is another disturbing feature of the manner in which the own resources decision went through. As far as anyone can tell, the decision was in breach of the undertaking given by the then Paymaster General to the Select Committee on European Legislation on 24 April this year. The Select Committee told the Government, in response to the explanatory memorandum, that we would expect the Government to come back to the Committee if the proposal was amended and resulted in a substantial change to the arrangements that were previously thought to exist.
  I was astonished to find that that scrutiny reserve, which goes to the heart of the Select Committee's scrutiny process, should have been broken on such an important

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  matter. The resolution of the House in October 1990 stipulates what is effectively a kind of veto by the Select Committee, and therefore the House, on the implementation of a decision. Therefore, the Minister who is our representative in the Council of Ministers should not, in almost any circumstances, make a decision when the Select Committee has put on a scrutiny reserve.
  On 31 October 1994 the own resources decision was passed, it would appear in breach of the resolution of the House in October 1990. That is a pretty serious state of affairs. I raised the matter on a point of order yesterday and I hope that the Minister will deal with it when he replies to the debate.
  In addition, the decision is in breach of our European manifesto. I fought hard, with great vigour and determination, during the European elections to support my local candidate and I remember well what the manifesto said. It used words to the effect that we would resist all pressure to raise the ceiling on public spending in the European Community.
  We had the presidency conclusions of the Edinburgh summit in December 1992. We then had the European elections in May/June 1994. We know from the sequence that I have described that the decision was not made binding in any respect until 31 October 1994. It would have been perfectly possible to have done a Fontainebleau by saying that circumstances had changed, so we should change with them, just as the Prime Minister said that circumstances had changed when we were ejected from the exchange rate mechanism. We should have said on 31 October, in all honesty and fairness to the other member states, particularly having regard to the behaviour of the Italians in all this, that we would not agree to the provisions.
  As I said on a point of order at the beginning of these proceedings, we know from the enormous row going on in Holland, rather unreported in the British press, that the Dutch are so concerned about the additional moneys that they might have to pay in order to implement the decision, that the measure may not go through until February. That throws considerable doubt over whether, in accordance with article 11 of the own resources decision, it would be able to come into effect at all. That is a remarkable state of affairs.
  The pressure that has been applied to get the measure through by 1 January 1995 is liable to be vitiated by the behaviour or attitude being adopted in Holland at the moment. That is Holland's affair, but no one should be under any misapprehension that we are being told to get the measure through by 1 January, when on any reasonable reading of the situation in the other member states that will not happen.
  Mr. Charles Kennedy: I am listening to the hon. Gentleman's reasoning with some interest. Is he saying that if the Government had a later implementation date the measure would be acceptable to him? He is using a sophist's argument if he objects to the measure in terms of the trigger date if there are difficulties in other member states. The measure is either acceptable to him or it is not and that should be the basis of his argument.
  Mr. Cash: I have made it clear that I intend to support the Bill although, as I have said, with grave reservations,
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  one of which is the matter to which the hon. Gentleman has just referred. It is important to make that position clear.
  Mr. Kennedy: Is the hon. Gentleman saying therefore that he has grave reservations vis-à-vis January, but not March?
  Mr. Cash: No, I am afraid that the hon. Gentleman does not understand what I am saying. I support the Bill but it is at least relevant to consider the extent to which the situation in other member states will delay the Bill beyond the legal requirements that are laid down in article 11 of the own resources decision.
  The Court of Auditors' report on fraud makes serious criticisms about the way in which the moneys that are received under the own resources decision are being handled.
  I understand perfectly, Mr. Morris, if you would rather we elaborated those questions on the next amendment, but for us to understand the implications of the own resources decision we had to have accurate figures. As you know, I was deeply concerned because there was a serious omission from the letter sent by -the Chancellor of the Exchequer to all hon. Members, which made the matter, unusually, a national issue. There was a £750 million gap, but I am glad to say that it has now been sorted out. Although the Chancellor of the Exchequer described my original figures as rubbish, he had to change his tune somewhat as the week went by, and fortunately the mistake has now been rectified by information later presented to the House.
  All those aspects throw substantial doubt on the way in which the Bill has been brought before the House. However, we have to make the best of the situation as we find it—and that brings me to a question that has caused me much concern, arising out of the manner in which the mechanisms to investigate own resources will operate.
  I have argued that the Public Accounts Committee ought to work in a spirit of mutual co-operation with the Court of Auditors, and be brought in to play a much larger role than it has so far been able to perform. I have been reading an excellent publication called "The Committee of Public Accounts of the House of Commons", which gives a full description of the functions of the PAC, and explains how it is set up under Standing Order No. 122.
  5 pm
  It is clear that it would be highly convenient for the British taxpayer to know with some certainty that the audit would be subject to the high degree of scrutiny and efficiency exercised by the Public Accounts Committee, the second most important Committee of the House. The Privileges Committee is the most important in terms of what is described as scrutiny seniority, and the Public Accounts Committee comes second. The Select Committee on European Legislation, on which I serve, is yet another Select Committee.
  The degree of independence of those Committees is reflected by their composition, their chairmanship and the fact that they—or at any rate, the Public Accounts Committee and the Scrutiny Committee—are chaired by members of the Opposition, to ensure that their scrutiny is totally independent. That is significant because the scrutiny process, the audit of the accounts on behalf of

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  the taxpayer, has to be done with the complete independence that will guarantee the public the right results from the mechanisms described.
  New clause 1 refers to article 8(2) of the own resources decision.
  Mr. Nigel Spearing: The hon. Gentleman has just elaborated on the importance of the PAC. Every Member of the House would endorse what he said about that. New clause 6, which the hon. Gentleman tabled but which has not been selected, is also relevant. Has he noticed that new clauses 14 and 15, which have not yet been selected either, but which deal with the same issue, now appear as starred amendments? Does he agree that it would be useful and appropriate to the matters that he is now raising if those new clauses could come into play in a later debate?
  Mr. Cash: I understand what the hon. Gentleman means, and I have much sympathy with what he says—but of course I defer entirely to your selection, Mr. Morris. However, it would be possible for a starred amendment to be selected tomorrow so that the matter could be considered then. But even now, as I shall explain, because article 8(2) raises the question of the mechanisms to be employed in investigating questions of audit and accounting, the provisions of Standing Order No. 122 could be extended to give the Public Accounts Committee that additional opportunity to consider such matters and to satisfy the British taxpayer.
  Article 8(2) says:
  "Without prejudice to the auditing of the accounts and to checks that they are lawful and regular as laid down in Article 188c of the Treaty establishing the European Community, such auditing and checks being mainly concerned with the reliability and effectiveness of national systems and procedures for determining the base for own resources accruing from VAT and GNP and without prejudice to the inspection arrangements made pursuant to Article 209(c) of that Treaty, the Council shall, acting unanimously",
  adopt those provisions, arid so on.
  In a nutshell, article 188(c) says that
  "The audit shall be based on records and, if necessary, performed on the spot in the other institutions of the Community and in the Member States. In the Member States the audit shall be carried out in liaison with the national audit bodies or, if these do not have the necessary powers"—
  that is an interesting point—
  "with the competent national departments. These bodies or departments shall inform the Court of Auditors whether they intend to take part in the audit."
  So even in article 188(c), which is referred to in the own resources decision, what I have been saying about the extension of the functions of the Public Accounts Committee is anticipated. All that we need to do is simply to turn the key and allow the PAC to take up those powers, which article 188(c) already anticipated might be necessary to make the system work effectively.
  The article continues:
  "The other institutions of the Community and the national audit bodies"—
  in this context I presume that that would include the PAC and the National Audit Office, on which the PAC relies extensively for its reports—
  "or, if these do not have the necessary powers"—
  that is the defect that we hope to rectify—
  "the competent national departments".
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  I hope that the Minister does not mind if from time to time I suggest that the words "the competent national departments"— might sometimes be changed to "the incompetent national departments"—for instance, in connection with the Treasury figures the other day. But I do not want to be too rude about that. The article says that the competent national departments
  "shall forward to the Court of Auditors, at its request, any document or information necessary to carry out its task."
  That means that we have a good working opportunity to get the procedure straight, and that would be of immense value and importance to British taxpayers, who would be assured that we were not only working within the context of the treaty itself, as amended up to and including Maastricht, but ensuring that taxpayers' money, as it relates to United Kingdom matters, was properly covered.
  There is another argument here. The Maastricht treaty contains an important declaration that national Parliaments should be more involved. What better opportunity is there to run all these things together than to provide a means of achieving those mutual objectives and to make the system work in the interests of the taxpayer? That would show the Government's good faith in tackling fraud and irregularities, and in ensuring proper accounting procedures.
  I never thought that I should say this, but I must say it because I like to use all the weapons that I can deploy. Even that dreadful concept of subsidiarity could be applied to this issue in the sense that there would be an opportunity to ensure that we got the proper examination of accounts in our domestic sphere in conjunction, as I said, with the operations of the Court of Auditors.
  Mr. Rupert Allason: Does my hon. Friend agree that one of the principles of subsidiarity, if we truly understand what that term means, is that individual Governments should make up their own minds and be masters of their own destinies on matters relating to the countries concerned? If we cannot rely on our European partners to tackle fraud in the rest of the Union, would it not be highly appropriate for our Government and this Parliament to exercise some control over British taxpayers' money that goes to the rest of Europe?
  Mr. Cash: Absolutely. As I shall say when I move to the analysis of gross national product, we must ensure that we do not have two separate sets of books of the kind that are, apparently, well known in Italian domestic tax collection. There are profound reasons why we want to be sure that the arrangements that we propose through our Public Accounts Committee become a model of the manner in which these matters should be dealt with in other countries. The knock-on effect in practical terms of what happens if we do things properly and other member states fiddle the books is that we end up paying much more. It is not merely a question of fraud; it is also a question of mismanagement, the result of which is that we end up paying a much bigger contribution than we should. A lot of profound and important questions are tied up in the intervention by my hon. Friend the Member for Torbay (Mr. Allason).
  As I have said, a whole range of matters are laid down under article 209, which deals with obtaining the opinion of the Court of Auditors; that is the dovetailing exercise I have in mind. Article 209(c) says that the Council shall

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  "lay down rules concerning the responsibility of financial controllers authorising officers and accounting officers, and concerning appropriate arrangements for inspection."
  There we have it in the European context, complemented by our arrangements with the Comptroller and Auditor General, the National Audit Office and the Public Accounts Committee. It is really quite a reasonable package which could result from the Government being constructive and forthcoming in making a change to Standing Order No. 122.
  I now refer briefly to Standing Order No. 122; members of the Committee may be interested to be reminded of it. It says:
  "There shall be a Select Committee to be called the Committee of Public Accounts for the examination of accounts showing the appropriation of the sums granted by Parliament to meet the public expenditure, and of such other accounts laid before Parliament as the committee may think fit".
  The words
  "and of such other accounts laid before Parliament as the committee may think fit"
  are important. The Standing Order then says that the Committee shall
  "consist of not more than 15 Members, of whom four shall be a quorum."
  Standing Order No. 122(3) says:
  "The committee shall have power to communicate to any committee appointed under Standing Order No. 130"—
  Standing Order No. 130 deals with the setting up of Select Committees—
  "such evidence as it may have received from the National Audit Office (having been agreed between that Office and the government department or departments concerned) but which has not been reported to the House."
  It so happens that the other accounts laid before Parliament include the reports of the Court of Auditors. We in the Select Committee on European Legislation consider those reports and they are then laid before the House.
  Recently—I say this with some concern and I have been critical of this—the reports have been shuffled together with a lot of other reports and have not been given the single-minded, independent debate that we used to have. Those debates were extremely valuable because people focused on the reports and they were not lost in a welter of other documents. If anything sensible came from the Government on the matter this evening, that point would be sorted out at the same time, thus giving the boxing blue clarity that I seek. Under Standing Order No. 122(3), the Public Accounts Committee would receive the evidence. Thus the whole package is neatly contained in my proposals.
  5.15 pm
  New clause 4 is grouped with new clause 1; I have examined new clause 1 to the extent that I wished. I raised the question of gross national product in the debate on convergence criteria some months ago. I happened to be rifling through my papers for the debate when I suddenly came across a table that took me a little by surprise. Our distinguished Chancellor of the Exchequer places much importance on the vital matter of convergence criteria and only yesterday, the President of the Board of Trade told us how wonderful it was that we were bringing down inflation, and so on. I had to point out to him that it was
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  only because we were now out of the exchange rate mechanism which he so strongly advocated. You will be glad to know, Mr. Morris, that I think that we can skip over that one for the moment.
  The fact is that this business of gross national product is really serious. In the debate on convergence criteria, which was prescribed under the European Communities (Amendment) Act 1993, the position became clear. In the tables that deal with how convergence criteria are calculated, east and west Germany are treated separately. I found that pretty astonishing. I thought that the wall had come down and that we were now dealing with one country.
  The report by the Court of Auditors, which has only just come out, gives special attention to the scope for manipulating the GNP of a country. The Court of Auditors is, rightly, deeply concerned about the way in which GNP is being calculated. I am prepared to say that there is a higher probability that we are accurate in the way in which GNP is calculated in this country. If GNP is calculated on a double-book basis by some other countries, in which case a shady GNP figure is produced, there will be a profound impact on the amount of own resources that are collected. That is a very serious matter. For many reasons, we want to be quite certain that the GNP is properly calculated in each of the member states.
  New clause 4 puts the matter in a nutshell. It says:
  "In implementing the provisions … of the Council decision of 31st October 1994 … the Government shall lay a report before Parliament in each year to the end of 1999, on the operation of the system set out in Article 10 of the Decision in respect of the United Kingdom; and each such report shall include an analysis of—
  (a) the revenue which the United Kingdom would be required to provide as own resources entered in the budget of the Communities as compared to the revenue required be provided by other Member States, by reference to the percentages of annual GNP set out in Article 2 of the Decision;"
  Secondly, the methods of calculating the GNP of the United Kingdom and each other member state and their accuracy should be put in a report. Finally, the new clause says that there should be an analysis of
  "the effects on the United Kingdom, were it to be implemented, of any re-examination made in any year by the Commission, under Article 10 of the Decision, of the correction of budgetary imbalances granted to the United Kingdom."
  That final matter is gobbledegook for the Fontainebleau rebate. It may come as some surprise to hon. Members that, under article 10 of the own resources decision, to which our Government have agreed, it says that the Commission shall, not might, by the end of 1999, submit a report on the operation of the system, including a re-examination of the correction of budgetary imbalances granted to the United Kingdom—that is the rebate—established by that decision. It shall also, by the end of 1999, submit a report on the findings of a study on the feasibility of creating a new own resource, as well as on arrangements for the possible introduction of a fixed uniform rate applicable to the VAT base.
  Bearing in mind the fact that under the Maastricht treaty as enacted, there will be economic and monetary union, if not for the United Kingdom, depending on our decision under section 2, certainly for the hard core of other countries, it is no exaggeration to say that by 1 January 1999 those countries will enter into economic and monetary union in the third stage. That is the failure of Maastricht.

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  However, if we combine the provisions in article 10 to which I have just referred with that 1999 situation, we arrive at a nuclear point. 'The new own resource system, which could well be produced under article 10, may well be the arrangements for a completely new financing of the European Community, in addition to anything that we now have before us—all of that by 1999. So, we need to know, through a Government report, what that means, because the own resources report does not say "in 1999": it says "by 1999".
  If, for example, by some terrible misfortune, the Government were to fall and if, for example, the Labour Government were to be in power, they would whistle through section 2 of the European Communities (Amendment) Act 1993 and, with the possibility to which I have just referred on the back of it, it is my belief that we could be in a very serious and difficult situation.
  Mr. Spearing: The hon. Gentleman has drawn to the attention of the House, and possibly the country, the importance of article 10 of the decision, which the Bill endorses. He is quoting properly from the Official Journal of the Community, No. L 293/9 of 12 November 1994. Is he aware that the words that he is pointing out are also on the amendment paper? If, in future, there were an amendment to include those words as part of a schedule to this new Act, it would be plain for all to see. If that amendment were ever selected, would the hon. Gentleman vote for it?
  Mr. Cash: I do not believe in hypotheses, certainly not when confidence motions are floating around. It is difficult enough to make up one's mind when one is faced with a real vote. I shall certainly not engage in a hypothesis of execution as well.
  The question of GNP is very important because in 1993, the European Community raised £52 billion from the 12 member states, of which the United Kingdom's share was £6·3 billion. Each member state's contribution arises from four sources: VAT, fourth resource payments, customs duties and agricultural and sugar levies. The relative importance of each of them is shown by the proportions which they represent. VAT represents 55 per cent. of the member states' contributions, fourth resource payments 22 per cent., customs duties 20 per cent. and agricultural and sugar levies 3 per cent. The first two items, VAT and fourth resource payments, account for 77 per cent. of the Community's own resources and they are assessed wholly or partially by reference to GNP.
  If we consider the way in which article 2 is drawn, which is the basis of revenue for the own resources, we see that a change is taking place. In 1995, the percentage of GNP required of the member states is 54 per cent., but it is 53 per cent. in 1996, 52 per cent. in 1997, 51 per cent. in 1998 and 50 per cent. in 1999. A country's VAT contribution to the Community budget is capped by reference to the country's GNP, while the fourth resource payments are assessed and paid on the basis of a country's GNP as a share of aggregate Community GNP. At the Community level, the total size of the Community's budget has to be held within a certain percentage of aggregate Community GNP, which is currently set at approximately 1.2 per cent.
  Therefore, the accurate measurement of each member state's GNP is of crucial importance on two counts—first, in determining the contribution for each member state and, secondly, in determining the overall size of the
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  Community budget. The amounts of money involved are absolutely massive and an error of 1 per cent. only in calculating, for example, the German GNP, would mean a difference in her fourth resource payment alone of something like £30 million. The question is how accurate, and how fair between member states, is the measurement of each country's GNP? It is not that accurate and fair, as the Court of Auditors' report makes clear.
  On the reliability of GNP measurements, the Court says:
  "The Commission's conclusions do not make it possible to form a clear opinion of the degree of reliability of the data currently supplied by the 'Member States."
  That is not a joking matter. It is about the extent to which, and the manner in which the amount of our own resources will be calculated with regard to other member states. If anybody thinks that is a matter of little importance, all I can say is that the taxpayers do not think so. The Opposition, if I may so—I am sure that they would not want to fall out with me this afternoon—may take account of the fact that all their palaver about fraud and so on is relevant only in so far as they properly appreciate the amount of money that British taxpayers are expected to cough up in this exercise. That amount is calculated by reference to the country's GNP.
  The Court of Auditors goes on to say:
  "It would therefore seem to be rather unrealistic to think that a pronouncement can be made with the necessary rigour, on the reliability and comparability of the GNP aggregates that the member states supply to the Commission."
  In other words, the Court of Auditors is saying that the member states are cooking the books. The result is that if we do not cook the books and we come up with a proper and accurate assessment of our GNP, we end up carrying the can.
  Earlier, in discussing the fact that estimates of GNP are out of date in general, with some countries' estimates being more out of date than others, the Court of Auditors goes on to say in paragraph 1.92:
  "For example, there is the question of the updating of national accounts, with regard to which there is considerable disparity between Member States and for which 'reserve' should have been issued concerning GNPs that were determined on the basis of data that were too old (Greece and Portugal)."
  There is also the example of the GNP of the former German Democratic Republic. Its previous planned economy is bound to pose problems for the assessment and integration into the GNP of the Federal Republic of Germany. As I have said, most people thought that we had a unified Germany. It seems that that is not the position when it comes to paying money into the Community. It is an amazing state of affairs. I hope that my hon. Friend the Minister will provide us with an explanation.
  The Court of Auditors states:
  Despite the fact that the four-year time limit has not yet expired (Germany was unified in 1990), it is still astonishing that the Commission has not issued a reserve with regard to this question. This is a very serious matter."
  "Reserve" is a technical word for rectification and notification; actions which the Commission is supposed to take. Presumably it takes an incident of staggering magnitude to induce the Court of Auditors to use an expression such as "it is still astonishing", but it did.
  What are we to make of all this?
  5.30 pm
  Mr. Nicholas Budgen: We have seen some recent comment about these matters. It seems that the Commission thought that the Court of Auditors was behaving in an unhelpful way in issuing its recent report. The Commission felt that the court should be rather more careful. It felt that it was undermining the idealism of the Community by revealing uncomfortable truths. Is my hon. Friend aware of those observations from the Commission?
  Mr. Cash: I certainly heard of them. As I am a member of the Select Committee on European Legislation, I have had the opportunity to visit the Court of Auditors and to have private sessions with it as well as the more formal ones. One of the most senior members of the court, Mr. Carey, was so dissatisfied with the way in which these matters were being conducted that he—I believe that the hon. Member for Newham, South (Mr. Spearing) had the original letter—tendered his resignation. He thought that the whole thing was going off the wall. Perhaps the hon. Gentleman will deal with that later. I hope that I have not misrepresented the position in any way. It was certainly deeply worrying.
  Figures have been provided and the Select Committee on European Legislation in the other place referred to about £4 billion-worth of fraud, or £6 billion. I am coming to believe that we have no idea of the extent of the fraud and that the figure could be as high as £15 billion, or £20 billion for all anyone knows. The Commission has every apparent intention of putting the matter under wraps.
  Mr. Budgen: I am grateful to my hon. Friend. I hope that he will forgive me for using that term to describe him. He may remember that the Chancellor of the Exchequer said that the figure of £6 billion-worth of fraud had been plucked out of the air. I know that my hon. Friend follows the Chancellor's observations with great care. What is the Government's figure for fraud in the Community?
  Mr. Cash: If the Chancellor of the Exchequer's figures, as expressed in his letter—
  The Chairman: Order. The hon. Member is getting into full flight. We are dealing with own resources and not exploring fraud in depth.
  Mr. Cash: Absolutely, but I was dead on the point until I was diverted by my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen). I am delighted to refer to him as my hon. Friend.
  The Chairman: The hon. Member is correct; he was in order until he was nearly tempted by his hon. Friend.
  Mr. Cash: What are we to make of the GNP issue? The measurement of GNP and the way in which the Community raises money from member states are genuinely complex matters. I make no bones about that. If we read between the lines of the pronouncements set out in the recent report of the Court of Auditors, we find vast areas of what must be described as unfairness when it comes to assessing member states' contributions. If Portugal and Greece are still using 1970s data, as the court says, and if Germany is conveniently forgetting that unification took place, someone somewhere is being treated unfairly.
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  We can assume yet again that the country that the Court of Auditors does not mention in its catalogue of GNP sinners is the one whose Government want it to be at the heart of Europe. We are undoubtedly paying for that. The distortions in the figures show that as usual the United Kingdom is playing the game and that the other member states, according to the Court of Auditors, are not.
  I say with some sadness that some hon. Members go pottering about claiming that people such as myself are inventing nightmares, goblins or whatever; that we are slightly off the wall; that we do not have any concept of what the European Community is or should be, and that we are a collection of ridiculous, pompous old bores. It might occur to one or two of those hon. Members, who have been grossly negligent in the way in which they have allowed the European Community to burgeon as it has, to reflect that some of us are merely trying to do the job that we were elected to do. We are examining what is going on. The figures that I have produced and the arguments that I have advanced have all focused on the relationship between the United Kingdom Parliament, the Court of Auditors, the European Parliament, the Commission and a mutual arrangement. If we are to make any sense of these matters, we must take up the-arguments that I have been addressing. These issues must not be bunged under the carpet.
  I am informed by unimpeachable sources that during the debate on the EC budget on 28 October, when the House considered cutting out the European Parliament's proposals for an anti-fraud measure, it was said that the Government believed that the "Council's Second Reading budget" was "acceptable". That seems to suggest—I would like to hear the Minister's view—that the Government were going along with that budget rather than putting up a fight to increase the number of anti-fraud arrangements, which included the expenditure of 96,000 ecu for a unit to co-ordinate action against fraud. I would much prefer the matter to be dealt with through the Public Accounts Committee, but the arguments that I have been advancing are extremely relevant to the manner in which the own resources system functions.
  Mr. Bill Walker: Paragraph 5 of the explanatory and financial memorandum states:
  "The new Decision has to be approved by all member states in accordance with their national procedures before it can enter into force. It will take effect as from 1st January 1995."
  Everything that my hon. Friends and I have been trying to do has been designed to make sure that the House carries out its normal procedures and studies these matters, and that Committees are properly set up to do that as well.
  Mr. Cash: Absolutely. If we are to have a Community that works—I have been writing recently about this—and a Community that we want to be a member of, one that does not bully, threaten and cheat us, it is essential that we have complementary arrangements that are enforceable in the other member states. Why should we have debates of this sort, scrutiny arrangements, sittings of the Public Accounts Committee and all our other procedures if the other member states are cooking the books and not properly scrutinising the arrangements? Surely we are not that idiotic. We must insist on complementary arrangements and proper scrutiny as preconditions to any movements within the intergovernmental conference.

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  Given the connection between monetary union and own resources, we should also say no to a single currency now. That would clear up much of the trouble.
  I see you stirring in your seat, Mr. Morris, and I would not want to inconvenience you by causing you to stand to put me back on the straight and narrow. Accordingly, I shall make my final point. I have sought to explain my reasons for tabling my amendments and new clauses. I am deeply concerned that the Fontainebleau rebate appears to be up for grabs. I cannot understand how that could ever have been incorporated in an own resources decision which is at the heart of the Bill that we are implementing, in accordance, it is said, with our constitutional requirements. In our own Bill—in our own legislation—we are carrying out an obligation imposed upon us by the Government as a result of their not resisting the re-examination of the rebate, to open the question whether what was negotiated for at Fontainebleau should remain on the table. That is a very serious matter.
  I hope that we hear from the Minister, to minimise the potential man-traps that lie ahead this evening, a clear statement that we will have the opportunity, through the Public Accounts Committee, to look into all those questions. If we do, we will be able to get the finances of the European Community on to a better footing and, with a bit of luck and determination, also get the other member states to realise that we are not just an old, obsolete dinosaur of a Parliament, that we have some teeth and guts, and that we are going to do something about it.
  Mr. Spearing: The hon. Member for Stafford (Mr. Cash) outlined in extenso, but most usefully, several matters to which the Committee and, indeed, the nation should pay attention.
  We all know, I think, in outline form that own resources, which are the theme of the first important debate on this important Bill, relate to no fewer than three very complex and moving formulae: first, that which determines the maximum amount that the European Communities can spend in any one year; secondly, the formula that the nations of the Community contribute, which is an extremely complex affair dealing with levies, VAT and GNP; and, thirdly, the extremely significant rebate methods, to which the hon. Member for Stafford drew attention, whereby up to half of our contributions to the European Community are returned by way of rebates.
  Each of those is an extremely complex formula—much more complex even than most people realise. The Bill authorises financial provisions that will last until 1999, at which point—the hon. Member for Stafford spoke of an atomic explosion—they will come to a head. In 1999, the whole caboodle will have to be renegotiated, and, under article 10, which is important, so will the recalculation and reassessment of the United Kingdom's own rebate mechanism. The Bill refers to and authorises a decision to which we will be committed.
  The Government may accept the new clauses if they so wish as they are not essential to the purpose of the Bill. Indeed, Sir Michael, new clause 1, which was moved by my hon. Friend the Member for Oxford, East (Mr. Smith), new clause 4, which stands in the name of the hon. Member for Stafford, and new clause 12, which stands in the name of my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore), are essentially "glasnostic". They deal with the mechanism of the
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  procedure, which is almost unbelievably complex, even for those of us who try to understand it and come back to it every five years or so.
  The means by which the formulae are drafted, let alone how they work, are almost impossible to discern. Where does one find a textbook or a running commentary on how they have been worked out in the past five years? We had such debates in 1988, Sir Michael, although I do not think that there are many survivors of them, and we know that, in 1999, our successors—some of us might be here then, but probably not many—will face an enormous problem.
  The new clauses, especially those on article 8(2), and the extensive requirements of new clause 4, will be an invaluable guide. In the intervening years, if the new clauses are accepted—and I see no reason for their not being accepted—the country will be able to trace a little more easily what is really happening. When the House debates the difficulties of 1999, which will be pretty bad—at least one very important nation in the European Community has said that the British rebate cannot remain as it is, and I heard that from an authenticated source—there will be the most colossal collision.
  5.45 pm
  I do not understand why the Government should not accept the new clauses. Are not reports to the House open government? Is that not what the Government are supposed to be about? Article 8(2), to which my hon. Friend the Member for Oxford, East referred, treads on the matter of fraud, which we must not debate yet, Sir Michael.
  The Chairman: Order. There has recently been too much confusion of identity. I am not Sir Michael.
  Mr. Spearing: I beg your pardon, Mr. Morris. I revert to the proper usage.
  Why should not new clause 4 be accepted? I do not say that the Minister should accept it straight away, but, if it is not accepted, where else will such matters be raised? We can look with some sympathy upon at least the intentions of the hon. Member for Stafford. Even if the Government do not want the new clause, the issues that the hon. Gentleman has raised and the questions that he has asked, particularly in respect of the formulae of new resources, are tremendously significant. Indeed—dare I suggest it?—the sums involved might be as great as or greater than the sum involved in last night's dramatic Division. It is very easy to lose squillions of pounds in such formulae yet worry about the mere £1,000 million which we discussed last night.
  I wish, in a relatively brief introduction, to refer to the terms of new clause 12, which you, Mr. Morris, have kindly included in this group. In view of its terms, my right hon. Friend the Member for Bethnal Green and Stepney, and my hon. Friends who might catch your eye to back him up, will request a separate Division if the Government do not accept it. I shall chance my arm and suggest that the Paymaster General accept it. It is a very straightforward request for an annual report to Parliament on the operation of the great big decision. The first thing that we want is
  "a general presentation in text and tables of the financing and expenditure of the European Economic Communities in sterling equivalent and any common unit, which shall include comparable tables of income derived from each member state and expenditure therein in respect of each principal category of expenditure".

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  I have no doubt that at some stage the Paymaster General will say, "Oh, the information is all in some report." It might be, but I suggest that what is sought by paragraphs (a) to (e) of new clause 12 will not be comprehensively available. It will not be gathered together in one slim White Paper which is presented to the House and which is available in public libraries for people in universities, colleges and schools to read and understand.
  I found it necessary to gather that information when I read some figures in respect of our contribution to the European Union. It is particularly important in relation to rebate mechanisms. We should remember that our rebate is paid for by another sub-formula of countries that have to adjust their own contributions by paying more for the British rebate and other offsets.
  I tried to get some figures from the Library to show how the European Community's receipts of expenditure had expanded at constant prices from 1973 to the present and how our own resources contribution and rebates worked out. The Library produced a graph, which I suggest is the only way for any citizen to understand what has happened. It looks rather like an atomic explosion because, even at constant prices, the amount of expenditure and income has expanded rapidly. This decision will authorise further expansion.
  Some cynics say that the only way in which the European Community secures agreement is by lubricating disagreements with more cash. That is one of the reasons why the Government and the Community require greater own resources contributions at a time when the Community is telling the Chancellor to watch his own expenditure, but that is an aside.
  The importance of our rebate formula cannot be overestimated because it zips up and down from year to year, as we were told during debate last week. Another graph that I commissioned from the Library shows the fluctuations only too well. The proportion of our receipts to our payments, without the rebate, is extraordinary. In some years, our receipts amount to only about one third of what we pay and the rebate makes up another third. However, if the rebate were taken away—as is envisaged in the decision that we will endorse in 1999—we would be in real shtook. Monitoring, which is the "in" word, as described in new clause 12 is very important indeed, as are the account of rebate mechanisms, which apply to any member state.
  New clause 12, proposed by my right hon. Friend the Member for Bethnal Green and Stepney, would require
  "the operation of each article of the Decision"—
  how it is worked out in practice. One article in the decision—which, incidentally, I believe should be a schedule to the Bill—relates to the British rebate. As I pointed out in an intervention, it is printed in the report to the Committee of the whole House. As you know, Mr. Morris, an amendment was proposed that sought to write the whole of the decision into the Bill as a schedule so that it would be there for all to see.
  Article 4 of the decision, which appears in the Official Journal and on the amendment paper, is quite extraordinary. It contains 30 lines of excruciating mathematical formulae, which I was tempted to read into the record. I do not think that I will do so, although it
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  may be educational for hon. Members. Almost every one of the 30 lines introduces another mathematical element into the decision— the magical formula
  "multiplying the result by 0.66"
  and so on. Paragraph 3 states:
  "The basic amount shall be adjusted in such a way as to correspond to the reference compensation amount",
  whatever that may be. Article 4 will affect the country most crucially but, unless a schedule is passed on Report or in another place, its yearly operation will hardly be debated at all because it is retrospective.
  Much was said in the debate last Monday and in previous debates about how much extra money will be paid to the European Union—I could not understand all that farrago. The press went batty, arguing about whether it was £750 million or less. I suggest that one cannot tell how much it will be because the article is retrospective. I see that the well-informed hon. Member for Harrow, East (Mr. Dykes) is nodding his head. The press farrago about how much the Government will pay is a matter of speculation; it is merely an estimate. Unless the Government are forced to report annually to Parliament, we will not have a retrospective report of how the amount was worked out. The paragraph about reporting is a very important part of new clause 12.
  If it does not appear in the schedule and we do not receive a report, as proposed under new clause 12, where will we get the information? The Official Journal, which was wielded by the Member for Stafford, contains the extraordinary statement:
  "Council decision of 31 October 1994; Acts whose publication is not obligatory".
  Fortunately, because the decision is an important one it is contained in the Official Journal. Regulations are regarded as being important and therefore have to be published, but decisions are usually much less important than this one, which amounts to a treaty, and may not be published. I suspect that this decision, according to strict European Community treaty law, did not need to be published, even in the Official Journal. I suspect that that is so, but perhaps the Paymaster General will seek advice and confirm whether I am correct.
  I hope that I have persuaded the Committee, particularly the Paymaster General, that new clause 12 is a democratic necessity. Without it, we will not be able to find out what has gone on and the Government will not be able to tell us comprehensively about the operation of this decision, and the 1998 decision which has to be considered with it. The decision of 1988 and the decision of 31 October 1994 have to be read together in order to find out what is going on. The 30 October 1994 decision comprised three different decisions, including one about budget discipline, which is related to this decision but is not the same. Perhaps the other place will include in legislation the reference number of another amendment which was put down but not selected and which is quite important.
  I challenge the Minister to explain why we should not have some British glasnost on this matter. What is the Treasury afraid of in opposing the proposed new clause? I cannot think of any possible democratic, financial or moral reason to refuse it.
  Mr. John Biffen: I am glad that the debate is proceeding without the drama of an impending general election or the mass withdrawal of the Whip. Of course, it has lost a little excitement in the process, but that is more than compensated for by the very pertinent comments made by the Labour Front Bench, my hon. Friend the Member for Stafford (Mr. Cash) and the hon. Member for Newham, South (Mr. Spearing).
  The three proposed new clauses—Nos. 1, 4 and 12—are an attempt by the House of Commons to at least have a presence in European Union decisions. Through the actions of this and past Governments, we are bereft of what are traditionally considered to be appropriate powers. However, that surrender has not taken place with total acceptance on the part of the House. Euro-scepticism is alive and vigorous, and—foolish or wise—believes that the future belongs to it. The more we travel with the evolution of the Union in post-Soviet collapse circumstances, the more we realise that the original blue paper judgments of the treaty of Rome are increasingly inappropriate.
  Therefore, the questions that we consider this afternoon are how the House can be better informed about resource allocation within the European Union and where the net balance of political judgment lies. Above all, that must be underwritten by the Treasury Bench and not secured by reading The Financial Times or The Independent. That is an important and legitimate aspiration. Knowledge will be the precursor of repossessing greater parliamentary authority in the decision-taking processes of the Union.
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  I hope that my hon. Friends on the Treasury Bench will feel generous towards the arguments that have been made, and will accept that we are trying to establish a partnership between the House of Commons and the Executive in the conduct of European policies. I say that because I believe that it is a matter of constitutional significance and one that will move in an evolutionary way, although not with high drama. As the hon. Member for Newham, South said, a few years from now people will look back and mark these debates. They will see what arguments were deployed and how they related to the way in which the Union has proceeded under the impact of our sister European nations.
  The way in which the Union will proceed is a matter of speculation on our part. I believe that the forces operating against centralisation within the Union are powerful and will mesh with the attitudes that have been expressed this evening.
  Mr. Geoffrey Hoon: I have followed the right hon. Gentleman's arguments with some care. Is he saying that, in reviewing the way in which the House of Commons votes money for the European institutions, it is right that we should consider how those institutions spend that money? Is not his argument that the House of Commons should have that opportunity when European institutions also have that opportunity? The European Commission, the European Parliament and the European Council examine both how the money is raised and how
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  it is spent. Does he not find it curious that the Bill deals only with how the money is raised and not with how it is spent?
  Mr. Biffen: That is an interesting point. I have no wish to widen my area of dialogue with the Front Bench. I think that I am doing reasonably well on the present basis, but I take account of what the hon. Gentleman says.
  There are great dangers in supposing that we can be some missionary force in the conduct of European fiscal affairs, and that the way in which we do things will eventually be accepted by our sister European countries. They all have their own traditions. One of the problems will be how those traditions relate to one another in a collective framework. Therefore, I am cautious about saying that we will stand out and have remarkable power in influencing future behaviour on such matters in Europe.
  I do not intend to make a long speech. My hon. Friend the Member for Stafford and the hon. Member for Newham, South properly concentrated on the role of the gross domestic product in the calculation of the allocation of resources. As the hon. Member for Newham, South said, GDP is presented in the European Council decision in the most fantastic, sophisticated manner, running to heaven knows how many places after the decimal point.
  In reality, the concept of GDP is hit or miss. It is not possessed of immense sophistication. I am led rather pedantically to quote the American economist Morgenstern, who said:
  "Qui incipit numerari incipit errari."
  That is perfectly true. One has only to look—[Interruption.] I assume that the Latin tongue is well known on the Opposition Benches, but I will supply a translation for the Treasury Bench if it is thought appropriate. Hansard is well able to cope with these matters. It is when I lapse into Welsh that difficulties arise.
  The concept of GDP is a matter for serious consideration. When substantial transfers of money from one country to another take place through a doubtful mechanism such as the present mechanism or whatever, do not suppose that there will not be eventually sharp political consequences. I see some Scots Members on the Opposition Benches. They will remember the days of rating revaluation. Something that ought to have been perfectly clear and manageable gave rise to a tremendous political furore.
  How do we measure the black economy? How do we measure something which, by its nature, cannot be measured? How do we think it operates in Italy, Greece or other countries possessed of the Latin culture, as opposed to countries such as Denmark or Germany, which are Nordic in their traditions?
  I do not see the point in any xenophobic way. It is a sheer practical consideration when we consider how we proceed with governmental co-operation, when the most intimate matters of resource allocation are decided by such dubious mechanisms. I will tell the House what will happen. There will be conflict and recrimination in all layers of government. The press will be expert in explaining how we are being ripped off by our partners. We see it already. We are forcing an arrangement which will compound all those difficulties.
  I believe that it is perfectly possible for beneficial circumstances to result from resource transfer. Of course I do. The Marshall plan was easily the most successful

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  internationally mounted system of resource reallocation. It was done without any of the absurd formulae which will be but an apple of discord for the future.
  The conclusion I draw is that what we are being asked to nod reverentially and acquiesce to is the blueprint for the next phases of European co-operation, which will produce exactly the opposite outcome to that intended. It is bad enough that the mechanism has to deal with the present budgetary ambitions of the European Union. If it is to be the fulcrum for the transfer of resources to bring about economic cohesion and the preconditions for a single currency, it will simply lead to disaster.
  Of course, I shall give the Treasury Bench all the support that it requires of me. But do not let it ask me to say that I have been intellectually convinced by Maastricht, by Edinburgh or by this Bill. For it simply will not stand the most severe testing—that of time.
  Mr. Denzil Davies: The right hon. Member for Shropshire, North (Mr. Biffen) had a short dialogue with those on his Front Bench. Perhaps I may have a short one with mine.
  I commend the speech of my hon. Friend the Member for Oxford, East (Mr. Smith). He will be surprised to hear that. Some of us were critical of his approach during the Maastricht debate, but his reply to the intervention of the hon. Member for Harrow, East (Mr. Dykes), who tried to trap him into a complete defence of own resources, gave some of us Euro-sceptics some encouragement.
  As my right hon. and hon. Friends see the doors of government opening and getting ever nearer, before long we on the Opposition Benches who have been the Euro-sceptics will gradually move to the main stream of the Labour party's attitude to Europe. All my hon. Friend needs to do is attend a session of what used to be called the Budget Council—I do not know whether there is still a Budget Council. The Budget Council is not about the budget, and its members cannot have any influence over spending decisions. In 1977–78, all the money went on the common agricultural policy, so there was not much point in going to Brussels for the Council. That is part of the problem—spending is set.
  I understand that surpluses can be carried forward. The Treasury used to shudder at the very thought of carrying forward surpluses, or money not spent, from one year to the next. That system does not provide any sensible control over public expenditure.
  I predict that, once my right hon. and hon. Friends get into government, the Labour party will move back to its original Euro-sceptic state. Whatever Government are in power, at some time they will have to stand up and defend British interests at the Councils of Ministers.
  Mr. Iain Duncan Smith: Does the right hon. Gentleman agree that the main point that so differentiates this budget from a domestic budget is the simple fact that, if we did nothing today, or on Third Reading, the Community would still get its money year on year? The increase is the only thing that it would not get. If a domestic budget is not voted through, there is no money for the following year, and therefore there can be no control.
  Mr. Davies: I understand that very well. The object of this debate is to make a charge on the Consolidated Fund.
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  It is that terrible thing, hypothecation. A chunk of money—about £2.5 billion net next year—is hypothecated. The Chancellor is scrabbling around to find £1 billion as a result of what happened last night. He can touch all other areas of public expenditure—I do not think that he can touch judges' salaries, as they also have their backsides on the Consolidated Fund—but he cannot touch the Euro-budget. That is the object of this sort of exercise.
  To return to the own resources debate, I must inform the Paymaster General that I was intrigued with article 8(2) of the European Council's decision, whereby the Commission is given certain powers to do certain things to apply the, decision. I do not understand what that means. I am sure that the Paymaster General is well briefed, and will tell us what it really means from a technical point of view.
  On the abatement provisions, I was a great admirer of Lady Thatcher and those people who negotiated the Fontainebleau agreement. It was not an easy thing to do, and our contributions decreased for a while. Now, that agreement is written into the document under discussion, as it presumably was in 1988. It is codified, and has been taken away from Fontainebleau and become part of article 4 of the Council's decision.
  When the document comes to the end of its life, the Fontainebleau agreement will do so also, and there will have to be more negotiations. On top of that, article 10 of the decision states that the Commission has to do something about it by 1999. It is therefore slightly disingenuous for the Government to say that they have preserved the Fontainebleau agreement, because it is up for grabs again.
  I do not know what will happen in 1999, or even before then. I do not know what will happen in 1996—the year of the intergovernmental conference. Perhaps new institutions and new common policies will be created, as well as new work found for the old institutions. Article 2(2) refers to common policies and new charges. Presumably, if a new policy is created, new money will have to be obtained.
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  I wonder whether what we are debating is really as sacrosanct as the Government seem to think. If substantial changes were to be made in 1996, it might give the Commission the opportunity to slip in a few figures, raise the ceiling a little and gain more powers for certain institutions.
  The history of this European centralised state has been the history of the battle to acquire power between the institutions. It is the Europe of the institutions and not of the people. The struggle is not between nation state and centralised European state, but within that centralised state for more power and more money. Power needs money, and more money produces more power. I would not be as sanguine as the Government that everything is all right until 1999. That is not how such things work. The Commission is adept at finding itself more money—not necessarily to spend for itself, but because of the power that goes with expenditure.
  The cost of the CAP is increasing. Perhaps it is a smaller percentage of the budget than it used to be, but the amount spent on it will still have increased by 1999. As I said on Second Reading, some people seem to think that the Poles will save us from the CAP and that they will smash it when they join, but they will need regional

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  and structural funds. Enlarging the Community with countries from the east, which are poorer than ours, will not mean a smaller budget or getting rid of the CAP.
  The balance of payments is not a fashionable subject these days. The Paymaster General is present: he probably writes the cheques once a week, or whatever it states in the agreement, which probably also states, "If you don't, the Commission will come down on you like a ton of bricks." So he has to write the cheques. I imagine that they are in ecus or deutschmarks. I do not suppose that they are made out in pounds. Presumably the money comes out of the exchange equalisation account. Perhaps things have changed, but that used to be the case.
  If our net contribution is to be £2.5 billion next year—I know that one cannot identify a particular year, because money goes in and comes back out—in my book that is £2.5 billion on the balance of payments deficit. In his Budget speech, the Chancellor said how wonderfully the balance of payments was doing. I am not so sure. I found in the Red Book that we would have a deficit of £6.5 billion on manufacturing industry and £7 billion on something called "other", which is in effect food and drink. That is a total of £13.5 billion, but it will be reduced by about £2 billion or £3 billion in invisibles and £5 billion in oil, as it has doubled in the past few years.
  Old oil is being called on once again to save the Conservative Government, although it is probably too late on this occasion. Earnings from invisibles and oil bring the total down, but the £2.5 billion has presumably been subtracted, and it amounts to half the surplus on oil exports. That sum of money is not merely public expenditure, as it goes across the exchanges. Perhaps it will do so less and less if we move to a single European currency. The great advantage of such a currency would be that no one would have to worry about such matters any more.
  The hon. Member for Harrow, East is nodding. He is very pleased. There would be no problems about a balance of payments deficit with Europe, or a large manufacturing deficit. Unemployment is the problem in my constituency, but I do not expect the hon. Gentleman to worry much about that. The problems will appear in different ways, but they will not appear in the balance of payments.
  Mr. Dykes: Unemployment is a separate problem, which needs to be dealt with by a separate mechanism. The programme on jobs, growth and employment was the beginning, and that is why more resources are needed to reduce unemployment. It still remains a modest amount of money in comparison with what other member states do.
  Mr. Davies: We have heard that speech so often. People say that more resources are required to counteract unemployment, and it is not very much really. As unemployment increases, more and more resources have to be found to combat it. Who has to pay? Constituents like mine, many of whom are unemployed anyway.
  If I may digress a little, I am surprised that the hon. Member for Harrow, East is considering unemployment in terms of little Europe. Perhaps we can debate the matter again. The world is passing us by, and moving away from
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  Europe. We have the general agreement on tariffs and trade and a global economy, yet the hon. Gentleman is still stuck in that old groove.
  The Chairman: Order. We are certainly not discussing the global economy in the debate on this new clause. The right hon. Gentleman must get back to own resources.
  Mr. Davies: I accept that we are talking about the European Union own resources decision, and nothing more global than that. The Library has assessed that we have spent £22 billion since 1974 across the exchanges on being a member of the club, or on having a seat at the top table. I am not quite sure what the justification is supposed to be. By 1999, it is projected that we will probably add to that another £13 billion. Let us round it up. It is just £35 billion—not very much to the hon. Member for Harrow, East, who thinks that that is a small amount in terms of total Government expenditure.
  That is the money that we have spent, but I do not know why we have spent it. Other countries have not spent similar amounts. As I said on Second Reading, my constituency is at the far end of Wales—Dylan Thomas described it as west Britain—far away from Brussels and further away from Berlin.
  I do not have the figures for Ireland here, but the Irish do marvellously. We talk about GNP—part of the GNP of the southern Irish economy comes from us. It comes from some of my constituents. The figures for income per head around Dublin are probably much higher than the income per head in Llanelli, Merthyr Tydfil or the Rhondda valley. Luxembourg does just as well as Ireland, and it has the second-highest per capita income in the European Union. That is the nonsense that we are discussing in the context of this new clause.
  The more information and control we have in the House the better. I would have thought that somebody would have to say that the ceiling should come down, and that, if we believe in subsidiarity, the ceiling should not go up. The battle between the centralised European state and the nation states will go on.
  I agree with the right hon. Member for Shropshire, North. I think that the tide is turning, and that it will not be long before even the Labour leadership recognises that change is necessary.
  Mr. Tim Renton: It strikes me as one of the ironies of my political life that, way back in 1979 when Lady Thatcher first formed her Government, I suddenly found myself made a Parliamentary Private Secretary to my right hon. Friend the Member for Shropshire, North (Mr. Biffen). He was already known as a fairly strong Euro-sceptic, while I was clearly on the Europhile wing of my party. That difference between us has not changed in the intervening years.
  My right hon. Friend tolerated me as a PPS with great good humour, until Lord Howe's Budget of 1981 when I resigned for not supporting the retrospective tax elements in it. My right hon. Friend tolerated my little rebellion. In those days, the resignation of a PPS earned about three lines on page 17 of a major newspaper, and my resignation did not make headline news. But he tolerated my departure with great good wit, just as, I am sure, the Front Bench will tolerate any rebellion by my right hon. Friend today.

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  I have always found that, despite our philosophical differences about the EC, my right hon. Friend and I have many other things in common. I agree very much with what he said about the need for greater transparency in the issues which we are discussing this afternoon. Clearly, that is not easy to achieve.
  My hon. Friend the Member for Stafford (Mr. Cash)— he is temporarily not in his seat—and the hon. Member for Newham, South (Mr. Spearing) bring to the issue enormous experience from sitting on relevant Committees, such as the Select Committee on European Legislation and the Committee on the Maastricht Bill. Most of the rest of us—myself included—do not have that experience. There are times when they are speaking—however wise the speech may be—when a certain miasma or a fog of lack of perception comes over one, simply because one does not know the details. That is one of the troubles with a debate such as this.
  The greater the transparency, the better. The House of Commons and all hon. Members need to be informed, no matter whether they have sat on the relevant Standing or Select Committees or not. I certainly accept that. Putting the issues of fraud or financial mismanagement aside to a later debate—that is what you want us to do, Mr. Morris—this first debate is therefore in search of transparency.
  The debate is about two prime questions: the first concerns the formula of own resources, and whether it can last until 1999, while the second is about the competence of the institutions that already exist to deal with the checking and control of the funds disbursed by the European Union.
  I shall deal with the resources question first. My hon. Friend the Member for Stafford—in a lengthy but well-informed speech—did somewhat exaggerate the problems of using GNP as a measurement of each country's proportionality or its suitability for contributing to own resources. That is borne out by the comments in the Court of Auditors report.
  The report carefully looks at whether the current, different definitions of GNP are adequate, but the court's summary on the issue states that employing a statistical concept such as GNP that does not correspond to a fiscal base that can be checked with reasonable certainty may provide a means of ensuring that the financial responsibilities of the European Union are fairly divided up between member states; the report states that the use of GNP may provide a fair division.
  To be fair, the report then goes on to say that the use of such a concept requires a considerable effort from the Commission and member states to ensure that national accounts are reliable and harmonised, and thus to ensure that the budget and the policies of the European Union are managed rationally. That is a far cry from the picture that my hon. Friend the Member for Stafford painted—that, as a result of conscious or unconscious distortions in GNP, the UK could find itself paying perhaps 1 billion ecu or 2 billion ecu more a year than was justified. My hon. Friend may have had his tongue in his cheek when he arrived at that over-dramatic conclusion.
  Of course GNP can be improved as a formula, and there is a necessity for the formula to be harmonised throughout member states. I do not believe that the formula has in
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  it—either at the moment or inherently—the degree of distortion which my hon. Friend painted. I do, however, agree much more readily with those who wonder whether the present own resources formula which is encapsulated in the Bill—clause 1 of which we passed with extreme rapidity—will last until 1999.
  The accession of the Visegrad countries—which hon. Members on both sides of the Chamber hope and believe will happen—is likely to increase the common agricultural policy budget by 50 per cent. and the regional budget by perhaps 100 per cent. By the time the British budget comes up for renegotiation in 1999—which is the present aim—the picture will be totally unrecognisable and different from the present situation. That should be put on the record, as we agree to the new higher limits based on an individual country's GNP.
  The second point is about the efficiency of the existing institutions to check on the disbursement of funds, and how carefully they are spent. It is remarkable that, during this interesting debate, no one has given credit to the European Parliament for having set up the Court of Auditors, which it decided to do in the early 1980s. I think we would all agree that that was very much a step in the right direction.
  As the hon. Member for Newham, South said, there is clearly friction between the Court of Auditors and members of the Commission. The Court of Auditors produced a fairly critical report, comprising 450 pages of detailed analysis of what, in many cases, constitutes financial mismanagement rather than fraud. Members of the Commission immediately stated, in print, that they considered some of the criticisms unfair and not properly based.
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  On one point, however, the Commission and the Court of Auditors established common ground. Shortly after presenting his annual report in Strasbourg on 15 November, Mr. Middelhoek, president of the Court of Auditors, said:
  "eighty per cent. of the European Budget is actually spent in the Member States so eighty per cent. of the problems come within the remit of the Member States".
  But what precisely does that word "remit" mean?
  The underlying thought, surely, is that if 80 per cent. of the money is passed on to the member states—remitted to them—by the Commission, it is up to those states to check that it is properly spent. Judging by some of the comments that I have heard, I think that there may be a gap in our present mechanism, which we and other member states must fill ourselves.
  I have never been a member of the Public Accounts Committee, but I fully appreciate its importance and its seniority in the pecking order of the House. Hon. Members have asked why the PAC is not empowered to look into the disbursement of European funds in this country, along the lines suggested by Mr. Middelhoek. What, in fact, is to stop it from doing so now? What is to stop the Comptroller and Auditor General from examining—at this very moment, if he so wishes—the way in which European funds are spent in this country, and establishing whether those funds are spent efficiently, fairly and honestly?
  Mr. Spearing: The quick and rather brutal answer to that question is that new clauses 14 and 15, and another

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  tabled by the hon. Member for Stafford (Mr. Cash), have not been selected. I understand that those new clauses would have done what the right hon. Gentleman asks.
  As for the 80 per cent. figure to which the right hon. Gentleman referred, it is difficult for a member state to say that the amount has been improperly distributed to some of its areas, regions and towns. The right hon. Gentleman might ask his city council, and I might ask mine, but it would be difficult to say that money sent by Brussels to perform—supposedly—many good works had been improperly sent by Brussels. It would be hard to question both the distribution of the money and the advisability of sending it.
  Mr. Renton: The hon. Gentleman has considerable experience in this context. Perhaps my hon. Friend the Minister will comment when he replies, but surely it would not be difficult for the Comptroller and Auditor General to examine the issue. Nowadays, for instance, bypasses are often built and little signs are put up, saying, "This bypass has been built in part with funds from the European Union." Surely it is easy to check whether the funds have been properly and fairly spent.
  This is, I think, very relevant to the common agricultural policy. As the CAP grows, which it is bound to do, with the accession of the Visegrad states, there is likely to be increasing demand for each member state to be responsible for CAP disbursements made within it—responsible in the sense of checking financial irregularity.
  Mr. Ted Rowlands: I should like the position to be as the right hon. Gentleman has described, but it is not, and I cannot see how it will be. The CAP does not involve British Government money; it is not part of any estimate in any individual Department. The accounting officer in the Ministry of Agriculture, Fisheries and Food is not responsible for CAP money, and is therefore not responsible for that expenditure to the National Audit Commission or the Public Accounts Committee. That is very sad: it represents one of the ways in which the House has lost control over the expenditure of large sums. I am afraid that the PAC is not the answer, however, although I should like it to be.
  Mr. Renton: Perhaps this is a genuine lacuna. Later this evening, we shall debate the PAC's role. New clauses which some of us tabled referred to it specifically, but they have not been selected.
  As a non-member of the PAC, I do not see any statutory bar that would prevent the Comptroller and Auditor General from examining the disbursement of the money. Furthermore, I believe that there will be increasing pressure from the Court of Auditors and the Commission on member states—not just because of the principle of subsidiarity but because of a genuine wish for the work to be done efficiently—to become more involved in checking that there has been no financial mismanagement.
  Mr. Duncan Smith: My right hon. Friend has said that a problem exists, and that it should therefore be scrutinised. He should approach the issue from another angle. The real problem lies in the fact that money passed to Brussels is then redistributed back to the nation states, where all accountability is lost. Surely the money should
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  not go to Brussels in the first place, but should be disbursed in the nation states originally. Brussels should then adjudicate.
  Mr. Renton: That issue lies at the heart of the way in which subsidiarity will develop in the years ahead. I strongly believe in the strength of the European Union and its ability to do some things better than individual nation states, but I think that because financial mismanagement—if not fraud—clearly accompanies international subsidy in particular, there will be a growing demand for better methods than subsidies to be found to redress regional or national imbalances. We do not yet know what that better way will be, but I think that allied with the pressure that I have mentioned will be pressure for fraud or mismanagement within member states to be the subject of redress within those states.
  The 450-page Court of Auditors report is an immensely impressive document; its authors have done a fantastic amount of work. The question now is this: how do we and other national Governments—and the Commission and the Council of Ministers—ensure that some of the report's many recommendations are implemented, and that problems are put right?
  I have been told, although I have not checked personally, that at present fraud against what are loosely defined as the European Union's financial interests is a criminal offence only in Germany, Italy and Portugal. If that is so, it means that there is a gap in the criminal justice provisions of individual countries, including our own. We should make certain that we have the legal and penalising weapons to ensure that, when we know that funds have been mismanaged, we have the capacity to right the position domestically when that is possible.
  I wholly agree with hon. Members who have said that the matter is deeply important to those of us who believe in the European Union. We know that, unless we get it right, the Union's image will be increasingly tarnished.
  Mr. Rowlands: I listened with considerable interest to the right hon. Member for Mid-Sussex (Mr. Renton), and all his speech demonstrated to me was the sad and tortuous way in which we are now realising exactly how much power has gone and is going from this place.
  I hope that the Minister will take the opportunity now, although the issue of control of public expenditure and its disbursement should arise when we discuss our next set of amendments, to clarify whether I was right in saying, when I intervened on the speech of the right hon. Member for Mid-Sussex, that there is no means by which the accounting officer in the Ministry of Agriculture, Fisheries and Food—the permanent secretary—can be hauled before the House of Commons or the Public Accounts Committee over expenditure on the common agricultural policy, because it is not part of any estimates in any Government Department. I shall illustrate that argument to him later, with the example of a Department for which he had some responsibility, in overseas aid.
  The right hon. Gentleman also, I think, left out a major aspect in his speech. He said that there were two issues—first, how money was raised and, secondly, the control of its disbursement and the competence and accountability of disbursement. There is one stage between those two— where the money is spent. The other aspect that requires transparency is the expenditure that will be given, as a result of the Bill, to the European Commission and Commissioners.

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  An important feature of new clause 12 is that we say that not only own resources but the expenditure that will flow from those own resources should be the subject of annual reports. If you have any doubts, Mr. Lofthouse, paragraph (a) of new clause 12 covers the point clearly.
  I therefore draw to the Committee's attention the aspects of expenditure that we shall approve. However, first I should like to say something to the Paymaster General. I listened to the Budget last week. I sat and listened to the Chancellor boasting about the degree of financial and Budget discipline that he had managed to instil and obtain. One of the key successes that he claimed in our last Budget was that he had stopped carrying over expenditure; the savings resulting from lower inflation had been clawed back, and that is why the public sector borrowing requirement was decreasing. That was one of the central things that he said. How could the same Minister and the same Cabinet likewise approve article 7 of the own resources decision, which reads:
  "Any surplus of the Communities' revenue over total actual expenditure during a financial year shall be carried over to the following financial year"?
  That means that there will be, presumably, built-in continuing expenditure, irrespective of whether one can find meaningful plans for spending the money and whether it will be efficiently spent—it does not matter. The money will be carried forward from year to year.
  How can the same Government who, in their national Budget, argued passionately that they had achieved that form of budget discipline approve an article of that type? We might want to carry money over to spend, but how can a Government who actually preached about prudence of that character, endorse and support article 7 of the own resources decision?
  Mr. Spearing: I suggest a possible answer to my hon. Friend. It is the old style of secret package bargaining. They have said, "And if you do not agree with that, we will not maintain your rebate."
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  Mr. Rowlands: My hon. Friend is absolutely right.
  There is another matter to which I draw the Committee's attention because it has not been discussed tonight, although my right hon. Friend the Member for Llanelli (Mr. Davies) mentioned some aspects. The other part of the bargain that was made was the determination of the expenditure that will arise from those own resources between now and 1999. It is not true that, one of these days, we shall decide where the money is to be spent. That matter was also determined at Edinburgh. It should be the subject of annual reports of the character that we suggest in new clause 12.
  I should like the Minister, when he replies, to tell us the status and nature of the "Financial perspectives 1993 to 1999—Appropriations for Commitments" which was attached to the own resources decision after the Edinburgh conclusions, which said not only, "This is how we shall raise the new money and the new own resources," but, "This is where it will be spent."
  Let me draw the Committee's attention to those commitments and decisions. For example, it was decided that there would be an increase of no less than 19 per cent. in real terms in administrative expenditure. The current
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  Government, who have said that administrative savings must be made so that all pay and salary increases in the public services may be met from increased productivity in each Department, support a policy that the administrative expenses of the Commission, and so on, should increase by 19 per cent. in real terms.
  Where is the consistency in the approach? Why is there that complete set of double standards—that we have to have the greatest possible control of the administrative costs of running the public services in this country but we shall endorse, as a result of the Bill, a 19 per cent. increase in the Commission's administrative expenses? I honestly do not understand how one squares those arguments.
  We were left with the major impression that somehow we had capped CAP—that we had capped the costs of CAP. But a commitment—as I understand it, a legally binding commitment—of the same kind and character as the Bill makes on the own resources decision was contained in the Edinburgh decision, which ensures that, far from the expenditure being capped, there will be another increase in CAP in real terms of about 9 per cent. between now and 1999.
  I considered the two aspects that should matter most to a constituency such as mine. Initially, I was pleased to note that the cohesion fund will increase by 73 per cent. between now and 1999—again, as I understand it, a legally binding commitment to spend the money which we are raising in the Bill, and which is being raised in the own resources decision, on the cohesion fund. I was pleased, that is, until I found out—this is why we need reports of the type suggested in new clause 12—the way in which it has been rigged. The criteria that will be used for cohesion funds ensure that only three or four countries will benefit. Communities such as those in parts of Mid-Glamorgan whose gross domestic product per capita is as low as that of many communities in Spain or Portugal will not be able—partly as a result of the present Government's policies—to qualify for any expenditure under the cohesion fund.
  I should have been delighted at the 39 per cent. increase in structural funds; here, at least, some money might be repatriated back into communities of the character of those in my constituency. However, one finds that the whole of Wales is ruled out of objective 1 status and therefore will not qualify for anything but a fraction of that 39 per cent. increase in structural funds. In fact, one encounters such problems repeatedly.
  The hon. Member for Harrow, East (Mr. Dykes) said that those moneys could be used to improve the lot of the constituents of Llanelli and of Merthyr Tydfil and Rhymney. I want to tell him the sad story of RECHAR— of trying to obtain funds for coalfield communities such as mine when the pits were closed. We bargained and haggled. Haggling between the Government and the Commission went on and on until such expenditures were way behind the closures. They were supposed to be lifelines; the lifelines came very late indeed as a result. So, even when we have tried to manipulate and utilise the expenditures that are envisaged in the decision, we have found them horrifically bureaucratic and difficult to apply.
  Finally, I draw the Committee's attention to the aspect that is the most extraordinary result and consequence of the Edinburgh own resources decision, and therefore makes necessary the reports which are provided for in our new clause 12. Did any Minister come before the Dispatch Box between the Edinburgh summit and May 1994 to tell

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  the House that, as a consequence of the determination of the expenditures that I have described, more than 50 per cent. of the overseas aid budget will be spent by agencies outside the United Kingdom? Was any hon. Member informed by any Minister at the Dispatch Box that the consequence of agreeing those guidelines, those appropriation commitments, legally bound the overseas aid budget to increase and increase in European terms although the United Kingdom's sum total has been capped?
  We shall be in an extraordinary situation. Next year, because of expenditure in the United Nations, but primarily because of the increases in the European overseas aid budget, which we shall be legally bound to pay, more than 50 per cent. of a major Department's public expenditure will be spent by agencies outside the control of the House and the Government. That is extraordinary.
  Ministers who grappled with the problems of financial accountability should be horrified. I believe that the right hon. Member for Mid-Sussex was once responsible for the aid programme. He should be horrified at such Government expenditure and the fact that most of the money is now spent on agencies outside the control of the House, without any accountability to the Public Accounts Committee in the way that he suggested.
  Mr. Renton: For the record, I should put the hon. Gentleman right. The Minister responsible for overseas aid to whom he referred was my good friend and namesake, now Sir Timothy Raison, not Timothy Renton.
  Mr. Rowlands: I apologise—I thought that, in his Foreign Office days, the right hon. Gentleman had some responsibility for such matters. However, I hope that he is similarly horrified by the results of such policies.
  According to the table on the appropriations for commitments, the European external aid budget will increase by 42 per cent. in real terms between now and 1999, while the British overseas aid budget will be capped, held at the same level or given a marginal increase. More than 50 per cent. of the aid budget will be spent on external matters outside our control.
  More interestingly, 45 per cent. of the European aid budget is outside the control of the European Parliament because it belongs to the European development fund, which is not part of the budget. We do not control, supervise or scrutinise money from the European development fund—the European Parliament does not have any right to do so either, because that fund is not part of the budget. That is extraordinary, and all the more reason why we need information and knowledge. The right hon. Member for Shropshire, North (Mr. Biffen) said that knowledge was power. Information would warn us and we would see the pattern of expenditure developing. We would not be in our present position, where we find that decisions made in 1992 have led to extraordinary figures on overseas aid expenditure, with the House lacking control over them.
  It is time for us to assert ourselves, not on a party basis but on a cross-party basis. This is a parliamentary matter and we need the information and reports on which to try to re-establish some degree of accountability and scrutiny—at least to know the consequences of the decisions being made. We did not know the consequences of many of the decisions made in Edinburgh in 1992. I thought that it was unfortunate and unfair when, on
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  Second Reading, the Chancellor chided his Conservative Back-Bench colleagues—I think that the hon. Member for Tayside, North (Mr. Walker) was one of them—for not raising various matters about the 1992 Edinburgh decision. In fairness, the information was not available to the House. It was only gradually, as a result of questioning in Committees and vigilance, that we became aware of what was happening, what would happen and the consequences of some of the decisions.
  Mr. Spearing: The Government seem to have forgotten that about a year ago in European Standing Committee B they dealt with the matter and there was a Division. One day later, on the Floor of the House, there was another Division on a measure being taken forthwith, and more than 40 Opposition Members voted against the sort of proposals contained in the legislation. Ministers have probably forgotten about that—they probably did not even know that it happened.
  Mr. Rowlands: Every time we discuss such matters I become more worried. I was a slow learner, but on Second Reading I found myself becoming more sceptical as I began to realise how accountability was moving from the House as a consequence of the decisions being taken.
  We are entitled to ask for the sort of information that we demand in new clause 12. Will the Paymaster General tell us the status of the appropriations for commitments that I have been describing and outlining to the Committee? Are they legally binding commitments to expenditure? The own resources decision is a legally binding commitment on which the Government are unable to renege. Are the expenditures that were forecast and the commitments attached to the own resources decision legally binding? When it investigated the overseas aid aspects of the Edinburgh decision, the Select Committee on Foreign Affairs was told that those commitments were legally binding and we could do nothing about them.
  Over and over again, the European Commission has failed to spend quite a lot of the money and has carried it forward or held it in account until it can find appropriate projects. Anyone who has begun to look, not at the corruption but at the waste and incredibly divided management of the European aid budget, will understand what I am saying. The Select Committee has been uncovering such problems in the past few weeks and hopes to report to the House soon. Without important changes to the management and accountability of the programme, the Committee would not agree to a 42 per cent. real terms increase in the European overseas aid budget. There will be an opportunity to raise those issues in our discussion on the next set of amendments.
  We are calling for greater transparency and information so that we do not get caught unawares. We want to foresee the consequences of the decisions made in 1992.
  Mr. Allason: I rise to support new clause 4 in the name of my hon. Friend the Member for Stafford (Mr. Cash) and a number of others, including myself.
  I have no enthusiasm for the Bill, but it does not have the constitutional implications of the Maastricht treaty. New clause 4 is important because it will enable the House and the public to understand the matters that will be decided at the intergovernmental conference in 1996. We are seeking a sort of annual report which will describe our contributions precisely and in simple terms so that

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  comparisons can be made with other countries. That is significant because it is in line with the traditions of the House in scrutinising all our expenditure.
  Our traditions are not automatically accepted or followed by our European partners. Baroness Thatcher used to boast of her twice-weekly visits to the House to answer Prime Minister's questions. She would then remind her European partners that her Spanish counterpart, the Spanish Prime Minister, had the sole constitutional responsibility of visiting the Cortes just once a year to answer questions.
  Scrutiny by the House is of enormous importance; it goes back to the principle of no taxation without representation. The issue before us today is taxation without information. We are seeking to ensure that the maximum information is placed before the House in a manner which enables us to scrutinise expenditure. If that is not allowed to happen, we shall certainly be moving towards taxation without representation. The issue of representation falls outside the scope of the subject of own resources, however, and I shall therefore not expand on it.
  It is important that the public should have confidence, not necessarily in the fact that the money is well spent, but in the acceptance of all the principles of subsidiarity. Elected Members of Parliament should have the right and the ability to scrutinise where and how tax is being spent and to ensure that there is maximum transparency and scrutiny of the fraud that we understand has taken place in the European Union in recent years and thus to seek to minimise the disappearance of significant amounts of taxation.
  The Minister was eloquent on the subject of fraud. I know that it is a subject close to his heart because I heard him on my car radio on Friday afternoon when he emphasised the information that had been laid before the House. In an interview with Nick Clarke on "The World At One" he got the better of his interviewer by demonstrating that some rather abstruse items of information had been laid before the House. He clearly believes that the availability of information is important; that is also at the heart of new clause 1.
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  It is our desire to ensure that the maximum information can be laid before the House. There is, of course, a danger in misinformation. Christopher Booker has written numerous columns about interference from Brussels and the ridiculous bureaucratic rules that are produced by directives. Apparently, they are the guiding light for environmental health officers up and down the country. If Christopher Booker is to continue his campaign, it is essential that the information he uses is accurate. We heard yesterday that he was uncharacteristically incorrect in saying that VAT on domestic fuel was a requirement of the European Union. Apparently that is not the case; Brussels makes no demands in that direction, so in those circumstances Christopher Booker would appear to be wrong.
  Mr. Spearing: Without looking at the records, perhaps the Paymaster General would agree that our zero rating arrangement will come to an end in 1998 or 1999, when we shall have to negotiate whether a zero rating continues.
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  In other words, there is a presumption under treaty regulations that we shall have to give it up or obtain an exemption in the future.
  Mr. Allason: The hon. Gentleman is quite correct when he says that 1999—the date mentioned in new clause 4—is the date when all bets are off and all the assurances received in Edinburgh will be up for grabs. That is a cause for great concern, particularly as by then we shall already have experienced the intergovernmental conference, which has often been described as Maastricht 2. Who knows what kind of European structures will be developed as a result of Maastricht 2. I have no objection to having a debate on the subject and discussing in the House and elsewhere what Maastricht 2 will entail, but if we are to have that important debate with all its constitutional implications, it is essential that the House should have access to the information. There is only one way to get that information, and that is to ensure that it is included in the legislation by putting new clause 4 into the Bill.
  The Minister clearly supports maximum transparency, and it is of enormous importance as we run up to this second critical time when the Maastricht structure will be reconsidered. The implications for Britain are enormous. There is no doubt that we went through an extremely dramatic trauma—I certainly did—over the Maastricht issue. If we are to repeat that exercise, it is essential that the public are reassured that they and their elected representatives have access to the maximum amount of information.
  The question is how can that be achieved. New clause 4 does not describe the mechanism for that scrutiny. We have heard today all the problems related to fraud, all the problems related to how we judge gross national product and our doubts about Mediterranean practices in accountancy. We know what the problems are; the question is what our solution is.
  All hon. Members on both sides of the House who have spoken today have praised the experience, skill and dedication of the Public Accounts Committee. It is held in very high regard and its status as the second most important Select Committee is recognised by the House. So the solution must be to allow the House to scrutinise the books by requiring the Public Accounts Committee to do so.
  Accordingly, I call upon the Minister to think carefully about including new clause 4 in the legislation. It is not a wrecking amendment; it would receive enormous support in the country because the bottom line is that those who elected us would have confidence that the House is exercising at least a degree of control over the expenditure—the vast grant that we are giving the European Union. Perhaps equally significantly, we must also ensure that the Public Accounts Committee takes those statistics and figures to pieces and makes annual reports to the House. That would be welcomed in all parts of the House and, more importantly, by the voters who—goodness knows—have little enough faith not just in the legislation but in the European Union.
  Mr. George Stevenson: In considering the accounting mechanisms for own resources, I agree with right hon. and hon. Members who have stated clearly that we cannot engage in that exercise without examining the demands on those own resources.

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  I also agree with my hon. Friend the Member for Oxford, East (Mr. Smith) that a continued majority demand on those own resources is the common agricultural policy. It is no coincidence that at the same time as the own resources decision was taken by the Council of Ministers on 31 October a decision was taken on budgetary discipline. The two are very much intertwined.
  We are talking not about fraud, but about expenditure that at the moment is envisaged. We are talking about expenditure and demands on own resources that at the moment are planned. Of course, the House can speculate all it likes about what is to happen over the next few weeks or months to the planned expenditure and, therefore, the demand on own resources, but at the moment when we are asked to take this decision I suggest that the votes of right hon. and hon. Members must be determined by the information that we have.
  New clause 1 is therefore vital. It says, in effect, that cross-party concerns are involved and that there are serious matters to consider when we examine own resources and the demands made on them, particularly by the common agricultural policy.
  Why can we not have a report? Perhaps a motion to the House over the next few weeks would help to clarify the position. We have to remove some of the uncertainties. That would give us an opportunity to put the Government to the test—to test their sincerity and their commitment to ensuring that the demands on own resources are kept within the constraints already described to us. We cannot calculate properly through the own resources mechanism what is required by the Community unless we consider its expenditure, not only in terms of the expansion of expenditure but in terms of its control. At present, we are not in that situation; I will give some examples to show why.
  As I understand it, the Government are saying, as of today, that expenditure is likely to be 2.6 billion ecu in excess of the agricultural guideline. The Government also say that we need not worry because they have measures in hand which are likely to remove that. I wish them luck. They may be successful. On the other hand, they may not. Demands on own resources will therefore be far greater than we are told at the moment.
  In the course of the next few weeks we shall, I hope, know whether the Government have been successful. They have told me that alternative measures—appropriate steps—may have to be taken to raise a further 919 million ecu. They say that olive oil payments of 1.2 billion ecu to southern member states will be deferred until next year and are not contained in the present budget.
  In those circumstances, how can we tell the Government that we trust them, that they should go away and do their best and that we will give them what can be described only as a blank cheque for own resources? That is not sensible. It should not be acceptable to the House, not in the interests of any right hon. or hon. Members, but in the interests of the House as a whole and the public whom we are here to represent.
  I do not know how hon. Members will be able to tell their constituents that they voted for an own resources resolution that puts demands on the British taxpayer, but that they do not know how 2.6 billion ecu—about £1.8 billion—which is in excess of the present agricultural guideline, will be found. The Government tell us not to
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  worry because they have the matter in hand and are not prepared to accept that. That is fine. I am prepared to take them at their word, although many of my right hon. and hon. Friends may castigate me for so doing.
  If we are prepared to put the Government on trust, what is so unreasonable about asking them to accept new clause 1, which asks them to trust us, too? If they are so determined to clarify the issue and to ensure that demand on own resources is kept within the budgetary guidelines and disciplines that they have accepted, why can they not trust us a bit? Why do the Government insist that it is they who need a blank cheque?
  Mr. Andrew Robathan: Would the new clause allow the House to scrutinise what is happening right now, when taxpayers' money to the tune of about £20 million is being spent on advertising to discourage smoking while £1 billion—I think that it is pounds and not ecu—of resources which come mainly from the British taxpayer is being spent in the European Union on producing tobacco which is completely unusable and has to be buried or burnt?
  Mr. Stevenson: Without going into the detail of particular expenditure headings under the common agricultural guarantee fund, I have tried to show the crucial relationship between own resources and expenditure. The two cannot be divorced. We cannot say that we will concoct an amount of revenue to be spent, but that we are not sure how it will be spent.
  In a letter sent to me today by the Paymaster General, the Government admit that they are not sure how a significant part of that demand—2.6 billion ecu, which is about £1.8 billion—will be met. That sum is made up of 919 million ecu which may have to be obtained by what the Government describe as appropriate measures but which they do not specify, 1.2 billion ecu in olive oil payments which have been deferred to future years and 500 million ecu of the monetary reserve. The Government say that the 500 million ecu monetary reserve cannot be included in the calculation because it is there to be used in any case. But it is outside the agricultural guideline and outside the discipline that the Government have accepted. It is therefore financial sleight of hand, to say the least, for the Government to seek the support of the House for own resources when they are using expenditure that is outside the budgetary guideline that they have accepted as the limit of expenditure.
  7.15 pm
  If one accepts that the two elements of the equation cannot be divorced, as I argue strongly that they cannot be, the answer to the hon. Gentleman's question must be yes. It is therefore crucial that new clause 1 be accepted. It is also crucial because time is not on our side. If the Bill goes through unamended, the system will come into force on 1 January 1995. Unless new clause 1 is accepted and the Government are required to report back to the House on the implementation of article 8(2) of the Council decision, the Government will have, if not a completely blank cheque, a cheque with a significant number of noughts missing from it.
  The British people expect nothing less than that we should tell the Government that we want to know exactly how they intend to control demands on own resources before we are prepared to support own resources as put to us at the moment. That is perfectly sensible and

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  reasonable. As I have said, we are asking the Government to trust us a bit. We cannot get away with calling on the Public Accounts Committee to scrutinise the issue at this time—it is not practical to argue for that—but new clause 1 is a reasonable attempt at asking the Government to come back to the House and show us what they have done; if they have tried their best and made some progress, hon. Members may then support them. But to go ahead in this sort of blind-alley fashion cannot be right.
  For those good reasons, I urge all right hon. and hon. Members to support new clause 1.
  Mr. Heathcoat-Amory: The group of new clauses that we have been considering for the past few hours falls into two parts. New clause 1, which was tabled by the hon. Member for Oxford, East (Mr. Smith), states that the Act shall come into force only when the House of Commons has come to a resolution on a motion tabled by a Minister as to the measures that the Government intend to take in order to implement article 8(2) of the new own resources decision.
  The other two new clauses, which I shall deal with in due course, call on the Government to publish annual reports on various aspects of the own resources system and the Community budget. But first I shall dwell a little on what may be called the lead amendment, concerning article 8(2), which is about the detailed provisions necessary to put the own resources decision into practice—in other words, the implementing mechanism for giving effect to the own resources decision that is the subject of the Bill.
  First, I believe that new clause 1 is based on a misunderstanding, because it refers to the Government implementing article 8(2) of the new own resources decision, whereas in fact it is the Council of Ministers that agrees measures to implement that article. The Government have an effective power of veto over any measure that they find unsatisfactory, but they do not implement measures on their own, as the new clause implies. Of course the Government will be vigilant in using that veto if it proves necessary, and the House has a right to expect that.
  Secondly, there is nothing new in article 8(2). The text introduced in the new own resources decision is virtually identical to that in the existing ORD dating from 1988, but a few cross-references have been altered because of changes to the underlying treaty.
  However, the most important point, which has been overlooked by the Opposition, is that there are no plans to revise the existing implementing regulations. So article 8(2) will not be used as a consequence of the new own resources decision, or at any rate not in the foreseeable future.
  Mr. Hoon: The Paymaster General said that there was consistency between this decision and previous decisions on own resources. Will he explain why the original draft decision that gave rise to the decision we are debating contained specific reference to "fraud and irregularities" in connection with the Community budget, and the preliminary clause went on to detail the Commission's role in improving national VAT registration, calculation, recovery and control procedures? That was in the original
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  draft, but it is not in the version that we are debating. Why was there a change, and were the Government responsible, in Council, for making that change?
  Mr. Heathcoat-Amory: It is not clear whether the draft that the hon. Gentleman is talking about is a Labour party document or one of ours. He owes it to the Committee to be a little more specific in providing a reference if he wishes to ask a question. But when we deal with future new clauses or amendments, if they are debated, I shall endeavour to answer his question.
  What I am saying is important to the Opposition Front-Bench spokesmen, because their new clause is postulated on the idea that a number of revisions will be made in the implementing regulations. That is simply not in prospect. In 1988, there were quite profound and radical changes to the implementing directives and legislation. There were two large regulations and a directive, which profoundly changed the system whereby own resources were raised.
  The 1994 own resources decision makes no such radical change. It simply changes the figures within the programme. The programme itself is rolled forward into the new own resources decision. Indeed, that is specifically required and provided for separately by article 11(2)(a) of the new own resources decision, which explicitly provides the legal authority to continue using the earlier legislation.
  However, in due course new changes may be necessary to the implementing legislation, and any such decisions taken by the Council must be taken unanimously. That is a safeguard for the House and for this country. Any proposals from the Commission along those lines would be subject to the scrutiny requirements of the House. I believe that, on reflection, the hon. Member for Oxford, East will agree that it makes no sense to make the coming into force of what I hope will be an Act dependent on a resolution that contains nothing, because there is nothing at present to introduce under that heading.
  The hon. Member also talked about the United Kingdom abatement. He was joined in that concern by several other hon. Members, including my hon. Friend the Member for Stafford (Mr. Cash), and I believe that the right hon. Member for Llanelli (Mr. Davies) raised the issue as well. The Committee is right to be extremely vigilant about the British rebate.
  First, I shall answer a specific question asked by the hon. Member for Oxford, East: the new working methods paper on the United Kingdom abatement that the hon. Gentleman mentioned is set out in Council document 5455/94, and an explanatory memorandum was provided to the Scrutiny Committee on 22 February this year. I assure the hon. Gentleman that the formula by which the United Kingdom abatement is calculated has remained unchanged since 1988.
  Of course the Commission and many other member states would love to change and undermine the British abatement in one respect or another, and that brings me to a point raised by other hon. Members. There is nothing sinister in the requirement in the ORD that the Commission re-examine the British rebate by 1999, because it exactly replicates a similar requirement in the 1988 own resources decision. Indeed, the British rebate was examined in 1992.

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  However, the crucial fact for the Committee is that the abatement continues in force until it is changed, and it can be changed only by unanimity. As such a change would be contained in a new own resources decision in 1999 or later, and as the change can come into effect only through the constitutional requirements on member states, in this country that means that it can come into effect only through primary legislation. It therefore follows that not only the Government of the day but the House of Commons will have a veto over any alteration in the British rebate.
  I share the concerns expressed on both sides of the Committee about whether the Government of the day will maintain their position on the abatement. Opposition Members have reason to doubt their own Front-Bench spokesman, because the hon. Member for Dunfermline, East (Mr. Brown) said in 1992 that the British rebate would have to be up for renegotiation. So if the House is concerned to maintain the British rebate in its existing form—certainly I am—it must ensure that a Conservative Government are in charge in 1999.
  Mr. Andrew Smith: Having heard that allegation previously, my hon. Friend the Member for Dunfermline, East (Mr. Brown) has made it clear that he did not say that. Does the Minister accept that? Moreover, my hon. Friend has made it clear that it is and has been Labour party policy to maintain the United Kingdom rebate. I therefore hope that there will be no repetition of that charge by Conservative Members.
  Mr. Heathcoat-Amory: It is no comfort for me to know that that is claimed to be Labour party policy. Labour party policy changes week by week. What I do know is that the hon. Member for Dunfermline, East said on a radio programme listened to by millions of people that the British rebate was a matter for renegotiation. That shocked the House.
  Mr. Smith: Will the Paymaster General give way?
  Mr. Heathcoat-Amory: No. I will not give way to the hon. Gentleman, because I am answering the point he raised with me before.
  The hon. Member for Dunfermline, East, the shadow Chancellor of the Exchequer, said on the radio programme that the rebate was to be a matter for renegotiation. He may wish that he had not said that, and he may claim that it is no longer Labour party policy. I am illustrating to the Committee the fact that we get certainty and consistency on these matters only from Conservative Members.
  7.30 pm
  Ms Hilary Armstrong: The Minister really should accept Labour's assurances about what my hon. Friend the Member for Dunfermline, East (Mr. Brown) said. We can give him chapter and verse. On the radio this weekend, the Minister made claims about his tackling of the budget in the House last week which were not borne out in Hansard. We pressed him on what he had done about the European Parliament's amendment on fraud which was before the Council, and he refused to answer. However, on Friday or Saturday, he said on the radio that he had never been asked about that and that he
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  was not pressed about it. I know that he was in some distress in the debate last week, but I also know that he was pressed and that he never answered.
  Mr. Heathcoat-Amory: I am not sure what all that was about. I was referring to remarks made by the hon. Member for Dunfermline, East. If he has changed his mind, I welcome that. Consistency comes from Conservative Members.
  Mr. Smith: How many times do we have to say it? We have made it clear, and my hon. Friend the Member for Dunfermline, East has made it clear, that he did not say what the Minister alleges he said. We have made it clear that it has consistently been Labour party policy to uphold the abatement procedure and the United Kingdom rebate. We have given those pledges in good faith. I now call on the Minister to accept them, and to desist from repeating falsehoods.
  Mr. Heathcoat-Amory: The record will stand for itself. If the Labour party has changed its mind about the importance of the British rebate, I welcome that. I give an unqualified welcome to that. All my right hon. and hon. Friends welcome a sinner that répenteth.
  I now move on to a number of other issues raised in the debate. Serious points were raised about the GNP statistics, on which a great deal rests, especially the contributions from each member state. Again, this point was raised by my hon. Friend the Member for Stafford and, in truth, by the hon. Member for Oxford, East. I am glad to say that the Commission takes seriously the need to harmonise and to verify national GNP statistics. A GNP management committee set up in 1989 has led to improvements.
  It was correctly said that the statistics emanating from former East Germany were unreliable immediately following reunification. It is not the case that the contributions from Germany as a whole are assessed separately from former East Germany and former West Germany. They are based on the whole country. It is, of course, true that the change from a command economy threw up great difficulties in correctly and accurately estimating GNP statistics. As the world now knows, they were all made up before Germany was reunified.
  The other point raised in the debate has been the role of the Public Accounts Committee. The Committee is right to pay tribute to the work done by the PAC, and to raise the possibility of extending its remit to cover some of the matters that have been debated during the passage of the Bill.
  The National Audit Office may have a more direct and continuing interest in the actual auditing of the figures. It already has close links with the European Court of Auditors. When I met members of the court in London early this year, they went on to talk to and exchange ideas with the NAO. That does not undermine the case that has fairly been made out this evening for looking for ways in which to involve the PAC more intimately in this work.
  The PAC has a present remit which allows it to take a considerable interest in these matters. I may be able to be of assistance to the Committee, and especially to my hon. Friend the Member for Stafford who raised the matter specifically. It is a possibility that we could look again at the Standing Orders governing the PAC to see whether

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  changes might be appropriate to give it this wider remit. My right hon. Friend the Lord President is amenable to doing that.
  I have to put down the proviso that the PAC is a Committee of the House and not a Government committee. Decisions and discussions, therefore, of this nature will have to be conducted through the usual channels and, indeed, with the Chairman of the PAC. That very constructive suggestion has come out of the Committee, and it will meet some of the points raised in the debate.
  Mr. Rowlands: As I understand it, the PAC is triggered off by the responsibility of the accounting officer—the permanent secretary of each Government Department. How will it be possible for the permanent secretary of any Department to be responsible for money that has been handed over to Europe and spent by the European Commission?
  Mr. Heathcoat-Amory: I must not mislead the hon. Gentleman. I am not suggesting that the PAC can have a remit out of this country in pursuing expenditure in other member states. That would be stretching the terms of reference of the PAC to breaking point. That is not what I was suggesting.
  Mr. Cash: I am grateful for the indication that my hon. Friend has given. I have been given to understand that the points he has just made resulted from discussions today with the Prime Minister. Furthermore, I was given to understand that a specific undertaking would be given that the intention that the PAC should be involved in the process was something on which I could rely in good faith.
  If my hon. Friend put it in terms of an undertaking, I would then seek leave of the Committee to withdraw the motion. It would be a significant Euro-realist step for the PAC to be involved in dealing with fraud and own resources. That would indeed be a watershed in the whole European saga. I should be grateful for the words that I have asked for to be put in terms of an undertaking.
  Mr. Heathcoat-Amory: I have already explained that neither I nor my right hon. Friend the Prime Minister can direct the PAC, which is a Committee of the House. What I have already undertaken to do—I have the agreement of the Lord President—is to examine and to give a fair wind to changes in the terms of reference of the PAC, if the PAC considers that the terms of reference are a restraint on its action in this respect. My right hon. Friend the Prime Minister is certainly aware of this. He believes that tackling fraud and mismanagement, and getting better financial disciplines into the workings of the Community, are among the highest priorities that he takes into discussions in the European Union.
  I turn now to points raised by the hon. Member for Newham, South (Mr. Spearing), among others, on the connected but separate issue of reports to the House and the opportunities that the House has for scrutinising not only the Government but the workings of the European Union. The hon. Gentleman has a long and honourable role in defending the privileges of the House in this respect. I can give him some of the assurances he seeks.
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  First, however, I would like to point out to the Committee just how regular and numerous the reports already made by the Government to the House are.
  My hon. Friend the Member for Torbay (Mr. Allason) said that he was a strong advocate of information and transparency on such matters. I strongly agree. I believe that the House has a right in that respect. I must say, speaking as a former deputy Whip, that it is not always frightfully easy to get people to sit on the Committee to undertake the scrutiny. Indeed, some of the debates held on such matters are rather thinly attended. But that does not detract from the fact that the House has a right to the information. Indeed, many right hon. and hon. Members attending this debate have, over many years, taken a close personal interest in these matters.
  I emphasise that the quantity of information given to the House is seen by some as being too much, and of an indigestible nature, rather than too little. The figures for the net contributions to the EC budget are given out in the Red Book and at Budget time. In addition, the departmental report of the Chancellor's Departments is an expansion of the information in the Red Book and is presented around March each year.
  In addition to that, there is an annual statement on the Community budget, which takes the form of a White Paper. The statement for this year was published in March and it gave further information. There are also the Government's six-monthly White Papers on developments in the European Union, and an enormous number of explanatory memoranda on the Community budget. On European matters in 1994 alone, 673 explanatory memoranda have already been submitted to the House, 59 of which covered budgetary matters. They triggered no fewer than 31 scrutiny debates.
  In answer to the point raised by the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) on the expenditure—
  Mr. Spearing rose—
  Mr. Heathcoat-Amory: May I answer the point raised by the hon. Gentleman's hon. Friend on the expenditure side of the budget? That was, of course, one of the matters that we considered last Monday, when the 1995 budget was under discussion in the House.
  I would assure the hon. Member for Merthyr Tydfil and Rhymney that the overall discipline on the European Union is a ceiling on contributions, which cannot be breached. If one allies that ceiling on contributions with the fact that the European Community cannot borrow, it is a very real discipline on its expenditure. It has a financial perspective, which is an agreement between the Council of Ministers and the European Parliament, which, although not legally binding, is a political agreement, which sets limits for each category of expenditure year by year. However, a number of legal agreements cover matters such as structural funds and the cohesion funds.
  I can reassure the hon. Member for Stoke-on-Trent, South (Mr. Stevenson) one more time that the agricultural guideline will not be breached because it requires unanimity, and we will not sanction a breach of the guideline this year or next year. It is up to the Commission

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  to organise its expenditure to fit that upper limit. We have long gone beyond the years during which revenue was set to cover all expenditure.
  Mr. Stevenson: I am grateful for the Paymaster General's undertaking, as was communicated to me by letter, that the agricultural guideline will not be breached. First, does that include not deferring expenditure from this year to future years simply to keep within the guideline? Secondly, does that mean that such elements as the monetary reserve, which is not within the guideline, will not be used?
  Mr. Heathcoat-Amory: As the hon. Gentleman fairly says, I have corresponded with him about this matter. I have explained the purpose of the monetary reserve and the fact that, if it was used for specified purposes, it would not be a breach of the agricultural guideline. I hope that he will accept that reassurance.
  7.45 pm
  Mr. Spearing: I think that the Paymaster General was responding to new clause 12 earlier. Despite what he says, does he not agree that the five sets of publications which he mentioned are disparate, come out at different times of the year and are not a comprehensive Command Paper? Indeed, the memoranda are many, duplicated and not easily available to the public. What objection does he have to new clause 12?
  Mr. Heathcoat-Amory: I want to make a suggestion to the hon. Gentleman. I think that I have shown the Committee that what almost amounts to a deluge of information descends on the Scrutiny Committee. I pay an incidental tribute to the members of that Committee, who presumably have to read the stuff and decide whether it is to be debated in Standing Committee—or, indeed, recommended for debate on the Floor of the House. It seems that most hon. Members find the sheer volume, complexity and detail of that information extremely difficult to cope with. I therefore suggest that the annual report on the Community budget should be expanded into a report rather along the lines of what I think the hon. Member for Newham, South is suggesting.
  It has to be owned that the report is not a best seller. It has been published annually for some 14 years, largely without alteration. I understand that it was published initially at the request of the Public Accounts Committee, so it is not a statutory requirement but a request that the Government have granted every year. To make it more accessible, it could be expanded and made more what one may call Member-friendly, and put into a form which could become the basis, if the House so wished, for a debate on its content.
  I think that that would meet the terms of hon. Members' requests, which are not so much for more information as for better information in a more accessible way. It does not require legislation, and it does not require a new clause. It requires an undertaking from me, which I am very happy to give. If that satisfies the Committee, invite it to reject the new clauses.
  Mr. Hoon: At the outset, it was suggested that this debate was reminiscent of some of the Maastricht debates, but the one significant difference is that, with the exception of the Paymaster General, almost every hon. Member is in agreement. The right hon. Members for Shropshire, North (Mr. Biffen) and for Mid-Sussex (Mr.
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  Renton), the hon. Member for Torbay (Mr. Allason) and, I think, every Opposition Member have agreed about own resources. They agreed that a vote and a debate on an increase in own resources for the European Union should be accompanied by a discussion of how that money is to be spent and whether it is to be spent consistently, properly and in accordance with the normal rules of expenditure that we expect in the United Kingdom and with those set down by the various European institutions. That issue united hon. Members: only the Paymaster General took exception to it.
  The Paymaster General took exception by using a very narrow construction of new clause 1. If he looks in more detail at new clause 1, as well as at article 8(2), he will see, especially in the final three lines of article 8(2), that the Council is enjoined
  "to make possible the inspection of the collection, the making available to the Commission and payment of the revenue referred to in Articles 2 and 5."
  As a member of the Council of Ministers, it is obviously incumbent on the Government to play their part in ensuring that the revenue is made available on the basis of a proper system of collection and that appropriate inspection is available to those who, are responsible for ensuring that member states make their appropriate contributions to the European Union's budget.
  In a sense, that approach links hon. Members on both sides of the Chamber. Everyone has said that there must be a proper system for expenditure. The first part of article 8(2) ensures that there are proper systems for expenditure and for collection. As we are debating an increase in own resources to be available to the European Union, we should consider the system that bears on the collection of revenue and on how that revenue is spent.
  As much as anything else, article 8(2) is concerned with maintaining a consistent system of raising revenue across the European Union, which is crucial under the new system of calculating own resources. A proper understanding of the ceiling on own resources will be achieved only on the basis of a GNP calculation. At the same time, if we are properly to concern ourselves with ceilings on own resources for the European Union, we must be confident that every member state has a proper system for calculating GNP.
  It is easy to refer to other countries' difficulties in calculating GNP, but from time to time GNP in Italy, for example, has fluctuated dramatically. Sometimes the fluctuation has been the result of concern about Italy's contribution to the European Union's budget. It is well known that at one stage an adjustment was made because the Italian Government were extraordinarily concerned that Italy was paying more into the European Union's budget than had been anticipated. Given the size of the GNP that had been recorded, Italy was receiving less by way of commitment from that budget. It was not entirely surprising that there was a significant adjustment downwards of Italy's GNP for the following year.
  It is important that in voting extra funds for the use of the European Union—this view has been expressed by everyone who has spoken in the debate apart from the Paymaster General—we have regard to how the funds are spent. I am not advocating a wide-ranging, Budget-style discussion during which we consider every heading in the European Union's budget, but in being asked to make further contributions to the European Union's budget, British taxpayers should not be concerned that the budget

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  contains significant elements of fraud and some elements of waste. They should be satisfied that there is an effective system of delivering an agriculture policy for the European Union.
  It is difficult to understand how anyone in the House of Commons could object to that approach. I assume that even the Paymaster General is sympathetic to my argument, yet the Bill contains no reference to the matters that I have raised so far. It would have been open to the Government, in implementing the decision by which, I accept, they are bound under European law and an international obligation, to ensure that many of the provisions that have been discussed by hon. Members were incorporated in the Bill.
  The Paymaster General has defended the Bill, and that is understandable, but the Government could have included provisions of the sort that have been suggested to ensure that the House has opportunities for proper debate, which the European Union's institutions have already.
  The Government say that we must debate the Bill, but not more than the Bill. They say that we must debate only how an increase in own resources should be implemented. At the same time, the European Parliament, the Commission and even the Council consider own resources as they consider budgetary discipline and fraud. Curiously, an earlier draft from the Commission contained a specific reference to fraud, which was deleted only after the adoption procedure in Council. I am talking not about a Labour party draft or the publication of a quango or pressure group but about the text of a document that was agreed by the Commission. As I have said, it contained a specific reference to fraud, which showed that the Commission was concerned about fraud in terms of spending alongside own resources.
  New clause 3 refers specifically to a Council regulation on the protection of the Community's financial interests. That regulation is not restricted to the raising of revenue or the spending of revenue, for both issues are raised in the same document. Fraud is defined in the regulation as being a "diminution" of the Community's own resources or other revenue. The document refers to fraud in the raising of revenue in terms of own resources, and it treats fraud in expenditure in the same way. That is what all hon. Members who have spoken in the debate have invited the Government to do, with the exception of the Paymaster General.
  Mr. Stevenson: Perhaps my hon. Friend will reflect on the question that I put to the Paymaster General, to which he did not respond. We are talking about how revenue is expended as well as how it is raised. I argue that transferring significant parts of agriculture expenditure from one year to the next constitutes a de facto breach of the current guidelines.
  Mr. Hoon: I shall not be tempted to go along that path too far, but where there are clear decisions of European Union institutions— such as the decision on budgetary discipline, which set out a framework for spending— and the guidelines are breached, surely that is a matter for consideration by the House of Commons, especially when we are considering the payment of extra funds to the European Union.
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  We do not need to investigate in detail as part of the budgetary debate precisely how each and every ecu in the EU's budget is spent. We should, however, have the opportunity of considering the broad framework within which the European Union spends its funds. It follows from that—I hope that this is consistent with what is happening in the EU—that we in the House should be considering the broad outline of the budget as we consider how the budget is raised, how own resources are secured and, in a general sense, how they are spent.
  The essential question for the Government to answer, having introduced the Bill, is why they have not made that consideration possible. Why cannot we have provisions in the Bill that allow the House, along with the European Commission, the European Parliament and the Council of Ministers, to consider the broad outline of how funds are spent when the British taxpayer is being asked to devote significant sums of extra money to the European Union?
  Mr. Bill Walker: I welcome the opportunity to speak, and the Committee will be pleased to know that I shall be brief because my hon. Friend the Paymaster General has taken up the concerns that I and others have felt.
  I am pleased to see my right hon. Friend the Prime Minister on the Front Bench. He will know that I and others have been concerned about how the House can scrutinise European funding so that it becomes transparent.
  There is no doubt that our constituents are concerned about how the moneys that they contribute in taxes are used within Europe. With that in mind, I intervened on my right hon. and learned Friend the Chancellor of the Exchequer on Second Reading to draw his attention to the explanatory and financial memorandum. I make no apologies for returning to the matter.
  Paragraph 5 of the explanatory and financial memorandum states:
  "The new Decision has to be approved by all member states in accordance with their national procedures before it can enter into force. It will take effect as from 1st January 1995."
  Hon. Members on both sides of the House have been trying to ensure that Parliament knows what is going on. That calls for transparency and scrutiny of expenditure by the House. That is what we have been after; we have not been attempting to torpedo the Bill. I felt very upset about being accused of attempting to do so, when, in private conversations, I had made it perfectly clear what my objectives were. I said that I would be brief, and I shall say merely that I welcome what my hon. Friend the Paymaster General said. I take his assurance for what it is worth, and believe it.
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  Mr. Peter Shore: I listened with care to the Paymaster General. He was more forthcoming on some matters that have been raised than on others. He took seriously the point that was touched on by my hon. Friend the Member for Ashfield (Mr. Hoon) and by the hon. Member for Stafford (Mr. Cash)—that is, the importance of obtaining a correct, unified and uniform definition of GNP. The plain truth is that the component of own resources, which is now being taken up by GNP contributions, is growing. It was about 20 per cent. of the total some years ago. It certainly is destined, under the new arrangements, to rise to about 45 per cent.

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  of the total. Therefore, it matters very much that there is a uniform, reliable definition of the GNP of the different countries.
  I listened with sympathy to what my hon. Friend said about the Italians not always being entirely measured in their GNP figures. It is well known that they have a substantial black economy, and of course it is very difficult anyway to integrate that into the true picture of the GNP. Nevertheless, I broadly welcome what was said about efforts to establish, in a uniform way, the GNP of the member states.
  On the role of the Public Accounts Committee, the Paymaster General rightly said that anything that he said tonight had to be in reference to the Committee itself. Indeed, it is for the Public Accounts Committee to decide whether it wishes to have its terms of reference extended in the way that has been suggested. I was glad to see, however, before my hon. Friend finished his remarks on that matter, the presence of the Chairman of the Public Accounts Committee. I am sure that he has taken on board, I hope, sympathetically, what was suggested.
  I hope that it will be possible for the PAC, which is a very senior Committee of the House and one whose judgment and expertise we have come to value, to play a part in assessing expenditures made in the United Kingdom from the Community budget and the contributions that we make to that budget.
  On the matter which was raised by my hon. Friend the Member for Newham, South (Mr. Spearing) and spoken to by my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) dealing specifically with new clause 12, I was not so happy with what the Paymaster General said. He rightly reminded us that several disparate reports, which come out at different and unpredictable times of the year, deal with the financing of the Communities. As he rightly said, the net contribution that is made by the United Kingdom is set out in the Treasury Red Book. Hon. Members have seen the Red Book for this year. It is true that we receive a departmental report in March.
  Frankly, most of all, we are interested in our contribution to the European Community budget. Our contribution—that is to say, our gross contribution as well as our net contribution—how it is changing over time and how it compares with the gross and net contributions of other countries are of great importance. Although the Paymaster General expressed willingness to expand the Budget report in future to take account of some of our propositions, I do not think that that is quite good enough.
  We gave some thought to what we are urging, and we have a new clause with a number of component parts, all of which we wish very much to see enter the annual report for which new clause 12 calls. It is an annual report which is necessary for one overwhelming reason: there is no annual debate on the United Kingdom's contribution to the European Community's budget. It is only at approximately five-yearly intervals, when a new European Communities (Finance) Bill is required, that the figures are revealed. As we recall, as a preliminary to the debate on the European Communities (Finance) Bill 1994, the Chancellor published what the Treasury described as an
  "updated forecast of the UK's contribution to the EC Budget and a detailed paper describing the EC's Budgetary framework".
  There is much information in that publication which we do not normally see. Table 1, for example, gives the gross payments of the United Kingdom. I am not aware that
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  that information is published in any other document on a regular basis. We know from table 1 of that Treasury document that there has been an enormous increase in our contributions, from £5,800 million in 1989–90 to an estimated £8,308 million in 1994–95, rising in the Treasury forecast to £10.5 billion in 1997, which is virtually double in seven or eight years. That is significant.
  As was argued on Second Reading, it is not good enough simply to have the net figures—although we have those and they are important and relevant—because they reflect the priorities of the Community in spending money in its budget, not necessarily how we would wish that money to be spent. That is why, in new clause 12(a), we ask for
  "a general presentation in text and tables of the financing and expenditure of the European Economic Communities in sterling equivalent and any common unit, which shall include comparable tables of income derived from each member state and expenditure therein".
  That is a matter of considerable importance. We know that Germany is by far the largest net and gross contributor. We are certainly, massively, the second-largest gross contributor, and certainly the second-largest net contributor. Whether or not the new formula for own resources will lead to a change in our relative position, and whether or not we see Holland and perhaps France and Austria overtake Britain as net contributors, which is something that we would welcome, the only way of obtaining that information is through an annual report of the kind for which we have asked.
  I hope that that first requirement will be met, but it is not the only one. The Treasury report has helped to give us a real account of the rebate mechanism which has been used in adjusting Britain's net contribution. That is a very useful piece of information, as is the composition of own resources as between the three major components of agricultural levies, sugar levies, customs duties and VAT and now GDP, as the fourth component.
  We need that information. In paragraph (c) of our proposed new clause 12. we ask for the operation of each article of the decision of 31 October 1994. Perhaps the most important of the new articles—the one that we would certainly keep an eye on—is article 10, which the hon. Member for Stafford referred to in his speech. It contains proposals for a new additional own resource component. That is a very important matter and we want to contribute to the thinking behind it at an early stage. Any proposals for additional own resources should be reflected in the annual report for which we have asked.
  We have also asked, I think quite properly, for a report on any action taken by Her Majesty's Government in respect of financial discipline. Much has been said about financial discipline and more will be said about it in subsequent debates, but surely it is reasonable for the House of Commons to demand an annual report about financial discipline: what the British Government have proposed and how successful they have been in securing improvements in financial discipline.
  In paragraph (e) of our new clause 12, we ask for
  "the text of any regulation, directive or financial regulation relating to the operation of the Decision to which Her Majesty's Government has given its assent."
  I do not think there is a problem with that; we can expect to receive the information as soon as the European Community has made a decision under article 8(2).

  379
  I think that the precise categories of information for which we have asked are wholly reasonable. I think that they reflect the House's need to keep a close eye on the financing of the European Community, particularly as it affects the British contribution and British net receipts. I hope that we will be allowed to press the new clause to a Division tonight.
  Mr. Andrew Smith: I do not wish to detain the Committee for long, although I think that it has been a very useful debate. As my hon. Friend the Member for Ashfield (Mr. Hoon) said, there is a large measure of agreement on both sides. Hon. Members are not satisfied with the way in which the collection of European Union resources is supervised and they are not satisfied with the way in which expenditure is scrutinised. Many hon. Members referred to fraud and the need for better controls.
  When the Paymaster General replied to the debate I noticed that he did not answer the question which was put to him by my hon. Friend the Member for Stoke-on-Trent, South (Mr. Stevenson) about balances being carried forward from one year to the next. He asked whether that was consistent with the degree of financial control that the Government are seeking. Could the Paymaster General answer that question now?
  As Labour Members have said, we are not satisfied with the system of collection and calculation of European Community resources. Conservative Members also referred to the implications of inconsistencies in the way in which different member states calculate gross national product and VAT bases. They drew attention to the inequity in the amount of money paid by different member states. That, in itself, is a good reason to press our new clause to a Division.
  The Committee should also acknowledge that, in replying to new clause 12 proposed by my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) about an annual report to Parliament, the Paymaster General said that a good measure of the proposals could be incorporated in the annual report made to the House about the budget. But the Paymaster General will not incorporate some very important aspects of my right hon. Friend's new clause.
  The information which is detailed in new clause 12—rather than the great pile of documents that the Government bring to European debates— would be very useful and enlightening. The public would find it very interesting reading. Why does the Paymaster General think that certain parts of new clause 12 are unacceptable? We intend to support my right hon. and hon. Friends if they wish to press the matter to a Division.
  We also face the rather extraordinary prospect of the Paymaster General giving concessions to the hon. Member for Stafford (Mr. Cash)— concessions which were not given in the normal way in response to the debate, but which were negotiated at Downing street. That is a quite extraordinary turnaround for a Government who last week were going to beat the rebels and Euro-sceptics into the ground. All of a sudden, they are now negotiating with them at Downing street about terms. I suppose that the Government have learnt from last night that awarding
  380
  concessions five or 10 minutes before a 10 o'clock Division does not work. Perhaps they are trying a more structured approach.
  8.15 pm
  This style of governing—making all sorts of last-minute concessions—reveals the Government's total disarray and confusion. The Government's tactics are as confused as their Whips must be, if last night's vote is anything to go by. The Government are in as much mess as the European Union when it comes to controlling fraud.
  The Government have not responded adequately to the very powerful arguments for improved scrutiny and control of finances which were made on both sides of the Committee. In new clauses 1 and 12, my right hon. and hon. Friends advance the case for proper scrutiny by the House of what happens to money which is raised in this country and spent by the European Union. The public have a right to expect that control and scrutiny, and we intend to push the new clauses to a Division.
  Question put, That the clause be read a Second time:—
  The Committee divided: Ayes 259, Noes 318.

  Division No. 13]

  [20.17 pm

  AYES

  Abbott, Ms Diane

  Clarke, Eric (Midlothian)

  Adams, Mrs Irene

  Clarke, Tom (Monklands W)

  Ainger, Nick

  Clelland, David

  Ainsworth, Robert (Cov'try NE)

  Clwyd, Mrs Ann

  Allen, Graham

  Coffey, Ann

  Anderson, Donald (Swansea E)

  Cohen, Harry

  Anderson, Ms Janet (Ros'dale)

  Connarty, Michael

  Armstrong, Hilary

  Cook, Frank (Stockton N)

  Ashdown, Rt Hon Paddy

  Cook, Robin (Livingston)

  Ashton, Joe

  Corbett, Robin

  Banks, Tony (Newham NW)

  Corbyn, Jeremy

  Barnes, Harry

  Corston, Jean

  Barron, Kevin

  Cousins, Jim

  Battle, John

  Cox, Tom

  Bayley, Hugh

  Cunliffe, Lawrence

  Beckett, Rt Hon Margaret

  Cunningham, Jim (Covy SE)

  Beith, Rt Hon A J

  Dafis, Cynog

  Bell, Stuart

  Dalyell, Tam

  Benn, Rt Hon Tony

  Darling, Alistair

  Bennett, Andrew F

  Davidson, Ian

  Benton, Joe

  Davies, Ron (Caerphilly)

  Bermingham, Gerald

  Davies, Rt Hon Denzil (Llanelli)

  Berry, Roger

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

  Betts,Clive

  Denham, John

  Blair, Rt Hon Tony

  Dewar, Donald

  Blunkett, David

  Dixon, Don

  Boateng, Paul

  Dobson, Frank

  Bradley, Keith

  Donohoe, Brian H

  Bray, Dr Jeremy

  Dowd, Jim

  Brown, Gordon (Dunfermline E)

  Dunnachie, Jimmy

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

  Dunwoody, Mrs Gwyneth

  Burden, Richard

  Eagle, Ms Angela

  Caborn, Richard

  Eastham, Ken

  Callaghan, Jim

  Enright, Derek

  Campbell, Menzies (Fife NE)

  Etherington, Bill

  Campbell, Mrs Anne (C'bridge)

  Evans, John (St Helens N)

  Campbell, Ronnie (Blyth V)

  Ewing, Mrs Margaret

  Campbell-Savours, D N

  Fatchett, Derek

  Caravan, Dennis

  Field, Frank (Birkenhead)

  Cann, Jamie

  Fisher, Mark

  Carlile, Alexander (Montgomry)

  Flynn, Paul

  Chidgey, David

  Foster, Don (Bath)

  Chisholm, Malcolm

  Foster, Rt Hon Derek

  Church, Judith

  Foulkes, George

  Clapham, Michael

  Fraser, John

  Clark, Dr David (South Shields)

  Fyfe, Maria

  381

  Galloway, George

  McKelvey, William

  Gapes, Mike

  McLeish, Henry

  Garrett, John

  McMaster, Gordon

  George, Bruce

  McWilliam, John

  Gerrard, Neil

  Meacher, Michael

  Gilbert, Rt Hon Dr John

  Meale, Alan

  Godsiff, Roger

  Michael, Alun

  Golding, Mrs Llin

  Michie, Bill (Sheffield Heeley)

  Gordon, Mildred

  Michie, Mrs Ray (Argyll & Bute)

  Graham, Thomas

  Milburn, Alan

  Grant, Bernie (Tottenham)

  Miller, Andrew

  Griffiths, Win (Bridgend)

  Mitchell, Austin (Gt Grimsby)

  Grocott, Bruce

  Moonie, Dr Lewis

  Gunnell, John

  Morgan, Rhodri

  Hain, Peter

  Morley, Elliot

  Hall, Mike

  Morris, Estelle (B'ham Yardley)

  Hanson, David

  Morris, Rt Hon Alfred (Wy'nshawe)

  Hardy, Peter

  Morris, Rt Hon John (Aberavon)

  Harman, Ms Harriet

  Mudie, George

  Harvey, Nick

  Mullin, Chris

  Henderson, Doug

  O'Brien, Bill (Normanton)

  Heppell, John

  O'Brien, Mike (N W'kshire)

  Hill, Keith (Streatham)

  O'Hara, Edward

  Hinchliffe, David

  O'Neill, Martin

  Hodge, Margaret

  Oakes, Rt Hon Gordon

  Hoey,Kate

  Olner, Bill

  Hogg, Norman (Cumbernauld)

  Paisley, The Reverend Ian

  Home Robertson, John

  Parry, Robert

  Hood, Jimmy

  Pendry, Tom

  Hoon, Geoffrey

  Pickthall, Colin

  Howarth, George (Knowsley N)

  Pike, Peter L

  Howells, Dr. Kim (Pontypridd)

  Powell, Ray (Ogmore)

  Hoyle, Doug

  Prentice, Bridget (Lew'm E)

  Hughes, Kevin (Doncaster N)

  Prentice, Gordon (Pendle)

  Hughes, Robert (Aberdeen N)

  Primarolo, Dawn

  Hughes, Roy (Newport E)

  Purchase, Ken

  Hutton,John

  Quin, Ms Joyce

  Illsley, Eric

  Radice, Giles

  Jackson, Glenda (H'stead)

  Randal, Stuart

  Jackson, Helen (Shef'ld, H)

  Raynsford, Nick

  Jamieson, David

  Reid, Dr John

  Jones, Barry (Alyn and D'side)

  Rendel, David

  Jones, leuan Wyn (Ynys Mon)

  Robertson, George (Hamilton)

  Jones, Jon Owen (Cardiff C)

  Roche, Mrs Barbara

  Jones, Lynne (B'ham S O)

  Rogers, Allan

  Jones, Martyn (Clwyd, SW)

  Rooney, Terry

  Jones, Nigel (Cheltenham)

  Ross, Ernie (Dundee W)

  Keen, Alan

  Rowlands, Ted

  Kennedy, Charles (Ross,C&S)

  Ruddock, Joan

  Kennedy, Jane (Lpool Brdgn)

  Salmond, Alex

  Khabra, Piara S

  Sedgemore, Brian

  Kilfoyle, Peter

  Sheerman, Barry

  Kirkwood, Archy

  Sheldon, Rt Hon Robert

  Lestor, Joan (Eccles)

  Shore, Rt Hon Peter

  Lewis, Terry

  Short, Clare

  Liddell, Mrs Helen

  Simpson, Alan

  Litherland, Robert

  Skinner, Dennis

  Livingstone, Ken

  Smith, Andrew (Oxford E)

  Llwyd, Elfyn

  Smith, Chris (Isl'ton S & F'sbury)

  Loyden, Eddie

  Smith, Llew (Blaenau Gwent)

  Macdonald, Calum

  Soley, Clive

  Mackinlay, Andrew

  Spearing, Nigel

  MacShane, Denis

  Spellar, John

  Madden, Max

  Squire, Rachel (Dunfermline W)

  Maddock, Diana

  Steinberg, Gerry

  Mahon, Alice

  Stevenson, George

  Mandelson, Peter

  Stott, Roger

  Marek, Dr John

  Strang, Dr. Gavin

  Marshall, David (Shettleston)

  Straw, Jack

  Marshall, Jim (Leicester, S)

  Sutcliffe, Gerry

  Martin, Michael J (Springburn)

  Taylor, Mrs Ann (Dewsbury)

  Martlew, Eric

  Thompson, Jack (Wansbeck)

  Maxton, John

  Tipping, Paddy

  McAllion, John

  Tyler, Paul

  McAvoy, Thomas

  Walker, Rt Hon Sir Harold

  McCartney, Ian

  Wallace, James

  382

  Walley, Joan

  Winnick, David

  Wardell, Gareth (Gower)

  Wise, Audrey

  Wareing, Robert N

  Worthington, Tony

  Wray, Jimmy

  Welsh, Andrew

  Wright, Dr Tony

  Wicks, Malcolm

  Young, David (Bolton South East)

  Wigley, Dafydd

  Williams, Alan W (Carmarthen)

  Tellers for the Ayes:

  Williams, Rt Hon Alan (Sw'n W)

  Mr. Stephen Byers and

  Wilson, Brian

  Mr. John Cummings.

  NOES

  Ainsworth, Peter (East Surrey)

  Cormack, Patrick

  Aitken, Rt Hon Jonathan

  Couchman, James

  Alexander, Richard

  Cran, James

  Alison, Rt Hon Michael (Selby)

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

  Allason, Rupert (Torbay)

  Curry, David (Skipton & Ripon)

  Amess, David

  Davies, Quentin (Stamford)

  Ancram, Michael

  Davis, David (Boothferry)

  Arbuthnot, James

  Day, Stephen

  Arnold, Sir Thomas (Hazel Grv)

  Deva, Nirj Joseph

  Ashby, David

  Devlin, Tim

  Aspinwall, Jack

  Dicks, Terry

  Atkins, Robert

  Dorrell, Rt Hon Stephen

  Atkinson, David (Bour'mouth E)

  Douglas-Hamilton, Lord James

  Atkinson, Peter (Hexham)

  Dover, Den

  Baker, Nicholas (Dorset North)

  Duncan Smith, Iain

  Baker, Rt Hon K (Mole Valley)

  Duncan, Alan

  Baldry, Tony

  Dunn, Bob

  Banks, Matthew (Southport)

  Durant, Sir Anthony

  Banks, Robert (Harrogate)

  Dykes, Hugh

  Bates, Michael

  Eggar, Tim

  Batiste, Spencer

  Elletson, Harold

  Beggs, Roy

  Emery, Rt Hon Sir Peter

  Bellingham, Henry

  Evans, David (Welwyn Hatfield)

  Bendall, Vivian

  Evans, Jonathan (Brecon)

  Beresford, Sir Paul

  Evans, Nigel (Ribble Valley)

  Biffen, Rt Hon John

  Evans, Roger (Monmouth)

  Bonsor, Sir Nicholas

  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)

  Bowis, John

  Fishburn, Dudley

  Boyson, Rt Hon Sir Rhodes

  Forsyth, Michael (Stirling)

  Brandreth, Gyles

  Forsythe, Clifford (Antrim S)

  Brazier, Julian

  Forth, Eric

  Bright, Sir Graham

  Fowler, Rt Hon Sir Norman

  Brooke, Rt Hon Peter

  Fox, Sir Marcus (Shipley)

  Brown, M (Brigg & Cl'thorpes)

  French, Douglas

  Browning, Mrs. Angela

  Fry, Sir Peter

  Bruce, Ian (Dorset)

  Gale, Roger

  Budgen, Nicholas

  Gallie, Phil

  Burns, Simon

  Gardiner, Sir George

  Burt, Alistair

  Garel-Jones, Rt Hon Tristan

  Butcher, John

  Garnier, Edward

  Butler, peter

  Gillan, Cheryl

  Butterfill, John

  Goodlad, Rt Hon Alastair

  Carlisle, John (Luton North)

  Goodson-Wickes, Dr Charles

  Carlisle, Sir Kenneth (Lincoln)

  Gorst, Sir John

  Carrington, Matthew

  Grant, Sir A (Cambs SW)

  Cash, William

  Greenway, Harry (Ealing N)

  Channon, Rt Hon Paul

  Greenway, John (Ryedale)

  Chapman, Sydney

  Griffiths, Peter (Portsmouth, N)

  Churchill, Mr

  Grylls, Sir Michael

  Clappison, James

  Gummer, Rt Hon John Selwyn

  Clark, Dr Michael (Rochford)

  Hague, William

  Clarke, Rt Hon Kenneth (Ru'clif)

  Hamilton, Neil (Tatton)

  Clifton-Brown, Geoffrey

  Hamilton, Rt Hon Sir Archibald

  Coe, Sebastian

  Hampson, Dr Keith

  Colvin, Michael

  Hanley, Rt Hon Jeremy

  Congdon, David

  Hannam, Sir John

  Conway, Derek

  Hargreaves, Andrew

  Coombs, Anthony (Wyre For'st)

  Harris, David

  Coombs, Simon (Swindon)

  Haselhurst, Alan

  Cope, Rt Hon Sir John

  Hawkins, Nick

  383

  Hawksley, Warren

  Moate, Sir Roger

  Hayes, Jerry

  Molyneaux, Rt Hon James

  Heald, Oliver

  Monro, Sir Hector

  Heath, Rt Hon Sir Edward

  Montgomery, Sir Fergus

  Heathcoat-Amory, David

  Moss, Malcolm

  Hendry, Charles

  Needham, Rt Hon Richard

  Heseltine, Rt Hon Michael

  Nelson, Anthony

  Hicks, Robert

  Neubert, Sir Michael

  Higgins, Rt Hon Sir Terence

  Newton, Rt Hon Tony

  Hill, James (Southampton Test)

  Nicholls, Patrick

  Hogg, Rt Hon Douglas (G'tham)

  Nicholson, David (Taunton)

  Horam, John

  Nicholson, Emma (Devon West)

  Hordern, Rt Hon Sir Peter

  Norris, Steve

  Howard, Rt Hon Michael

  Onslow, Rt Hon Sir Cranley

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

  Oppenheim, Phillip

  Howell, Rt Hon David (G'dford)

  Ottaway, Richard

  Howell, Sir Ralph (N Norfolk)

  Paice, James

  Hughes, Robert (Aberdeen N)

  Patnick, Sir Irvine

  Hunt, Rt Hon David (Wirral W)

  Patten, Rt Hon John

  Hunt, Sir John (Ravensbourne)

  Pattie, Rt Hon Sir Geoffrey

  Hunter, Andrew

  Pawsey, James

  Jack, Michael

  Peacock, Mrs Elizabeth

  Jackson, Robert (Wantage)

  Pickles, Eric

  Jenkin, Bernard

  Porter, Barry (Wirral S)

  Johnson Smith, Sir Geoffrey

  Porter, David (Waveney)

  Jones, Gwilym (Cardiff N)

  Portillo, Rt Hon Michael

  Jones, Robert B (W Hertfdshr)

  Powell, William (Corby)

  Jopling, Rt Hon Michael

  Rathbone, Tim

  Kellett-Bowman, Dame Elaine

  Redwood, Rt Hon John

  Key, Robert

  Renton, Rt Hon Tim

  Kilfedder, Sir James

  Richards, Rod

  King, Rt Hon Tom

  Riddick, Graham

  Kirkhope, Timothy

  Rifkind, Rt Hon Malcolm

  Knapman, Roger

  Robathan, Andrew

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

  Roberts, Rt Hon Sir Wyn

  Knight, Greg (Derby N)

  Robertson, Raymond (Ab'd'n S)

  Knight, Mrs Angela (Erewash)

  Robinson, Mark (Somerton)

  Knox, Sir David

  Roe, Mrs Marion (Broxbourne)

  Kynoch, George (Kincardine)

  Ross, William (E Londonderry)

  Lait, Mrs Jacqui

  Rowe, Andrew (Mid Kent)

  Lamont, Rt Hon Norman

  Rumbold, Rt Hon Dame Angela

  Lang, Rt Hon Ian

  Ryder, Rt Hon Richard

  Lawrence, Sir Ivan

  Sackville, Tom

  Legg, Barry

  Sainsbury, Rt Hon Tim

  Lennox-Boyd, Sir Mark

  Scott, Rt Hon Nicholas

  Lester, Jim (Broxtowe)

  Shaw, David (Dover)

  Lidington, David

  Shaw, Sir Giles (Pudsey)

  Lightbown, David

  Shephard, Rt Hon Gillian

  Lilley, Rt Hon Peter

  Shepherd, Colin (Hereford)

  Lloyd, Rt Hon Peter (Fareham)

  Shersby, Michael

  Lord, Michael

  Sims, Roger

  Luff, Peter

  Skeet Sir Trevor

  Lyell, Rt Hon Sir Nicholas

  Smith, Sir Dudley (Warwick)

  MacGregor, Rt Hon John

  Smith, Tim (Beaconsfield)

  MacKay, Andrew

  Smyth, Rev Martin (Belfast S)

  Maclean, David

  Soames, Nicholas

  Madel, Sir David

  Speed, Sir Keith

  Maginnis, Ken

  Spencer, Sir Derek

  Maitland, Lady Olga

  Spicer, Michael (S Worcs)

  Major, Rt Hon John

  Spicer, Sir James (W Dorset)

  Malone, Gerald

  Spink, Dr Robert

  Mans, Keith

  Spring, Richard

  Marland, Paul

  Sproat, Iain

  Marshall, John (Hendon S)

  Squire, Robin (Hornchurch)

  Marshall, Sir Michael (Arundel)

  Stanley, Rt Hon Sir John

  Martin, David (Portsmouth S)

  Steen, Anthony

  Mates, Michael

  Stephen, Michael

  Mawhinney, Rt Hon Dr Brian

  Stern, Michael

  Mayhew, Rt Hon Sir Patrick

  Stewart, Allan

  McLoughlin, Patrick

  Streeter, Gary

  McNair-Wilson, Sir Patrick

  Sumberg, David

  Mellor, Rt Hon David

  Sweeney, Walter

  Merchant, Piers

  Sykes, John

  Mills, Iain

  Tapsell, Sir Peter

  Mitchell, Andrew (Gedling)

  Taylor, Ian (Esher)

  Mitchell, Sir David (Hants NW)

  Taylor, John M (Solihull)

  384

  Taylor, Rt Hon John D (Strgfd)

  Ward, John

  Temple-Morris, Peter

  Wardle, Charles (Bexhill)

  Thomason, Roy

  Waterson, Nigel

  Thompson, Patrick (Norwich N)

  Watts, John

  Thompson, Sir Donald (C'er V)

  Wheeler, Rt Hon Sir John

  Thomton, Sir Malcolm

  Whitney, Ray

  Thurnham, Peter

  Whittingdale, John

  Townend, John (Bridlington)

  Widdecombe, Ann

  Townsend, Cyril D (Bexl'yh'th)

  Wiggin, Sir Jerry

  Tracey, Richard

  Willetts, David

  Tredinnick, David

  Wilshire, David

  Trend, Michael

  Winterton, Mrs Ann (Congleton)

  Trotter, Neville

  Winterton, Nicholas (Macc'f'ld)

  Twinn, Dr Ian

  Wolfson, Mark

  Vaughan, Sir Gerard

  Wood, Timothy

  Viggers, Peter

  Yeo, Tim

  Waldegrave, Rt Hon William

  Young, Rt Hon Sir George

  Walden, George

  Walker, A Cecil (Belfast N)

  Tellers for the Noes:

  Walker, Bill(N Tayside)

  Mr. Bowen Wells and

  Waller, Gary

  Dr. Liam Fox.

  Question accordingly negatived.
  8.30 pm
  The First Deputy Chairman of Ways and Means (Mr. Geoffrey Lofthouse): Before we move on, I advise the right hon. Member for Bethnal Green and Stepney (Mr. Shore) that, when the time comes, I am prepared to allow a separate Division on new clause 12, if he so wishes.
  Mr. Spearing: On a point of order, Mr. Lofthouse. You and the Chairman will have heard the many references to the Public Accounts Committee. Indeed, in his reply the Minister referred to the Government's willingness, if the House permits, to take some action in that regard. May I draw your attention to starred amendments Nos. 14 and 15, which may be relevant to any future selection when the stars are removed?
  The First Deputy Chairman: For the moment, the Chairman has decided that those amendments are not selected.

New clause 3

  ENTRY INTO FORCE (PROTECTION OF FINANCIAL INTERESTS)
  'This Act shall come into force only when the House of Commons has come to a resolution on a motion tabled by a Minister of the Crown as to whether the United Kingdom Government should adopt a Council Regulation on the Protection of the Community's Financial Interests.'.—[Ms Quin.]
  Brought up, and read the First time.
  Ms Joyce Quin: I beg to move, That the clause be read a Second time.
  The First Deputy Chairman: With this, it will be convenient to discuss also the following: New clause 10—Annual report on fraud and waste—
  'Each year Her Majesty's Government shall make a report to Parliament on the proposals it has made and the progress achieved in combating fraud and waste in Community expenditure as documented in the relevant annual reports of the Court of Auditors.'.
  New clause 13—Fraud in the European communities: annual reports—

  385
  'Her Majesty's Government shall make an annual report to Parliament on their efforts to eliminate fraud in the spending of the European Communities' General Budget.'.
  Ms Quin: New clause 3 is important because it allows the important subject of fraud to be discussed in this debate.
  The new clause states:
  "This Act shall come into force only when the House of Commons has come to a resolution on a motion tabled by a Minister of the Crown as to whether the United Kingdom Government should adopt a Council Regulation on the Protection of the Community's Financial Interests."
  We know that such a regulation is being mooted, and I think that on this occasion the Government will claim to have been active in proposing it. I understand that the regulation was partly a British initiative and dates back to the early part of the year, when the British Government said that they wanted the rest of the European Union to consider the protection of the Community's financial interests, how money is spent and how best to crack down on fraud. I also understand that there have been discussions in the Council of Ministers as a result.
  As is often and frustratingly the case, it is difficult for hon. Members to get any information about what is happening in this important area. I understand that protection of the financial interests of the European Union was on the agendas of the Justice and Home Affairs Council on 1 December and the Economic and Finance Council on 5 December.
  Perhaps the Paymaster General can give us an update on the Council's consideration of that important matter when he replies to the debate. Any information that he can give us could greatly influence the attitude of hon. Members on both sides of the Committee towards that important issue and whether we feel that there is any real chance that fraud and financial mismanagement will be taken seriously.
  The results of the discussions at the two Council meetings were unclear. What seems clear, however, is that the Council of Ministers has simply come out in favour of a resolution on the protection of the financial interests of the European Union. As we know, a resolution is a very weak instrument in the Union. Apparently, the Government are in favour of a regulation on the legal protection of the Community's financial interests, as I am certain that we would be. Perhaps the Paymaster General can give us an update on the progress that has been made towards such a regulation. I understand that the matter might be discussed at one of the meetings taking place as part of the Essen summit. We would be extremely interested to know what progress is being made on that important matter.
  From recent debates and the long-standing interest of many hon. Members on both sides of the House, it is clear that hon. Members take the question of fraud in the European Union very seriously. None the less, I repeat that it is often difficult to get adequate information about what has been taking place.
  In an intervention on the Paymaster General, my hon. Friend the Member for Durham, North-West (Ms Armstrong) rightly mentioned the rather murky negotiations about fraud which took place as part of the Budget Council on 16 November, when Britain apparently agreed to a cut in the European Union's anti-fraud budget at the same time as the Government were trying to persuade suspicious Conservative Members that they were
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  trying to deal with the problem of European fraud. The fact that that was revealed in the press was especially frustrating to Opposition Members, including myself. I had tabled a written question to the Treasury, asking the Government to make a statement on the outcome of the Council held on 16 November. In the written answer that I received from the Paymaster General, which went into a certain amount of detail, there was no mention of the discussion of fraud. There is therefore a lack of transparency in the information that the Government are prepared to give the House on that important issue. I want the Paymaster General to deal with that matter.
  Press releases are issued at the end of each European Council meeting. The release issued after the Council on 16 November has just been made available to us. Again, there is absolutely no reference to the discussions on anti-fraud measures that we now hear took place, or to the fact that the Council failed to increase the funds available to combat fraud and, indeed, cut anti-fraud measures in the Union. We want an explanation of why Members of Parliament and the general public are refused information about the Council of Ministers. Many hon. Members on both sides of the House have rightly complained about undue secrecy in relation to Council of Ministers proceedings and this would seem to be a flagrant example of such secrecy when it is clear that members of the public as well as Members of Parliament want information on the fight against fraud and the measures that need to be taken.
  From the documents before us today, it is clear that the European Court of Auditors feels frustrated at the difficulty that it faces in getting information from the Council of Ministers. That comes over in the opinion of the Court of Auditors on the proposals for a Council decision concerning budgetary discipline.
  Mr. D. N. Campbell-Savours: I am sure that my hon. Friend knows John Tomlinson, who is a Member of the European Parliament. He issued a press release on 18 November 1993—12 months ago—which stated that, at a meeting which took place two weeks prior to that press release, the Council of Ministers failed to increase the budget to deal with fraud. One wonders whether that occurs every year, and whether the Council is now calling the same tune.
  Ms Quin: My hon. Friend is right to detect an alarming trend, and the information that he gives to the Committee is correct. It is certainly true that, a year ago, the Council of Ministers was also prepared to cut anti-fraud measures in the European Union at a time when clear incidence of fraud was increasing at an alarming rate. The Court of Auditors report, which is produced annually, has made severe criticisms of fraud in the European Union for a number of years.
  Rev. Ian Paisley: Is the hon. Lady aware that in a recent debate in Strasbourg, criticism was voiced about the reticence of the Commission in dealing in an upright and forthright way with the quaestors?
  Ms Quin: The hon. Gentleman pre-empts a comment that I was about to make. I had started to refer to the difficulty that the Court of Auditors has in receiving information from the Commission and from other pants of the European Union about the extent of fraud, and in having the figures in good time to make timely comments about the problems which are arising.

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  The court's comments on the Council's decision concerning budgetary discipline say, in relation to article 2, that the proposal provides for the monitoring of expenditure to be tightened up and for statements of expenditure by chapter presented by member states to be sent to the European Parliament and the Council for information. The Court of Auditors understandably says that the paragraph in the proposed Council decision relating to the matter should be amended to include the Court of Auditors, so that it could receive data promptly.
  When the Council decision was made on 31 October 1994, the request from the court for a change in the Council's decision was ignored. The court, even now, is in the frustrating position of not being able to get information in time to make criticisms at an earlier stage than it has been able to at present. In many ways, the court feels greatly frustrated by the fact that it has had to complain so long after the event. That makes its task in trying to get corrective measures adopted much more difficult.
  8.45 pm
  The Commission is castigated generally for its weakness in its approach to fraud, although it does have undoubted difficulties because so much fraud occurs within each member state. Lax controls within certain member states often give rise to many problems.
  In that respect, I can understand the comments made in relation to the earlier group of amendments on the role of the Public Accounts Committee. The way in which the Government reacted was disappointing, although I take the point made by the right hon. Member for Mid-Sussex (Mr. Renton) that the Public Accounts Committee could take certain initiatives without waiting to be cajoled by the Government. It is an area to which I am sure that the Public Accounts Committee will be paying close attention in the future.
  My hon. Friend the Member for Workington (Mr. Campbell-Savours) has referred to the Government's record on fraud. The Government like to give the impression that they are the leading fraud-busters. In fact, as my hon. Friend pointed out, their record is not quite so glossy. It is certainly true that the Government have voted against anti-fraud measures in the Council of Ministers, and a great deal more could have been done by the Government to campaign for reform of the common agricultural policy, which causes so many of the problems of fraud in the European Union.
  Although this may seem to be a minor point, the Government have failed in another respect—by conniving with other Governments to perpetuate the European Parliament's position of meeting in two different places. Many of us feel that a certain amount of useful money could be saved if the European Parliament was not forced into that expensive travelling circus. It is a great pity that the Edinburgh summit in 1992 confirmed the dual nature of the seat of the European Parliament. Of course, some elements of the Parliament still have their base in Luxembourg. The situation is absurd, and members of the public feel that it is quite crazy. Perhaps if there were more publicity about it, there would be more pressure to put an end to that waste of money in the European Union.
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  The question of the common agricultural policy is crucial to any discussion on fraud in the European Union. The Court of Auditors report gave many examples which were fully quoted in the debate that we had a couple of weeks ago. None the less, they are staggering. For example, there was the money paid out for the destruction of trees which are in fact still standing. There was the tremendous scandal of the wine lake, and the amount of money claimed in export refunds for wine supposedly exported from Italy to the countries of central and eastern Europe, when eight times more money was claimed than could be backed up by the figures for exports to those countries. It seems a strange and unjust system whereby the Italians and other wine-producing countries in the European Union can export with subsidies to countries in central and eastern Europe which are trying to build their own economies and in many cases have potentially excellent wine industries of their own but find themselves being undercut by that type of activity in the European Union.
  A similar situation exists with regard to the olive oil industry, where substantial fraud has been reported in the Court of Auditors report. Sub-standard olive oil was none the less claimed for as though it were of a high standard and high quality. It is a very sad situation when people notice how expensive olive oil is to buy at a time when there is a huge level of production in the European Union and a huge amount of money is being spent on subsidising that production.
  Mr. Oliver Heald: If what the hon. Lady is saying is right, why have Labour MEPs voted to double the increase to the future European budget that is proposed in the Bill? They did not make any of the provisos for which she is asking in new clause 3.
  Ms Quin: The provisos in new clause 3 have been pressed consistently by Labour MEPs since 1979. I can inform the hon. Gentleman of that fact, partly because I was a Member of the European Parliament from 1979 to 1989 and I took part in the debates, and partly because of the efforts of the Labour members of the budgetary control committee in the European Parliament: John Tomlinson has already been mentioned, and Terry Wynn is also active on that committee. I can assure the hon. Gentleman that what we are proposing here is fundamentally in line with what we have said on many other occasions, both here and in the European Parliament.
  Mr. Stevenson: Is it not strange that Conservative Members should make the comments that they have, given that a Conservative Government have presided over and agreed to a £5 billion increase in common agricultural policy expenditure since 1992–93?
  Ms Quin: It is indeed. The Conservatives—particularly in the European election campaign—claimed to have tackled, for example, the scandal of costly food mountains; yet, at the time when they made that claim there were about 200,000 tonnes of butter, 112,000 tonnes of cheese and 430,000 tonnes of beef in store. As my hon. Friend points out—he is in a good position to do so in view of his experience on the agriculture committee of the European Parliament—agricultural expenditure has

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  increased greatly. In certain sectors, production has continued to rise, despite the measures that have been taken.
  Rev. Ian Paisley: The hon. Lady will know that I, too, am a Member of the Strasbourg Parliament and I can confirm that Labour Members of the United Kingdom Parliament have continually opposed those developments on the Floor of the House.
  Ms Quin: I welcome the hon. Gentleman's comments. I believe that he has been a Member of the European Parliament since 1979; he will therefore have participated in many debates of this kind and will know what was said on those numerous occasions.
  I could give many more examples. For instance, there has also been a great deal of fraud in relation to tobacco. A large amount of money has apparently been spent on subsidising unusable tobacco; given the health problems that tobacco causes, subsidising usable tobacco may be slightly worse than subsidising unusable tobacco, but in any event it is scandalous that tobacco should be subsidised to that extent in the European Union.
  It seems crazy that tobacco farmers—if that is the right word—can obtain export credits for tobacco that is sold nowhere because it is unusable, and can then simply dump the tobacco. It would be cheaper to provide them directly with a livelihood without their having to produce the substance at all—not that I am suggesting that that should be done in the European Union, but it seems crazy that adopting such an approach would save money for the EU budget. It is regrettable, to say the least, that the Court of Auditors' report on tobacco fraud and misuse was ignored by EU Agriculture Ministers.
  The common agricultural policy itself is, unfortunately, a fraud-friendly system. There has been a huge increase in CAP fraud. Even the legal operation of the policy is tantamount to fraud: an absurd circular system of subsidy can arise, so that a farmer may be paid a subsidy for not putting one field into production while being paid another subsidy for increasing the yield from another field. We also know of the policy's negative effect on the trading for third world agricultural products.
  It is clear from the report that there are huge inefficiencies and irregularities in the use of European Union funds, that the .administration of the European guarantee fund in agriculture is ineffective, that fraud is encouraged by weak internal systems and complex legislation, that there are no proper clear and fixed objectives for expenditure, that there are breaches of rules in contracts with third parties, that there is confusion between administrative and operational spending, and that the Commission's delegation of financial management to national Administrations and third parties has led to a serious loss of control. That reinforces the point made earlier about the Commission's culpability.
  It is vital for member states to improve their accounting, internal control and auditing of European Community operations. The whole saga adds up to gross weaknesses in what should be sound financial management, and very poor value for money. That explains why so many hon. Members on both sides of the House have expressed concern about the issue recently, and why the new clauses have been tabled.
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  New clauses 10 and 13 call for annual reports on fraud to be presented to the House of Commons, which I think would be very sensible. I can foresee some of what the Paymaster General will say: he will say, for instance, that there are already many opportunities to raise such matters. There is, of course, a six-monthly report on events in the European Union, as well as the various procedures and documents that are considered in Committee—often, I may say, with inadequate media attention. Much of the work done in European Standing Committees is worthy of much more attention that it receives.
  Given the interest that the House has expressed in the issue, it strikes me as sensible to hold an annual, focused debate on it alone. I believe that we should continue to hold such annual debates until the fraud problem ceases to exist in the European Union; we all look forward to that time, but it seems unlikely to arrive in the near future.
  Earlier, my right hon. Friend the Member for Llanelli (Mr. Davies) forecast a certain meeting of minds between Euro-sceptics and those who are more positive about the European Union. I am not sure whether his forecast will be proved right, although I respect his experience: he has been in government, and has seen some of the matters that we are discussing from the viewpoint of the Council of Ministers. I know, however, that there is a great deal of cross-party agreement on this issue; I therefore hope that new clause 3 will receive the maximum support not only from Opposition Members, but from Conservative Members.
  Mr. Dykes: I shall speak briefly. I welcome the interest and support expressed by hon. Members on both sides of the Chamber on endeavours to deal with the thorny problem of fraud in the European Community. I have no quarrel with anyone who suggests that that is necessary, although I remain sceptical about whether these or, indeed, any amendments to existing legislation are needed, or will deal with fraud in the best possible way.
  I do not condone fraud either in member states—including this country—or in any of the Community transfer payments. Far from it. I am a member of the Select Committee on European Legislation—the Scrutiny Committee—and fraud is naturally one of our main concerns. It is a regular subject of discussion and deep examination, to the extent that we have the necessary information to hand. My quarrel, as emerged from the debate on Second Reading, is with putting it together with this legislation. That is why I would object to the proposed amendments, or any that were along similar lines.
  The Bill should not have been opposed by any hon. Member because it was a routine Bill, dealing with a very modest increase in own resources as agreed at the relevant summit meeting in Edinburgh. I shall not repeat the Second Reading debating arguments for that, but it remains a literal truth about the text, and the two clauses are entirely routine and should not even be gone over in that way. However, we know why that happened—for a totally different reason, and that is why fraud has been built into the argument as a wonderful way for anti-European Members of Parliament here, and the press especially, to have a tremendous field day. Interestingly, the press are not here tonight—that is a different point—but they certainly were here on Second Reading because they anticipated trouble and enjoyed the anticipation thereof.

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  To hound the European Community and say that it is riddled with fraud is a good, populist thing to say, but it is totally untrue. No one would condone any fraud at the margin anywhere, including in member states, and substantial fraud takes place in the United Kingdom that has nothing to do with the European Community. That needs to be tackled energetically by the various relevant authorities as well, and I hope that that will happen.
  For the hon. Member for Gateshead, East (Ms Quin) to be so optimistic as to say that fraud could be eliminated, either between member states of the European Union and the Commission handling all those payments in a complicated budget, or in the individual member states, is perhaps a little bit naive. I am afraid that there are some wicked people in the world. Unfortunately, our skill at financial techniques in this country, allied with agricultural payments, agricultural activity and other aspects, means that this country is full of people who practise those things, and that happens in the other member states.
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  Mr. Austin Mitchell: Will the hon. Gentleman give way?
  Mr. Dykes: At the moment, I do not intend to give way at all, because I want to be brief, to give other hon. Members a chance. I shall not give way at all unless I am deeply moved by an especially unusual and esoteric intervention. However, as, by definition, I shall not know that until I have given way and heard it, it is unlikely that I shall do that tonight. I want, therefore, to be brief, if the hon. Gentleman, with his extravagant obsessions about disliking the European Union, will forgive me on this occasion.
  That problem also applies in the other member states. I gleaned from my visits that each one is equally concerned with national domestic fraud that has nothing to do with the European Union and with the fraud that occurs in the European Community.
  However, let us keep the matter in perspective. Let us get rid of the hysteria. Let us get away from the £6 billion figure that was bandied about in the press, with no evidence to that effect; that equalled, by the way, the amount of money that the previous Chancellor of the Exchequer wasted in trying to defend an exchange rate mechanism rate that was untenably high, because we should not have entered at such a high rate against the deutschmark.
  Perhaps £6 billion is a leitmotif figure for all those seeming political and financial scandals, and will be repeated in other areas as well. However, in our own report—
  Mr. Campbell-Savours rose—
  Mr. Dykes: I have already said that I shall not give way.
  In our Select Committee reports, and in the explanatory memorandum provided by the Treasury and signed, I think, by my hon. Friend the Paymaster General, it emerges repeatedly that fraud is a legitimate and serious preoccupation of all of us—but at the margin the size is grossly exaggerated by the anti-European propaganda—
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  that the Commission has responded to the Court of Auditors' regular admonitions and references to those matters; and that the main problem is mishandling and mismanagement of financial payments, as was also discussed in the debate on the previous group of new clauses, rather than huge amounts of fraud in vast areas of the Community budget zones. That remains the literal truth. Therefore, it is a matter for the House of Commons to be extremely worried about, but let us keep it in perspective.
  I quote from the latest report that the Select Committee had on the latest Court of Auditors' report. We referred in paragraph 56 of our report to the Commission's response:
  "The Commission accepted a number of the Court's findings and"
  has
  "taken steps to implement them. The Commission's response to the main features of the report are detailed below".
  Then, in a specific example:
  "The Commission comments that for Own Resources it is aware of the importance and value of post-import clearance checks and agrees with the Court that the effectiveness of the checks depends on the adoption of methods based on risk analysis. It is in contact with Member States to promote their use. The Commission does not accept that the overall GNP figures are not reliable but agrees that further efforts need to be made to ensure harmonisation of the national accounts."
  In the "blue-top weekly Europe bulletins" that we receive from the various local Commission offices in the capital cities, the matter was also put in perspective with the leading paragraph in the edition of 24 November:
  "Commission rejects fraud allegations. Commission Secretary-General David Williamson has rejected media allegations that fraud was widespread in European budgetary spending. Commenting on the recent Court of Auditors report, he said that the document was not about fraud but about financial management"
  or mismanagement.
  "It mentioned fraud only once in its 484 pages"—
  Mr. Duncan Smith: Will my hon. Friend give way? It is esoteric.
  Mr. Dykes: I am not giving way.
  "It mentioned fraud only once in its 484 pages, referring to just one transaction in Denmark. It was completely wrong to bandy about figures suggesting that fraud amounted to £6 billion or more, Williamson said. The Court of Auditors makes the point that more than 80 per cent. of EU funds",
  as brought out in previous debates, on the Opposition Benches as well,
  "are managed on behalf of the Union by the Member States".
  I do not think that anyone in the Committee would regard Secretary-General David Williamson as anything other than a man of great integrity. He is an honest public servant with much international experience—a serious senior figure in the European Commission. He is from this country and I believe that he was a permanent secretary at the Ministry of Agriculture, Fisheries and Food many years ago before he went to Europe. He is a credit to this country and to the European Community and not the sort of person to tell lies. He should not apologise—he is not the sort of person who says that he agrees with The Sun and the Daily Star, and the gutter filth and poisoned propaganda against the European Community that one regularly reads in those journals and, sadly, elsewhere.
  Let us keep the subject in perspective. When Ministers deal with such issues, they should not succumb to the temptation to stir up hysteria about fraud by saying that it is connected with the legislation. To be fair to them,

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  Ministers have not done that, but the Opposition should not do so. The Opposition made a basic mistake—it is perfectly reasonable for, and open to, the Opposition to raise the subject of fraud in Europe or national fraud at any time without connecting it to the Bill. They have done a disservice to the cause of Europe in the House, where there is a natural, built-in majority for further developments after Maastricht among all parties. If there were free votes instead of the three-line Whip clamps put on by our nervous Whips—I understand why they do that nowadays—there would be large majorities in favour of all significant new developments in the Community. That is the important point on which to focus.
  Keeping matters in perspective means being rational and pragmatic, not hysterical. I have a good example that is directly linked with domestic fraud. I believe that social security fraud—allowing for all systems, including income support and unemployment fraud—amounts to about £4 billion per annum. Would it be wise and right for payments to genuine and deserving applicants of whatever sort within the social security protection system to be denied financial assistance pending the resolution of the problem of fraud?
  In the private sector, the Serious Fraud Office is, rightly or wrongly, under a great cloud of suspicion; it is suspected that it has adopted the wrong sort of investigative methods. Many people would be concerned if the SFO were too weak and had inadequate resources to do its job properly. Fraud also occurs when various spivs and crooks misuse public sector funds. There is fraud by way of tax evasion, not just avoidance—one can talk to any senior Inland Revenue officer about that. The sums involved amount to billions of pounds. Does that mean that ordinary, honest taxpayers should be penalised and brought into that category? No. Ministers should put the correct record on Europe in a balanced way. Newspaper propaganda and poison against Europe are moving from the merely alarming to the positively dangerous.
  I do not think that I shall be out of order if I refer to some articles that refer, at least tangentially, to fraud. Two recent examples fill me with gloom and foreboding if they reflect future standards in the British press. The examples are not taken from The Sun, the Daily Star or the Daily Sport, but from serious journals. One example comes from The Spectator of 3 December—
  Mr. Denis MacShane: A Tory comic.
  Mr. Dykes: I agree with that, and I thank the hon. Gentleman, who described it as a Tory comic. It is perhaps a right-wing comic. I am not sure that many of those Tories are genuine Tories in the old sense that I still respect.
  I love the story of the British mother whose children were taken to Germany by a recalcitrant and difficult father. The theme of the article is that the case is the direct responsibility of the European Union. The writer wonders how the wicked Germans and Europeans dare to lake the
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  wonderful children away from their mum in Britain. It is nothing to do with the European Union—that is poisoned propaganda—
  The Second Deputy Chairman of Ways and Means (Dame Janet Fookes): Order. This does not have much to do with the new clause either.
  Mr. Dykes: I agree, Dame Janet. Although I shall not detain the Committee at great length by reading from the article, in other passages it refers, tangentially, to fraud. Were other hon. Members alarmed by the futuristic article in the Daily Mail last Saturday? It certainly referred to fraud. [Interruption.] I am grateful for the advice from the Opposition, but such matters are important because the press are doing it more and more. What the press do—in concert with some of our hon. Friends, because they all work closely together—is to repeat poisoned propaganda against the European Union. It is a self-feeding process which would be easily reversed and dealt with if the Government had the necessary boldness and courage to deny such allegations, put the matter into perspective and restore the traditional enthusiasm for European Union developments on which the Government were partly elected, although the main policy areas must have been domestic, economic and social policy.
  As you are looking at me rather severely, Dame Janet—and understandably so—I shall conclude. If the Government give a balanced lead, acknowledge that these issues are important, reject the amendments, which are unnecessary and would not be an useful change to existing legislation, and express their determination to deal with matters where justified but keep them in a balanced perspective, they will get more support from all parts of the Chamber.
  Mr. Campbell-Savours: I want briefly to intervene to tell the hon. Member for Harrow, East (Mr. Dykes) that I simply cannot understand his attitude. Like me, he has spent most of his life advocating support for the Community. He must see the dangers of a referendum and he must accept that if there is a referendum by the end of the decade, the likelihood is that it will be fought on the issue of fraud and not on the ballot paper, if that is what it will be called. If it is fought on fraud, we shall lose and there will be a major crisis in terms of our membership of the European Community. The strongest advocates of the European Union have a special responsibility placed on their shoulders to deal with the issue before it destroys a principle that we have advocated for most of our lives.
  I was not here when my right hon. Friend the Member for Llanelli (Mr. Davies) made his speech, but I understand that he saw some consensus developing between those of us who are concerned as supporters of Europe with those who have historically taken a position in opposition. I recognise that a consensus will develop because it is in all our interests to resolve the issues.
  The Lords European Communities Select Committee has now produced three reports of which I am aware: the 1989 report, "Fraud against the Community", the 1992 report, "The Fight Against Fraud" and the 1994 report, "Fraud and Mismanagement of Community Finance". The reports point to the problem within the Community. They are all set against a background of repeated attempts over the years by Labour and, if I am honest, I must admit, by Conservative Members of the European Parliament to deal with such issues. They recognised, particularly

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  Conservative supporters of the Community, that the problem had to be dealt with before greater damage was done. Yet nothing has happened apart from measures being introduced as a result of the passing of the Maastricht treaty.
  The problem is whether the will is there: some of us believe that it is not. Even if measures are introduced under the provisions of the Maastricht treaty, some countries within the European Community may set out to undermine whatever arrangements are made because their reasons for membership are selfish. As we heard in the previous debate, they are prepared to adapt their national statistics to ensure that they are beneficiaries.
  I want to draw the Committee's attention to three particular pieces of information. The hon. Member for Harrow, East referred to a newspaper article. I shall refer to a Commissioner, Mr. Peter Schmidhuber, whom my hon. Friends will know. The EC Commissioner responsible for fraud prevention told MEPs in 1992 that the Commission was seeking to improve co-ordination between its own departments and member states. He told a public hearing of the European Parliament's budgetary control committee that
  "Brussels is examining whether to pay rewards for information on fraud, or offer performance-related bonuses to investigators."
  I have asked the Minister to take note of my request as I shall be seeking a response from him. Those two propositions were considered by the Commission. What was the result of that consideration, and will the fraud measures that we understand are to be introduced include those two provisions, which will go some way towards dealing with the problem?
  In 1992, Mr. Peter Schmidhuber went on to say:
  "Demands for a further 35 fraud-busters have had to be shelved because of a general financial squeeze"—
  I find that remarkable in the context of the EC budget—
  "and the effective devaluation of the Ecu, in which the EC budget is calculated, against the Belgian franc, in which most staff salaries are paid."
  9.15 pm
  Are we to believe that the Community, which seems to spend its money lavishly in many areas, could not find the resources to pay 35 fraud-busters? That is a Commissioner responsible for fraud prevention speaking to the European Parliament budgetary control committee.
  Mr. John Tomlinson, Member of the European Parliament, in a press release in 1993, said:
  "'European Community Ministers are attacking funds for fighting fraud in the Community budget—at the insistence of the British Government', said John Tomlinson Labour MEP today in the European Parliament in Strasbourg. 'This will be resisted most strongly and a row is certainly brewing between anti-fraud campaigners in the Parliament and the Council of Ministers. The first move was when the Ministers slashed 25 million ECU (about £20 million) from the anti-fraud funds in next year's European Community budget.'"
  Again, nothing happened.
  On 10 March 1994, in a letter to the editor of The Independent, Terry Wynn said:
  "Can I make one or two comments following Douglas Hurd's remarks about fraud in the European Community. In July last year at the Council of Ministers first reading of the 1994 EC Budget, the Council made sweeping cuts throughout the budget. However, when it came to agriculture, which accounts for half of the £56 billion
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  budget of the EC, the only cut they made was to take 20 million off the anti fraud line at the insistence of the British Government. At their second reading, the European Parliament had allocated funds to create 50 extra posts in the Anti Fraud Unit, they voted against this also. Mr. Hurd should remember that under the British Presidency, the Edinburgh Council insisted that the European Parliament continue to meet in Strasbourg, which means Parliament pays about £100 million per year for this decision, rather than being centralised in Brussels. He really should remember that when it comes to fraud, Member States have the prime responsibility for preventing, detecting and prosecuting fraud against the Community Budget and for recovering sums unduly paid out."
  We all know what has happened about that promise. Many of us see it as a vague promise arising from the passage of the Maastricht treaty.
  The truth is that unless we deal with the problem we will lose the Community because it will be destroyed and discredited. I tell the hon. Member for Harrow, East that it is all right trying to ignore it—[Interruption.] The hon. Gentleman's speech suggested to me that while he may be concerned about the problem, he believed that it was exaggerated. I believe that we are looking at only the tip of the iceberg.
  I have spent much of my life in Italy. I lived there as a child, I have friends and contacts there now and I go there regularly. Fraud is rife not only in Italy but in Greece, Spain and in parts of the CAP budget in France—
  Mr. Dykes: And in the United Kingdom.
  Mr. Campbell-Savours: Yes, and in the United Kingdom.
  Mr. Dykes: Everywhere.
  Mr. Campbell-Savours: If it is, it should be dealt with. If we do not deal with it, we will lose the Union. That is why we have a special responsibility.
  This issue will surface at the top of the British parliamentary agenda, not because we are anti-Community but because many of us are concerned that the Community might be wrecked unless the problem is dealt with.
  Mr. MacShane: Is my hon. Friend aware that the Court of Auditors report, which many hon. Members have mentioned, shows that there were more fraud cases in the United Kingdom than in France or Italy? The sums were larger in France, because the French defraud in a more concentrated way there, but let us pay tribute to the British firms, farms and organisations that go out and show how to milk money from Brussels.
  Sometimes I wonder whether we should put ourselves in the position of a German or a French parliamentarian ranting on about fraud in England. How quickly our xenophobic press would pick that up. Parliaments in the rest of Europe, however vigorous and vicious they may be, debate the issue in a rather more measured way.
  Mr. Campbell-Savours: I can tell my hon. Friend why there is a higher incidence of fraud, if that is the right way to put it, in the United Kingdom. It is because we detect it. In some other Community countries, people simply do not want to detect fraud.
  Mr. Dykes: Very naive.
  Mr. Campbell-Savours: The hon. Gentleman may think that I am naive, but last year members of the European Standing Committee were heavily briefed on

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  the subject, and I spent several days reading the material. One report in particular, which I have been trying to find, dealt with the different reporting mechanisms in the various European states, and showed how in some states there is resistance within the Administration to identifying fraud. The hon. Member for Harrow, East may shake his head at that; clearly he thinks that the source of the material was poor. But if I remember rightly, the document came from the Court of Auditors. If I find it after I finish my speech, I shall intervene and tell him what it was called.
  Mr. Dykes: Will the hon. Gentleman give way?
  Mr. Campbell-Savours: No; the hon. Gentleman did not give way to me.
  Mr. Dykes: But the hon. Gentleman keeps referring to me. Will he give way?
  Mr. Campbell-Savours: All right.
  Mr. Dykes: I know that I did not give way to the hon. Gentleman, but that was because I was trying to be brief, and I had said that I did not intend to give way to anybody. However, the hon. Gentleman is repeatedly referring to me, so I am grateful to him for letting me intervene briefly.
  As a member of the Select Committee on European Legislation I know that we scrutinise the annual report of the Court of Auditors. The hon. Member for Newham, South (Mr. Spearing), who does more homework than most hon. Members on such matters, knows that too. Every one of those annual reports says that there is fraud in every member state, including the United Kingdom. In many areas the incidence of fraud is greater here than in other countries. Detection systems and cultures vary, but I have visited all the other member states and, with one or two exceptions—deliberately, I shall not name them now—every country thinks that it has the best detection systems, and that others are cheating more than it is.
  Mr. Campbell-Savours: That is the hon. Gentleman's view, but it is not mine. If I find the document, I shall give him the reference.
  I have here a document, the Thomson report, which is about EC agricultural policy for the 21st century. Ministers have repeatedly told us in Parliament that we could not see that report, because it dealt with reform of the common agricultural policy. We have been told again and again from the Dispatch Box that it is a Commission document and is not available to us. My hon. Friend the Member for Stoke-on-Trent, South (Mr. Stevenson) tried to get access to the document before he left the European Parliament, and I understand that several other hon. Members have tried to get hold of it. Finally, I got my local Member of the European Parliament for Cumbria and Lancashire, Tony Cunningham, to extract it from the Commission by one means or another.
  The document is extremely significant, and I advise all hon. Members to read it because it deals with reform of the CAP and makes many interesting proposals that should be debated in the House. If we really intend to deal with fraud in the Community we must tackle the structures and frameworks within which that fraud takes place. We must reform the CAP; it desperately needs reform.
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  I have been in the House for 15 years now, and the problem is that year after year Members get up and talk about reforming the CAP, but nothing ever happens. Ministers speak from the Dispatch Box in annual agriculture debates. We used to have an annual statement on the settlement, at which hon. Members always asked Ministers for assurances that work was going on to reform the CAP. Very little has happened. All that has happened is that larger amounts have been being spent despite the fact that we have been given undertakings that, over the longer term, there will be reductions in the CAP budget.
  We must address the issue and there should be open debate. Documents should not be the unique preserve of Commission officials. The material should be made available to Members of Parliament so that we can deal with the issues. That is the only way in which we shall see proper reform in the Community.
  Mr. Duncan Smith: I find myself in pretty near full agreement with the hon. Member for Workington (Mr. Campbell-Savours). He had a more honest and clear view of the problem than did my hon. Friend the Member for Harrow, East (Mr. Dykes), who spent most of his speech trying to hide away some of the problems. He seems to think that we should ignore them because we have to get them in perspective. The reality is that, unless these things are dealt with, there will not be a European Union, because it will have collapsed under the weight of its own inefficiency and fraud. If we wish to continue to see a marketplace here, we would not necessarily wish that to happen.
  My hon. Friend the Member for Harrow, East went on to say something along the lines that one of the Commissioners had said that fraud was out of all proportion, and that it was really a question of mismanagement. I tell my hon. Friend and other hon. Members that I used to be a business man. When running a company, I would have looked at mismanagement of finance in the same way that I would have looked at fraud. Deliberate mismanagement is the same as fraud.
  The point about the report by the Court of Auditors is simply that the court is not able to find out how much of the mismanagement is really fraud. In truth, the structures are such that mismanagement is endemic. The mismanagement is part of the system, and leads to further fraudulent mismanagement of money.
  The argument for an annual debate on the finances of the European Community is now strong. Each year, we rightly discuss the Budget and the Finance Bill, when the Government seek money for the next year. Yet the reality is that each year, we sit here quietly while European money flows through the Consolidated Fund straight into the European Community. Until the Heads of Government get together to decide whether there should be any more money, Parliaments are denied access to the debate. It is ironic that we should debate the matter here, when the reality is that we do so on the basis of the increase and not the total budget.
  The timely arrival of the report by the Court of Auditors has made the debate even more interesting. I looked at the executive summary of the report; the main book is very detailed. It is interesting that, at the beginning of the report, the authors talk about comparing the findings with the annual report for 1983. Even glancing through, one is struck by how little has changed. We have talked about the powers that Maastricht gave the Court of Auditors in

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  the whole investigative process. From looking through the reports in 1983, one finds that the present report mentions essentially the same things. The court did not have all the extra powers in 1983.
  There is no demonstration that the powers under Maastricht have suddenly opened this can of worms. The can of worms was on display; it is just that nobody had the political will to discuss it. There was not the drive. It is only now that we see the inexorable rise of money that the drive has come to find out where the money is going. The report says:
  "it is clear that many of the problems then identified in accounting and financial management of the most important areas of Community expenditure have not yet been overcome."
  The report talks about the Commission having "made efforts" and about the
  "proper level of financial management and control necessary in the complex environment of Community finances."
  Nothing has changed. The court was saying the same things back in 1983.
  The report talks about mismanagement and about inducements; it touches here on the agricultural side. I know that the hon. Member for Gateshead, East (Ms Quin) went into detail on that point. I shall not go down that road, but will simply reiterate the point. The report says:
  "Agricultural management measures are still failing to achieve balanced markets."
  The report talks about how aids for distillation, appropriate for temporary production surplus, have been made into permanent encouragement to the reduction of unsaleable wine. It goes on to say:
  "the permanent abandonment of vineyards are offset by others which encourage investment in the sector."
  It is the particular part which talks about temporary production surpluses made into permanent encouragement which suggests a quiet slide across in practice. That is endemic. It was allowed to happen.
  Another part of the report is even more fascinating. I ask the Committee to think about the matter as though I were talking about a local council, and that it were an investigation of how councillors were carrying through their practice. The paragraph says:
  "The audit continues to discover breaches of the rules governing the placing of contracts with third parties … The financial controller's department has sometimes accepted that expenditure be charged to the wrong account or that a single operation be covered by several small private treaty contracts instead of one large contract which would have been put out to tender."
  I looked at that, and I could not believe it. I immediately thought that, if it had been a reference to a council in this country and we had been talking about councillors, the Audit Commission would have recommended surcharging them and their disbarment.
  That is not only mismanagement. It is now entitled mismanagement, but it is fraud, because it is a misuse of moneys which the Community has no right to abuse and misuse. It is not a case of hiding the problem or pretending that it is out of all proportion: it is a reality. It was just the same in 1983. The travesty is that it is still happening.
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  9.30 pm
  The report even goes on to say:
  "The Commission's central accounting system is supported by inadequate documentation which fails to provide a clear 'audit trail'".
  That is accountants' doublespeak. On numerous occasions, I have seen business accounts vetted by accountants who talk in the first instance about difficulty in finding documentation; a lost trail. That is them giving hint to the fact that it has more than probably been deliberate, that in fact documents have gone missing which nicely hide the reality of the figures.
  The report goes on:
  "the Commission needs to devote a significantly larger proportion of its staff resources to securing the necessary improvements in the performance of its own services".
  I shall come to that matter later, because I want to ask the big question at the end: to whom will those people be accountable, and about what?
  There are two other sections with which I want to deal briefly. One section, on the financial audit, makes very interesting reading. I recommend that right hon. and hon. Members read it. It says:
  "Cases of avoidance of the rules and tenders, the granting of approval ex post facto by the Financial Controller or officials who are not authorised to do so, the absence or inadequacy of supporting documents, items which are not booked in accordance with the provisions of the regulations and various book-keeping procedures are all weaknesses in the internal control system."
  They are not weaknesses: they are disasters. Over that period of 11 years, there was no drive to tighten up those aspects.
  It is not that we now have people looking into matters and saying that it is a problem. Nobody, at any stage, who controls the money—those same upright individuals about whom my hon. Friend the Member for Harrow, East talked—once asked themselves why they were living with those weaknesses, why they were not doing something about it, why they needed a policeman to come along to tell them it was wrong. If they did not intend it to happen, why did they not stop it earlier? It is the same for our own Government practices, and we should hunt those flaws down on the same basis. However, those disasters come through as
  "weaknesses in the internal control system."
  The section of the report entitled "European Parliament Building Expenditure" is enlightening. I know that the hon. Member for Gateshead, East said that it was ridiculous that there were two buildings, and possibly a third, and I fully agree. I do not think that anybody in this Committee would for one moment believe that there should be more than one building.
  However, in the midst of that discussion, we suddenly find a little gem. The report says:
  "It was found that there had been no prior invitation to tender for the execution of the project"—
  the building of the Parliament. That is quite incredible. In other words, somehow that invitation was known about, quietly slid along and, somehow, the right people tendered a bid. It goes on:
  "The Parliament is obliged to review these aspects for the purposes of obtaining long-term financing for the project at the lowest cost."
  The funny thing is that, when one reads the report, one begins to get the feeling that one is almost re-reading through some eastern potentate's book of accounts,

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  because one begins to see the number of palaces growing, people with largesse and large salaries. It is as if we are talking about something that is both anti-democratic—
  Mr. MacShane: Will the hon. Gentleman give way?
  Mr. Duncan Smith: With all due respect, I shall not give way. I am aware that others wish to speak. I wish to draw my remarks to a conclusion.
  Some information has been given to me by the hon. Member for Antrim, North (Rev. Ian Paisley), who is now in his place, about Pieter Dankert, who I believe was the president of the European Parliament. The information stems from the debate that took place on the Court of Auditors. I gather that Mr. Dankert said—I am paraphrasing—that it was strange that the Commission seemed not to have co-operated fully and speedily when the Court of Auditors was producing its report. He seemed to say that somehow the process was slowed down.
  We must remember what was going on when the report was being written. A number of nations were applying to join the European Community and were holding their referendums. There were Austria—Switzerland rejected membership—Finland and Sweden. The process that I was describing was not completed until shortly after Sweden held its referendum.
  I am not trying to suggest that an attempt was made to stop the Swedes knowing about the "company" that they were about to join, but the situation was rather like taking part in a company as a director, for example. Would such a person sign himself in only after he had read the accounts? Applicant countries did not have that opportunity, and they will now be saying, "What have we said we shall join?"
  Rev. Ian Paisley: I can confirm what the hon. Gentleman has said, and what Mr. Pieter Dankert said. As the hon. Gentleman has said, Mr. Dankert was a president of the Strasbourg Parliament, and so could not be called a Euro-sceptic. He said that it was interesting to note that, if someone wanted to join a company, he would always examine the books, but in the instance to which the hon. Gentleman was referring the books could not be opened until the referendum took place.
  I was a member of the Bureau of the Strasbourg Parliament. During a meeting of the Bureau, the French argued that, unless the issue of the new Parliament building was dealt with quickly and quietly, they would stop the European elections altogether. It was said that the members of the Bureau should not let the matter out of the meeting.
  Mr. Duncan Smith: I am grateful to the hon. Gentleman for his intervention. He told me earlier that he wanted to make the specific point.
  Time and again, hon. Members on both sides of the House reach the point when they say, "There are problems. There is endemic, deep-seated fraud." As the hon. Member for Workington said, we cannot rely on the figures of some countries when they investigate fraud.
  Like the hon. Gentleman, I have lived and spent a long time in Italy and various other countries, and have done business with them. I know the culture, which does not lend itself to the genuine examination that I have witnessed in the United Kingdom and in some other
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  countries. There is endemic fraud in certain countries, and it is their structures that have given rise to it. It is those structures that we must tackle.
  It is no good saying that we should level police on police so that they can investigate each other. That will mean allocating even more money for the next structure that investigates the structure below it, and so on. That is exactly the problem with the Community now. The different structures are not co-operating but hiding themselves from each other as part of a game.
  The common agricultural policy, for example, is no longer viable in its present form. Indeed, it has not been viable for a long time. So what must we do with it? The main problem is that moneys go into the Commission and then out to member states. There is no control at Commission level. The members of the Commission are the policemen, and at the same time they control the moneys that go out to member states. It is clear that they are not under any pressure to resolve the problem.
  The issue could be settled by repatriating much of the control of the Commission back to member states and leaving the Commission, as it should have been in the first place, adjudicating between nation states. That would give the real cause and the real drive behind checking on fraud. Essentially, in that and all other matters throughout the cohesion fund and every other mechanism in the Commission, at present we give it that money in the first place and then watch it recycled back, through various means, to us and to others.
  In reality, restructuring or changing is the answer, not a continual demand for more police, because they will not find out any more. They will just do in 10 years what they have done over the past 11 years, and that is to say, "Oh, surprise, surprise, there is fraud in the European Community, but we cannot obtain a full answer because we do not have full co-operation." Let national Parliaments ask their Governments why we are paying more tax.
  Forums across Europe will be the right ones to investigate using their own versions of the Public Accounts Committee, not trying to give central control and central investigation. I therefore urge my hon. Friend the Minister to drive this matter forward into 1996 and reform root and branch the structures that exist in in Community; otherwise, as has been said, we shall inevitably watch the disintegration of what exists there at the moment.
  Mr. Shore: I agree with much of what the hon. Member for Chingford (Mr. Duncan Smith) said. It contrasts very starkly with the remarks by the hon. Member for Harrow, East (Mr. Dykes). The hon. Member did not do his cause any good by seeking to minimise the extent and gravity of fraud in the European Community. He would have done very well indeed to have listened to the good advice of my hon. Friend the Member for Workington (Mr. Campbell-Savours).
  One of the most telling phrases during the debate came from my hon. Friend the Member for Gateshead, East (Ms Quin). She said correctly and pointedly that the CAP is a fraud-friendly system. It is. No one who has turned his or her mind seriously to the character of the CAP would deny that.

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  I do not know whether I may formally move new clause 10 in my name, but we are calling for—
  The Second Deputy Chairman: Order. The right hon. Gentleman cannot do so at this stage. Debate is possible, because new clause 10 has been grouped with new clause 3. If new clause 10 were moved, it would have to be moved in the order in which it appears on the amendment paper.
  Mr. Shore: I may, however, refer to its terms. We say that
  "Each year Her Majesty's Government shall make a report to Parliament on the proposals it has made and the progress achieved in combating fraud and waste in Community expenditure as documented in the relevant annual reports of the Court of Auditors."
  No one who has followed the annual documentation by the Court of Auditors on fraud, waste and inadequate financial control in the Community over the past decade can fail to see the need for such a new clause. The hon. Member for Chingford made a telling point when he said that the recent report of the Court of Auditors itself made the point that nothing has really changed in the past 10 years. That is a tremendous indictment not of the Court of Auditors but of the Commission and the national Government authorities which should be concerned with combating fraud.
  To the dismay of the Government, no doubt, the Court of Auditors published its annual report for the year 1993 as recently as 24 November. What the Court of Auditors and the House of Lords Select Committee had to say in the two major documents to which I shall refer is very telling.
  It is absurd for the hon. Member for Harrow, East, who is unfortunately not in his place, to refer to "poisoned propaganda". The Court of Auditors is a professional and competent body which can hardly be challenged by the people whom it has been appointed to investigate and whom it has found it necessary to censure. The Commission's defence is very unconvincing indeed.
  9.45 pm
  The Court of Auditors said a great deal about CAP and the overseas aid programme. At the beginning of its very gentle general summing up it says:
  "Overall, it would be fair to say that the development of Community activities has not been accompanied, either in the Commission or in the Member States, by a commensurate development of the necessary financial management and control systems".
  It goes on to say:
  "insufficient resources, both in quantity and in quality, have been allocated to ensuring the best use of public money and accountability for it."
  They are very measured words, but the charges are documented over and again in the 480 pages which form the report.
  I find the last of the House of Lords European Communities Committee reports very convincing— the idea that it is "poisoned propaganda" is simply ludicrous. The report was published on 19 July this year, so it is very recent indeed. I draw the Chamber's attention to the report's summary, which says:
  "The Committee's main conclusions are as follows: the Commission's new anti-fraud strategy is inadequate. It is an action plan with no plans for action."
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  Its next finding states:
  "there is not enough emphasis on fraud prevention as distinct from fraud detection …The former should be an objective of policy and much more attention should be paid to fraud-proofing regulations and schemes".
  The Committee's next conclusion says:
  "the Commission must accept its responsibility for ensuring proper administration of Community funds and must specify precisely the procedures and controls to be followed by Member States acting as its agents".
  Mr. Rowlands: Did the Government accept this?
  Mr. Shore: I will come to that point in a minute. I wish to finish with their Lordships' conclusions because they are highly relevant. They continue:
  "the Court of Auditors must be strengthened".
  They said that in July this year, knowing full well what had gone into the Maastricht treaty and what additional powers it had given to the Court of Auditors. They go on to say:
  "the whole of the European Parliament should play a more active role in the fight against fraud and Member States should pay more attention to reports from the Budgetary Control Committee".
  Another important conclusion states:
  "public opinion needs to be informed and motivated".
  The public must not be misinformed nor should the truth be hidden from them, as the hon. Member for Harrow, East, who is not in his place, would have us accept. The final conclusion states:
  "the present step-by-step approach is not producing sufficient results. A Task Force of outside experts should be appointed to undertake a fundamental review of the way the Institutions are discharging their financial responsibilities and in particular the matters referred to in paragraph 53. Failing that, the European Council must insist on the Commission undertaking such a review itself with the help of outside professionals."
  That is a series of quite powerful recommendations. Those conclusions were reached after careful study by a body whose members could hardly be accused of being Euro-sceptics. On the contrary, they are very responsible people who, for the most part, are friends of the European Union.
  My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) has prompted me to ask how the Government will respond to the House of Lords Select Committee report. I think that the whole House would like to have that response.
  I conclude my dealings with the report by quoting paragraph 56, which says:
  "We emphasise, as we have done in previous reports, that there has hitherto been a lack of political will in the Community to take remedial action, with the result that the integrity of the Community's financial statements is in doubt."
  I know that hon. Members on both sides of the Committee will concur fully with those words. It continues:
  "It is Europe's honest taxpayers and traders who bear the huge sums"—
  the Committee's words—
  "lost to fraud against the Community. These losses are a public scandal. Unless the measures described above are set in hand boldly and resolutely, adverse reports will continue to be issued by the Court of Auditors year after year, and such reports will inevitably fail to give the assurances required by the Maastricht Treaty. The Community in the meanwhile will continue to suffer grievous losses through fraud and irregularity. We do not think that any responsible Government would wish to allow that state of affairs to continue."

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  Those are pretty weighty words. They fully express the proper anxiety that has been articulated in today's debate by hon. Members on both sides of the Committee about the extent of fraud and the difficulty that has been found so far in combating it.
  The Government's response to that report is something that we would be interested to hear. The Government have not helped themselves or their reputation by turning down those sums of money which have been offered in two member states to help deal with fraud. My hon. Friend the shadow Chancellor cited some items during his speech on Second Reading. Only yesterday or the day before the political editor of The Guardian, Michael White, had this to say of recent meetings of Budget Ministers on 16 November. The article reads:
  "Mr. Heathcoat-Amory agreed to a £3.9 million cut in the anti-fraud budget for 1995, currently set at £100 million and far less than demanded by the European Parliament."
  If the Minister agreed to cut £3.9 million from the anti-fraud budget, that undermines his credibility as a Minister who should take such matters very seriously.
  The now absent hon. Member for Harrow, East quoted defensively the extraordinary reaction of the European Commission to the Court of Auditors' censure of it. He quoted Mr. David Williamson, the Secretary-General of the European Commission, who made an unwise and foolish statement. He went out of his way to diminish the impact of the report. That is not what he should have done as a person very much involved in the reputation of the European Community.
  Reference has been made in the debate to the regulation and convention for the protection of the Community's financial interests. That occurs in the new clause moved by my hon. Friend the Member for Gateshead, East. It is obviously germane to the problem of fraud and financial irregularities. A regulation and convention for the protection of the Community's financial interests is now being negotiated within the Community. There is great difficulty in achieving an agreement on the content of that regulation and, indeed, that convention.
  The regulation is that part of the procedure of the Community that comes under the old provisions of the Rome treaty and, if agreed unanimously, it would be imposed on us. The convention for the protection of the Community's financial interests has been negotiated on our behalf, under the third pillar arrangement of the Maastricht treaty, by the Home Secretary with the Ministers of Justice and Home Affairs of other Community countries.
  The great difficulty is the lack of any agreement on what fraud is. If one cannot reach an agreement on a definition of fraud, frankly, one will not get far with legislation of that type, whether it be a regulation or a convention.
  As the Committee will recognise, in new clause 10 we ask the Government to make an annual report to Parliament on their proposals and the progress achieved in combating fraud. That would precisely focus the attention of the Government on what we want to hear from them—not merely the extent of fraud, but what they are doing to combat it. Our proposal makes the Minister's reply a very important contribution to this debate, especially in relation to the recommendations made by the House of Lords Select Committee.
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  I have another proposal, which must have occurred to many hon. Members. Fraud should be given the high profile and urgent attention that it needs. Goodness knows, we have enough Commissioners—we do not know quite what to do with them all. One would have thought that the Commission should accept that a senior Commissioner should be given, as his main or only task, the responsibility of combating fraud and imposing adequate financial controls. It would be beneficial for the Commission and for all of us.
  Mr. Tim Devlin: A Commissioner is already responsible for tackling fraud—Mr. Schmidhuber, whose name was mentioned earlier.
  It was interesting to see how several hon. Members dealt with an intervention by my hon. Friend the Member for Harrow, East (Mr. Dykes). They said that he was trying to ignore the problems of fraud in the European Union. In fact, my hon. Friend was absolutely right. The report of the Court of Auditors is a report not on fraud but on financial management in the Union as a whole. In the information note attached to the report, which picks out the highlights, fraud is cited only once.
  The interesting aspect of coverage of that subject in the United Kingdom is that we constantly hear references to a figure of 6 becu, which is said to be the extent of fraud in the Community. That figure has no basis in fact. Its origin can be found in a report carried out by a German academic some years ago, in an extrapolation of an estimate of 10 per cent. of the Community budget which is possibly lost to fraud. He based those calculations on a specific slaughter premium scheme and extrapolated the amount to all parts of the budget. As such, the example and the amount are totally without justification.
  The Court of Auditors' report strongly criticises member states, including the United Kingdom, on financial management. The president of the court pointed out that, as Governments of member states effectively manage about 80 per cent. of the Union's budget, to some degree they are responsible for its proper management. We all know that there are differences in standards of financial probity in member states, but we must bear it in mind that, as the Secretary of State for Social Security has told the House more than once, we have sufficient fraud in our social security system without its negating the whole system. When discussing such matters, we have to take care that we do not debase the institutions themselves when labelling everything in the European Union as fraudulent and dishonest. Hon. Members should not forget that one third of the budget of the European Union is spent in disadvantaged regions of the Union, and that much is spent in the north-east of England, where I come from, and in Scotland. Since 1989, £30 billion has been spent in that way.
  My hon. Friend the Member for Chingford (Mr. Duncan Smith) has said that it is interesting that, as greater financial contributions are made to the European Union budget, there will undoubtedly be greater scrutiny of the expenditure of the Union. That is only right. After all, each directorate in the Commission has its own computer system which has been contributed by different member states. I do not know which member state introduced the computer system—
  It being Ten o'clock, THE SECOND DEPUTY CHAIRMAN left the Chair to report progress and ask leave to sit again.
  Committee report progress.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 14 (Exempted business),
  That, at this day's sitting, the European Communities (Finance) Bill may be proceeded with, though opposed, until any hour.—[Mr. Kirkhope.]
  Question agreed to.
  Again considered in Committee.
  Mr. Devlin: I shall return to the point which I briefly wanted to make. I have spoken for only three minutes so far. [Interruption.] I shall see my hon. Friend the Member for Salisbury (Mr. Key) later. [Interruption.]
  The Second Deputy Chairman: Order. Before the hon. Gentleman continues his speech, may I say that I deprecate what appears to be the post-prandial gossip which is taking place in the Chamber? If hon. Members wish so to engage, I suggest that they leave the Chamber.
  Mr. Devlin: It is nice to know that some hon. Members are making such a contribution to diminishing the European wine lake.
  The point which I wanted to make briefly is that the systems within the Community can be scrutinised heavily. The situation regarding computers is that each directorate has selected a computer system from a different Community country. For instance, the education directorate's computer system has been installed by Greeks, and its software was written by a Greek. It is not one of the most worthy computer systems, and is prone to certain inefficiencies.
  Across the Community institutions as a whole, there are a large number of well-paid officials who, frankly, are not finding enough to do with their time. Consequently, we could be looking for further productivity improvements from them.
  We also have an historic opportunity with the joining of three new countries—Finland, Sweden and Austria—to the Community. A shift will take place in the Community which will give this country a fundamental opportunity. Up until now, the French-speaking countries have had a hold over the institutions in the European Union. We are seeing a shift, and a number of senior policy positions will be taken over by Germans, Austrians and other nationalities.
  With the influx of Austrians, Finns and Swedes, English will be used much more as the working language in the Community. We are also seeing a massive improvement in information technology, most of which is written in English. That will have a serious effect on the management of the European Union, because it will mean that the standard of financial management which we have grown used to in this country will be much more amenable to the operating systems within the Union. With that in mind, we can see that there will be a much greater improvement in the future.
  Let me finish by identifying an area in which an early improvement in financial systems would be very welcome. I refer to the allocation of European social fund objective 2, 3 and 4 status, and the management of the funds. In my constituency and throughout my region in the north of England, a number of local authorities, voluntary organisations and other institutions have applied
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  for ESF objective 2 funding, but they will not find out until half way through the financial year—or even later—whether they will receive that money.
  Organisations in my constituency that applied for funds for their projects in January still have not heard whether they will receive those funds. They are, however, required to spend their money evenly over the year; so they are speculating, taking money that they have earned from other sources—or borrowing money—and then spending it in the hope that later in the year they will receive the funds that they confidently expect. It is not a happy system, because it may mean that a number of worthy organisations are left out in the financial cold.
  I look forward to further reforms in the future, but I agree with my hon. Friend the Member for Harrow, East that the whole question has been blown very much out of proportion. We must try to preserve the integrity of the European initiative without necessarily dressing it up in an erroneous cloak of fraud.
  Mr. Austin Mitchell: I should have thought that the best way of preserving the integrity of the European initiative was by demonstrating the extent of fraud. That would show whether we can have faith in Europe's control systems and institutions. Rather than saying, as the hon. Member for Stockton, South (Mr. Devlin) seemed to say at one stage, that it is okay as long as some of the money comes to the north-east, we should want all the fraud to be detected so that we know what we are dealing with.
  At present, unfortunately, fraud and the European Community are synonymous in the minds of a vast number of people. Indeed, the European Union could almost be called the European Union of fraudsters and related trades. Examples of fraud have been brought home to people by television reports and reports from the Court of Auditors. There is, for instance, the massive olive fraud in Italy: for years, people went around counting the olive trees on the estate and plotting them on maps; then they moved on to superior technology—aerial spotting of olive trees. Subsequently, that technology was itself improved: the spotting was done by means of ortho-chromatic, pan-chromatic, infra-red and ultra-violet film. By that method, all the olive trees could be minutely counted.
  The comic aspect only gives ammunition to people like me who are strongly critical of the Community. It generates an atmosphere of alienation—a general belief that the Community is all about fraud. Other examples are the piggy-go-round, and the export rebates on goods that never leave the country or else return to it by some roundabout route. I am not talking only about the common agricultural policy, although it is a fraudsters charter that accounts for half the budget. The CAP, along with the enormous fluctuations in commodity prices, gives great scope for fraud, as does tobacco.
  Our new clause 10 mentions waste as well as fraud. We need to deal with waste. We have spent £1 billion on growing tobacco in Greece, and more billions on expanding the wine lake. We have provided subsidies to cut wine production, and production has increased. All those examples are endemic in the CAP, but trading schemes are also a problem. An element of corruption is present in the Commission itself, and we must ask whether the European Parliament is an adequate means of dealing with fraud. Building contracts for the European Court are an example, as are the travel expenses

  409
  claimed—fraudulently, in some cases—by Members of the European Parliament. Some claim the full fare and then pay a cut-price fare. Wasteful overseas trips are made. How can anyone have faith in an institution that is so redolent of fraud, when so many examples of it are hitting the newspapers?
  The sad fact is that policing of that fraud depends on national Governments, who often have a vested interest in sustaining the fraud, or not revealing it because it will draw attention to what is happening, and national Governments who, in some cases, are corrupt.
  The example of what is happening in Italy was mentioned by my hon. Friend the Member for Workington (Mr. Campbell-Savours). One cannot claim that fraud is not endemic in a system in which politicians are interrogated about fraud and politicians are carried off to prison as a result of fraud.
  Perhaps, in passing, I should commend the example of Italy to the Government, because the effect of carrying politicians off to gaol has been a collapse of confidence in the lira; the lira has fallen and Italian exports and Italian manufacturing are booming. It is a precedent that the Government might well choose to follow, given the incompetent way in which they handled our own exit from the exchange rate mechanism.
  One cannot assume that, in a system where that is happening in national politics, fraud and corruption are restricted to national politicians; they must be endemic in the society. If they are endemic in the society, we cannot know the scale of what is happening to the European Community's spending in that country.
  Italian fraud, Spanish practices and the Irish beef scandal are all examples of a corrupt system that is essentially a fiddlers charter. Other problems are the huge scale of spending, which gives enormous scope for speculation, the conflict between European authorities and national authorities, and the pork barrel mentality whereby, as long as funds are channelled into the "Club Med" states and the poorer states, corruption is accepted. A conspiracy of silence develops in relation to it.
  We do not know the scale of fraud. The Chancellor of the Exchequer says, with his usual insouciance, that it is on a small scale—peanuts—but he thinks that of so many things. Our budget contributions are on a small scale—peanuts. Only tomorrow, when he comes to the House with a package on a much bigger scale, shall we discover his definition of something that is not peanuts. It is all peanuts to the Chancellor—but what are the estimates?
  The Court of Auditors produced an estimate of fraud and waste last year of between £600 million and £4 billion. I am happy to accept any estimate, provided that it is high enough. The fact is that we do not know. My estimates, from a prejudiced point of view, are as good as the estimates of people whose attitude to the Community is favourable.
  That is the aim of the new clauses. It is simply to shed light on the issue from all points of view, as my hon. Friend the Member for Workington said. From the point of view of people who are enthusiastic about and loyal to the Community, it is important that the true scale of fraud, a cancer eating away at the heart of the Community, which is alienating public opinion on a considerable scale, should be known, just as it is important from my point of view that it should be known.
  410
  The true scale of fraud might be high, in which case it will probably fuel my frenzy; it might well be low, in which case it will fuel the enthusiasm of those people who are committed to the Community. We need to know, if we are to deal with the problem adequately and in the effective way in which we tackle fraud in this country; the public want to know, and it is essential for the enlightenment of the public that they be told the scale of the problem. There is a connection between the widespread alienation from Europe which exists, and which is shown by public opinion polls in this country, and the pervasive feeling that what is going on there is a fraudsters charter.
  It is hypocrisy for Governments to come back, as the Government have done, year after year, and tell us, "We are strengthening the procedures for fraud, we are voting more money to deal with fraud," and then be found to be voting in the Council for cuts in the provision for tackling fraud. It happened last year, as was revealed by John Tomlinson—our Government supported a £20 million cut in the provision for tackling fraud. When the European Parliament suggested in this year's draft budget that 50 additional staff should be provided for the anti-fraud squad in Europe, the squad was cut with the concurrence of our Government. Such double-talk leads to a collapse in belief in terms of what people say about Europe—one thing is said here and another elsewhere.
  What we need and what the new clauses will provide is more light on the subject. Much of the secrecy is due to the Council of Ministers, which is one of the obstacles to dealing with fraud. It will not provide the information to the Court of Auditors or to us. Our new clause 10 simply provides for a report to Parliament on what is being done to combat both fraud, which is endemic, arid waste, which is an even more serious problem. New clause 13, tabled by the official Opposition, does not mention waste and does not cover all Community expenditure as our new clause does; it merely deals with the general budget.
  10.15 pm
  I would expect a Government who are trying to persuade Parliament to agree to raise the ceiling on European expenditure to support the new clauses, and to defend and promote them. If we are giving a concession to the Community by raising the ceiling, it is surely essential to use that as a negotiating counter and say that we have to take action to deal with fraud. The Government have lavished money on the big six accountancy houses, including Coopers and Lybrand and Price Waterhouse. I do not know why the Government do not propose that one of the big six firms of auditors should audit the expenditure and financial procedures of the Commission and the Council.
  I had a moment of hope when it was proposed that Sir James Goldsmith should draft into the Commission a team of 200 auditors to find out what is going on. What a good thing that would be. Why do the Government not propose that? Why do they not send Coopers and Lybrand to Brussels to deal with the problems and tell us what is going on? We are asking for more light and more information. If our new clauses are agreed to—they are an essential concomitant of the increase in expenditure and fraud—we shall have achieved that.
  Mr. Heathcoat-Amory: I can at least agree with the hon. Member for Great Grimsby (Mr. Mitchell) that we

  411
  are debating a serious issue. Over the past 10 years and more, the United Kingdom has often ploughed a lonely furrow in encouraging and arguing for prompter and more resolute action against fraud and mismanagement in all its forms. We believe not only in direct action to fight fraud, but in tightening up financial discipline at all levels in the European Community and introducing better systems of budgetary management to stop fraud arising in the first place. That is why we are extremely glad that a number of other European Union institutions now take the issue with the same degree of seriousness.
  The European Parliament sometimes has a reputation for running a sort of global foreign policy rather than looking after the interests of taxpayers. It is extremely welcome that members of that Parliament are grasping the issue and using their own powers to bring the European budget under better control. Member states are also becoming interested, which may have something to do with the fact that more of them are becoming net contributors. Before the end of the century, in terms of net contributions per head, we shall be overtaken by France, the Netherlands, Sweden and Austria, with Germany remaining by far and away the largest net contributor. Italy too is becoming a contributor to the budget so the attitude of those countries towards the need for better financial control has been transformed in recent years.
  New clause 3 does not make a great deal of sense because it assumes that it is the United Kingdom that adopts Council regulations. It is not; the Council of Ministers adopts them. We have a veto over their adoption because they must be agreed by unanimous vote, but that distinction is a important one. The regulation specified in new clause 3 has already been submitted to the Scrutiny Committee. That happened on 5 October and it has been recommended for debate, so we do not need a new clause to ensure that that draft regulation is properly scrutinised.
  The Opposition sometimes speak as though the draft regulation against fraud were the only one that exists. It is important because it will bring into effect a European Union-wide system of administrative penalties which we very much welcome. A great deal has been happening quite separately from that initiative. For instance, my right hon. and learned Friend the Home Secretary put forward a British proposal under the third pillar of the Maastricht treaty which requires inter-governmental action. It suggested a series of measures to ensure that fraud against the interests of the Community is subjected to appropriate sanctions under national laws. Indeed, it was largely at his prompting that the Justice and Home Affairs Council has now agreed a resolution that will go forward to Essen to be considered by the European Council next weekend.
  The hon. Member for Gateshead, East (Ms Quin), who introduced the debate for the Labour party, sought to suggest that the United Kingdom had voted against anti-fraud measures. I want to put that myth to rest. In the draft budget for next year, the Commission asked for anti-fraud resources of some £102 million. That was virtually granted in full by the Council. It is true that it represents a small cut on 1994 but that is because the 1994 budget for anti-fraud measures includes a number of start-up costs and one-off studies and the purchase of capital equipment which obviously do not have to be
  412
  repeated every year, but the operational effectiveness and the number of people deployed on the ground against fraud will remain, and in some cases be enhanced.
  Of course the European Parliament, as so often is the case, sought an increase in expenditure for this category as for many others. It wanted some £2 million more spent on agriculture to make sure that the inspection of animals in transit was enhanced. That did not find favour with the Council of Ministers. Another suggested item of expenditure would insert into the operational section of the budget a number of administrative expenditure budgets. Those two items were taken out by the Council of Ministers. If it is of any assistance to the hon. Lady, I can give her the categorical assurance that the United Kingdom did not vote for any cut whatsoever.
  There is a wider point, however, that action against fraud is not simply a question of spending more public money. We want more preventive measures and better regulations in Community legislation. We want to improve the discipline of the budget to stop fraud arising in the first place. It is too often the instinct of the European Parliament and Opposition parties to meet expenditure with more expenditure and to judge any organisation simply by the amount of money being spent on it.
  Mr. Campbell-Savours: What about social security?
  Mr. Heathcoat-Amory: The anti-fraud measures in the European Commission and elsewhere are properly funded and have the required degree of political momentum behind them.
  Mr. Campbell-Savours rose—
  Mr. Heathcoat-Amory: I am responding to the hon. Gentleman, who spoke earlier in the debate.
  The hon. Gentleman referred to the Thomson report on agriculture. I think that he has a copy, but he can also obtain one from the Library where I believe that it was recently deposited by my right hon. Friend the Minister of Agriculture, Fisheries and Food. It is entitled, "European Agriculture in the 21st Century". I believe that it is a rattling good read and I commend it to the House. There is no question of the United Kingdom Government wishing to suppress well thought out and constructive contributions to the debate about CAP reform which itself has an important part to play in reducing the incentives for fraud.
  My hon. Friend the Member for Chingford (Mr. Duncan Smith) wanted an annual debate on this and in my final remarks I shall mention an idea along those lines. First, I want to assure him that the United Kingdom Government were instrumental in obtaining for the European Court of Auditors full status as an institution of the European Union during the Maastricht negotiation and ensuring that reports from the European Court of Auditors are not simply filed in the bottom drawer in the Commission but are responded to and acted upon.
  Mr. Shore: I hope that the Minister will address himself to the House of Lords Select Committee's July report which particularly mentions, as their Lordships saw it, the lack of powers of the Court of Auditors after the Maastricht treaty.
  Mr. Heathcoat-Amory: I was coming to that very point. The right hon. Gentleman rightly drew attention to

  413
  the good work that has been done in another place on the question of fraud and how to fight it. The Government will be responding in due course to their Lordships' latest report, but I can assure the right hon. Gentleman that already many of the constructive proposals that they put forward, including strengthening the European Court of Auditors, are being put in place. I met the European Court of Auditors in London earlier in the summer and I gave it an assurance that it would receive the full support of the British Government and, I presumed, of the House in the good work that it does.
  I end by responding to the point about reports to the House. It is an essential task of the Government to keep the House fully informed about what we are doing on the question of fraud and mismanagement. At an earlier stage in the debate I mentioned the annual report submitted to the House on the Community budget. Starting from next year, I propose to expand the statement to include what is being done on budgetary discipline and mismanagement and to counter fraud. A point picked up by other hon. Members but suggested by me was that in some ways the House suffers from a surfeit of different reports, not all of them being properly scrutinised. Therefore, there is merit not in triggering yet another report as a consequence of today's debate, but in incorporating it into a single annual report which will draw together all that the Government are doing on this important issue.
  Ms Quin: Despite what the Minister has just said, the Opposition consider that the new clause is still important and that it would be right for the Council to adopt this regulation on the protection of the Community's financial interests so that all of us could feel that something was being done to tackle the problem effectively. For that reason, we shall press the new clause to a Division.
  Question put, That the clause be read a Second time:—
  The Committee divided: Ayes 255, Noes 319.

  Division No. 14]

  [22.28 pm

  AYES

  Abbott, Ms Diane

  Byers, Stephen

  Adams, Mrs Irene

  Callaghan, Jim

  Ainger, Nick

  Campbell, Menzies (Fife NE)

  Ainsworth, Robert (Cov'try NE)

  Campbell, Mrs Anne (C'bridge)

  Allen, Graham

  Campbell, Ronnie (Blyth V)

  Anderson, Donald (Swansea E)

  Campbell-Savours, D N

  Anderson, Ms Janet (Ros'dale)

  Canavan, Dennis

  Armstrong, Hilary

  Cann, Jamie

  Ashton, Joe

  Carlile, Alexander (Montgomry)

  Barnes, Harry

  Chisholm, Malcolm

  Barron, Kevin

  Church, Judith

  Battle, John

  Clapham, Michael

  Bayley, Hugh

  Clark, Dr David (South Shields)

  Beckett, Rt Hon Margaret

  Clarke, Eric (Midlothian)

  Beith, Rt Hon A J

  Clarke, Tom (Monklands W)

  Bell, Stuart

  Clelland, David

  Benn, Rt Hon Tony

  Clwyd, Mrs Ann

  Bennett, Andrew F

  Coffey, Ann

  Benton, Joe

  Cohen, Harry

  Bermingham, Gerald

  Connarty, Michael

  Berry, Roger

  Cook, Frank (Stockton N)

  Betts, Clive

  Cook, Robin (Livingston)

  Blunkett, David

  Corbett, Robin

  Boateng, Paul

  Corbyn, Jeremy

  Bradley, Keith

  Corston, Jean

  Bray, Dr Jeremy

  Cousins, Jim

  Brown, Gordon (Dunfermline E)

  Cox, Tom

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

  Cunliffe, Lawrence

  Burden, Richard

  Cunningham, Jim (Covy SE)

  414

  Dafis, Cynog

  Jones, Martyn (Clwyd, SW)

  Dalyell, Tam

  Jones, Nigel (Cheltenham)

  Darling, Alistair

  Keen, Alan

  Davidson, Ian

  Kennedy, Charles (Ross, C&S)

  Davies, Bryan (Oldham C'tral)

  Kennedy, Jane (Lpool Brdgn)

  Davies, Ron (Caerphilly)

  Khabra, Piara S

  Davies, Rt Hon Denzil (Llanelli)

  Kilfoyle, Peter

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

  Kirkwood, Archy

  Denham, John

  Lestor, Joan (Eccles)

  Dewar, Donald

  Lewis, Terry

  Dixon, Don

  Liddell, Mrs Helen

  Dobson, Frank

  Litherland, Robert

  Donohoe, Brian H

  Llwyd, Elfyn

  Dowd, Jim

  Loyden, Eddie

  Dunnachie, Jimmy

  Macdonald, Calum

  Dunwoody, Mrs Gwyneth

  Mackinlay, Andrew

  Eagle, Ms Angela

  MacShane, Denis

  Eastham, Ken

  Madden, Max

  Enright, Derek

  Maddock, Diana

  Etherington, Bill

  Mahon, Alice

  Ewing, Mrs Margaret

  Mandelson, Peter

  Fatchett, Derek

  Marek, Dr John

  Field, Frank (Birkenhead)

  Marshall, David (Shettleston)

  Fisher, Mark

  Marshall, Jim (Leicester, S)

  Flynn, Paul

  Martin, Michael J (Springburn)

  Foster, Rt Hon Derek

  Martlew, Eric

  Foulkes, George

  Maxton, John

  Fraser, John

  McAllion, John

  Fyfe, Maria

  McAvoy, Thomas

  Galloway, George

  McCartney, Ian

  Gapes, Mike

  McKelvey, William

  Garrett, John

  McLeish, Henry

  George, Bruce

  McMaster, Gordon

  Gerrard, Neil

  McNamara, Kevin

  Gilbert, Rt Hon Dr John

  McWilliam, John

  Godsiff, Roger

  Meacher, Michael

  Getting, Mrs Llin

  Meale, Alan

  Gordon, Mildred

  Michael, Alun

  Graham, Thomas

  Michie, Bill (Sheffield Heeley)

  Grant, Bernie (Tottenham)

  Milburn, Alan

  Griffiths, Nigel (Edinburgh S)

  Miller, Andrew

  Griffiths, Win (Bridgend)

  Mitchell, Austin (Gt Grimsby)

  Grocott, Bruce

  Moonie, Dr Lewis

  Gunnell, John

  Morgan, Rhodri

  Hain, Peter

  Morley, Elliot

  Hall, Mike

  Morris, Estelle (B'ham Yardley)

  Hanson, David

  Morris, Rt Hon Alfred (Wy'nshawe)

  Hardy, Peter

  Morris, Rt Hon John (Aberavon)

  Hattersley, Rt Hon Roy

  Mudie, George

  Henderson, Doug

  Mullin, Chris

  Heppell, John

  O'Brien, Bill (Normanton)

  Hill, Keith (Streatham)

  O'Brien, Mike (N W'kshire)

  Hinchliffe, David

  O'Hara, Edward

  Hodge, Margaret

  Oakes, Rt Hon Gordon

  Hoey, Kate

  Olner, Bill

  Hogg, Norman (Cumbernauld)

  Paisley, The Reverend Ian

  Home Robertson, John

  Parry, Robert

  Hood, Jimmy

  Pendry, Tom

  Hoon, Geoffrey

  Pickthall, Colin

  Howarth, George (Knowsley N)

  Pike, Peter L

  Howells, Dr. Kim (Pontypridd)

  Pope, Greg

  Hoyle, Doug

  Powell, Ray (Ogmore)

  Hughes, Kevin (Doncaster N)

  Prentice, Bridget (Lew'm E)

  Hughes, Robert (Aberdeen N)

  Prentice, Gordon (Pendle)

  Hughes, Roy (Newport E)

  Primarolo, Dawn

  Hughes, Simon (Southwark)

  Purchase, Ken

  Hutton, John

  Quin, Ms Joyce

  Illsley, Eric

  Radice, Giles

  Ingram, Adam

  Randal, Stuart

  Jackson, Glenda (H'stead)

  Raynsford, Nick

  Jackson, Helen (Shef'ld, H)

  Reid, Dr John

  Jamieson, David

  Robertson, George (Hamilton)

  Jones, Barry (Alyn and D'side)

  Robinson, Geoffrey (Co'try NW)

  Jones, Ieuan Wyn (Ynys Mon)

  Roche, Mrs Barbara

  Jones, Jon Owen (Cardiff Central)

  Rogers, Allan

  Jones, Lynne (B'ham S O)

  Rooney, Terry

  415

  Ross, Ernie (Dundee W)

  Taylor, Mrs Ann (Dewsbury)

  Rowlands, Ted

  Thompson, Jack (Wansbeck)

  Ruddock, Joan

  Timms, Stephen

  Salmond, Alex

  Tipping. Paddy

  Sedgemore, Brian

  Vaz, Keith

  Sheerman, Barry

  Walker, Rt Hon Sir Harold

  Sheldon, Rt Hon Robert

  Walley, Joan

  Shore, Rt Hon Peter

  Wardell, Gareth (Gower)

  Short, Clare

  Wareing, Robert N

  Simpson, Alan

  Welsh, Andrew

  Skinner, Dennis

  Wicks, Malcolm

  Smith, Andrew (Oxford E)

  Wigley, Dafydd

  Smith, Chris (Isl'ton S & F'sbury)

  Williams, Alan W (Carmarthen)

  Smith, Llew (Blaenau Gwent)

  Williams, Rt Hon Alan (Sw'n W)

  Soley, Clive

  Wilson, Brian

  Spearing, Nigel

  Winnick, David

  Wise, Audrey

  Spellar, John

  Worthington, Tony

  Squire, Rachel (Dunfermline W)

  Wray, Jimmy

  Steinberg, Gerry

  Wright, Dr Tony

  Stevenson, George

  Young, David (Bolton SE)

  Stott, Roger

  Strang, Dr. Gavin

  Tellers for the Ayes:

  Straw, Jack

  Ms Tessa Jowell and

  Sutcliffe, Gerry

  Mr. John Cummings.

  NOES

  Ainsworth, Peter (East Surrey)

  Carrington, Matthew

  Aitken, Rt Hon Jonathan

  Cash, William

  Alexander, Richard

  Channon, Rt Hon Paul

  Alison, Rt Hon Michael (Selby)

  Chapman, Sydney

  Allason, Rupert (Torbay)

  Churchill, Mr

  Amess, David

  Clappison, James

  Ancram, Michael

  Clark, Dr Michael (Rochford)

  Arbuthnot, James

  Clarke, Rt Hon Kenneth (Ru'clif)

  Arnold, Jacques (Gravesham)

  Clifton-Brown, Geoffrey

  Arnold, Sir Thomas (Hazel Grv)

  Coe, Sebastian

  Ashby, David

  Colvin, Michael

  Aspinwall, Jack

  Congdon, David

  Atkins, Robert

  Conway, Derek

  Atkinson, David (Bour'mouth E)

  Coombs, Anthony (Wyre For'st)

  Atkinson, Peter (Hexham)

  Coombs, Simon (Swindon)

  Baker, Nicholas (Dorset North)

  Cope, Rt Hon Sir John

  Baker, Rt Hon K (Mole Valley)

  Cormack, Patrick

  Baldry, Tony

  Couchman, James

  Banks, Matthew (Southport)

  Cran, James

  Banks, Robert (Harrogate)

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

  Bates, Michael

  Curry, David (Skipton & Ripon)

  Batiste, Spencer

  Davies, Quentin (Stamford)

  Beggs, Roy

  Davis, David (Boothferry)

  Bellingham, Henry

  Day, Stephen

  Bendall, Vivian

  Deva, Nirj Joseph

  Beresford, Sir Paul

  Devlin, Tim

  Biffen, Rt Hon John

  Dicks, Terry

  Bonsor, Sir Nicholas

  Dorrell, Rt Hon Stephen

  Booth, Hartley

  Douglas-Hamilton, Lord James

  Boswell, Tim

  Dover, Den

  Bottomley, Peter (Eltham)

  Duncan Smith, Iain

  Bottomley, Rt Hon Virginia

  Duncan, Alan

  Bowis, John

  Dunn, Bob

  Boyson, Rt Hon Sir Rhodes

  Durant, Sir Anthony

  Brandreth, Gyles

  Dykes, Hugh

  Brazier, Julin

  Eggar, Tim

  Bright, Sir Graham

  Elletson, Harold

  Brooke, Rt Hon Peter

  Emery, Rt Hen Sir Peter

  Brown, M (Brigg & Cl'thorpes)

  Evans, David (Welwyn Hatfield)

  Browning, Mrs. Angela

  Evans, Jonathan (Brecon)

  Bruce, Ian (Dorset)

  Evans, Nigel (Ribble Valley)

  Budgen, Nicholas

  Evans, Roger (Monmouth)

  Burns, Simon

  Evennett, David

  Burt, Alistair

  Faber, David

  Butcher, John

  Fabricant, Michael

  Butler, Peter

  Fenner, Dame Peggy

  Butterfill, John

  Field, Barry (Isle of Wight)

  Carlisle, John (Luton North)

  Fishburn, Dudley

  Carlisle, Sir Kenneth (Lincoln)

  Forsyth, Michael (Stirling)

  416

  Forsythe, Clifford (Antrim S)

  Lennox-Boyd, Sir Mark

  Forth, Eric

  Lester, Jim (Broxtowe)

  Fowler, Rt Hon Sir Norman

  Lidington, David

  Fox, Sir Marcus (Shipley)

  Lightbown, David

  Freeman, Rt Hon Roger

  Lilley, Rt Hon Peter

  French, Douglas

  Lloyd, Rt Hon Peter (Fareham)

  Fry, Sir Peter

  Lord, Michael

  Gale, Roger

  Luff, Peter

  Gallie, Phil

  Lyell, Rt Hon Sir Nicholas

  Gardiner, Sir George

  MacGregor, Rt Hon John

  Garel-Jones, Rt Hon Tristan

  MacKay, Andrew

  Garnier, Edward

  Maclean, David

  Gillan, Cheryl

  Madel, Sir David

  Goodlad, Rt Hon Alastair

  Maginnis, Ken

  Goodson-Wickes, Dr Charles

  Maitland, Lady Olga

  Gorst, Sir John

  Major, Rt Hon John

  Grant Sir A (Cambs SW)

  Malone, Gerald

  Greenway, Harry (Ealing N)

  Mans, Keith

  Greenway, John (Ryedale)

  Marland, Paul

  Griffiths, Peter (Portsmouth, N)

  Marshall, John (Hendon S)

  Gummer, Rt Hon John Selwyn

  Marshall, Sir Michael (Arundel)

  Hague, William

  Martin, David (Portsmouth S)

  Hamilton, Neil (Tatton)

  Mates, Michael

  Hamilton, Rt Hon Sir Archibald

  Mawhinney, Rt Hon Dr Brian

  Hampson, Dr Keith

  Mayhew, Rt Hon Sir Patrick

  Hanley, Rt Hon Jeremy

  McLoughlin, Patrick

  Hannam, Sir John

  McNair-Wilson, Sir Patrick

  Hargreaves, Andrew

  Mellor, Rt Hon David

  Harris, David

  Merchant, Piers

  Haselhurst, Alan

  Mills, Iain

  Hawkins, Nick

  Mitchell, Andrew (Gedling)

  Hawksley, Warren

  Mitchell, Sir David (Hants NW)

  Hayes, Jerry

  Moate, Sir Roger

  Heald, Oliver

  Molyneaux, Rt Hon James

  Heath, Rt Hon Sir Edward

  Monro, Sir Hector

  Heathcoat-Amory, David

  Montgomery, Sir Fergus

  Hendry, Charles

  Moss, Malcolm

  Heseltine, Rt Hon Michael

  Needham, Rt Hon Richard

  Hicks, Robert

  Nelson, Anthony

  Higgins, Rt Hon Sir Terence

  Neubert, Sir Michael

  Hill, James (Southampton Test)

  Newton, Rt Hon Tony

  Hogg, Rt Hon Douglas (G'tham)

  Nicholls, Patrick

  Horam, John

  Nicholson, David (Taunton)

  Hordern, Rt Hon Sir Peter

  Nicholson, Emma (Devon West)

  Howard, Rt Hon Michael

  Norris, Steve

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

  Onslow, Rt Hon Sir Cranley

  Howell, Rt Hon David (G'dford)

  Oppenheim, Phillip

  Howell, Sir Ralph (N Norfolk)

  Ottaway, Richard

  Hughes, Robert G (Harrow W)

  Paice, James

  Hunt, Rt Hon David (Wirral W)

  Patnick, Sir Irvine

  Hunt, Sir John (Ravensbourne)

  Patten, Rt Hon John

  Hunter, Andrew

  Pattie, Rt Hon Sir Geoffrey

  Hurd, Rt Hon Douglas

  Pawsey, James

  Jack, Michael

  Peacock, Mrs Elizabeth

  Jackson, Robert (Wantage)

  Pickles, Eric

  Jenkin, Bernard

  Porter, Barry (Wirral S)

  Jessel, Toby

  Porter, David (Waveney)

  Johnson Smith, Sir Geoffrey

  Portillo, Rt Hon Michael

  Jones, Robert B (W Hertfdshr)

  Powell, William (Corby)

  Jopling, Rt Hon Michael

  Rathbone, Tim

  Kellett-Bowman, Dame Elaine

  Redwood, Rt Hon John

  Key, Robert

  Renton, Rt Hon Tim

  Kilfedder, Sir James

  Richards, Rod

  Kirkhope, Timothy

  Riddick, Graham

  Knapman, Roger

  Rifkind, Rt Hon Malcolm

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

  Robathan, Andrew

  Knight, Greg (Derby N)

  Roberts, Rt Hon Sir Wyn

  Knight Mrs Angela (Erewash)

  Robertson, Raymond (Ab'd'n S)

  Knox, Sir David

  Robinson, Mark (Somerton)

  Kynoch, George (Kincardine)

  Roe, Mrs Marion (Broxbourne)

  Lait, Mrs Jacqui

  Ross, William (E Londonderry)

  Lamont Rt Hon Norman

  Rowe, Andrew (Mid Kent)

  Lang, Rt Hon Ian

  Rumbold, Rt Hon Dame Angela

  Lawrence, Sir Ivan

  Ryder, Rt Hon Richard

  Legg, Barry

  Sackville, Tom

  Leigh, Edward

  Sainsbury, Rt Hon Tim

  417

  Scott, Rt Hon Nicholas

  Thornton, Sir Malcolm

  Shaw, David (Dover)

  Thurnham, Peter

  Shaw, Sir Giles (Pudsey)

  Townend, John (Bridlington)

  Shephard, Rt Hon Gillian

  Townsend, Cyril D (Bexl'yh'th)

  Shepherd, Colin (Hereford)

  Tredinnick, David

  Shersby, Michael

  Trend, Michael

  Sims, Roger

  Trimble, David

  Skeet, Sir Trevor

  Trotter, Neville

  Smith, Sir Dudley (Warwick)

  Twinn, Dr Ian

  Smith, Tim (Beaconsfield)

  Vaughan, Sir Gerard

  Smyth, Rev Martin (Belfast S)

  Viggers, Peter

  Soames, Nicholas

  Waldegrave, Rt Hon William

  Walden, George

  Speed, Sir Keith

  Walker, A Cecil (Belfast N)

  Spencer, Sir Derek

  Walker, Bill (N Tayside)

  Spicer, Michael (S Worcs)

  Walker, Gary

  Spicer, Sir James (W Dorset)

  Ward, John

  Spink, Dr Robert

  Wardle, Charles (Bexhill)

  Spring, Richard

  Waterson, Nigel

  Sproat, Iain

  Watts, John

  Squire, Robin (Hornchurch)

  Wheeler, Rt Hon Sir John

  Stanley, Rt Hon Sir John

  Whitney, Ray

  Steen, Anthony

  Whittingdale, John

  Stephen, Michael

  Widdecombe, Ann

  Stern, Micheal

  Wiggin, Sir Jerry

  Stewart, Alan

  Willetts, David

  Streeter, Gary

  Wilshire, David

  Sumberg, David

  Winterton, Mrs Ann (Congleton)

  Sweeney, Walter

  Winterton, Nicholas (Macc'fld)

  Sykes, John

  Wolfson, Mark

  Tapsell, Sir Peter

  Wood, Timothy

  Taylor, Ian (Esher)

  Yeo, Tim

  Taylor, John M (Solihull)

  Young, Rt Hon Sir George

  Temple-Morris, Peter

  Thomason, Roy

  Tellers for the Noes:

  Thompson, Patrick (Norwich N)

  Mr. Bowen Wells and

  Thompson, Sir Donald (C'er V)

  Dr. Liam Fox.

  Question accordingly negatived.
  Mr. Shore: On a point of order, Mr. Lofthouse. I raised the matter with Dame Janet Fookes when she was in the Chair. It was my clear understanding that there would be a Division on new clause 10.
  The First Deputy Chairman of Ways and Means (Mr. Geoffrey Lofthouse): I know of no undertaking being given.
  Mr. Spearing: Further to that point of order, Mr. Lofthouse. We accept your ruling, of course, but would it be possible for you to read the relevant passage in Hansard tomorrow?
  The First Deputy Chairman: I shall certainly read Hansard tomorrow.

New clause 11

  HOUSE OF COMMONS APPROVAL OF SUBORDINATE ACTION
  'No Minister of the Crown shall give assent to any Regulation, Directive, or other instrument relating to the operation of the decision of 31st October 1994 in the Council of the European Communities in section 1(e) above, unless the text of that instrument has been approved by a Resolution of the House of Commons.'.—[Mr. Spearing.]
  Brought up, and read the First time.
  10.45 pm
  Mr. Spearing: I beg to move, That the clause be read a Second time.
  418
  The clause deals with the powers of the House of Commons in the voting of money. I shall not speak for long— [Interruption.] That is partly because the Conservative Members who are jeering and laughing should quickly understand that they have been sent to this place to do a job of work. If they do not examine taxation and how it is used, their party will not be pursuing its constitutional and parliamentary purpose. The clause would ensure that that purpose would be pursued.
  The clause turns on how the House of Commons decides where taxpayers' money goes. We all know from previous debates that about £10 billion of taxpayers' money may be allocated to the European Communities in the next year or so. Some Conservative Members may feel that that is a good deal. I shall not deal with the merits of membership, because I wish to confine myself to whether the House controls taxpayers' money. [Interruption.]
  The First Deputy Chairman: Order. It is difficult to hear what the hon. Member is saying. The Committee must settle down.
  Mr. Spearing: As I was saying, Mr. Lofthouse—
  Mr. Campbell-Savours: On a point of order, Mr. Lofthouse. Shortly before the most recent Division, the Paymaster General gave an assurance that a certain document had been placed in the Library. I understand that those in the Library, having been requested by a number of Members to produce the document, undertook an extensive search but found no reference to it, except for one last March, when two Members of the other place asked for a copy to be placed in the Library. Perhaps the Minister would care to qualify what he said earlier. We cannot find the document that he assured Parliament was available to Members.
  The First Deputy Chairman: That is not a matter for the Chair. The hon. Member for Newham, South (Mr. Spearing) has the floor.
  Mr. Spearing: An essential question is how the House of Commons votes money. The Chamber is crowded at Budget time, especially when it comes to debates about whether value added tax is to be reduced, for example. When it comes to voting up to £10 billion a year to the European Communities, we demonstrate a failure to take control. Conservative Members who are talking while in their places and perhaps not understanding the purpose of the clause may demonstrate a greater understanding when we come to 1999, when perhaps a third of the rebate that we were debating earlier will disappear. The hapless Government of the time will be faced with an extremely difficult situation.
  The Bill authorises the maximum amount that the Community can impose on its members. It does not provide, however, how much each annual budget will be. That is a matter for annual procedure, in which the Paymaster General is a key figure. The Chancellor of the Exchequer watches to see how much each year the Communities are to spend. The details come before the House of Commons, where they are scrutinised in what is usually a take-note debate. That debate usually takes place late at night, and is usually attended by relatively few hon. Members.

  419
  The moneys for the 1995 budget were debated on Monday evening, and I do not think that more than 20 hon. Members were present. That shows the extent to which hon. Members on both sides of the Chamber are unaware of the power that is potentially in their hands, or rather in the hands of the Government, that is not being used.
  In the past couple of hours, we have had a long debate about fraud. If one is not satisfied with the bookkeeping of a company or organisation to which one subscribes, the ultimate weapon to ensure that fraud is diminished or tackled properly—clearly, in this case, it is not—is to say, "No. Next year we will not vote you any more money. We will not cut you off, but we will not vote any increase at all." Conservative Members support a Bill which says, "We will give you virtually carte blanche to increase our contributions up to £10 billion gross a year, without any practical possibility of saying that, in any one year, we are not going to provide any more."
  New clause 11 would ensure that, before a Minister of the Crown agreed to the annual budget in Brussels, the Government presented an instrument to the House and obtained approval of that budget, not just in a take-note discussion in respect of a document when it is of perhaps even greater import than some previous Budget motions.
  We want some control. The only way of doing that is by agreeing the new clause, which says that no Minister shall give assent to expenditure for a certain Community year unless the proposal receives, by resolution, the assent of the House. At present there is a take-note debate and a bit of discussion, and the Minister goes off and does more or less what he likes. That is proven by the revelation of a previous Paymaster General, when we discussed this very matter in 1988. He said:
  "I fully accept the need for the Government to take careful note of the views of the House whenever possible before agreeing directives or regulations linked to the new own resources decision, but—I do not intend the next remark ironically, although it may be so taken—I nevertheless urge hon. Members to reject the new clause"—
  which is virtually the same as new clause 11—
  "as it would impose an excessive and unnecessary constraint on the Government's freedom of action."—[Official Report, 24 October 1988; Vol. 139, c. 129.]
  That is freedom of action to send to the European Communities, after negotiation, what they consider suitable.
  In doing that, the Government are throwing away most of the power to ensure proper prevention of waste, proper prevention of fraud, and even their bargaining power in the Council of Ministers. If the Government went to the Council and said, "Our House of Commons will allow only a certain amount," they would have real muscle behind them. Instead, the budget of the Community expands year on year because there is a mutual back-scratching exercise for everybody to obtain a bit more, so that they can agree and then go home and tell their Parliaments and nations how well they have done, and how much they have, at the expense of an ever-expanding budget and an inability to tackle fraud.
  420
  It is even worse than that. Many hon. Members have talked about waste. I shall conclude this relatively brief speech by giving an almost breathtaking example. The hon. Member for Harrow, East (Mr. Dykes), who knows much about the Community, decried people for talking about waste, and said that there are scare stories in the newspapers and so on. I shall give an example of how a resolution such as we suggest would actually bite.
  I refer to expenditure, which will almost surely occur, of £6 million by the European Community. The money will be spent to tell us something which most of us know already: lifelong learning is important. All hon. Members will agree that we continue to learn, and in these modern times we have the opportunity to learn to a relatively late age. We learn new facts and new ideas and gain new insights every day. There is no dissent about that.
  The European document of 29 September 1994 under the name of Mr. Klaus Kinkel, President of the Council of the European Union, advocates a year of European lifelong learning. The "year" will spread over one year of preparation and a second year of expenditure. It will cost £6 million, but it will not suggest any procedures for lifelong learning. It will simply produce a number of conferences, logos and surveys in order to impress upon the citizens of the member states of the European Union the importance of lifelong learning.
  According to the explanatory memorandum which accompanies the document, it is based on articles 126 and 127 of the Union's treaty of Maastricht. In other words, the treaty has given it a form of legislative and statutory basis.
  Mr. MacShane: I am grateful to my hon. Friend for giving way. Will he provide details of the document to each Member of the House? We would like to see a little of that £6 million spent in Rotherham. A lifelong learning scheme would do all of us a power of good.
  Mr. Spearing: I think that my hon. Friend misunderstands what I have said. Unfortunately, I gather from the raw document that not a pound of the £6 million will be spent on the sorts of excellent adult education schemes that they have in Rotherham. The document explains what will happen under the proposal. It says:
  "Contents: Actions wholly financed out of the Community budget.
  Organisation of European conferences on the abovementioned themes to launch and close the European Year.
  Organisation of meetings in the Member States in order to stress the contribution made by the European Union to the abovementioned themes.
  Community-wide information and promotional campaigns involving: the designing of a logo and a slogan for the European Year of Lifelong Learning".
  If the project were confined to grants for adult education or lifelong learning it might be a different story, but I am afraid that my hon. Friend has been taken in by the document's title; it is an advertising campaign.
  Mr. Lofthouse, if you and I heard about the proposal and started up a consultancy or put in a bid to run the campaign in Britain— I presume that about £1 million will be spent on this rather curious exercise— we might be in the money; particularly if we had warning of what was going to happen.

  421
  The project is not an example of fraud, but it will generate enough money for someone to do quite well. We do not want to see the Commission financing that sort of project, even if, like my hon. Friend the Member for Rotherham (Mr. MacShane), we are very much in favour of the Union.
  My hon. Friend the Member for Workington (Mr. Campbell-Savours) talked about certain schemes which did not do the Union any good. I suggest that the project is a bad use of public money. That sort of thing can be stopped only if the Chamber uses its power to vote money—just as it does on voting Supply to the Crown, or on voting, as we did last night, on measures which will make money for the Government. Unless and until we get a grip on the European Community's finances, there will be trouble ahead for the Chamber, the Government and, above all, the people of this country.
  11 pm
  Mr. Heathcoat-Amory: I open by answering a point raised by the hon. Member for Workington (Mr. Campbell-Savours), although he does not seem to be in his place. He is probably back in the Library trying to find his book. I did not give an undertaking that the book on European agriculture was available. I said that I understood that it was in the Library. I had been told such by the Ministry of Agriculture, Fisheries and Food. If it is not in the Library, I apologise, and I shall make sure that it is placed there at the earliest possible moment. I repeat that it is not the intention of the British Government to suppress the book. It appears to be a useful contribution to the issue of reform of the common agricultural policy, which has been led by the Government and by Britain.
  Although I sympathise with some of the points made by the hon. Member for Newham, South (Mr. Spearing), I cannot accept his new clause 11. It is potentially extremely wide. The House will accept that already a huge quantity of documents is submitted to the House and is available for parliamentary scrutiny. Earlier in the evening, I quoted the figure of 673 explanatory memorandums submitted to the House in 1994 alone, of which 59 applied to budgetary issues. So Ministers who go to Council meetings and negotiate on behalf of the British Government already provide the House with a great deal of information. The Scrutiny Committee sifts through those explanatory memoranda and recommends some for debate.
  Mrs. Gwyneth Dunwoody: This is an important point. This morning in one of the European Committees the House was asked to examine four major directives on the training of marine employees, safety at sea and pollution. We made it clear that it was not in the interests of the House of Commons that such major pieces of legislation, which will have the effect of law in this country if they are passed, should be allowed to go through in one block sitting without proper examination or any opportunity for the House of Commons to vote against any amended resolution brought to the Floor of the House.
  It is all very well the Minister saying that more than 600 memoranda have been looked at. If that is the sort of scrutiny they receive from the House of Commons,
  422
  neither the Government nor the House should be satisfied that we are monitoring what is happening in the Community.
  Mr. Heathcoat-Amory: It is up to the House to order its scrutiny proceedings in order to give proper attention to the memoranda put before it. I emphasise that the Select Committee, not the Government, decides which shall be recommended for debate. I assure the hon. Lady that, when a draft directive or regulation is submitted to the Government, it is in turn provided to the Scrutiny Committee by way of an explanatory memorandum before final decision, and often before any decisions are taken in discussions in Council meetings in Brussels or elsewhere.
  So the Government are most anxious to supply the House with all necessary information, although it has been observed in the debate that the very quantity of explanatory memoranda means that they do not individually receive the attention that they deserve. I have already made the suggestion that we should consolidate some of the information into an annual report, which could perhaps receive more concerted attention from the House as a whole.
  The effect of new clause 11 would be to mandate Ministers at each stage of every negotiation in Council meetings. That is simply not realistic. A negotiator must be able to speak for those he represents. Obviously, during negotiations positions have to shift; opening bids retreat or advance; and objectives are secured by giving concessions elsewhere. If, at every point in the negotiations, reference had to be made back to the House and another resolution passed before they could proceed, they clearly could not proceed in any realistic sense of the term.
  Any hon. Member who has negotiated in any forum will appreciate that it is unwise for a Government to reveal their negotiating position in full before exchanges take place. I think that the House accepts that it is consistent with our scrutiny proceedings that Ministers should go to Council meetings with the knowledge of where the House stands on important issues, but free to negotiate the best deal possible.
  One should not forget that the negotiations are international discussions, and it behoves Ministers and officials negotiating for this country to get the best possible deal. They are conscious of the need to keep the House of Commons informed, but that position would be undermined by new clause 11, and I recommend that the House reject it.
  Mr. Spearing: With the leave of the House, Mr. Lofthouse. I shall be brief, but I think that the Minister is not absolutely clear about the meaning of new clause 11 in respect of the decision.
  I believe that it might be desirable—the Minister thinks it undesirable—for Ministers to be bound by decisions of this House in scrutiny debates, because all the things he mentioned will be a consequence. The resolution required by new clause 11 relates to the Council decision of 31 October, which concerns finance and the voting of money. I suggest that that changes the position.

  423
  Inadvertently or otherwise, the Paymaster General has been most frank in revealing the nature of the constraints that would be applied by the House and that he and any Minister would be placed under. He used the words "advance", "retreat", "negotiating positions", "concessions" and "concessions elsewhere". I hope that he means elsewhere in a regulation, but I am afraid that he means elsewhere in other matters of policy.
  Since the negotiations take place in secret, who is to know what minority interest in this country—employment in one hon. Member's constituency, or capital appreciation somewhere else—has been sacrificed. Hon. Members and the people of this country would be unaware of that.
  The Minister could come back and say, "I've done the best for the United Kingdom." The reason why any Government—including one whom I supported strongly, who said virtually the same—would say that is because the nature of the constitution of the European Union makes it thus. It mixes up the important matter of legislation, which we do openly and in public in this House, with negotiation, which is a matter of policy formulation between sovereign states. In their reply to the new clause, the Government admitted that mix, which is poisonous to the spirit of democracy, if not to its actuality.
  The hour is late, Mr. Lofthouse, and the Government in their wonderful democratic way, having allocated two days to debate the matter, appear to want to press on. I do not want to give them too much, but by refusing the new clause, with its deep, underlying constitutional principles, they have revealed the fix they are in, the fix that any Government would be in, and the nature of the treaties to which successive Governments have adhered and advocated to the House. Given the opportunity, I would negative the new clause, then we can perhaps move on to the next business.
  Question put, That the clause be read a Second time:—
  The Committee divided: Ayes 50, Noes 312.

  Division No. 15]

  [23.10 pm

  AYES

  Adams, Mrs Irene

  Gordon, Mildred

  Banks, Tony (Newham NW)

  Graham, Thomas

  Barnes, Harry

  Hall, Mike

  Benn, Rt Hon Tony

  Hanson, David

  Betts, Clive

  Hoey, Kate

  Burden, Richard

  Illsley, Eric

  Campbell-Savours, D N

  Lewis, Terry

  Canavan, Dennis

  Livingstone, Ken

  Cohen, Harry

  Loyden, Eddie

  Connarty, Michael

  Mackinlay, Andrew

  Corbyn Jeremy

  Mahon, Alice

  Cunliffe, Lawrence

  McAvoy, Thomas

  Cunningham, Jim (Covy SE)

  Michie, Bill (Sheffield Heeley)

  Dalyell, Tam

  Mullin, Chris

  Davidson, Ian

  Olner, Bill

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

  Paisley, The Reverend Ian

  Dixon, Don

  Pickthall, Colin

  Donohoe, Brian H

  Pope, Greg

  Evans, John (St Helens N)

  Prentice, Bridget (Lev'm E)

  Gerard, Neil

  Rooney, Terry

  424

  Rowlands, Ted

  Spellar, John

  Salmond, Alex

  Williams, Alan W (Carmarthen)

  Shore, Rt Hon Peter

  Wise, Audrey

  Simpson, Alan

  Skinner, Dennis

  Tellers for the Ayes:

  Smith, Llew (Blaenau Gwent)

  Mrs. Gwyneth Dunwoody

  Spearing, Nigel

  and Mr. Austin Mitchell.

  NOES

  Ainsworth, Peter (East Surrey)

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

  Aitken, Rt Hon Jonathan

  Curry, David (Skipton & Ripon)

  Alexander, Richard

  Davies, Quentin (Stamford)

  Alison, Rt Hon Michael (Selby)

  Davis, David (Boothferry)

  Amess, David

  Day, Stephen

  Ancram, Michael

  Deva, Nirj Joseph

  Arbuthnot, James

  Devlin, Tim

  Arnold, Jacques (Gravesham)

  Dorrell, Rt Hon Stephen

  Arnold, Sir Thomas (Hazel Grv)

  Douglas-Hamilton, Lord James

  Ashby, David

  Dover, Den

  Aspinwall, Jack

  Duncan Smith, Iain

  Atkins, Robert

  Duncan, Alan

  Atkinson, Peter (Hexham)

  Dunn, Bob

  Baker, Nicholas (Dorset North)

  Durant, Sir Anthony

  Baker, Rt Hon K (Mole Valley)

  Dykes, Hugh

  Baldry, Tony

  Eggar, Tim

  Banks, Matthew (Southport)

  Elletson, Harold

  Banks, Robert (Harrogate)

  Emery, Rt Hon Sir Peter

  Bates, Michael

  Evans, David (Welwyn Hatfield)

  Batiste, Spencer

  Evans, Nigel (Ribble Valley)

  Beggs, Roy

  Evans, Roger (Monmouth)

  Bellingham, Henry

  Evennett, David

  Bendall, Vivian

  Faber, David

  Beresford, Sir Paul

  Fabricant, Michael

  Biffen, Rt Hon John

  Fenner, Dame Peggy

  Bonsor, Sir Nicholas

  Field, Barry (Isle of Wight)

  Booth< Hartley

  Fishburn, Dudley

  Boswell, Tim

  Forsyth, Michael (Stirling)

  Bottomley, Peter (Eltham)

  Forsythe, Clifford (Antrim S)

  Bottomley, Rt Hon Virginia

  Forth, Eric

  Bowis, John

  Fowler, Rt Hon Sir Norman

  Boyson, Rt Hon Sir Rhodes

  Fox, Dr Liam (Woodspring)

  Brandreth, Gyles

  Fox, Sir Marcus (Shipley)

  Brazier, Julian

  Freeman, Rt Hon Roger

  Bright, Sir Graham

  French, Douglas

  Brooke, Rt Hon Peter

  Fry, Sir Peter

  Brown, M (Brigg & Cl'thorpes)

  Gale, Roger

  Browning, Mrs. Angela

  Gallie, Phil

  Bruce, Ian (Dorset)

  Garel-Jones, Rt Hon Tristan

  Bruce, Malcolm (Gordon)

  Garnier, Edward

  Budgen, Nicholas

  Gillan, Cheryl

  Burns, Simon

  Goodlad, Rt Hon Alastair

  Burt, Alistair

  Goodson-Wickes, Dr Charles

  Butcher, John

  Gorst, Sir John

  Butler, Peter

  Greenway, Harry (Ealing N)

  Butterfill, John

  Greenway, John (Ryedale)

  Campbell, Menzies (Fife NE)

  Griffiths, Peter (Portsmouth, N)

  Carlile, Alexander (Montgomry)

  Grylls, Sir Michael

  Carlisle, Sir Kenneth (Lincoln)

  Gummer, Rt Hon John Selwyn

  Carrington, Matthew

  Hague, William

  Cash, William

  Hamilton, Neil (Tatton)

  Channon, Rt Hon Paul

  Hamilton, Rt Hon Sir Archibald

  Chapman, Sydney

  Hampson, Dr Keith

  Churchill, Mr

  Hanley, Rt Hon Jeremy

  Clappison, James

  Hannam, Sir John

  Clarke, Rt Hon Kenneth (Ru'clif)

  Hargreaves, Andrew

  Clifton-Brown, Geoffrey

  Harris, David

  Coe, Sebastian

  Haselhurst Alan

  Colvin, Michael

  Hawkins, Nick

  Congdon, David

  Hawksley, Warren

  Conway, Derek

  Hayes, Jerry

  Coombs, Anthony (Wyre For'st)

  Heald, Oliver

  Coombs, Simon (Swindon)

  Heathcoat-Amory, David

  Cope, Rt Hon Sir John

  Hendry, Charles

  Cormack, Patrick

  Hicks, Robert

  Couchman, James

  Higgins, Rt Hon Sir Terence

  Cran, James

  Hill, James (Southampton Test)

  425

  Hogg, Rt Hon Douglas (G'tham)

  Newton, Rt Hon Tony

  Horam, John

  Nicholls, Patrick

  Hordern, Rt Hon Sir Peter

  Nicholson, David (Taunton)

  Howard, Rt Hon Michael

  Nicholson, Emma (Devon West)

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

  Norris, Steve

  Howell, Rt Hon David (G'dford)

  Onslow, Rt Hon Sir Cranley

  Howell, Sir Ralph (N Norfolk)

  Oppenheim, Philip

  Hughes, Robert G (Harrow W)

  Ottaway, Richard

  Hughes, Simon (Southwark)

  Paice, James

  Hunt, Rt Hon David (Wirral W)

  Patrick, Sir Irvine

  Hunt, Sir John (Ravensbourne)

  Patten, Rt Hon John

  Hunter, Andrew

  Pattie, Rt Hon Sir Geoffrey

  Hurd, Rt Hon Douglas

  Pawsey, James

  Jack, Michael

  Peacock, Mrs Elizabeth

  Jackson, Robert (Wantage)

  Pickles, Eric

  Jenkin, Bernard

  Porter, David (Waveney)

  Jessel, Toby

  Portillo, Rt Hon Michael

  Johnson Smith, Sir Geoffrey

  Rathbone, Tim

  Jones, Gwilym (Cardiff N)

  Redwood, Rt Hon John

  Jones, Robert B (W Hertfdshr)

  Renton, Rt Hon Tim

  Jopling, Rt Hon Michael

  Richards, Rod

  Kennedy, Charles (Ross,C&S)

  Riddick, Graham

  Key, Robert

  Rifkind, Rt Hon Malcolm

  Kilfedder, Sir James

  Robathan, Andrew

  King, Rt Hon Tom

  Roberts, Rt Hon Sir Wyn

  Kirkwood, Archy

  Robertson, Raymond (Ab'd'n S)

  Knapman, Roger

  Robinson, Mark (Somerton)

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

  Roe, Mrs Marion (Broxbourne)

  Knight, Greg (Derby N)

  Ross, William (E Londonderry)

  Knight Mrs Angela (Erewash)

  Rowe, Andrew (Mid Kent)

  Knox, Sir David

  Rumbold, Rt Hon Dame Angela

  Kynoch, George (Kincardine)

  Ryder, Rt Hon Richard

  Lait, Mrs Jacqui

  Sackville, Tom

  Lamont, Rt Hon Norman

  Sainsbury, Rt Hon Tim

  Lang, Rt Hon Ian

  Scott, Rt Hon Nicholas

  Lawrence, Sir Ivan

  Shaw, David (Dover)

  Legg, Barry

  Shaw, Sir Giles (Pudsey)

  Leigh, Edward

  Shephard, Rt Hon Gillian

  Lennox-Boyd, Sir Mark

  Shepherd, Colin (Hereford)

  Lester, Jim (Broxtowe)

  Shersby, Michael

  Lidington, David

  Sims, Roger

  Lightbown, David

  Skeet, Sir Trevor

  Lilley, Rt Hon Peter

  Smith, Sir Dudley (Warwick)

  Lloyd, Rt Hon Peter (Fareham)

  Smith, Tim (Beaconsfield)

  Lord, Michael

  Smyth, Rev Martin (Belfast S)

  Luff, Peter

  Soames, Nicholas

  Lyell, Rt Hon Sir Nicholas

  Speed, Sir Keith

  MacGregor, Rt Hon John

  Spencer, Sir Derek

  MacKay, Andrew

  Spicer, Michael (S Worcs)

  Maclean, David

  Spicer, Sir James (W Dorset)

  Madel, Sir David

  Spink, Dr Robert

  Maginnis, Ken

  Spring, Richard

  Maitland, Lady Olga

  Sproat, Iain

  Malone, Gerald

  Squire, Robin (Hornchurch)

  Mans, Keith

  Stanley, Rt Hon Sir John

  Marland, Paul

  Steen, Anthony

  Marshall, John (Hendon S)

  Stephen, Michael

  Marshal, Sir Michael (Arundel)

  Stern, Michael

  Martin, David (Portsmouth S)

  Stewart, Allen

  Mates, Michael

  Streeter, Gary

  Mawhinney, Rt Hon Dr Brian

  Sumberg, David

  Mayhew, Rt Hon Sir Patrick

  Sweeney, Walter

  McLoughlin, Patrick

  Sykes, John

  McNair-Wilson, Sir Patrick

  Tapsell, Sir Peter

  Mellor, Rt Hon David

  Taylor, Ian (Esher)

  Merchant, Piers

  Taylor, John M (Solihull)

  Mills, Iain

  Taylor, Rt Hon John D (Strgfd)

  Mitchell, Andrew (Gedling)

  Temple-Morris, Peter

  Mitchell, Sir David (Hants NW)

  Thomason, Roy

  Moate, Sir Roger

  Thompson, Patrick (Norwich N)

  Molyneaux, Rt Hon James

  Thompson, Sir Donald (C'er V)

  Monro, Sir Hector

  Thomton, Sir Malcolm

  Montgomery, Sir Fergus

  Thurnham, Peter

  Needham, Rt Hon Richard

  Townend, John (Bridlington)

  Nelson, Anthony

  Townsend, Cyril D (Bexl'yh'th)

  Neubert, Sir Michael

  Tredinnick, David

  426

  Trend, Michael

  Whitney, Ray

  Trotter, Nevillé

  Whittingdale, John

  Twinn, Dr Ian

  Widdecombe, Ann

  Vaughan, Sir Gerard

  Wiggin, Sir Jerry

  Waldegrave, Rt Hon William

  Willetts, David

  Walden, George

  Wilshire, David

  Walker, A Cecil (Belfast N)

  Winterton, Mrs Ann (Congleton)

  Waller, Gary

  Winterton, Nicholas (Macc'fld)

  Wolfson, Mark

  Ward, John

  Yeo, Tim

  Wardle, Charles (Bexhill)

  Young, Rt Hon Sir George

  Waterson, Nigel

  Watts, John

  Tellers for the Noes:

  Wells, Bowen

  Mr. Timothy Wood and

  Wheeler, Rt Hon Sir John

  Mr. Timothy Kirkhope.

  Question accordingly negatived.

New clause 12

  ANNUAL REPORT TO PARLIAMENT
  'Each year Her Majesty's Government shall make an annual report to Parliament concerning the operation of the Decision in section 1 (e) above in respect of the preceding financial year, which shall include:

  (a) a general presentation in text and tables of the financing and expenditure of the European Economic Communities in sterling equivalent and any common unit, which shall include comparable tables of income derived from each member state and expenditure therein in respect of each principal category of expenditure;

  (b) an account of rebate mechanisms applicable to any member state;

  (c) the operation of each article of the Decision;

  (d) action taken by Her Majesty's Government in respect of financial discipline;

  (e) the text of any regulation, directive or financial regulation relating to the operation of the Decision to which Her Majesty's Government has given its assent.'.—[Mr. Shore.]

  Brought up, and read the First time.
  Motion made, and Question put, That the clause be read a Second time:—
  The Committee divided: Ayes 73, Noes 308.

  Division No. 16]

  [23.21 pm

  AYES

  Adams, Mrs Irene

  George, Bruce

  Anderson, Ms Janet (Ros'dale)

  Gordon, Mildred

  Armstrong, Hilary

  Graham, Thomas

  Banks, Tony (Newham NW)

  Gunnell, John

  Barnes, Harry

  Hall, Mike

  Benn, Rt Hon Tony

  Hanson, David

  Betts, Clive

  Heppell, John

  Caborn, Richard

  Hill, Keith (Streatham)

  Campbell-Savours, D N

  Hoey, Kate

  Canavan, Dennis

  Home Robertson, John

  Clwyd, Mrs Ann

  Howarth, George (Knowsley N)

  Cohen, Harry

  Illsley, Eric

  Connarty, Michael

  Jones, Jon Owen (Cardiff C)

  Corbyn, Jeremy

  Jones, Martyn (Clwyd SW)

  Cunliffe, Lawrence

  Kilfoyle, Peter

  Cunningham, Jim (Covy SE)

  Lewis, Terry

  Dalyell,Tam

  Livingstone, Ken

  Darling, Alistair

  Loyden, Eddie

  Davidson, Ian

  Mackinlay, Andrew

  Davies, Ron (Caerphilly)

  Mahon, Alice

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

  Martin, Michael J (Springburn)

  Dixon, Don

  McMaster, Gordon

  Donohoe, Brian H

  Michael, Alun

  Dowd, Jim

  Michie, Bill (Sheffield Heeley)

  Evans, John (St Helens N)

  Moonie, Dr Lewis

  427

  Mullin, Chris

  Salmond, Alex

  O'Hara, Edward

  Shore, Rt Hon Peter

  Paisley, The Reverend Ian

  Skinner, Dennis

  Pickthall, Colin

  Smith, Andrew (Oxford E)

  Pike Peter L

  Smith, Llew (Blaenau Gwent)

  Pope, Greg

  Spearing, Nigel

  Powell, Ray (Ogmore)

  Spellar, John

  Prentice, Bridget (Lew'm E)

  Sutcliffe, Gerry

  Williams, Alan W (Carmarthen)

  Quin, Ms Joyce

  Wise Audrey

  Robertson, George (Hamilton)

  Roche, Mrs Barbara

  Tellers for the Ayes:

  Rooney, Terry

  Mrs. Gwyneth Dunwoody

  Rowlands, Ted

  and Mr. Austin Mitchell.

  NOES

  Ainsworth, Peter (East Surrey)

  Coombs, Simon (Swindon)

  Aitken, Rt Hon Jonathan

  Cope, Rt Hon Sir John

  Alexander, Richard

  Cormack, Patrick

  Alison, Rt Hon Michael (Selby)

  Couchman, James

  Ancram, Michael

  Cran, James

  Arbuthnot, James

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

  Arnold, Jacques (Gravesham)

  Curry, David (Skipton & Ripon)

  Arnold, Sir Thomas (Hazel Grv)

  Davies, Quentin (Stamford)

  Ashby, David

  Davis, David (Boothferry)

  Aspinwall, Jack

  Day, Stephen

  Atkins, Robert

  Deva, Nirj Joseph

  Atkinson, Peter (Hexham)

  Devlin, Tim

  Baker, Nicholas (Dorset North)

  Dorrell, Rt Hon Stephen

  Baker, Rt Hon K (Mole Valley)

  Douglas-Hamilton, Lord James

  Baldry, Tony

  Dover, Den

  Banks, Matthew (Southport)

  Duncan Smith, Iain

  Banks, Robert (Harrogate)

  Duncan, Alan

  Bates, Michael

  Dunn, Bob

  Batiste, Spencer

  Durant, Sir Anthony

  Beggs,Roy

  Dykes, Hugh

  Bellingham, Henry

  Eggar, Tim

  Bendall, Vivian

  Elletson, Harold

  Beresford, Sir Paul

  Emery, Rt Hon Sir Peter

  Biffen, Rt Hon John

  Evans, David (Welwyn Hatfield)

  Bonsor, Sir Nicholas

  Evans, Nigel (Ribble Valley)

  Booth, Hartley

  Evans, Roger (Monmouth)

  Boswell, Tim

  Evennett, David

  Bottomley, Peter (Eltham)

  Faber, David

  Bottomley, Rt Hon Virginia

  Fabricant, Michael

  Bowis, John

  Fenner, Dame Peggy

  Boyson, Rt Hon Sir Rhodes

  Field, Barry (Isle of Wight)

  Brandreth, Gyles

  Fishburn, Dudley

  Brazier, Julian

  Forsyth, Michael (Stirling)

  Bright, Sir Graham

  Forsythe, Clifford (Antrim S)

  Brooke, Rt Hon Peter

  Forth, Eric

  Brown, M (Brigg & Cl'thorpes)

  Fowler, Rt Hon Sir Norman

  Browning, Mrs. Angela

  Fox, Dr Liam (Woodspring)

  Bruce,Ian (Dorset)

  Fox, Sir Marcus (Shipley)

  Bruce, Malcolm (Gordon)

  Freeman, Rt Hon Roger

  Burns, Simon

  French, Douglas

  Burt, Alistair

  Fry, Sir Peter

  Butcher, John

  Gale, Roger

  Butler, Peter

  Gallie, Phil

  Butterfill, John

  Garel-Jones, Rt Hon Tristan

  Campbell, Menzies (Fife NE)

  Garnier, Edward

  Carlile, Alexander (Montgomry)

  Gillan, Cheryl

  Carlisle, Sir Kenneth (Lincoln)

  Goodlad, Rt Hon Alastair

  Carrington, Matthew

  Goodson-Wickes, Dr Charles

  Cash, William

  Gorst, Sir John

  Channon, Rt Hon Paul

  Grant Sir A (Cambs SW)

  Chapman, Sydney

  Greenway, Harry (Ealing N)

  Churchill, Mr

  Greenway, John (Ryedale)

  Clappison, James

  Griffiths, Peter (Portsmouth, N)

  Clarke, Rt Hon Kenneth (Ru'clif)

  Grylls, Sir Michael

  Clifton-Brown, Geoffrey

  Gummer, Rt Hon John Selwyn

  Coe, Sebastian

  Hague, William

  Colvin, Michael

  Hamilton, Neil (Tatton)

  Congdon, David

  Hamilton, Rt Hon Sir Archibald

  Conway, Derek

  Hampson, Dr Keith

  Coombs, Anthony (Wyre For'st)

  Hanley, Rt Hon Jeremy

  428

  Hannam, Sir John

  Merchant, Piers

  Hargreaves, Andrew

  Mills, Iain

  Harris, David

  Mitchell, Andrew (Gedling)

  Haselhurst, Alan

  Mitchell, Sir David (Hants NW)

  Hawkins, Nick

  Moate, Sir Roger

  Hayes, Jerry

  Molyneaux, Rt Hon James

  Heald, Oliver

  Monro, Sir Hector

  Heathcoat-Amory, David

  Montgomery, Sir Fergus

  Hendry, Charles

  Needham, Rt Hon Richard

  Hicks, Robert

  Nelson, Anthony

  Higgins, Rt Hon Sir Terence

  Neubert, Sir Michael

  Hill, James (Southampton Test)

  Newton, Rt Hon Tony

  Hogg, Rt Hon Douglas (G'tham)

  Nicholls, Patrick

  Horam, John

  Nicholson, David (Taunton)

  Hordern,Rt Hon Sir Peter

  Nicholson, Emma (Devon West)

  Howard, Rt Hon Michael

  Norris, Steve

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

  Onslow, Rt Hon Sir Cranley

  Howell, Rt Hon David (G'dford)

  Oppenheim, Phillip

  Howell, Sir Ralph (N Norfolk)

  Ottaway, Richard

  Hughes, Robert (Aberdeen N)

  Paice, James

  Hughes, Simon (Southwark)

  Patnick, Sir Irvine

  Hunt, Rt Hon David (Wirral W)

  Patten, Rt Hon John

  Hunter, Andrew

  Pattie, Rt Hon Sir Geoffrey

  Hurd, Rt Hon Douglas

  Pawsey, James

  Jack, Michael

  Peacock, Mrs Elizabeth

  Jackson, Robert (Wantage)

  Pickles, Eric

  Jenkin, Bernard

  Porter, David (Waveney)

  Jessel, Toby

  Portillo, Rt Hon Michael

  Johnson Smith, Sir Geoffrey

  Rathbone, Tim

  Jones, Gwilym (Cardiff N)

  Redwood, Rt Hon John

  Jones, Robert B (W Hertfdshr)

  Renton, Rt Hon Tim

  Jopling, Rt Hon Michael

  Richards, Rod

  Kennedy, Charles (Ross,C&S)

  Riddick, Graham

  Key, Robert

  Rifkind, Rt Hon Malcolm

  Kilfedder, Sir James

  Robathan, Andrew

  King, Rt Hon Tom

  Roberts, Rt Hon Sir Wyn

  Kirkwood, Archy

  Robertson, Raymond (Ab'd'n S)

  Knapman, Roger

  Robinson, Mark (Somerton)

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

  Roe, Mrs Marion (Broxbourne)

  Knight, Greg (Derby N)

  Ross, William (E Londonderry)

  Knight, Mrs Angela (Erewash)

  Rowe, Andrew (Mid Kent)

  Knox, Sir David

  Rumbold, Rt Hon Dame Angela

  Kynoch, George (Kincardine)

  Ryder, Rt Hon Richard

  Lait, Mrs Jacqui

  Sackville, Tom

  Lamont, Rt Hon Norman

  Sainsbury, Rt Hon Tim

  Lang, Rt Hon Ian

  Scott, Rt Hon Nicholas

  Lawrence, Sir Ivan

  Shaw, David (Dover)

  Legg, Barry

  Shaw, Sir Giles (Pudsey)

  Leigh, Edward

  Shephard, Rt Hon Gillian

  Lennox-Boyd, Sir Mark

  Shepherd, Colin (Hereford)

  Lester, Jim (Broxtowe)

  Shersby, Michael

  Lidington, David

  Sims, Roger

  Lightbown, David

  Skeet, Sir Trevor

  Lilley, Rt Hon Peter

  Smith, Sir Dudley (Warwick)

  Lloyd, Rt Hon Peter (Fareham)

  Smith, Tim (Beaconsfield)

  Lord, Michael

  Smyth, Rev Martin (Belfast S)

  Luff, Peter

  Soames, Nicholas

  Lyell, Rt Hon Sir Nicholas

  Speed, Sir Keith

  MacGregor, Rt Hon John

  Spencer, Sir Derek

  MacKay, Andrew

  Spicer, Michael (S Worcs)

  Maclean, David

  Spicer, Sir James (W Dorset)

  Madel, Sir David

  Spring, Richard

  Maginnis, Ken

  Sproat, Iain

  Maitland, Lady Olga

  Squire, Robin (Hornchurch)

  Malone, Gerald

  Stanley, Rt Hon Sir John

  Mans, Keith

  Steen, Anthony

  Marland, Paul

  Stephen, Michael

  Marshall, John (Hendon S)

  Stern, Michael

  Marshall, Sir Michael (Arundel)

  Stewart, Alan

  Martin, David (Portsmouth S)

  Streeter, Gary

  Mates, Michael

  Sumberg, David

  Mawhinney, Rt Hon Dr Brian

  Sweeney, Walter

  Mayhew, Rt Hon Sir Patrick

  Sykes, John

  McLoughlin, Patrick

  Tapsell, Sir Peter

  McNair-Wilson, Sir Patrick

  Taylor, Ian (Esher)

  Mellor, Rt Hon David

  Taylor, John M (Solihull)

  429

  Taylor, Rt Hon John D (Strgfd)

  Wardle, Charles (Bexhill)

  Temple-Morris, Peter

  Waterson, Nigel

  Thomason, Roy

  Watts, John

  Thompson, Patrick (Norwich N)

  Wells, Bowen

  Thompson, Sir Donald (C'er V)

  Wheeler, Rt Hon Sir John

  Thornton, Sir Malcolm

  Whitney, Ray

  Thurnham, Peter

  Whittingdale, John

  Townend, John (Bridlington)

  Widdecombe, Ann

  Townsend, Cyril D (Bexl'yh'th)

  Wiggin, Sir Jerry

  Tredinnick, David

  Willetts, David

  Trend, Michael

  Wilshire, David

  Trotter, Neville

  Winterton, Mrs Ann (Congleton)

  Twinn, Dr Ian

  Winterton, Nicholas (Macc'fld)

  Vaughan, Sir Gerard

  Wolfson, Mark

  Waldegrave, Rt Hon William

  Yeo, Tim

  Young, Rt Hon Sir George

  Walden, George

  Walker, A Cecil (Belfast N)

  Tellers for the Noes:

  Waller, Gary

  Mr. Timothy Wood and

  Ward, John

  Mr. Timothy Kirkhope.

  Question accordingly negatived.
  Bill reported without amendment.
  Motion made, and Question proposed, That the Bill be now read the Third time.—[Mr. Heathcoat-Amory.]
  11.33 pm
  Mr. Shore: It would be absurd if we were to allow the Third Reading of this contentious and, in many ways, memorable Bill to be taken on the nod, and we have no intention of allowing that to happen.
  The Bill will enter the annals of parliamentary history for several reasons. First, it has been a memorable Bill for the passions that it has excited, not least among Conservative Members. It has also been a very puzzling Bill because of the curious tactics employed by the Prime Minister and the Cabinet in order to secure its passage. When people return to the Bill, as they will again and again, they will want to know why on earth the Government thought that it was necessary to get the measure through. They will ask, too, why amendments of a most reasonable kind were not accepted in Committee—why on earth the Prime Minister thought it was so worth while to get the Bill that he threatened electoral suicide and a general election, and why, in pursuit of the same cause, he was prepared to turn his elected majority Government into a minority Government. Those are truly amazing events, although we shall, over time, come to understand them a little better.
  The Bill is about increasing the Community's own resources from 1.20 per cent. to 1.27 per cent. over a five-year period. That is an increase of about 5 per cent. in its total budgetary or tax yield. Five per cent. of about £60 billion, which is spent now, is a yield of about £3 billion over that period.
  People will ask, why on earth was it necessary to have the Bill at all? What were the increased expenditures that it was designed to cover? We find, of course, that the principal item was the so-called cohesion fund in the Maastricht treaty, under which, in contradiction of an accepted regional policy, special funds were made available to Greece, Portugal, Spain and Ireland—not to particular regions in those countries but to the countries themselves.
  We know why that pledge was made and those funds have been raised. It was not because of the particular needs of those countries—they would be covered properly by regional policy—but as a kind of general bribe to bring them along into the Euro-federal camp to get through the other far more dangerous and contentious parts of the Maastricht treaty. I have nothing but good will in my feelings towards the four countries concerned, but I do not think that it is right that they should be the recipients of a cohesion fund.
  The House of Commons has a long tradition of careful scrutiny of finance, taxation and expenditure and has always insisted that grievances be remedied before it voted Supply. The Court of Auditors report, although we may argue about the precise amount, reveals waste, lack of financial control and fraud amounting to 10 per cent. of the Community budget or a sum equal to £6 billion. People will ask how the House could consider increasing the Community's finances by £3 billion when up to £6 billion could be saved if we had proper scrutiny and checks on the waste, the fraud and the other failings of
  432
  the budgetary system. It is difficult to understand why no such amendments were approved, despite the fact that they were proposed.
  What argument carried the Bill through the House of Commons? I think that, above all, it was a false but important constitutional argument: that the Prime Minister felt that this had the status of a full treaty and that the agreement that he had entered into in Edinburgh in December 1992 was not the Prime Minister giving his consent, subject to the approval of Parliament, but his giving consent, as Ministers have in the past when signing a foreign treaty, by the use of prerogative power, which is seldom challenged in the House after it has been used. But this is not a treaty. How can we go on accepting that agreements arranged between Community countries should have the status of a full-blown treaty? That is absurd, and it is simply a means of ensuring that we lose democratic control.
  Agreements are being made all the time in the European Community—agreements or "decisions". Are we to be told the same every time an agreement is made? The document is not called a treaty; it is called a decision—the decision of 31 October 1994. Are we to be told in future that all the decisions taken in the European Community have the status of treaties, and that those who have signed them feel so strongly and passionately about them that they are prepared to resign en bloc and force a general election if they do not get them through?
  It is constitutionally improper that such threats should be made, and if those threats are effective, Parliament is reduced in power and influence in a totally unacceptable way. We shall constantly be threatened with the use of a treaty power, when we should be treating such agreements as if they were normal pieces of legislation.
  It is interesting that in the so-called decision of 31 October, after the usual prelude, with the long list of "whereas this" and "whereas that" that precedes Community doctrines, the articles of the decision are introduced by the following passage:
  "Whereas the European Council provided that this Decision should take effect on 1 January 1995,
  HAS LAID DOWN THESE PROVISIONS, WHICH IT RECOMMENDS TO THE MEMBER STATES FOR ADOPTION".
  The Council "recommends". That is not the language of a treaty; it is the language of an ordinary decision, almost equivalent to a piece of domestic legislation.
  The Bill is memorable for the reasons that I have given. It represents a major constitutional innovation, and in order to get it through the Government have behaved as no Government, in my recollection, have ever behaved. It has been introduced at a time when its purpose is clearly under dispute, and it coincides with a massive indictment of fraud and waste in the Community.
  I hope that the House will never again allow a decision made within the Community to be given the status of a treaty, thus denying the House the right to object, to amend and to turn it out if need be. I hope that we shall all come to that resolution. Although I do not believe that I shall defeat the Bill on its Third Reading I shall certainly vote against it, and I shall do so with enthusiasm.
  11.42 pm
  Ms Armstrong: I echo what my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) said about the amazing procedure that we have seen and been through during the passage of the Bill.

  433
  We have always made it clear that we support the principles agreed at Edinburgh, but that we believe that the Government can do far more to examine and scrutinise properly fraud, waste and the common agricultural policy. At the moment, scrutiny is insufficient and ineffective, and much more could be done. Speeches made during the passage of the Bill have made it clear that hon. Members on both sides of the House believe that much more can and should be done.
  It was always clear to us that the Government would get the Second Reading of the Bill, because despite their Euro-sceptics there was sufficient support for it in the House. Yet it seems as though the Prime Minister decided that this was the time when he had to show his authority. This was the time to show that he would tolerate no more, and that he would not have people constantly disrupting his Government. So, in spite of what common sense should have told him, he decided to make the Bill an occasion for a great show of strength. The result was—[HON. MEMBERS: "Why not?"] Hon. Members ask why not. A politician has to decide when it is time to take such action and when it is not necessary. What happened last week was that the Prime Minister showed incalculably bad judgment, which has split his party and left him with a minority Government. It led to his Government being defeated last night and today, it has led to ignominious, backstairs dealing—[HON. MEMBERS: "Say it again."]— backstairs dealing to get a shabby agreement from those who, last week, were prepared to vote and to stick with their consciences and who, today, were doing deals with the Prime Minister to sell out what they had supposedly gone to the stake for last week.
  Many people outside the House will wonder what all the fuss was about last week. We know now that the party in government is in a shambles. The Government do not know how they want to govern, they do not know what their priorities are and they do not have the confidence of their own party, let alone the confidence of the country.
  The debate today began interestingly, with the hon. Member for Stafford (Mr. Cash) making a long speech to draw out from the Paymaster General and to get on the record exactly what the shady deal had been. As I said, he and his colleagues disappeared; we have seen no more of them. Their determination to scrutinise disappeared and we can only guess at what was said within No. 10 Downing street about it. That is no way to run a Government. What a shambles and what a disgrace to British democracy!
  The people of this country want to see a Government who scrutinise effectively the raising of money from them and the way in which that money is spent. They have the right to expect that and we in the House have the right to expect that. That is what the new clauses were all about. The Government have wavered today, not sure quite what they were going to do until they were sure that the Euro-sceptics had been bought off. Once the Euro-sceptics were bought off, the Government wanted to run and to get home quickly. I know that they have had too much of this place this week, but the country has had too much of them.
  The Government will get their Bill tonight because, as I have said, we agree with the principle, but they have lost their credibility and their competence to govern. Many hon. Members now believe that the Government are unfit to govern.
  11.48 pm
  Mr. Rowlands: As a preamble to the Bill, every hon. Member was sent a letter by the Chancellor of the Exchequer in which he explained what a minor and minimum sum was involved in the Bill. As the explanatory and financial memorandum states, the figure will be a mere £75 million net additional cost in 1995–96, rising to £250 million. Frankly, the reason why I did not believe that letter and why I believe that we are being conned is based on my own experience in this House. I came here in 1966, years before we were a member of the European Community. I voted in the referendum in 1975 to stay in the European Community and it is interesting to note that in that year, the gross contribution made by the United Kingdom to the EC budget was £341 million. The public sector receipts from the European Community were £398 million. The only year in which we were net beneficiaries of the whole system was 1975, when I voted to stay in the European Community and when we were net beneficiaries by some £57 million as a result of transitional arrangements and so on.
  It is worth reminding the House of what I have seen those figures become. We have been asked to agree that the Bill represents a mere £75 million now and a mere £250 million by net increase next year. In 1975, the year I voted in a referendum to stay in the Community, the gross contribution was a mere £341 million. The gross contribution in 1994 is £7,203 million. As a result of the changes in this Bill, the gross United Kingdom contribution will reach £10 billion by 1996–97.
  If I look back again at the time when I voted in 1975, the net contribution was minus £57 million. In 1994, it will be £1.3 billion and by 1996, net contribution to the European budget will become £3.53 billion. So, we have every reason, if one takes into account about a 20-year period since the key decision was made in 1975, to wonder about, question and worry about whether we should pass a Bill on the basis of a Chancellor's letter that tells us that we will be paying a mere £75 million extra this year and a mere £250 million next year.
  I have lost any belief that Governments have meaningful control over the UK contribution. I am an old-fashioned parliamentarian. I came here because I thought that this was where influence and power lay. As a parliamentary historian, before and during my time here, I believe passionately that this House matters and that the procedures, means and the basis on which we have built parliamentary traditions in this House are based on scrutiny and control of public expenditure. The term that my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) used about redress before Supply was old-fashioned, but good nevertheless. It was the basis on which this House was created, formed and became a continuous institution. Before then, it was an occasional occurrence when the House met. Years would go by when Parliament did not even meet. Problems of annual estimates and the creation of the first Public Accounts Committee occurred 300 years ago this year, in the 1690s, as I said on Second Reading. From there, annual Sessions were perpetuated.
  Others may not care a damn about whether that tradition matters. I believe that it does. I believe that it is very important. It gave people the confidence to give Government money because they knew that there was

  435
  some method and degree of parliamentary accountability. What do I see now? I witness a gross, growing erosion of that basic fundamental power of control over expenditure.
  One of the worrying beliefs which I have heard expressed tonight is the illusion, which has been gradually created between the Minister and his Back Benchers, that, somehow, our Public Accounts Committee will be able to get a handle on the issue. I raised the matter with the Minister and he said that it was a House of Commons matter and not one for him, but when replying to earlier debates he offered the idea that the Public Accounts Committee would be able to get involved in the detailed control and scrutiny of European expenditure. I ask him again: how?
  Public Accounts Committee procedure is based on the simple principle that the permanent secretary, as the accounting officer of the Department, is ultimately responsible to the PAC, the National Audit Office and the Comptroller and Auditor General. As I understand it, no individual permanent secretary will be responsible to the House for a penny of the expenditure that is involved in the Bill. It would seem that the same comment could be made in respect of the PAC. If I am wrong, I hope that the Minister will tell me, but I do not think that I am. No estimates flow from own resources. The financial prospectus, as it was called, that was attached to the Edinburgh accord, or conclusions, was a five-year forward budget for individual items, not one of which will be subject to parliamentary accountability. No permanent secretary, as the accounting officer of a Department, will be responsible and answerable to the PAC.
  Money is being handed over to another body to spend. The permanent secretaries of the Ministry of Agriculture, Fisheries and Food and the Department of Trade and Industry will not be responsible for structural funds or the CAP. There is no connection between the money being handed over and the system of parliamentary accountability that we have devised. The Paymaster General was offering an illusion when he suggested to Conservative Back-Bench Members that the PAC would be able to become involved. The Minister should not try to kid us or persuade us that a new form of accountability will emerge as a consequence of the "promises" from the Government Front Bench to Conservative Back-Bench Members. Perhaps the Minister will care to tell me by what procedures it will emerge.
  The system of permanent secretaries becoming accounting officers was one of the consequences of Treasury changes that were introduced in the 1920s, and related to the estimates of Departments.
  I questioned the Paymaster General about the financial prospectus. We have been much concerned about own resources but alongside them is a five-year projected budget. The prospectus for 1993–99 lists various areas of expenditure, including the increased expenditure that will take place. The Minister told us that it was a political agreement, not one that was legally binding.
  Will the Minister tell us in future that the prospectus was not legally binding, but that it was politically internationally binding on the Government that the figures be observed? Will we be told that there can be no fundamental alterations in the budgets that were laid down at Edinburgh? That will mean that the 41 per cent.
  436
  increase in the structural operations, for example, is laid down and will have to be spent. There will not be a major alteration unless all parties agree.
  Will the Minister tell us, just as we were told on Second Reading, that the own resources part of the Bill was a matter of confidence and had to be driven through unamended? Will he say that because the Government have given their word, we are bound to the own resources decisions and to all of the budget arrangements for the next five years and the expenditure there outlined? Are those arrangements immutable in the sense that they have been signed and agreed politically? Are they binding on us unless all parties agree to alter them?
  Irrespective of its not being legally binding, does the political agreement which was created at Edinburgh have the same moral force of an international arrangement of the kind that the Paymaster General has tried to sell us and to which we are committed in terms of own resources? If it is, for the next four or five years, the way in which the money will be raised and where it will be spent will be outside our control. We cannot alter the various budgets. The Government are binding us not only to resources but to a four or five-year expenditure programme.
  I should like to believe that my constituency will be a beneficiary, but I am growing increasingly disillusioned. Anyone who was involved in RECHAR or structural funds, and anyone who has tried to beg money from the European Commission in the past couple of years goes away feeling very sorry. Anyway, it is only begging for money that we have sent. It is only trying to obtain a small proportion of the gross contribution that we have made. We are major net contributors. Even the curious recycling process is elaborate and bureaucratic. We are now told that the financial perspective is a political agreement, and that that, too, is as unalterable as the own resources decision.
  I have been slow in waking up to the matter. I said on Second Reading, and I repeat on Third Reading, that I was a slow learner on the European Community. I did not appreciate what was involved. Other hon. Members who are much more perceptive than I am spotted the arguments earlier. I am a good pupil, and I have learnt my lesson. I will not support a Bill which has been driven through in such a way, with its consequences for expenditure and parliamentary and public accountability. I will not be conned by the letter which the Chancellor sent to me before the Bill began its progress or by the promises of a Minister who obviously does not know much about parliamentary procedure and who is offering a fig leaf by way of control of public accountability through the Public Accounts Committee. For those reasons, I shall certainly oppose the Third Reading.
  12.1 am
  Mr. Charles Kennedy: I wish to contribute briefly to the Third Reading debate. It is a fair indication of the confusion at the heart of the Government on this and many other matters that a Bill which began its life with its Second Reading becoming a motion of confidence, which threatened to bring down the Government and send off the Prime Minister to see Her Majesty the Queen to seek an immediate dissolution and a pre-Christmas general election, all within the space of 10 days, has its Third Reading moved formally by the Minister. That is a breathtaking constitutional development in little more than one working week at Westminster.

  437
  As has been said, in the past 10 days, the Government have technically turned themselves into a minority Government. We saw the Minister, when he replied to his hon. Friend the Member for Stafford (Mr. Cash)—I do not know whether he is one of his hon. Friends at the moment—offer a palliative via the Public Accounts Committee. That was a clear sign that the Government are desperate to get the rebels back on board.
  If there is one group of people who have shown consistency in this matter, it is the Conservative Euro-sceptics. I have said it before, and I repeat, that they stick to their guns and they argue their case. They did so again in the Lobby last night, and we must respect them. I completely and utterly disagree with them. They are wrong on the European issue and they are doing great damage to the country's interests because of the influence that they are exerting within their own party at the moment; but I must respect the fact that they stick to their guns and argue their case.
  I just wish that we had a Prime Minister who knew what his case on Europe was. I wish that he would argue with conviction and consistency, but alas the Prime Minister does not. We have now reached the Third Reading of a Bill of which, had there been a free vote on Second Reading, 500 hon. Members would have voted in favour.
  The Prime Minister managed to turn the vote into an issue of confidence. He has not just sundered what should have been all-party support for the principles of the Bill on Second Reading, but in the process he has allowed the Back-Bench sceptics to have still more influence over the Government on matters European. We have seen hopeless parliamentary tactics and very poor political leadership from the Prime Minister in the past 10 days.
  The Government are in the utterly farcical situation—not seen since the days of Denis Healey— of having to deliver a mini-Budget tomorrow afternoon as a result of a defeat which can be traced directly to the Bill's Second Reading and to the way that the issue was mishandled by the Conservative party. That is a matter of internal grief for the Conservatives, but the problem is that this country will pay a heavy price in terms of its interests.
  If the Conservatives hang on to power for another year or 18 months, the sceptics will have more influence over the Government's stance vis-à-vis the 1996 intergovernmental conference. I predict that two things will happen. First, the Government will have to came out in favour of a referendum on the European issue. I believe in that myself. I voted for it during the debate on Maastricht; I thought that we should have had a referendum about that issue. There should be referendums to decide any constitutional implications arising out of the IGC, such as the single currency issue and the like.
  Secondly, as we saw in the Prime Minister's speech to the Conservative women's conference at the end of last week, the Government will adopt a more chauvinistic and nationalistic approach.
  Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. Could we hear a little about something that is in the Bill?
  Mr. Kennedy: I contend that these are the implications which flow from the approach which the Government and the Cabinet have taken to the Bill. Therefore, my comments are absolutely generic to the case.
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  As a result of the way in which the Prime Minister and the Chancellor have handled the Bill, the stance that the Government will adopt at the next IGC will be damaging to our national interests. At the end of the day, the Prime Minister will be more concerned about appeasing a vocal and determined minority within his own ranks than he will be about addressing the broader issues of greater integration, greater democracy and greater decentralisation for European institutions as a whole. Regrettably, that is the price that we will pay.
  Pressing the nuclear trigger in the form of the confidence vote, technically losing an overall majority in the House and finally losing the vote on the Budget measure last night and having to come up with an emergency package tomorrow will be seen as the beginning of the end for the Prime Minister, and I hope the beginning of the end for the Government.
  It is a great shame that a Bill which should have commanded all-party support cannot do so because the Government have quite erroneously turned it into an issue of confidence. It is impossible for the Labour party and the Liberal Democrats, who support the principles of the Bill, to vote for it because of the Government's stupid handling of the issue.
  12.7 am
  Mrs. Dunwoody: I shall not follow the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) in his remarks. Whatever my views about the Conservative party, if there comes a time when the House of Commons does not listen to the differing opinions of Back Benchers there will be absolutely no point in having democratic elections.
  The House has control over taxation. It has the power to increase taxes, to decide priority spending areas and to monitor whether taxes are paid. That constitutes the basis of House of Commons procedure. The majority of hon. Members come to this place because we have priorities about those things that we believe are of concern in our electorates. I believe that constant erosion of the House of Commons' power to examine in considerable detail where taxation money should be spent would frighten those whom we seek to represent. That is increasingly the situation in which the House of Commons finds itself.
  I have the honour to sit on a European Committee that is charged with the responsibility of looking not only at the constant flow of directives and regulations but at the precise monetary implications of the legislation which is brought before us. We are failing to examine in sufficient detail what is happening within the Community. We are certainly failing to examine the flow of moneys, over which we have little control, from the United Kingdom into the Community.
  It is all very well to use slightly sophisticated and superficial phrases such as, "If you belong to a club, you have to pay the subscription." It is tremendously important to understand that the Bill means a great deal more than a subscription. It is the movement of a very large amount of money raised from the British people by taxation, but not controlled by them or by the democratic Government who are elected by them. Indeed, the money is not even supervised by the Members of Parliament for whom they have the opportunity to vote.
  Throughout the coming years, it will become clear that the priorities for the use of the money will not be those set by the House. Monitoring of the proper use of that

  439
  money will not be undertaken by the House. The Government seek to mislead if they imply that we will have extra powers which will enable us to examine in detail what is happening.
  I deplore the way in which the Bill has been handled. I certainly deplore the fact that a major piece of legislation should be handled at this hour with such superficiality. That approach is defended by the Government, giving the impression that a few Members of Parliament seek to detain the House without having a legitimate political reason. I believe that simply being a democrat and being proud to be a Member of Parliament is enough reason for me to detain the House. I am deeply worried by what we are doing tonight. I am frightened that in the near future the House of Commons will have real reason to rue the decisions that we are about to take.
  12.11 am
  Mr. Austin Mitchell: I agree with the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) that the Bill has moved from crisis to cursory contempt. The cursory contempt has been shown in the way in which it has been pushed through tonight. The Bill started out with the most incompetent piece of parliamentary management that has been seen this century. It has overwhelming support in the House, although not from me. About 500 Members might well support the Bill.
  The episode ended last week with the farce of having to push the Bill through on a vote of confidence. That guaranteed that the Liberals were desperate to grovel and to support any initiative from Europe. The Labour party, which is now communautaire and friendly to all things European, was forced to vote against the measure because it has been handled in such an incompetent way. The Bill could have been passed easily. The matter has been turned into a tremendous difficulty, which ends only tonight. That is insane incompetence. It has ended in a squalid scuttle, as the midnight hour passes and most people are sensibly at home in bed.
  "Oh what a tangled web we weave,
  When first we practise to deceive!"
  That has been the progress of the Bill. The Government have got their legislation. The Prime Minister gave his word at Edinburgh and that word is upheld by the House by the procedure that I have described, but at what cost? No trust. Trust has been broken. It can never be glad, confident Major again, if it ever was. The Prime Minister has cashed in all his credit chips to get this measure through in such a fashion.
  The Prime Minister cannot get any support from that section of his party that he has treated so contemptuously and stupidly. He will get the Bill on the back of a widespread realisation that it has been pushed through by what amounts to a confidence trick on Parliament and on the British people, by using the treaty power to push through a measure that will tax the people, against their consent and without that of Parliament.
  If the money is justified, why not ask the people for it honestly? If belonging to the club brings them benefits, they will be prepared to pay the contribution. Why should the case not be put before the people and before us, and our honest consent asked for? Why should it be treated in such a deceitful and half-baked fashion, with the legacy of and hostility that that builds up? I am happy
  440
  that it builds up that feeling in the Conservative party, but it has also built up unease outside because the people see what has been done and how. They might not have a clear understanding of the deceit that has been used, but they are uneasy and unhappy about what has happened. The Government are trying to build a commitment to Europe on that unease.
  The Bill has been dealt with contemptuously and without any safeguards, checks, audit, justification or controls. The Government have rejected all the controls in the amendments that were tabled. There are no safeguards. The Bill is just the latest part of that long, humiliating and embittering experience that is our relationship with Europe and our membership of the European Union.
  It is no wonder that every poll shows a widespread hostility, distaste and dislike for Europe. The people sense that the relationship has brought them no benefit—in fact, they know it from their experiences with jobs, food prices, regulations, interference and the unjustified actions imposed on them. They know that they are asked to pay an accumulating total—£22 billion net since the relationship began—to belong to a club that is doing damage to the economy, jobs and food prices. They are asked to pay a contribution that cannot be justified, and the bill will increase—to £10 billion in 1996.
  Because that cost cannot be justified and the Government cannot explain why the people should pay that money to have damage done, we are forced into what amounts to an agenda of lies in the democratic dialogue of this country. It has become a dialogue of lies and of half-truths. We have to pretend that loss is benefit, that drain is success and that humiliation is triumph. All that has to be reinterpreted for the British people because they know instinctively what is wrong and they cannot be told the truth.
  The Bill prolongs that process. It is no longer Lady Curzon's motto on matters sexual, "Lie back and think of England," but "Lie back and think of Europe." That is the only justification that the Government can give for the Bill and for the half-truths, distortions, dodges and the Chancellor's letter. That becomes a culture—a habit of lies and dodges like the ones used to push through as a treaty a measure that should have been scrutinised, audited, costed and controlled.
  I am concluding, Mr. Deputy Speaker. It is said that power corrupts and absolute power corrupts absolutely. Long tenure of power makes one contemptuous, and an even longer tenure of power makes the Government absolutely contemptuous of the Parliament, the people and, worst of all, their own party—an instrument that has been so badly messed about in pushing through the Bill.
  The Bill, and that relationship, has been an embittering experience. Fortunately, that experience carries its own nemesis because it is building its own antibodies, alienation, dislike and mistrust for the institution in whose name all that is done and for the Government who are doing it.
  12.19 am
  Mr. Spearing: My right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) properly asked why we have had such extraordinary political and constitutional contortions about this Bill. The answer, I think, is that the Conservative party has got itself into

  441
  what might be termed a form of political crack. It has a certain amount of muscle when operating along the traditional lines, but those traditional lines no longer work. That is why the Conservative party is proposing the Bill in the form of an extended crisis on two or three fronts.
  The main reason for that is that the power which the Government once had in this House as sole decision makers as to what money should be spent and what money should be taxed has gone elsewhere. No longer is the Conservative party—nor, indeed, any party holding a majority—in the position in which it might have been even in 1975 when we had the referendum.
  I put it to the Government Front Bench that there have been two ministerial statements of untruth in the media in relation to the Bill, one of which was made in this House. The Chancellor tried to make out in the House that there was an international or treaty obligation that the Bill should be passed. As recently as this week, the Secretary of State for Defence—I gave the right hon. and learned Gentleman warning that I intended to raise the matter in the House—said the same thing.
  We had better get it straight. The claims of those Cabinet Ministers are wrong. Either they do not know the treaty, or they have been misinformed. Article 201 of the treaty—we should get this firmly on the record in the closing minutes of debate on this important Bill—says in relation to own resources:
  "To this end, the Commission shall submit proposals to the Council. After consulting the European Parliament on these proposals the Council may, acting unanimously, lay down the appropriate provisions, which it shall recommend to the Member States for adoption in accordance with their respective constitutional requirements."
  The treaty was signed on the basis of an option to this House. It may be that the Government have given some undertaking, but that was not the constitutional last decision, which is for this House alone. Yet the Chancellor, the Secretary of State for Defence and possibly other members of the Cabinet pretend otherwise.
  I suggest that the wording of article 201 gives a clue as to what we now have. We have a cascade of coercion in which the Prime Minister himself is entangled, as is the Chancellor and any hon. Member who goes along with the principle of the treaties that we have signed. Why is that? It is because that article says that the Commission shall propose what taxes will be. The last word is not with the Commission, but it is the originator of any proposal for own resources taxation.
  The article then says that the Council will take that proposal up. The Council may do that but, in secret bargaining inside the Council, there is coercion on the back markers, who must take something which they do not want because they have to pay for something else. In relation to that, individual Governments—whether they wish to or not—must go to their respective Parliaments or assemblies and say, "We have got the best deal we could. Here are the tax proposals. Please will you pass them?"
  We then go down to our constituents and tell them that they will have to pay the taxes, extra heating charges or VAT to supply the money which was first proposed by
  442
  the Commission. In other words, we are back to the constitutional position that we were in before 1688, when proposals for expenditure came from the Crown and not from the revolutionary representatives of the House acting on behalf of a neutralised Crown. Our new Crown is primarily an amalgam of the Commission and the Council. That is the constitutional position and I challenge any Conservative Member to controvert it in absolute principle. It lies behind the reason why the Government—and, I believe, members of any future Conservative Government—will find themselves in considerable difficulty.
  That was illustrated by my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), who demonstrated in his speech that we are now being asked to pay the price of the sort of Maastricht treaty that the Prime Minister—after a great deal of negotiation—thought that he could recommend. That treaty arose from the much fiercer, more tightly bound treaty proposed by the Dutch presidency, which was changed. The Prime Minister managed to persuade his party to accept it only because the Foreign Secretary said, "It is not a great unity; we have the pillars—we have the trunk. The court cannot get at the whole thing, nor can the Community institutions." He tried to make out, in fact, that the Union was bigger than the Community.
  There is a technical and legal difference, but is there such a difference in practice, in the Council of Ministers? I doubt it very much. The Prime Minister had to pay for that opt-out—that modification. He also had to pay for a temporary, theoretical opt-out from the requirements of economic and monetary union. The third thing that he secured, and perhaps the most controversial of all, was a so-called opt-out from the social chapter—or so we are told, although that is not what the treaty says.
  Indeed, there is no social chapter in the Union treaty that was agreed at Maastricht. It is in the Single European Act, and we have to pay for it with the money on which we are now voting. That is why I speak of a unity: the measure that we shall pass tonight constitutes a decision to pay for the whole Community and all its works—not just to pay for a few things in future, but to make payments to which we are already committed.
  The Community's stability is fuelled only by libations of additional cash. Agreements can be reached only if everyone wins more money—more grants. Problems with the common agricultural policy, for instance, are solved by surpluses. That is the only way in which negotiation can be reasonably successful for everyone. Everyone gets a prize, says the president of the Commission. The Community staggers on, and is stable—up to a point—only because of that inherent instability, fuelled by the cash that the Bill will provide in the future.
  If that were not so, common sense would dictate that the Community should remain at its institutional level and that we should find out how things are going before we go on to the next stage, instead of which we go on and on and on—[HON. MEMBERS: "And on, and on, and on."]

  443
  Indeed. We go on and on to lose the powers that Conservative Members, and the rest of us, were elected to exercise.
  Legislation is now encompassed in an invisible cage of existing regulation. Taxation relates increasingly to the EC; the allocation of expenditure relates more and more to the EC; administration becomes more like that of county councils year by year; and adjudication, the other function of sovereign Governments, is increasingly a matter for the European Court.
  The passing of this Act, and especially the passing of the European Communities (Finance) Act 1988—which initiated own resources—mean that we are returning to the constitutional position that obtained before 1688. We are losing not only our own financial resources—the source of our power, as my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) admirably noted—but the sources of our own democracy, because we now have to bow to what is fundamentally an authoritarian system, over which we have lost, and will lose, more and more control.
  12.29 am
  Mr. Salmond: I was moved to speak, not so much by the prospect of keeping so many Conservative Members of Parliament from their beds, attractive though that prospect is, but rather by the comments of the hon. Member for Great Grimsby (Mr. Mitchell), who a few moments ago estimated that about 500 Members of the House of Commons basically supported the legislation. I should think that that is an underestimate. I believe that at least 550 Members basically support the legislation. I cannot believe that there are any more than 100 fundamental Euro-sceptics in the Conservative and Labour parties who would really want to vote against the legislation.
  It is worth reflecting on the extraordinary progress of the legislation in the past few weeks. I know that many Conservative Members were not in the Chamber at the start of proceedings this evening, but I was, and I heard the Minister define what we were doing and say that there would be two votes of confidence this evening. The first was to be on the Question that clause 1 stand part of the Bill, which we then did not actually vote on, if I remember correctly, and the second was to be on Third Reading.
  I thought that I was entitled in those circumstances to turn up for the Third Reading debate and to participate in that vote of confidence, as defined by Ministers. I am not sure why the other votes that we had this evening were not to be defined as votes of confidence. I have reached the conclusion that the Conservative party Whips Office is now so incompetent that it could not do the basic arithmetic and realise that it was not in any conceivable danger of losing any of the earlier votes this evening. None the less, as defined by the Government Front Bench, the vote on Third Reading of the legislation is a vote of confidence, which is why I find myself in the extraordinary position of being more in support of the legislation than, I believe, the vast majority of hon. Members on the Conservative Benches, but none the less having to vote against it if, indeed, a vote is forced in a few minutes' time.
  444
  How can we arrive at a position in which a Government defeat on part of their Budget legislation—which happened yesterday evening—is not defined as a vote of confidence and not even placed on the Order Paper as a formal vote of confidence while the vote on the legislation before us now, supported by about 550 Members of the House of Commons, is defined as a vote of confidence?
  I leave the following thought with Conservative Members: if the Government are now in the extraordinary position of having such enormous difficulty in forcing through the House of Commons a piece of legislation which carries the support of 550 Members, how on earth will they progress the business of the rest of the Session, which might be more contentious? I hope that the more thoughtful Conservative Members—which may be only a few of the people on the Conservative Benches—will reflect on that when they go to their beds tonight, because I do not think that they will have a happy new year to look forward to.
  12.32 am
  Mr. Heathcoat-Amory: There has always been a majority in the House in favour of the Bill, and only the opportunistic manoeuvres of the Opposition parties tried to block the Bill on Second Reading.
  The Bill gives effect to the financial arrangements agreed at the Edinburgh Council two years ago. That agreement was not legally binding, and no Member on the Conservative side of the House has suggested otherwise, so I can assure both the right hon. Member for Bethnal Green and Stepney (Mr. Shore) and the hon. Member for Great Grimsby (Mr. Mitchell) that they are correct: we have always agreed that that Edinburgh agreement needed to be given legal effect by the Bill. That is the precise purpose and intent of the Bill before the House.
  The abatement is safe under the Bill. Our contribution will increase between now and the end of the century in line with the projections in the own resources decision, adding seven hundredths of 1 per cent. of Community gross national product to the budget. We shall pay a lower share of the total cost than many other member states.
  Today's debate has shown the seriousness with which the House takes the issue of financial mismanagement and the related issue of fraud. The fight against fraud will not be won by grand gestures, by setting up new institutions or even by the involvement of the Public Accounts Committee in this country, although I welcome that possible development. It will be won by relentless and grinding vigilance, by attention to detail and by giving it the highest possible political impetus and attention, as has been promised by my right hon. Friend the Prime Minister. I am pleased that that attitude has received the full support of the House today and I hope that the House will also give the Bill a Third Reading.
  Question put, That the Bill be now read the Third time:—
  The House divided: Ayes 295, Noes 23.

  Division No. 17]

  [12.35 am

  AYES

  Ainsworth, Peter (East Surrey)

  Allason, Rupert (Torbay)

  Aitken, Rt Hon Jonathan

  Amess, David

  Alexander, Richard

  Ancram, Michael

  Alison, Rt Hon Michael (Selby)

  Arbuthnot, James

  445

  Arnold, Jacques (Gravesham)

  Fabricant, Michael

  Arnold, Sir Thomas (Hazel Grv)

  Fenner, Dame Peggy

  Ashby, David

  Field, Barry (Isle of Wight)

  Atkins, Robert

  Fishburn, Dudley

  Atkinson, David (Bour'mouth E)

  Forsyth, Michael (String)

  Atkinson, Peter (Hexham)

  Forsythe, Clifford (Antrim S)

  Baker, Nicholas (Dorset North)

  Forth, Eric

  Baker, Rt Hon K (Mole Valley)

  Fowler, Rt Hon Sir Norman

  Baldry, Tony

  Fox, Dr Liam (Woodspring)

  Banks, Matthew (Southport)

  Fox, Sir Marcus (Shipley)

  Banks, Robert (Harrogate)

  Freeman, Rt Hon Roger

  Bates, Michael

  French, Douglas

  Batiste, Spencer

  Gale, Roger

  Beggs, Roy

  Gallie, Phil

  Bellingham, Henry

  Garel-Jones, Rt Hon Tristan

  Bendall, Vivian

  Garnier, Edward

  Beresford, Sir Paul

  Gillan, Cheryl

  Biffen, Rt Hon John

  Goodlad, Rt Hon Alastair

  Bonsor, Sir Nicholas

  Goodson-Wickes, Dr Charles

  Booth, Hartley

  Gorst Sir John

  Boswell, Tim

  Grant, Sir A (Cambs SW)

  Bottomley, Peter (Eltham)

  Greenway, Harry (Ealing N)

  Bottomley, Rt Hon Virginia

  Greenway, John (Ryedale)

  Bowis, John

  Griffiths, Peter (Portsmouth, N)

  Brandreth, Gyles

  Grylls, Sir Michael

  Brazier, Julian

  Gummer, Rt Hon John Selwyn

  Bright, Sir Graham

  Hague, Wiliam

  Brooke, Rt Hon Peter

  Hamilton, Neil (Tatton)

  Brown, M (Brigg & Cl'thorpes)

  Hamilton, Rt Hon Sir Archibald

  Browning, Mrs. Angela

  Hampson, Dr Keith

  Bruce, Ian (Dorset)

  Hanley, Rt Hon Jeremy

  Burt, Alistair

  Hannam, Sir John

  Butcher, John

  Hargreaves, Andrew

  Butler, Peter

  Harris, David

  Butterfill, John

  Haselhurst, Alan

  Carlisle, Sir Kenneth (Lincoln)

  Hawkins, Nick

  Carrington, Matthew

  Hayes, Jerry

  Cash, Wiliam

  Heald, Oliver

  Channon, Rt Hon Paul

  Heathcoat-Amory, David

  Chapman, Sydney

  Hendry, Charles

  Churchill, Mr

  Hicks, Robert

  Clappison, James

  Higgins, Rt Hon Sir Terence

  Clarke, Rt Hon Kenneth (Ru'clif)

  Hill, James (Southampton Test)

  Clifton-Brown, Geoffrey

  Hogg, Rt Hon Douglas (G'tham)

  Coe, Sebastian

  Horam, John

  Colvin, Michael

  Hordern, Rt Hon Sir Peter

  Congdon, David

  Howard, Rt Hon Michael

  Conway, Derek

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

  Coombs, Simon (Swindon)

  Howell, Rt Hon David (G'dford)

  Cope, Rt Hon Sir John

  Howell, Sir Ralph (N Norfolk)

  Cormack, Patrick

  Hughes, Robert G (Harrow W)

  Couchman, James

  Hunt, Rt Hon David (Wirral W)

  Cran, James

  Hunter, Andrew

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

  Jack, Michael

  Curry, David (Skipton & Ripon)

  Jackson, Robert (Wantage)

  Davies, Quentin (Stamford)

  Jenkin, Bernard

  Davis, David (Boothferry)

  Jessel,Toby

  Day, Stephen

  Johnson Smith, Sir Geoffrey

  Deva, Nirj Joseph

  Jones, Gwilym (Cardiff N)

  Devlin, Tim

  Jones, Robert B (W Hertfdshr)

  Dorrell, Rt Hon Stephen

  Jopling, Rt Hon Michael

  Douglas-Hamilton, Lord James

  Key, Robert

  Dover, Den

  Kilfedder, Sir James

  Duncan Smith, Iain

  King, Rt Hon Tom

  Duncan, Alan

  Kirkhope, Timothy

  Dunn, Bob

  Knapman, Roger

  Durant, Sir Anthony

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

  Dykes, Hugh

  Knight, Greg (Derby N)

  Eggar,Tim

  Knight, Mrs Angela (Erewash)

  Elletson, Harold

  Knox, Sir David

  Emery, Rt Hon Sir Peter

  Kynoch, George (Kincardine)

  Evans, David (Welwyn Hatfield)

  Lait, Mrs Jacqui

  Evans, Nigel (Ribble Valley)

  Lamont, Rt Hon Norman

  Evans, Roger (Monmouth)

  Lang, Rt Hon Ian

  Evennett, David

  Lawrence, Sir Ivan

  Faber, David

  Legg, Barry

  446

  Leigh, Edward

  Sainsbury, Rt Hon Tim

  Lennox-Boyd, Sir Mark

  Scott, Rt Hon Nicholas

  Lester, Jim (Broxtowe)

  Shaw, Sir Giles (Pudsey)

  Lidington, David

  Shephard, Rt Hon Gillian

  Lightbown, David

  Shepherd, Colin (Hereford)

  Lilley, Rt Hon Peter

  Shersby, Michael

  Lloyd, Rt Hon Peter (Fareham)

  Sims, Roger

  Lord, Michael

  Skeet Sir Trevor

  Luff, Peter

  Smith, Sir Dudley (Warwick)

  Lyell, Rt Hon Sir Nicholas

  Smith, Tim (Beaconsfield)

  MacGregor, Rt Hon John

  Smyth, Rev Martin (Belfast S)

  MacKay, Andrew

  Soames, Nicholas

  Maclean, David

  Speed, Sir Keith

  Madel, Sir David

  Spencer, Sir Derek

  Maitland, Lady Olga

  Spicer, Michael (S Worcs)

  Malone, Gerald

  Spicer, Sir James (W Dorset)

  Mans, Keith

  Spink, Dr Robert

  Marland, Paul

  Spring, Richard

  Marshall, John (Hendon S)

  Sproat, Iain

  Martin, David (Portsmouth S)

  Squire, Robin (Hornchurch)

  Mates, Michael

  Stanley, Rt Hon Sir John

  Mawhinney, Rt Hon Dr Brian

  Steen, Anthony

  Mayhew, Rt Hon Sir Patrick

  Stephen, Michael

  McLoughlin, Patrick

  Stern, Michael

  McNair-Wilson, Sir Patrick

  Stewart, Allan

  Mellor, Rt Hon David

  Streeter, Gary

  Merchant Piers

  Sumberg, David

  Mitchell, Andrew (Gedling)

  Sweeney, Walter

  Mitchell, Sir David (Hants NW)

  Sykes, John

  Moate, Sir Roger

  Tapsell, Sir Peter

  Molyneaux, Rt Hon James

  Taylor, Ian (Esher)

  Monro, Sir Hector

  Taylor, John M (Solihull)

  Montgomery, Sir Fergus

  Temple-Morris, Peter

  Needham, Rt Hon Richard

  Thomason, Roy

  Nelson, Anthony

  Thompson, Patrick (Norwich N)

  Neubert, Sir Michael

  Thompson, Sir Donald (C'er V)

  Newton, Rt Hon Tony

  Thornton, Sir Malcolm

  Thurnham, Peter

  Nicholls, Patrick

  Townend, John (Bridlington)

  Nicholson, David (Taunton)

  Townsend, Cyril D (Bexl'yh'th)

  Nicholson, Emma (Devon West)

  Tracey, Richard

  Norris, Steve

  Tredinnick, David

  Onslow, Rt Hon Sir Cranley

  Trend, Michael

  Oppenheim, Phillip

  Trotter, Neville

  Ottaway, Richard

  Twinn, Dr Ian

  Paice, James

  Vaughan, Sir Gerard

  Patnick, Sir Irvine

  Viggers, Peter

  Patten, Rt Hon John

  Waldegrave, Rt Hon William

  Pattie, Rt Hon Sir Geoffrey

  Walden, George

  Pawsey, James

  Waller, Gary

  Peacock, Mrs Elizabeth

  Ward, John

  Pickles, Eric

  Wardle, Charles (Bexhill)

  Porter, David (Waveney)

  Waterson, Nigel

  Portillo, Rt Hon Michael

  Watts, John

  Rathbone, Tim

  Wells, Bowen

  Redwood, Rt Hon John

  Wheeler, Rt Hon Sir John

  Renton, Rt Hon Tim

  Whitney, Ray

  Richards, Rod

  Whittingdale, John

  Riddick, Graham

  Widdecombe, Ann

  Rifkind, Rt Hon Malcolm

  Wiggin, Sir Jerry

  Robathan, Andrew

  Winterton, Mrs Ann (Congleton)

  Roberts, Rt Hon Sir Wyn

  Winterton, Nicholas (Macc'fld)

  Robertson, Raymond (Ab'd'n S)

  Wolfson, Mark

  Robinson, Mark (Somerton)

  Wood, Timothy

  Roe, Mrs Marion (Broxbourne)

  Yeo,Tim

  Ross, William (E Londonderry)

  Young, Rt Hon Sir George

  Rowe, Andrew (Mid Kent)

  Rumbold, Rt Hon Dame Angela

  Tellers for the Ayes:

  Ryder, Rt Hon Richard

  Mr. David Willetts and

  Sackville, Tom

  Mr. Michael Bates.

  NOES

  Banks, Tony (Newham NW)

  Cunliffe, Lawrence

  Barnes, Harry

  Davidson, Ian

  Canavan, Dennis

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

  Corbyn, Jeremy

  Dunwoody, Mrs Gwyneth

  447

  Evans, John (St Helens N)

  Salmond, Alex

  Hoey, Kate

  Shore, Rt Hon Peter

  Lewis, Terry

  Skinner, Dennis

  Mackinlay, Andrew

  Smith, Llew (Blaenau Gwent)

  Marshal, Jim (Leicester, S)

  Spearing, Nigel

  Wise, Audrey

  McAvoy, Thomas

  Michie, Bill (Sheffield Heeley)

  Tellers for the Noes:

  Paisley, The Reverend Ian

  Mr. Austin Mitchell and

  Pike, Peter L

  Mr. Ted Rowlands.

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

Opencasting (Leeds Green Belt)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Bates.]
12.46 am
Mr. Spencer Batiste: I am most grateful, Mr. Deputy Speaker, for this opportunity to raise a subject of vital importance to my constituents, albeit at a late hour and in a very interesting week in politics. It is a subject, as I say, that is of great interest and importance to my constituents, as I believe it is also to yours, Mr. Deputy Speaker, and to those of my hon. Friend the Member for Leicestershire, North-West (Mr. Ashby), who is in his seat tonight.
My purpose in seeking the debate is to focus attention on the effect of the revision of mineral planning guidance note 3 this summer on opencast applications in the green belt and to seek clarification of what those changes mean. I am concerned particularly with its impact on the east Leeds green belt, but what I have to say will have wider implications for similar areas.
I am aware that my hon. Friend the Minister cannot comment on the facts of individual cases, but I shall have to refer to some to identify the issues of principle that they raise. However, I say at the outset how pleased I am that my right hon. Friend the Secretary of State has agreed to visit my constituency to see the area for himself that has been affected by a recent spate of opencast applications and to discuss what needs to be done as far as the planning framework is concerned.
It has been clear for some time that MPG3, the planning guidelines governing opencast applications, were out of date and needed fairly radical review. I and many others submitted evidence to the Secretary of State in the consultation process on that review. Many of the ideas that I and others submitted were incorporated into the revision that was announced in July, and I welcome that.
However, the first appeal decision to be made by an inspector under that revision, by H.J. Banks Ltd., related to land at Garforth in my constituency, and my concern is that, if that decision is a valid precedent, the new thinking in the MPG3 revision is not working out in practice as was intended and as I believed at the time when it was raised in the House.
The old position was that, in the national interest, there was a presumption in favour of opencasting. That is clearly no longer true, as there is a massive surplus both of coal being produced and of coal reserves. That presumption was removed, first by a ministerial statement and then, by way of confirmation, by the MPG3 revision.
Rightly, there is now no overriding requirement in the national interest that coal should be extracted simply because it is there. The correct test now is principally one of environmental acceptability. But that must carry a special significance for the green belt, where there are especially strong environmental factors.
Although it is true that coal can be worked only where it lies, it is equally true that houses can be built only where there is appropriate land available. Now that there is no national priority for extracting coal, there is no more logical reason for treating that activity more favourably than any other kind of development in the green belt. In other words, it should be allowed only in exceptional circumstances.

449
Let me make it clear that I do not oppose opencasting in the right circumstances; nor, for that matter, does Leeds council. Several years ago, the council granted consent for a very large site at St. Aidans, a site in the green belt in my constituency that borders your constituency too, Mr. Deputy Speaker. The development required the diversion of the River Aire and its associated canal, and I sponsored a private Bill through Parliament to enable that to take place.
That happened under the old MPG3, but I believe that it would have been equally justified under the revised MPG3. The site was derelict, and a potential health hazard. It was dangerous, and only by opencasting could the problems be properly addressed. There will be a massive improvement in the environment when the extraction has been completed.
It is vital to be able to determine clearly what is environmentally acceptable and what is not. If environmental acceptability is now the key test, what exactly does it mean? To whom should a development be acceptable? How does the new test, expressed in the context of MPG3, impact on other planning guidelines, such as those on green belt? Does the existing case law affecting planning need to be redefined?
It is at that point that the experience of my constituency shows up the weakness in the current position. One would have expected that the revision of MPG3 would have reduced the number of opencast applications, especially in green belts. One would have expected that appeals to Department of the Environment inspectors would face more stringent tests. But the opposite seems to have happened. Apart from the St. Aidans site that I mentioned, four separate applications have been made in the green belt in or around the south of my constituency.
The Banks application at Barwick road, Garforth, which was made during the run-up to the revision but decided afterwards, was rejected by the council but allowed by an inspector on appeal. Following that, Leeds council granted an application for a site in Methley lane, allegedly on the basis that, after the Banks decision, it had no choice. At least two more applications are threatened or pending in the Garforth area, at Barrowby lane and at Hawk's Nest wood.
At this stage, it is necessary to examine the issues on which the Banks inquiry turned. The original rejection by the council took place under the old MPG3, and was on very limited grounds. The public inquiry took place in the summer and was completed just before the announcement of the MPG3 revision. The inspector's decision was announced in August, after the revision was published.
The council claimed that it was inhibited from expanding on the limited grounds that it had used to reject the original application and from bringing in wider issues of policy. I gave evidence at the inquiry, in which I reminded the inspector that he could reopen the public inquiry after the publication of MPG3 if he wanted to hear evidence on the changed criteria.
At the inquiry, the application was opposed by myself, as the Member of Parliament, by the council, by all the local councillors, by the local Member of the European Parliament, by local industry, by the Department of Transport, by a local action group and by a number of individuals. Why was there such unanimity?
450
In the Garforth area, there has been no mining for many years. Its green belt is one of the most sensitive in the Leeds area, because it prevents the Leeds conurbation from expanding and swallowing up the surrounding towns and villages. It attracts long-term, high-quality investment from international companies, which is prejudiced by opencasting.
One such company, which I worked hard to help bring to the Garforth area, opened two years ago and now employs almost 200 people in the textile industry, which, we hear from so many sources, is under threat in the United Kingdom. The company is now planning further expansion. It has submitted evidence that it would have to invest heavily in air filters if opencasting was allowed, to protect the quality of the white polyester yarn it produces at the factory. Why should such a company have to compensate for environmental degradation? Is it sustainable development when long-term, world-class investment in jobs is threatened by an ephemeral opencast application?
Against that background, great play was made by the opencast developer of the sterilisation of coal reserves that would follow due to the imminent building of the A1-M1 link road over the site. However, the Department of Transport opposed the application, because it feared that opencasting would delay work on the road, which is massively important to my area, from both an environmental and an economic point of view. It will open up access for industrial operations and it will remove heavy traffic from congested villages. What on earth do the concepts of environmental acceptability and sustainable development mean when consent for opencasting is given by the inspector against that background?
The inspector gave that consent without warning in August, when many people, including myself, were away on holiday. A petition was raised, which was signed by most of the local inhabitants, which I passed on to the Secretary of State for the Environment. I was told by his office that he had no power to intervene, and that the decision was the inspector's alone. Many local people find it difficult to believe that, and I should be grateful if the Minister could confirm that that was the situation. How unsatisfactory that is. This is an issue that cannot be decided on that narrow basis alone.
Indeed, the problem was that the only group that could, in practice, have objected was the council. It could have applied to the court for judicial review, but it chose not to do so. It was not helped in that decision by the fact that there was a limited time for appeal, which was fully taken up with the holiday period. That in itself was bad enough. We have now moved on from that situation to one in which the council is inclined to grant further opencast applications without serious opposition, as it has at Methley lane, arguing that it is bound by the Banks decision.
That is simply not acceptable, especially when the council owns, directly or indirectly, a great deal of the land in the area and stands to make a great deal of money if opencasting expands, or if the fear of opencasting forces an area of the green belt out of the green belt and into other kinds of development. All this is a very long way from the principle of environmental acceptability, and it is politically unacceptable as well.

451
I am aware that the council can prepare a minerals plan, defining where opencasting would be acceptable and where it would not be. That is sensible, and the council should get on with it, alongside the current unitary development plan for Leeds. However, even if we can get over the council's conflict of interests, that will not help us in the short term, with the current and pending applications for opencasting and others that will be stimulated by the success of previous applications. Nor does it set the right background for the preparation of the minerals plan.
Against that background, I should like to hear what my hon. Friend the Minister has to say. I look forward to the visit by the Secretary of State to the area, and to being able to show him at first hand exactly what is at stake. Most of all, I look forward to action to resolve the uncertainties. There is uncertainty about what environmental acceptability means in the context of a sensitive green belt. If that requires further clarification or amendment, so be it. The current situation in my constituency is simply unacceptable.
12.59 am
The Parliamentary Under-Secretary of State for the Environment (Sir Paul Beresford): First of all I should like to thank my hon. Friend the Member for Elmet (Mr. Batiste), in spite of the hour, for raising this quite important matter. He has been extremely diligent in pursuing the interests of his constituents over this matter.
I understand the concerns of my hon. Friend and his constituents about opencast coal mining. It is those concerns and similar concerns that influenced the thinking behind the guidance we published in the new MPG3 in July. That guidance emphasises that development should be allowed only where the development can be carried out in an environmentally acceptable way or where there are overriding—I must emphasise—benefits. But it is not, and should not, be the intention to stop all opencast mining.
The aim of the new guidance is to ensure that the extraction of coal can take place in accordance with the full and proper protection of the environment and the principles of sustainable development. The new guidance was not produced rashly. It was drawn up after extensive consultation with the industry, planners, environmental groups and local communities. As has been mentioned, that consultation included meetings with my hon. Friend, a delegation from Leeds city council, and the Yorkshire Opencast Objectors Group.
As my hon. Friend graciously recognises, the new guidelines respond to many of the concerns that were expressed. The strong presumption in favour of opencast mining has been removed. The guidelines emphasise a development plan-led approach and tests of environmental acceptability for individual projects. There is a tougher approach to the assessment of impacts with an annex addressing each one in turn, including such matters as dust, noise and visual impact. We are committed to monitoring the implementation of the guidance through the research programme.
The development plan-led approach ensures that decisions on land availability and use are debated fully and openly at local level. That must offer the greatest
452
certainty for industry about where coal extraction and spoil disposal is likely to be allowed. Similarly, however, communities where coal reserves exist will have a clearer idea about where such activities are likely to take place and over what period. This new approach, which responded to many of the concerns raised, has been generally well received, but I need to expand a little on it.
Planning policy needs to be formulated within the framework of the Government's energy programme. That programme, or policy, is to ensure diverse and sustainable supplies of energy in the form which people and businesses want and at competitive prices consistent with wider economic policies and the full and proper protection of the environment. The Government believe that that can best be achieved through the operation of a competitive and open market. In that context, it is not for the planning system to seek to set national limits on or targets for any particular source or level of energy supply, nor to predetermine the appropriate levels of coal to be produced by underground or even opencast mining.
The Government believe that coal can be mined economically and in an environmentally acceptable way, and that it is an important indigenous energy resource. The aim of the guidance is to ensure that development that can be carried out in an environmentally acceptable way is not inhibited. While it is for the industry to make decisions on the level of output that it wishes to aim for in the light of market conditions at the time, the acceptability of individual projects will be determined by the land use planning system.
My hon. Friend expressly refers to the test of environmental acceptability and how that is to be discharged. As he will realise, there is no simple answer to that question, but what is clear is that, first, the development plan has to provide a policy lead. The preparation of the development plan provides an opportunity to test the acceptability of national guidance to local circumstances. Secondly, in considering individual proposals, planning authorities need to weigh up on one hand the benefits of the development and, on the other hand, the environmental impact.
As I have already said, the new guidance gives comprehensive advice on the specific impacts that may arise and how to deal with them. Those include such matters as visual impact, noise, as I have already mentioned, blasting, dust, water pollution, transportation, land use and built heritage and nature conservation. The MPG3 also makes it clear that the guidance it contains is relevant to the consideration of planning applications whether or not the development plan is up to date.
My hon. Friend referred to the decision to grant planning permission for opencast coal mining at Garforth. As he said, that decision was issued on appeal by an inspector in August, following a local inquiry in June. Although the inquiry was held before the new MPG3 was published, the inspector took account of the revised guidance in reaching his decision. The inspector, as has been mentioned, has delegated powers to issue decisions on behalf of the Secretary of State. That was the situation in this case.
My hon. Friend will understand that it would be improper for me to discuss the merits of a decision. The pros and cons were argued at the local inquiry and the reasons for the decision are set out in the inspector's letter. I can say, however, that the decision appears to fall well within the revised guidelines. The project is of short

453
duration— 13 months— and avoids the sterilisation of coal by allowing its extraction in advance of the construction of the three-lane M1-A1 link road.
The planning inspector has imposed tough conditions on the permission. These conditions relate, for the most part, to the timing, preparation, operation and restoration of the site, together with measures for the protection of local amenity, including controls on noise and dust.
My hon. Friend mentioned other cases in the area—one which has already been approved and two which are pending. He expressed concern that the appeal decision at Garforth had created a precedent and fettered the planning authority's discretion. That is not the case. I cannot comment on applications currently before the planning authority, but I should point out that, in his decision letter on the Garforth case, the inspector stated:
"Nor do I consider that an approval in this case has any bearing on other proposals for opencasting in the wider area that might come forward in the future".
That is clear. The fact is that each case must be determined on its merits in accordance with the relevant provisions of the development plan and all other material considerations.
I turn to mineral working in the green belt, which was raised by my hon. Friend. Green belts have been a cornerstone of the town and country planning system. They will remain so, serving us in as good if not better stead as we enter the 21st century. Now, more than ever, we need to remember that we hold the environment in trust for future generations, and to take decisions wisely.
Green belts have served us well in preventing urban sprawl and ribbon development. They are probably the most popular part of our planning system. They have been emulated widely abroad, from the Netherlands to South Korea. Let no one doubt that the Government remain as firmly committed as ever to green belts. Since 1979, their extent has more than doubled. They now cover 12 per cent. of England, or about 3.8 million acres.
Inside green belts, development is normally restricted to agriculture, forestry, open-air leisure and sport, and other uses appropriate to a rural area. There is a general presumption against inappropriate development within them. Very special circumstances are required to justify permitting any development which is not normally
454
appropriate in a green belt, or removing any land from the green belt. We expect shortly to publish a revision of planning policy guidance note 2 on green belts. This will confirm the overriding importance that we attach to their protection, and further strengthen green belt policy.
But there is no bar to making planning applications for development in the green belt. Nor do we intend to introduce a presumption against mineral working in green belts. The simple fact is that minerals can be worked only where they are found, and are a temporary use of the land. Their extraction therefore need not be incompatible with green belt objectives.
However, applications for mineral working in the green belt should be examined very carefully, and development should be allowed only where the highest standards of operation and restoration can be achieved. MPG3 does not encourage applications for green-field sites, but provides that priority should be given to proposals that involve the clearance of dereliction. Operators will need to demonstrate that real benefits will accrue from their proposals if they wish to work sensitive green-field sites.
I congratulate my hon. Friend on the way in which he has presented his case and represented his constituents. In addition to the debate, he has met my right hon. Friend the Secretary of State. As my hon. Friend has said, he is to visit his constituency. I know that my right hon. Friend is particularly well aware of my hon. Friend's concerns; hence his acceptance of the invitation.
I emphasise that the purpose of the new planning guidelines, as set out in MPG3, is to ensure that mining and spoil disposal are carried forward in an environmentally acceptable way through the planning system.
The guidelines aim to provide a balanced approach. On the one hand, they provide a positive steer in terms of national policy for the extraction of the resource. On the other hand, they give planning authorities the responsibility of indicating how, where and at what pace the resource should be developed through the development plan system. Within that framework, each proposal must be considered on its merits according to the circumstances of the particular case.
Question put and agreed to.
Adjourned accordingly at nine minutes past One o'clock.

HEALTH

  Ward Funds
  Mr. Redmond
  To ask the Secretary of State for Health what assessment she has made of the effect of separate registration of individual ward funds on the income of NHS hospitals.

  Mr. Sackville
  Individual ward funds are required to be registered only where they constitute separate charities. We have no information on any link between registration and income.

  Community Care
  Mr. Pickthall
  To ask the Secretary of State for Health what evidence she has to demonstrate that the transfer of funding to local authorities for care in the community is keeping pace with the transfer of responsibilities.

  Mr. Bowis
  Since 1990–91, total resources for community care have risen by 121 per cent. to £5,122.6 million for 1995–96, including an increase of 12.4 per cent. for 1995–96 over 1994–95. In addition, specific grants have been increased for drugs and alcohol, AIDS/HIV and social work training for 1995–96 in line with inflation and increased by some 30 per cent. for mental illness.

  Mr. Pickthall
  To ask the Secretary of State for Health when she plans to meet representatives of Lancashire county council to discuss the resourcing of care in the community.

  Mr. Bowis
  I have on various occasions met members and officers of Lancashire county council and Members of Parliament from the area. I have no current plans for further meetings.

  Maternity Services
  Mrs. Wise
  To ask the Secretary of State for Health if she will list the organisations who will be consulted about the applicability of the data set to maternity care.

  Mr. Sackville
  The development of the maternity contract minimum data set will require consultation with all organisations who have an interest in the data set. These will include representatives of the organisations involved in the delivery of maternity services, those involved in the purchasing of maternity services, and of organisations representing the health professionals involved.

  Mrs. Wise
  To ask the Secretary of State for Health if she will publish the criteria for assessment of the data set for maternity services to be used during the piloting programme.

  Mr. Sackville
  The criteria for the assessment of the maternity data set will be agreed during the initial stages of its development.
  208
  Mrs. Wise
  To ask the Secretary of State for Health what information in respect of the professional group of main care giver the minimum data set for maternity services will record.

  Mr. Sackville
  The draft contract minimum data set published in October 1993 recommended the inclusion of a data item to record the key professional with overall responsibility for the care programme. The proposed classifications were consultant, general practitioner and midwife.

  NHS Trusts
  Mr. Gordon Prentice
  To ask the Secretary of State for Health if she will now make it her policy to keep a record centrally of the resignations or dismissals of chief executives of NHS trusts, together with the reasons for the resignation or dismissal and details of the settlement agreed on termination.

  Mr. Malone
  No.

  NHS Managers
  Mr. Gordon Prentice
  To ask the Secretary of State for Health what is the definition of proper public scrutiny in respect of confidentiality clauses in employment contracts of general and senior managers in the NHS.

  Mr. Malone
  Proper public scrutiny in this con text means parliamentary scrutiny and judgment about propriety.

  Asthma
  Mr. Cousins
  To ask the Secretary of State for Health if she will make it her policy to include targets relating to asthma in the "The Health of the Nation" targets programme under review; and when she expects to conclude that review.

  Mr. Sackville
  "The Health of the Nation" programme is continuously under review. The chief medical officer's working group is considering what further work is necessary on interventions and possible targets, before asthma can be reconsidered for key area status.

  Quality (NHS)
  Mrs. Beckett
  To ask the Secretary of State for Health what evidence she has on the extent to which the quality of care provided by the NHS differs from what it was four years ago.

  Mr. Malone
  The changes we have introduced, including the introduction of a managed market, national health service trusts, the general practitioner fundholding scheme and the patients charter have all contributed to marked improvements in the quality of patient care, by focusing on the development of locally determined services which reflect the needs and wishes of the individuals who use those services. Tangible benefits in terms of patients care include: significant reductions in waiting-times, the development of quality services which effectively reflect local needs and priorities and a greater role for patients in decisions concerning their own health care and treatment.

  These improvements have been borne out by the results of the recently published British Social Attitudes Survey, which suggests that, since 1990, the number of people satisfied with the NHS has increased by 10 per cent.

  Hypothermia
  Mr. Wicks
  To ask the Secretary of State for Health how many deaths have been caused by, or were associated with, hypothermia among people over(a)65 years, (b) 75 years and (c) 85 years old in each year since 1979.

  Mr. Sackville
  The information for England and Wales will be placed in the Library.

  Cot Mattresses
  Mr. Pike
  To ask the Secretary of State for Health if she plans a full investigation of the safety of cot and baby mattresses; and if he will make a statement.

  Mr. Sackville
  Dr. Kenneth Calman, the chief medical officer, has set up an expert group to steer further work by the Department on cot deaths. The group will be chaired by Lady Limerick.

  Its terms of reference are:
  To review the findings of the report on "Sudden Infant Death Syndrome" (the "Turner Report", 1991) and any subsequent data on hypotheses linking antimony with unexplained deaths in infants; and to advise the CMO on what further studies should be undertaken to investigate postulated causal relationships between chemicals and cot deaths.

  The group has been asked to review the available material and to provide the Department with advice as quickly as possible. It will meet shortly.

  Waiting Lists
  Mrs. Beckett
  To ask the Secretary of State for Health (1) how many patients were waiting for hospital treatment(a) in total and (b) over 12 months, for each year since 1979;

  (2) how many patients had been waiting for hospital treatment for more than a year in March 1991.

  Mr. Malone
  Information on the numbers of people waiting over 12 months and in total for hospital treatment is shown in the table. There has been a reduction of 66.7 per cent. in the numbers waiting over one year since March 1979.

  Number waiting over one year

  Total waiting

  1979

  March

  185,195

  752,422

  September

  197,532

  695,726

  1980

  March

  196,983

  664,919

  September

  187,993

  635,881

  1981

  March

  180,774

  628,333

  September

  180,905

  619,393

  1982

  March

  175,554

  622,480

  September

  192,902

  725,865

  1983

  March

  198,546

  726,186

  September

  205,920

  703,755

  1984

  March

  194,614

  692,945

  September

  189,546

  682,599

  1985

  March

  171,197

  674,453

  September

  160,227

  661,249

  1986

  March

  161,326

  673,107

  September

  164,682

  681,901

  1987

  March

  162,273

  687,945

  210

  Number waiting over one year

  Total waiting

  September

  209,440

  848,022

  1988

  March

  207,925

  876,246

  September

  219,929

  900,051

  1989

  March

  223,311

  922,676

  September

  218,116

  929,056

  1990

  March

  207,860

  958,976

  September

  202,740

  957,533

  1991

  March

  169,761

  948,243

  September

  155,419

  947,842

  1992

  March

  80,585

  917,717

  September

  80,581

  939,740

  1993

  March

  56,877

  994,974

  September

  71,022

  1,032,038

  1994

  March

  64,508

  1,065,369

  September1

  61,693

  1,063,302

  Note:

  1Provisional Figures from September 1987 figures include numbers waiting for day case treatment.

  Chlamydia Trachomatis Infection
  Mr. Alton
  To ask the Secretary of State for Health when the review of the Public Health Laboratory Service into the epidemiology and control of chlamydia trachomatis infection will be complete; what representations she has received about this matter; and if she will made a statement.

  Mr. Sackville
  The paper being prepared by the Public Health Laboratory Service for the Department of Health is a compilation of published and unpublished epidemiologic data concerning:the levels of genital chlamydia infection in various population groups in the United Kingdom and abroad;
  what is known concerning the health burden resulting from chlamydia;
  information that has been gathered in the United Kingdom and elsewhere relating to control strategies and the outcome of those measures.

  This paper is a background document. Given the lack of information in this field, it is likely to make recommendations as to the areas of further study which could be undertaken. The paper is in a late stage of development and will be delivered to the Department in the new year.

  Covert Video Surveillance
  Mr. Morgan
  To ask the Secretary of State for Health, pursuant to her answer of 25 November,Official Report, columns 412–3, if the use of covert video surveillance at the North Staffordshire hospital is classified as a research experiment.

  Mr. Bowis
  No; it is one of the range of services available to individual children and like other innovative developments, it is regularly evaluated.

  Empty Property
  Mr. Pike
  To ask the Secretary of State for Health what plans she has to make use of her Department's empty residential property.

  Mr. Sackville
  The Department and the national health service follow Government guidelines on the management of their residential estate whereby only property which is required for operational purposes should be retained, and that surplus property should be disposed of as quickly as possible. This may be in the open market, or to housing associations or local authorities. Consideration should be given to short-term or temporary lettings of vacant residential property which is either not surplus, or which cannot be disposed of immediately.

  Smoking
  Mr. Speller
  To ask the Secretary of State for Health what studies her Department has undertaken to ascertain whether higher taxes are the most effective and fair means of reducing smoking.

  Mr. Sackville
  The Government's assessment of the effectiveness of interventions to reduce smoking is based on critical evaluation of the available research evidence. Studies show that an increase of 10 per cent. in the price of tobacco products can be expected to lead to a drop of between 3 and 6 per cent. in tobacco consumption. There is a significant relationship between price and consumption across the range of income groups. This supports the view that raising tobacco taxation is one of the most important parts of any strategy to reduce smoking.

  Mental Hospitals (Sales)
  Ms Jowell
  To ask the Secretary of State for Health what were the capital receipts on the sale of mental hospitals over the past six years by region; and what were the consequent current revenue savings by region.

  Mr. Sackville
  The information requested is not separately identifiable in the information available centrally.

  Tapeworm Infection
  Dr. Strang
  To ask the Secretary of State for Health for each of the years 1990, 1991, 1992 and 1993, how many people in the United Kingdom(a) became infected with the tapeworm echinococcus granulosus and (b) died from infection with the tapeworm echinococcus granulosus caught in the United Kingdom.

  Mr. Sackville
  The number of laboratory reports of human echinococcus infection received by the Public Health Laboratory Service communicable disease surveillance centre in 1990–93 are shown in the table. Place of acquisition of the infection is not reported.

  1990

  1991

  1992

  11993

  England and Wales

  14

  5

  16

  13

  Northern Ireland

  0

  0

  0

  0

  Scotland

  0

  0

  0

  1

  United Kingdom

  14

  5

  16

  14

  1 Data for 1993 are provisional.

  There have been no deaths certified as being clue to echinococcus granulosus—1ICD 122.0, 122.1, l 22.2, 122.3, 122.4 in 1990–92. The table below gives the
  212
  number of deaths in each of the three years due to echinococcus unspecified—1ICD 122.8, 122.9—in England and Wales, Scotland and Northern Ireland. Information on whether the infections were acquired in the United Kingdom or abroad is not available. Data for 1993 are not yet available.

  1990

  1991

  1992

  England and Wales

  5

  3

  3

  Scotland

  0

  0

  0

  Northern Ireland

  0

  0

  0

  United Kingdom

  5

  3

  3

  1 International Classification of Diseases, 9th Revision.

  Dr. Strang
  To ask the Secretary of State for Health for each of the years 1990, 1991, 1992 and 1993, what has been the cost to public funds of treatment of infection with the tapeworm echinococcus granulosus.

  Mr. Sackville
  Echinococcus granulosus—hydatid disease—can be treated either medically or with a combination of anti-helminthic drugs and surgery. It is not possible to estimate the cost to public funds of this treatment.

  Dr. Strang
  To ask the Secretary of State for Health what have been the main focuses in the United Kingdom of infection with the tapeworm echinococcus since 1990.

  Mr. Sackville
  Information on the focuses of infection with echinococcus granulosus—hydatid disease—is not available. Data on the number of cases are available from laboratory reports made to the Public Health Laboratory Service communicable disease surveillance centre. A total of 34 laboratory reports were made from 19 different laboratories in England and Wales during the period 1991 to 1993. However, as data are provided by reporting laboratory it is not possible to assume focuses of infection from these figures because some laboratories—for example, Cardiff public health laboratory and the London tropical diseases hospital—have particular interest and expertise in this field and cases are referred to them from all over the country. It is also not possible to tell from these reports whether these are new cases or fresh investigations on previously diagnosed cases or what duplication might exist in them.

  NHS Probity
  Mr. Alex Carlile
  To ask the Secretary of State for Health if she will make a statement concerning the Audit Commission's report, "Ensuring Probity in the NHS"; and if she will make a statement.

  Mr. Malone
  We welcome the report's comments that the majority of national health service employees and contractors are honest and diligent. The level of losses through fraud are small compared with the huge amount spent on the health service. We have already taken a number of steps to safeguard NHS funds but have asked the NHS executive to scrutinise the report to see whether any further action is necessary.

  Hearing Aids
  Mr. Alex Carlile
  To ask the Secretary of State for Health what is her policy in relation to the provision of non-NHS hearing aids to adults for whom they have been prescribed by medical practitioners on the basis that they
  213
  are more suitable than NHS hearing aids; and if she will make a statement.

  Mr. Bowis
  Where no standard range hearing aid meets the medical needs of a patient, an alternative model may be supplied.

  Hillingdon Hospital Health Trust
  Mr. Alex Carlile
  To ask the Secretary of State for Health if she will call for a report on the suitability of Professor Neil Merritt, vice-chancellor of Portsmouth university, as chairman of the Hillingdon Hospital Health trust; and if she will make a statement.

  Mr. Malone
  No. Hillingdon Hospital National Health Service trust has been very successful, meeting all its financial objectives and achieving eight five star awards in the patients charter league tables.

  Organ Donation
  Mr. Alex Carlile
  To ask the Secretary of State for Health if she will make it her policy to replace organ donor cards by an opting-out system; and if she will make a statement.

  Mr. Sackville
  The Government believe that giving organs should be a positive, altruistic choice made by individuals or their surviving relatives and not a presumed right on the part of the state. "Opting-out" does not have the support of the majority of the British people and there is no clear evidence that it would improve donation rates. On 6 October this year, we launched the national health service organ donor register; all those wishing to signal their intention to be a donor can now record their names on this central computerised register. The volume of applications is already encouraging.

ENVIRONMENT

  Housing Corporation
  Mrs. Maddock
  To ask the Secretary of State for the Environment (1) how many jobs the Government estimate are created annually by the approved development programme budget;

  (2) what was the average cost to a housing association of compiling a bid for the Housing Corporation's approved development programme for the most recent year for which figures are available.

  Mr. Robert B. Jones
  Neither my Department nor the Housing Corporation can provide the cost to housing associations of compiling bids for the Housing Corporation's approved programme or the total number of jobs created by the approved development programme.

  Mrs. Maddock
  To ask the Secretary of State for the Environment what proportion of the budget of the Housing Corporation is spent on administration.

  Mr. Robert B. Jones
  The Housing Corporation's administration costs for 1994–95 represent 1.4 per cent. of its total grant in aid.

  Sound Insulation
  Mr. Matthew Taylor
  To ask the Secretary of State for the Environment (1) how the sound insulation provisions of the building regulations are enforced 214
  currently; what plans he has to introduce post-construction testing of building; and what plans he has to introduce standards for impact sound transmission into the regulations;

  (2) what is his estimate of the proportion of post-1985 buildings which have sound insulation below the standard generally regarded as reasonable for building regulations purposes.

  Mr. Robert B. Jones
  Reasonable standards of sound insulation between new dwellings were required by the 1985 building regulations, which applied in England and Wales outside London. In 1986, these were extended to cover new dwellings built in London where previously there was no requirement for sound insulation in the London Building Acts. The requirements were further extended in the 1991 building regulations to cover reasonable standards of sound insulation between converted flats. We have no information on the proportion of dwellings built since 1985 where reasonable provision for sound insulation was not required.

  The approved document to part E of the building regulations provides guidance on ways of demonstrating compliance, including recommending forms of construction which have been shown to provide a reasonable standard of sound insulation in practice. As with other parts of the building regulations, they are administered by local authorities or approved inspectors who normally assess plans and carry out site visits.

  My Department funds a programme of research at the Building Research Establishment to assess how the regulations are operating in practice. As noted above, the provisions for sound insulation were last strengthened in 1991, and they are kept under review. The need for, and the costs, benefits and practical implications of, post-construction testing, and any further provisions for impact sound transmission beyond those already covered by the regulations which might be considered necessary for the purpose of achieving a reasonable standard of health, are included in such reviews.

  Rough Sleepers
  Mr. Pike
  To ask the Secretary of State for the Environment what information he has received regarding the numbers of rough sleepers(a) in London and (b) outside London; and what representations he has received regarding accommodation provision for them outside London.

  Mr. Robert B. Jones
  The 1991 census is the only national count of people sleeping rough. It found 2,650 people sleeping out in England, of whom 1,197 were in London, with most concentrated in the central London boroughs. Since 1990, the Government's £182 million rough sleepers initiative has been successful in reducing the number of people sleeping rough in central London by around three-quarters; 268 were found in a count undertaken by voluntary sector organisations in May 1994.

  My Department receives occasional representations to extend the RSI outside central London. however, the initiative remains targeted on central London because the greatest concentrations of people sleeping rough remain there. Outside central London, it is the responsibility of each local authority to consider the housing needs of all people living in its area, including people sleeping rough, when drawing up its housing strategy. I commend to local

  215
  authorities the RSI model of co-operation between statutory and voluntary organisations in meeting the needs of people sleeping rough.

  Housing Stock
  Mrs. Maddock
  To ask the Secretary of State for the Environment what is the total asset value of local authority owned housing stock.

  Mr. Robert B. Jones
  The Department has no direct data on the value of dwellings owned by local housing authorities.

  However, for the purpose of setting guideline rents for housing revenue account subsidy, the value of each authority's stock is estimated, based on the pre-discount prices of recent right-to-buy purchases. For the year 199495, the total of these estimates for all English housing authorities was £151.43 billion.

  Homelessness
  Mr. Pike
  To ask the Secretary of State for the Environment what guidelines are issued to local authorities regarding their statutory duty to house homeless 16 and 17-year-olds; and if he will make a statement.

  Mr. Robert B. Jones
  I refer the hon. Member to chapter 6 of the "Homelessness Code of Guidance to Local Authorities", third edition, 1991, issued under section 71 of the Housing Act 1985, a copy of which is in the Library.

  Building Control Fees
  Mr. Bill Michie
  To ask the Secretary of State for the Environment what change has been made to building control fees for(a) local authority building control and (b) the National Housebuilding Council; and if he will make a statement.

  Mr. Robert B. Jones
  Changes to the fees local authorities charge for their building control work were made in the Building (Prescribed Fees) Regulations 1994, which came into force on 1 October 1994. The fees chargeable by the National House Building Council as an approved inspector are a matter for it.

  Radioactive Waste
  Mr. Betts
  To ask the Secretary of State for the Environment (1) if local authorities will be allowed to refuse authority for the disposing of radioactive waste from the nuclear industry under the proposals contained in the consultation paper, "Review of Radioactive Waste Management Policy: Preliminary Conclusions";

  (2) if the proposals in the consultation document, "Review of Radioactive Waste Management Policy: Preliminary Conclusions" will allow radioactive waste to be deposited in tips owned privately or by the Local Authorities Waste Disposal Companies Association.

  Mr. Atkins
  I refer the hon. Member to the reply I gave him on 6 December at column 132.

  Mr. Betts
  To ask the Secretary of State for the Environment what means he intends to take to ensure the ability of private owners of tips to comply with all necessary requirements before allowing the depositing of radioactive waste on such tips under proposals contained in the consultation document, "Review of Radioactive Waste Management Policy: Preliminary Conclusions".
  216
  Mr. Atkins
  The Government's consultation document "Review of Radioactive Waste Management Policy: Preliminary Conclusions" proposed that there might be advantage in encouraging waste producers to make greater use of the burial of low-level radioactive waste at landfill sites. This remains only a proposal, however, and there are no plans in relation to specific sites. The Government are considering the responses to the consultation document and will make a statement of future policy in due course.

  Pollution Prosecutions
  Ms Ruddock
  To ask the Secretary of State for the Environment if he will list all prosecutions, and their outcome, initiated over the past three years in England and Wales by(a) Her Majesty's Inspectorate of Pollution, (6) the National Rivers Authority, (c) the London Waste Regulation Authority and (d) local waste authorities.

  Mr. Atkins
  I will write to the hon. Member.

  Scrap Metal
  Mr. Peter Ainsworth
  To ask the Secretary of State for the Environment what plans he has to provide exemptions from waste management licensing for the recovery of scrap metal; and if he will make a statement.

  Mr. Atkins
  On 8 November I published a consultation paper setting out our proposals for exemptions from waste management licensing under part II of the Environmental Protection Act 1990 for the recovery of scrap metal and the dismantling of waste motor vehicles. The consultation paper invited comments by 5 December and proposed that waste management licensing should apply to these activities from 1 January 1995.

  It is clear from the responses I have received that the period of transition to the new system is a matter of concern to both the industry and waste regulation authorities. There are two main reasons for this concern. The first arises from section 77(2) of the 1990 Act. Under the terms of this provision, licences issued under part 11 of the Control of Pollution Act 1974, which are in force when the new system is implemented, will be treated as site licences under part II of the 1990 Act. The second is the need for the industry and waste regulation authorities to have time to consider any regulations which are laid before Parliament, and the related statutory guidance on licensing, before the new system comes into force.

  I recognise the importance of both these issues to the industry and waste regulation authorities. I have decided, therefore, that waste management licensing under part. II of the 1990 Act should apply to the recovery of scrap metal and the dismantling of waste motor vehicles from 1 April 1995. I have made the necessary amendment to the commencement order to give effect to this decision.

  I will now conclude my consideration of the responses to the consultation paper with the aim of laying the regulations providing any exemptions, and publishing the related statutory guidance on licensing, as early as possible in the new year.

  Sustainable Development
  Mrs Lait
  To ask the Secretary of State for the Environment if he will make a statement on the outcome of the consultation recently carried out by his Department on the setting up of the United Kingdom round table on sustainable development.
  217
  Mr. Gummer
  My Department issued a consultation paper on 21 October, inviting comments before 17 November. Some 134 responses had been received by 25 November, including 50 from business and industry, 21 from environmental groups and 10 from local government. A list of responses will be lodged in the Libraries of both Houses and in the Department of the Environment library.

  Most of the responses received were supportive of the proposals in the consultation paper, and many offered helpful suggestions that expanded upon the proposals we had made. Some 95 of the responses commented on membership, and 37 suggested topics for the round table's work programme. In the light of this response, and the need to consider all of the suggestions fully before proceeding, I have decided to call the first meeting of the round table early in the New Year, rather than on 13 December, which was mentioned as a possibility in the consultation document.

  Dealing with the Public
  Mr. Simon Coombs
  To ask the Secretary of State for the Environment when he intends to update the index to the explanatory material on how his Department deals with the public which he first made available last July.

  Mr. Robert B. Jones
  I have today made available the first update of the index to the explanatory material on my Department's dealings with the public. This index will continue to be regularly updated, demonstrating my Department's commitment to open government. I have placed a copy of the index in the Library of the House and it is also available from my Department's libraries and from the Government offices for the regions.

EMPLOYMENT

  Computer Malfunctions
  Mr. Redmond
  To ask the Secretary of State for Employment what has been the cost to date of reimbursing employees in his Department who ran up overdrafts and bank charges due to computer malfunction in his Department in July; if he will list by month for the last 24 months the number of occasions similar computer malfunctions have occurred and the cost to his Department on each occasion; and if he will make a statement.

  Miss Widdecombe
  The cost of reimbursing employees due to a late payment of Employment Department group salaries in July 1994 was £28,969. The only other similar occurrence in the last 24 months was in February 1993 when the cost was £25,980. A complete review of the systems of control has been undertaken which should make it unlikely that a similar problem could occur again.

  Internet
  Mr. David Shaw
  To ask the Secretary of State for Employment if he will make a statement about the plans of his Department to make information available on the Internet and the documents which he intends to be made available on the Internet over the next year which will be accessible via the world wide web server, "open. gov. uk" or any specific departmental server.
  218
  Miss Widdecombe
  The Department has no firm plans to place information on the Internet.

  Portable Machines
  Mr. Spellar
  To ask the Secretary of State for Employment what representations he has received regarding European Commission proposals to harmonise the voltage of portable tools and machines on construction sites.

  Mr. Oppenheim
  The European Commission has made no such proposals.

  Labour Statistics
  Mr. Austin Mitchell
  To ask the Secretary of State for Employment what is his estimate of the number of jobs lost and gained and his explanation of why and how from membership of the EEC since 1972.

  Mr. Oppenheim
  I refer the hon. Member to the replies given to him by my right hon. Friend the Economic Secretary on 17 March,Official Report, column 822 and 30 June, Official Report, column 680; by my hon. Friend the Paymaster General, on 25 November, Official Report, column 468 and by my right hon. Friend the Minister of State, Foreign and Commonwealth Office on 29 November, Official Report, column 583.

EDUCATION

  Disabled Children
  Ms Lynne
  To ask the Secretary of State for Education when all schools will be fully accessible to disabled children.

  Mr. Forth
  It is impracticable to place a timetable on the Government's commitment to improvements in the accessibility of schools. The Government consider that by far the most effective and affordable way to improve access steadily is to ensure that the needs of disabled people are provided for when buildings are designed or constructed. That is why my Department will shortly be consulting on the upgrading of its constructional standards which will mean that all new schools and extensions would be fully accessible to disabled people. Parental choice will continue to play a fundamental part in the decision as to where children are educated and existing school buildings may be rendered accessible accordingly.

  Local Education Authorities
  Mr. Simon Hughes
  To ask the Secretary of State for Education what is the shortfall between resources allocated to local education authorities in 1994–95 and the bids made by them; and if she will make a statement.

  Mr. Robin Squire
  The 1994–95 local authority grant settlement allowed for local education authorities to spend £17,087 million on education in that year. This was distributed between authorities through the standard spending assessment mechanism, and through a limited range of specific grants. Bids related only to some of the specific grants, which totalled less than 2 per cent. of the settlement for education. Local authorities also bid for credit approvals in respect of capital projects.

  Grant-Maintained Schools
  Mr. Blunkett
  To ask the Secretary of State for Education (1) how many copies of the video, "Grant-Maintained Schools: Our Children, Our Choice", have been distributed; what conditions they are distributed under; whether they are(a) on sale, and if so, how many copies have been sold, (b) on loan, and if so, how many copies have been borrowed and how many have been returned or (c) are free;

  (2) what was the production cost of the video, "Grant-Maintained Schools: Our Children, Our Choice"; how many copies have been made; and what was the total cost of the videos.

  Mr. Robin Squire
  The video "Our Children, Our Choice" cost some £48,000 to produce, and 10,0()0 copies have been made at a further cost of £16,000, giving a total cost of £64,000.

  About 6,000 copies have been distributed to date. Copies are made available free in response to requests; they are not loaned. A few copies have been returned, but the Department does not have a record of the precise number.

  Building Refurbishment
  Mr. Milburn
  To ask the Secretary of State for Education if she will itemise the refurbishment works undertaken on buildings housing departmental staff in the last three years, indicating the costs involved and the nature of the refurbishment.

  Mr. Boswell
  The information requested is as follows:

  1991–92 £

  1991–92 £

  1993–94 £

  (Mowden Hall Teachers Pensions Agency premises)

  102,000

  1,738,000

  83,000

  (Mowden Hall Departmental premises)

  103,000

  45,000

  36,000

  Vincent House

  74,000

  4,000

  2,000

  Corporation House

  2,000

  4,000

  2,000

  Enterprise House

  2,000

  —

  7,000

  Total

  283,000

  1,791,000

  130,000

  (1) All figures are rounded to nearest £000.

  (2) Refurbishment work at the Teachers Pensions Agency premises at Mowden Hall included external and internal fabric and a new ventilation system.

  (3) Refurbishment work at all other DFE premises listed included internal adaptations of erecting and demounting walls, replacing light fittings and redecoration.

PRIME MINISTER

  EU Anti-fraud Budget
  Sir Teddy Taylor
  To ask the Prime Minister if he will raise at the next meeting of the European Council the size of the European Union's anti-fraud budget.

  The Prime Minister
  As I made clear following my meeting with the French Prime Minister at Chartres, I will insist that discussion of all aspects of fraud and irregularity against the Community budget is given a high priority at the Essen European Council.

  Security and Intelligence Services
  Sir Anthony Durant
  To ask the Prime Minister if he will make a statement about the staff counsellor for the Security and Intelligence Services.

  The Prime Minister
  Sir Philip Woodfield KCB CBE has served as staff counsellor for the Security and Intelligence Services since November 1987. He will retire from the post on 31 March 1995, and I express the Government's gratitude to him for the way in which he has established this very sensitive post and fulfilled the duties of it. Sir Christopher France GCB, currently permanent secretary at the Ministry of Defence, will succeed him as staff counsellor from 1 April 1995.

  Conference on Security and Co-operation in Europe
  Sir Michael Neubert
  To ask the Prime Minister if he will make a statement on the outcome of the Conference on Security and Co-operation in Europe summit in Budapest.

  The Prime Minister
  I represented the United Kingdom at the summit meeting of the Conference on Security and Co-operation in Europe in Budapest on 5 to 6 December, accompanied by my right hon. Friend the Foreign Secretary.

  The meeting adopted the Budapest summit declaration; and separate declarations on the 50th Anniversary of the termination of world war II, and on Baltic issues. It also adopted 10 decisions on different aspects of the CSCE's work.

  These decisions embraced strengthening the CSCE; regional issues; further development of the capabilities of the CSCE in conflict prevention and crisis management; code of conduct on politico-military aspects of security; further tasks of the CSCE forum for security co-operation; principles governing non-proliferation; a common and comprehensive security model for Europe for the 21st century; the human dimension; the economic dimension; and the Mediterranean.

  Copies of all of these documents will be placed in the Library of the House.

  The CSCE is no longer just a conference. Its role has widened since the end of the Cold War. Under the Budapest decision on "Strengthening the CSCE", its title will change from 1 January 1995 to "The Organisation for Security and Co-operation in Europe, CSCE". This change of title has been accompanied by some structural changes which are set out in the relevant decision.

  Among its other decisions, the summit:
  —initiated planning for a CSCE-led peace-keeping operation in Nagomo-Karabakh. Deployment of a multi-national CSCE peace-keeping force will depend on progress towards a political settlement, on United Nations Security Council backing, and on the requisite military preparation;
  —adopted measures to strengthen the CSCE in its central role of conflict prevention;
  —reinforced, as a result of a British initiative, the CSCE's arrangements for dealing with the problem of minorities and other human rights questions;
  —set out standards for the democratic control of armed fon:es, in a new code of conduct;
  —added to military confidence building measures, including provisions for the exchange of information on all conventional forces.

  At a separate ceremony in Budapest on 5 December, Ukraine acceded to the non-proliferation treaty. On behalf

  221
  of the United Kingdom, I extended to Belarus, Kazakhstan and Ukraine the nuclear security assurances which we have given in the past to other non-nuclear weapon states. Presidents Clinton and Yeltsin extended the same assurances on behalf of the United States of America and the Russian Federation.

  In the margins of the conference, I had discussions with many of the CSCE heads of Government, including the Presidents of the Czech Republic, Georgia, Russia, Ukraine and the United States; the German Federal Chancellor; and the Prime Ministers of Hungary, Norway and Turkey.

  The future development of the North Atlantic Alliance was one of the subjects mentioned in many speeches to the conference, and also during my bilateral meetings. It was a point of particular concern to the Russian delegation. I explained to President Yeltsin that our aim, which was widely supported by our partners in NATO and the European Union, was to extend to the east the prosperity and stability which members of the European Union and NATO now enjoy. That was why both organisations were developing their links with the countries of central and eastern Europe. NATO had commissioned a study of the principles of enlargement, but had taken no decisions yet on which countries might join the organisation or when. It was very important for NATO to build up its relationship with Russia, and we therefore hoped that the Russian Government would soon sign their agreement with NATO on the "Partnership for Peace" programme. It was common ground that there should be no new dividing line across Europe.

  The dominant political issue at the summit was the conflict in Bosnia. CSCE decisions are adopted by

  Gross public expenditure on aid (£ thousands)

  1993–94 Cash price

  Percentage of total

  1983–84 Cash price (expressed in of total 1993–94 prices)

  1983–84 Real terms

  Percentage of total

  Bilateral

  1,304,515

  56.60

  554,730

  936,332

  52.19

  Multilateral

  1,000,079

  43.40

  508,111

  857,644

  47.80

  Total

  2,304,594

  1,062,841

  Note:

  Administrative costs and flows from ODA to CDC are excluded.

  Aid and Trade Provisions
  Mr. Bayley
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer of 23 November 1994,Official Report, column 199, which British companies have received contracts, and what value these contracts have been, as a result of ATP projects approved for funding since June 1993.

  Mr. Baldry
  The information requested is as follows:

  £ million

  Project

  Company

  Export value

  Atp value

  1993

  Railways Double Tracking

  Transmark

  1.964

  0.982

  Tetouan gas turbines

  John Brown Engineering Ltd.

  65.000

  10.925

  222
  consensus, and because of differences of view between certain participants, a draft declaration on Bosnia was not adopted. However, the chairman of the conference spoke for many delegations in issuing, in his personal capacity, a call on all warring parties in Bosnia, and particularly in Bihac, to end the fighting, declare a ceasefire and allow free access of humanitarian assistance throughout Bosnia.

  My right hon. Friend, the Foreign Secretary, will be making a statement separately to the House on Bosnia, taking account of discussions during the Budapest summit.

OVERSEAS DEVELOPMENT ADMINISTRATION

  Aid
  Sir David Steel
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he has discussed with his right hon. and learned Friend the Chancellor of the Exchequer the shift of resources from poverty-focused direct aid to commercially tied projects; and if he will make a statement.

  Mr. Baldry
  No. The primary emphasis of the aid programme continues to be to assist development and thereby alleviate poverty. Over 90 per cent. of aid allocatable by income group has gone to low income and lower middle income countries since 1990–91.

  Mr. Win Griffiths
  To ask the Secretary of State for Foreign and Commonwealth Affairs what was the total amount of(a) bilateral and (b) multilateral aid in (1) cash and (ii) real terms in 1983 and 1993; and what were the percentages in each case.

  Mr. Baldry
  The information is as follows:

  £ million

  Project

  Company

  Export value

  Atp value

  Bombay and Delhi airports

  Cossor Electronics Ltd.

  4.105

  1.437

  1994

  Muela Hydropower project

  Kvaerner Boving Ltd.

  9.550

  4.775

  Chickens processing plant phase II

  Humatt Engineering Ltd.

  8.990

  4.227

  Kundasale Strategic Study

  Sir Alexander Gibb and Partners Ltd.

  0.093

  0.093

  Santiago Traffic Control

  Siemens Plessey Controls

  2.372

  0.831

  Mini Hydros

  Balfour Beatty Projects and Engineering Ltd.

  15.019

  4.121

  Education Projects
  Mr. Win Griffiths
  To ask the Secretary of State for Foreign and Commonwealth Affairs how much was spent in cash and real terms in each of the last five years on education projects in(a) developing countries outside the Commonwealth and (b) developing countries in the Commonwealth, by the European Union; and what was the extent of British funding for these projects.

  Mr. Baldry
  EC commitments to education programmes in African, Caribbean and Pacific countries under the fourth Lome convention—1991 to date—have totalled 199.2 mecu or £155.3 million. The United Kingdom share of these programmes, funded through the European Development Fund, is 16.37 per cent.

  Education commitments to Asia in 1993 totalled 173 mecu or £134.9 million, and to Latin America 16.2 mecu or £12.6 million. The United Kingdom share of these costs, financed through the Community Budget, will be around 16 per cent.

  Disaggregated figures by individual Commonwealth and non-Commonwealth countries are not available. As these commitments will spend over a number of years it is also not possible to give annual expenditure figures in real and cash terms.

  Indonesia
  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list all infrastructure projects in Indonesia that are assisted by aid from the United Kingdom.

  Mr. Baldry
  The following infrastructure projects are presently being funded from the United Kingdom's aid programme to Indonesia.

  Shortwave Radio Transmitters

  Steel Bridging Phase II

  Citayam-Cibinong Railway

  Cigading-Serpong Railway

  Samarinda Power Station

  Cikampek-Padalarang Toll Road

  Cikampek-Cirebon Railway (Double Tracking)

  European Union Development Council
  Mr. Ottaway
  To ask the Secretary of State for Foreign and Commonwealth Affairs what matters were discussed at the European Union Development Council in Brussels on 25 November.

  Mr. Baldry
  My right hon. and noble Friend Baroness Chalker of Wallasey represented the United Kingdom at the Council. There was extensive discussion of the situation in Rwanda. An action programme totalling 67 mecu, or £52 million, was endorsed and the importance of national reconciliation underlined. Further progress was made on co-ordination between Community and member state aid programmes, notably through agreement on joint guidelines on food, security and education. There were also useful exchanges of view on the state of play on the mid-term review of the Lome convention, future assistance to South Africa and evaluation.

TRANSPORT

  British Transport Police
  Mr. Trotter
  To ask the Secretary of State for Transport what are his plans as to the future employer of the British Transport police.

  Mr. Watts
  The Government have decided that the BR board will continue as employer of the BTP for the foreseeable future. The role of employer will eventually pass to the British Transport police committee, when a suitable legislative opportunity can be found.

  Mr. Mackinlay
  To ask the Secretary of State for Transport in whom the ownership and control of the British Transport police will be vested following the flotation and privatisation of Railtrack.

  Mr. Watts
  [holding answer 29 November 1994]: I refer the hon. Member to the reply I gave to the hon. Member for Tynemouth (Mr. Trotter) earlier today.

  Road Signs, London
  Mr. Lamont
  To ask the Secretary of State for Transport, what progress is being made on the project to replace the road signs on London's primary route network; and if he will make a statement.

  Mr. Norris
  The Highways Agency has awarded a trial contract for the replacement of route direction signs on primary routes in west London, mainly along the A4. This follows extensive consultation carried out by the Highways Agency to develop a signing system which will better serve drivers needing to make journeys within the M25.

  The trial contract, which has been awarded to Ringway Ltd., will be used to validate the designs, work methods and materials to be used in the main signing project contracts which follows.

  The first of the four main project contracts is due to be let next autumn with a view to the re-signing project being substantially completed by the end of 1997.

  Poor signing causes drivers to lose their way, wasting both time and money. The new signs will give clearer, simpler and consistent directions. This important project will help drivers and assist traffic movement in the capital.

  Capital Expenditure
  Mr. Denham
  To ask the Secretary of State for Transport (1) if he will list for each county council its capital expenditure on public transport as a percentage of its capital expenditure on roads.

  (2) if he will list for each county council (a) its capital expenditure on roads and (b) its capital expenditure on public transport.

  Mr. Watts
  The figures for 1993–94, as reported by local authorities in their transport policies and programme submissions for 1995–96, are set out in the following table.
  225

  Expenditure for 1993–94—All figures in £000

  Authority

  TSG eligible major highway works

  Non-TSG eligible major highway works

  Structural maintenance of principal road carriageways

  Structural maintenance of bridges

  Local roads safety schemes

  Other minor highway works

  Major public transport schemes

  Public transport minor works

  Total highways

  Total public transport

  Total transport

  Public transport as percentage of highways

  Parking

  Total capital

  Avon

  13.800

  0

  2,492

  2.163

  630

  3,329

  142

  113

  22,414

  255

  22,669

  1.1

  0

  22.669

  Bedfordshire

  1,511

  0

  1.154

  2,240

  1,066

  1,315

  0

  82

  7,286

  82

  7.368

  1.1

  0

  7.368

  Berkshire

  1,978

  0

  1,901

  1,127

  955

  408

  0

  121

  6,639

  121

  6,490

  1.9

  300

  6,790

  Buckinghamshire

  1,735

  1,938

  2,207

  638

  753

  666

  0

  0

  7.937

  0

  7.937

  0

  0

  7,937

  Cambridgeshire

  2,406

  0

  2,597

  2,603

  2,972

  1,067

  0

  0

  11.645

  0

  11.645

  0

  367

  12,012

  Cheshire

  17.572

  34

  7,422

  2,902

  505

  2,008

  495

  47

  30,443

  542

  30,985

  1.7

  297

  31.282

  Cleveland

  5,918

  0

  2,310

  423

  671

  409

  0

  546

  9,731

  546

  10,277

  5.3

  0

  10.277

  Cornwall

  7,623

  0

  2,404

  1,695

  408

  3,107

  0

  163

  15,237

  163

  15.400

  1.1

  35

  15,435

  Cumbria

  2,663

  0

  2,240

  1,985

  625

  1,459

  0

  0

  8,972

  0

  8,972

  0

  155

  9,127

  Derbyshire

  4,233

  0

  1.810

  1,192

  390

  8,032

  986

  115

  15,657

  1,101

  16,758

  6.6

  733

  17,491

  Devon

  5.730

  1,317

  4,164

  1,402

  1.311

  5,146

  0

  1,764

  19.070

  1,764

  20.834

  8.5

  1,430

  22,264

  Dorset

  4.755

  0

  1,295

  570

  833

  1,785

  0

  50

  9.238

  50

  9.288

  0.5

  0

  9,288

  Durham

  6,464

  818

  1,273

  1,120

  501

  1.539

  0

  0

  11,715

  0

  11,715

  0

  14

  11,729

  East Sussex

  3.218

  1.833

  2.174

  1,864

  356

  2.880

  0

  0

  12,325

  0

  12,325

  0

  192

  12,517

  Essex

  10.279

  378

  2,507

  1,813

  2,334

  5.396

  0

  22

  22,707

  22

  22,729

  0.1

  0

  22,729

  Gloucestershire

  5.045

  0

  1,474

  756

  486

  2,223

  0

  370

  9.984

  370

  10.354

  3.6

  0

  10,354

  Hampshire

  26,762

  34

  4,646

  1,654

  1,420

  2,673

  0

  707

  37,189

  707

  37,896

  1.9

  0

  37,896

  Hereford and

  Worcester

  3,115

  0

  1,914

  842

  507

  2,044

  0

  0

  8.422

  0

  8,422

  0

  77

  8,499

  Hertfordshire

  11,282

  0

  2,870

  2,294

  1.184

  4,269

  0

  101

  21.899

  101

  22,000

  0.5

  0

  22.000

  Humberside

  10,910

  3.167

  3,869

  1.998

  651

  884

  0

  20

  21,479

  20

  21,499

  0.1

  720

  22,219

  Isle of Wight

  0

  0

  966

  607

  414

  1,155

  0

  0

  3,142

  0

  3,142

  0

  5

  3,147

  Kent

  60,900

  0

  7.753

  1,943

  1.175

  3,416

  0

  240

  75,187

  240

  75.427

  0.3

  0

  75,427

  Lancashire

  12,339

  23

  2,160

  5,962

  1,869

  3,289

  142

  1,012

  25,642

  1,154

  26,7%

  4J

  75

  26,871

  Leicestershire

  5,998

  0

  2,060

  911

  641

  1,706

  986

  37

  11.316

  1,023

  12,339

  8.3

  0

  12,339

  Lincolnshire

  5,329

  0

  2,440

  2,501

  463

  2,894

  0

  5

  13.627

  5

  13,632

  0

  0

  13,632

  Norfolk

  2,709

  2.728

  6.251

  2,861

  2.431

  2,174

  0

  389

  19,154

  389

  19,543

  2

  479

  20,022

  Northamptonshire

  3,514

  1,260

  4,122

  1,476

  1,004

  1,262

  0

  8

  12,638

  8

  12.646

  0.1

  171

  12,817

  Northumberland

  3,013

  0

  2,2%

  4,566

  422

  368

  0

  0

  10,665

  0

  10.665

  0

  235

  10,900

  North Yorkshire

  8.232

  0

  4,470

  3,082

  1,699

  3,731

  0

  74

  21.214

  74

  21,288

  0.3

  791

  22,079

  Nottinghamshire

  5,076

  769

  3,577

  2,203

  1,047

  9,680

  2,910

  1.677

  22,352

  4,587

  26,939

  17

  1,048

  27,987

  Oxfordshire

  1.917

  63

  1,281

  1,214

  1,444

  259

  0

  0

  6,178

  0

  6,178

  0

  0

  6,178

  Shropshire

  3,122

  0

  1,750

  2,154

  363

  4,189

  0

  91

  11.578

  91

  11.669

  0.8

  0

  11,669

  Somerset

  4,022

  0

  1,734

  1,292

  351

  2,450

  0

  0

  9,849

  0

  9,849

  0

  0

  9,849

  Staffordshire

  5.837

  0

  6,442

  1,674

  577

  2,618

  0

  0

  17,148

  0

  17,148

  0

  0

  17,148

  Suffolk

  629

  1.316

  3,153

  2,378

  1,357

  6,222

  0

  800

  15.055

  800

  15,855

  5

  601

  16.456

  Surrey

  22,215

  0

  3,133

  4,536

  2,502

  3,438

  0

  0

  35,824

  0

  35,824

  0

  0

  35,824

  Warwickshire

  332

  0

  1,204

  2,348

  994

  785

  0

  51

  5,663

  51

  5,714

  0.9

  54

  5,768

  West Sussex

  3,125

  95

  1,872

  558

  855

  2,190

  0

  0

  8,695

  0

  8,695

  0

  495

  9,190

  Wiltshire

  1,749

  0

  0

  152

  675

  1,573

  0

  0

  4,149

  0

  4.149

  0

  83

  4,232

  Internet
  Mr. David Shaw
  To ask the Secretary of State for Transport if he will make a statement about the plans of his Department to make information available on the Internet and the documents which he intends to be made available on the Internet over the next year which will be accessible via the world wide web server "open.gov.uk" or any specific departmental server.

  Mr. Norris
  The Department has no plans to make information available on the Internet. This will be considered as part of a review of publication arrangements.

  Vehicle Licensing
  Mr. Alison
  To ask the Secretary of State for Transport what estimate he has made of the proportion of commercial and heavy goods vehicles operating illegally on British roads by carrying no licence, insurance or taxation disc.

  Mr. Norris
  A sample roadside check held earlier this year in the south-east and Metropolitan traffic area indicated that about 8 per cent. of vehicles stopped illegally had no operator's licence. However, the exercise was targeted on vehicles thought likely to be offending the regulations, so the estimate may be considerably higher than the true national proportion of such vehicles.
  226
  We have no reliable estimate of the proportion of commercial and heavy goods vehicles operating without insurance.

  A roadside survey conducted in 1989 found that some 2.4 per cent. of goods vehicles were operating without VED. An up-to-date estimate based on a survey conducted in summer 1994 will be published shortly.

  Trains (First Aid)
  Sir David Mitchell
  To ask the Secretary of State for Transport, pursuant to his answer of 25 November 1994,Official Report, column 381, what information he has on the extent to which the requirement for passenger trains to carry first aid kits is complied with; and if he will investigate the absence of a first aid kit on a train travelling from Basingstoke to Reading on 24 October when Matthew Burridge was injured.

  Mr. Watts
  All passenger trains are checked daily to ensure that they are carrying first aid kits in sealed containers. Any used equipment must be replaced before trains are allowed to leave a depot.

  I understand that in the case of the incident concerning Mr. Matthew Burridge, on 24 October, the train in question was carrying a first aid kit. The kit was not used as the conductor had radioed ahead to Reading station for medical assistance, which was given following arrival at the station three minutes later.

  Drivers Hours
  Mrs. Dunwoody
  To ask the Secretary of State for Transport if he will list the organisations that responded to his consultation paper on the deregulation of drivers' hours.

  Mr. Norris
  We have not issued a consultation paper on the deregulation of our national rules on driver's hours, but we sought views from a number of bodies on the operation of the present rules. The organisations included HGV and bus operators, trades unions, trade associations, enforcement agencies, road safety groups and public utilities.

HOME DEPARTMENT

  Asylum Seekers
  Mr. Wilshire
  To ask the Secretary of State for the Home Department (1) if he will list, by country of origin and, where appropriate, the third country passed through, the number of asylum seekers arriving at Heathrow Airport during(a) 1992, (b) 1993 and (c) 1994;

  (2) if he will list, by port of entry the number of asylum seekers arriving in the United Kingdom during (a) 1992, (b) 1993 and (c)

  (3) if he will list, by country of origin and, where appropriate, the third country passed through and the number of asylum seekers arriving in the United Kingdom during (a) 1992, (b) 1993 and (c)

  Table B

  Applications1 received for asylum in the United Kingdom, excluding dependants, by location of application and nationality, 1992 to end-October 1994

  Number of principal applicants

  1992

  1993

  1994 (January-October)

  Nationality

  Total applications2

  Applied at port

  Applied in country

  Total applications2

  Applied at port

  Applied in country

  Total applications2

  Applied at port

  Applied in country

  Europe and Americas

  Bulgaria

  180

  5

  170

  100

  10

  90

  160

  15

  145

  Colombia

  280

  120

  160

  380

  200

  175

  320

  210

  110

  Poland

  90

  45

  45

  155

  95

  55

  245

  85

  160

  Romania

  305

  30

  275

  370

  105

  265

  270

  55

  215

  Turkey

  1,865

  695

  1,165

  1,480

  655

  830

  1,740

  520

  1,215

  Former USSR

  270

  25

  245

  385

  45

  340

  480

  45

  435

  Former Yugoslavia

  5,635

  2,180

  3,455

  1,830

  260

  1,565

  1,140

  235

  905

  Other

  275

  50

  230

  585

  200

  385

  780

  275

  505

  Total

  8,895

  3,150

  5,745

  5,280

  1,570

  3,710

  5,135

  1,440

  3,695

  Africa

  Algeria

  ..

  ..

  ..

  305

  40

  265

  755

  95

  660

  Angola

  245

  50

  195

  320

  140

  180

  470

  115

  355

  Benin

  15

  —

  15

  ..

  ..

  ..

  5

  —

  5

  Burkina Fasco

  5

  *

  5

  ..

  ..

  ..

  ..

  ..

  ..

  Cameroon

  40

  10

  30

  70

  10

  60

  65

  5

  55

  Chad

  15

  *

  10

  ..

  ..

  ..

  ..

  ..

  ..

  Congo

  15

  —

  15

  5

  5

  *

  ..

  ..

  ..

  Ethiopia

  680

  115

  565

  615

  150

  465

  645

  130

  515

  Gabon

  15

  —

  15

  5

  —

  5

  ..

  ..

  ..

  Ghana

  1,600

  175

  1,425

  1,785

  400

  1,385

  1,670

  345

  1,325

  Ivory Coast

  310

  45

  270

  330

  105

  230

  665

  420

  250

  Kenya

  110

  20

  90

  630

  435

  195

  1,605

  620

  385

  Liberia

  100

  45

  50

  90

  55

  35

  115

  70

  50

  228
  Mr. Nicholas Baker
  The available information on the number of asylum seekers applying for asylum in the United Kingdom by port of entry for the period 1993 to end—October 1994 is given in table A. Information prior to 1993, and by nationality is not available.

  Information for the period 1992 to end—October 1994, on the number of asylum seekers applying for asylum in the United Kingdom, by location of application and nationality, is given in table B.

  Statistical information about the country through which asylum seekers pass is not available.

  Table A

  Applications1 for asylum in the United Kingdom, excluding dependants, by port of entry, 1993 to end—October 1994.

  1993

  1994 January—October

  Heathrow

  5,300

  6,400

  Terminal 1

  600

  1,000

  Terminal 2

  1,500

  2,000

  Terminal 3

  2,000

  2,200

  Terminal 4

  1,200

  1,200

  Gatwick

  900

  800

  North

  400

  400

  South

  500

  500

  Other port

  1,100

  1,200

  Total port applications

  7,300

  8,500

  1 Figures are rounded to the nearest hundred; sub totals are rounded independently and may not appear to add up to the component parts.

  229

  Table B

  Applications1received for asylum in the United Kingdom, excluding dependants, by location of application and nationality, 1992 to end-October 1994

  Number of principal applicants

  1992

  1993

  1994 (January-October)

  Nationality

  Total applications2

  Applied at port

  Applied in country

  Total applications2

  Applied at port

  Applied in country

  Total applications2

  Applied at port

  Applied in country

  Nigeria

  615

  95

  520

  1,665

  220

  1,450

  3,350

  325

  3,020

  Sierra Leone

  ..

  ..

  ..

  1,050

  220

  830

  1,665

  945

  720

  Somalia

  1,575

  890

  685

  1,465

  675

  785

  1,390

  585

  805

  South Africa

  40

  15

  30

  60

  20

  40

  75

  35

  40

  Sudan

  560

  80

  480

  300

  40

  260

  275

  65

  215

  Togo

  35

  5

  30

  40

  10

  35

  45

  5

  40

  Uganda

  295

  150

  140

  585

  385

  210

  285

  80

  205

  Zaire

  880

  440

  435

  635

  340

  295

  630

  300

  335

  Other

  490

  80

  410

  320

  135

  190

  695

  250

  445

  Total

  7,630

  2,220

  5,410

  10,295

  3,380

  6,915

  13,805

  4,390

  9,415

  Middle East

  Iran

  405

  90

  315

  365

  105

  260

  445

  115

  330

  Iraq

  700

  240

  465

  495

  270

  225

  435

  190

  245

  Lebanon

  380

  160

  220

  285

  145

  140

  180

  60

  125

  Other

  495

  95

  400

  370

  120

  250

  570

  285

  290

  Total

  1,980

  580

  1,395

  1,520

  640

  880

  1,630

  645

  985

  Asia

  Afghanistan

  ..

  ..

  ..

  ..

  ..

  ..

  275

  210

  65

  Bangladesh

  165

  60

  105

  160

  15

  140

  ..

  ..

  ..

  China

  330

  10

  320

  215

  85

  130

  295

  170

  125

  India

  1,450

  145

  1,305

  1,275

  105

  1,165

  1,625

  205

  1,420

  Pakistan

  1,700

  65

  1,630

  1,125

  85

  1,040

  1,455

  150

  1,305

  Sri Lanka

  2,085

  1,205

  880

  1,965

  1,050

  915

  2,020

  1,115

  905

  Other

  375

  235

  140

  440

  290

  155

  415

  30

  390

  Total

  6,100

  1,720

  4,380

  5,175

  1,630

  3,545

  6,085

  1,875

  4,210

  Nationality not known

  —

  —

  —

  100

  100

  —

  115

  115

  —

  Grand Total

  24,605

  7,675

  16,930

  22,370

  7,320

  15,050

  26,765

  8,465

  18,305

  1 Provisional figures rounded to the nearest 5 with '*'= 1 or 2 and '..'= unavailable

  2 Figures do not include applications made overseas.

  Mr. Wilshire
  To ask the Secretary of State for the Home Department how many asylum seekers who could be removed from the United Kingdom to France have been allowed to remain in the United kingdom because the Immigration Service judged that entry into France would be refused during(a) 1992, (b) 1993 and (c)

  Mr. Nicholas baker
  The information requested is not available. It is the practice of the Immigration Service to remove all failed asylum seekers unless there are exceptional,compelling or compassionate circumstances.

  Mr. Wilshire
  To ask the Secretary of State for the Home Department how many asylum seekers removed from the United Kingdom to France have been returned to the United kingdom by the French authorities; and on what grounds during(a) 1992, (b) 1993 and (c)

  Mr. Nicholas Baker
  The information requested is not available for the period before the enactment of the Asylum and Immigration Appeals Act 1993. Eleven asylum seekers were returned to the United Kingdom by the French authorities in the period 26 July 1993 to 31 December 1993. Sixty-two asylum seekers were returned in the period 1 January 1994 to 31 October 1994.
  230
  Information relating to the grounds for their return is not available.

  Mr. Wilshire
  To ask the Secretary of State for the Home Department how many asylum appeals have been lodged; how many have been determined; how many have been rejected; and how many of the applicants whose appeals have been rejected have been removed from the United kingdom during(a) 1992, (b) 1993 and (c)

  Mr. Nicholas Baker
  The available information is that in the period 1 January to 31 October 1994, about 8,500 appeals against a refusal of asylum have been received and about 1,900 appeals determined by adjudicators. Of the 1,900 determined, about 80 per cent. have been dismissed. Information prior to 1994 is not available.

  Information on the number of asylum seekers removed in 1992, 1993 and 1994 is given in the table. Information on the number of asylum seekers removed after having either an appeal against removal under the Immigration Act 1971 or under the Asylum and Immigration Appeals Act 1993 dismissed is not separately identified in the statistics.
  231

  Removals and voluntary departures1 of asylum applicants, excluding dependants, 1992 to end-October 1994.

  Number

  1992

  1,345

  1993

  1,820

  1994 (Jan-Oct)

  1,605

  1 figures exclude voluntary departures in deportation cases prior to February 1994.

  Compensation Orders
  Mr. Michael
  To ask the secretary of State for the Home Department how many compensation orders were made by the courts in(a) 1990, (b) 1991, (c) 1992 and (d) 1993; what was the total value of compensation ordered to be paid in each of these years; and what number and percentage of compensation orders made in each of these years were paid in full (i) within 12 months of the making of the order, (ii) within two years and (iii) within three years.

  Mr. Maclean
  Information on the number of offenders ordered to pay compensation and the total amount ordered is given in the following table.

  Information is not collected centrally on when and on how much of the compensation is paid.

  Number of offenders orders to pay compensation for all offences1 and the total amount ordered by type of court 1990–1993

  England and Wales

  £ thousands

  Court/Year

  Number of offenders ordered to pay compensation

  Total amount

  Magistrates' courts

  1990

  117.2

  18,431.4

  1991

  102.7

  17,804.1

  1992

  97.5

  16,499.5

  1993

  90.2

  15,602.8

  Crown Court

  1990

  12.4

  220,484.4

  1991

  10.1

  8,581.7

  1992

  8.8

  9,811.3

  1993

  6.3

  7,301.5

  1 Excluding summary motoring offences.

  2 Includes a small number of extra large amounts of compensation ordered for fraud and forgery offences.

  Pre-sentence Reports
  Mr. Michael
  To ask the Secretary of State for the Home Department if he will list the inquiries conducted by his Department or by HM inspectorate of probation since 1 October 1992 into the use by judges and magistrates of pre-sentence reports on offenders and into the arrangements for their delivery by the probation services of England and Wales; and if he will place copies of all such reports in the Library.

  Mr. Nicholas Baker
  The Home Office research and planning unit has undertaken a survey of criminal justice agencies' experience of the operation of the Criminal Justice Act 1991, which included questions seeking the views of sentencers about the usefulness of pre-sentence reports. The unit has also undertaken a more specific survey of judges' and magistrates' satisfaction with services provided by probation staff, including the 232
  preparation of pre-sentence reports. Both are due to be published shortly.

  As an addition to the general probation area inspection programme, HM inspectorate of probation has conducted two inquiries since 1 October 1992 which bear specifically on the arrangements for the provision of the pre-sentence reports. The report of the criminal Justice Act 1991 inspection was published in 1993; and the report on the quality and provision of expedited pre-sentence reports prepared for the Crown Court by the probation service was published earlier this year. Copies of both reports are already in the Library.

  Police Authorities
  Mrs. Maddock
  To ask the Secretary of State for the Home Department what are the budgeted total administration costs for each of the new police authorities of England and Wales in their first year; and how much was spent on administration in total by each of the old police authorities of England and Wales in their final year.

  Mr. Maclean
  It will be for each of the new police authorities to determine its budgetary requirements for 1995–96. The new police authorities are currently being established and the budgets have not yet been set. Details of the administration costs of existing police authorities are not held centrally.

  Mohammed Riaz
  Mr. Cox
  To ask the Secretary of State for the Home Department what is the prison sentence being served by Mohammed Riaz in Long Lartin prison; what was the recommendation of the trial judge; and if he will make a statement.

  Mr. Michael Forsyth
  The period for retribution and deterrence in this case was originally set in 1988. At that time, the trial judge recommended 10 years. The Lord Chief Justice of the day recommended a minimum period of 16 years. The Minister then set a period of 20 years. In doing so he would have had regard to the statement by Sir Leon Brittan, as Home Secretary in 1983, that terrorists and certain other specified categories of murderer could normally expect to serve at least 20 years.

  Following the Doody judgement of June 1993, the above details were disclosed to Mr. Riaz. He subsequently made representations and his case was considered afresh in December 1993. My right hon. and learned Friend concluded that there were no grounds to justify disapplying the policy set out in the Britian statement. He therefore confirmed the existing period of 20 years.

  Racial Violence and Harassment
  Mr. Cox
  To ask the Secretary of State for the Home Department what representations he has received regarding racial violence and harassment.

  Mr. Nicholas Baker
  The Home Office has received a number of representations from individuals and organisations condemning racial violence and harassment. It has also received the report of the Home Affairs Committee's inquiry into racial attacks and harassment, to which it gave its response on 20 October, a copy of which is in the Library. The Government continue to condemn racial violence and harassment and are committed to taking effective action to deal with it.

  Animals (Drowning)
  Mr. Morley
  To ask the Secretary of State for the Home Department in what circumstances downing is permitted as an acceptable or humane method for killing animals.

  Mr. Nicholas Baker
  There are no circumstances in which the drowning of a conscious animal would be accepted as humane. Drowning is not one of the methods of humane killing of laboratory animals listed in schedule 1 to the Animals (Scientific Procedures) Act 1986. A scientific case would have to be made out before it could be authorised under section 5 of that Act.

  Ministerial Speeches
  Mr. Campbell-Savours
  To ask the Secretary of State for the Home Department on what occasions since 1979 civil servants in his Department have been asked to draft speeches of a constituency nature for use in a Minister's own constituency.

  Mr. Howard
  None.

  Child Abusers
  Mr. Gordon Prentice
  To ask the Secretary of State for the Home Department what continuing treatment and counselling facilities are available in north-west England for those convicted of child abuse but now released into the community.

  Mr. Nicholas Baker
  Area probation services run a range of programmes for those convicted of a sexual offence who have been sentenced to a community sentence or who are undergoing a period of supervision following their release from custody.

  Participation in such programmes may be made a condition of release on licence, as may attendance on a psychologist, psychiatrist or medical practitioner. Information about individual service provision is not kept centrally.

  Prisoners (HIV)
  Mr. Cohen
  To ask the Secretary of State for the Home Department what evidence he has of cases of HIV-positive prisoners acquiring the infection in prison; and if he will make a statement.

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

  Letter from Derek Lewis to Mr. Harry Cohen, dated 7 December 1994.
  The Home Secretary has asked me to reply to your recent Question about what evidence there is of cases of HIV positive prisoners acquiring the infection in prison.
  There has been one documented case of a prisoner who became infected with HIV whilst within the prison system in England and Wales. This case, which was referred to in a reply from Lord Ferrers, the then Minister of State at the Home Office to a Question from Lord Kilmarnock on 6 July 1994 (WA81).

  Life Imprisonment
  Sir Ivan Lawrence
  To ask the Secretary of State for the Home Department, what changes have been made in the review procedures in cases of persons sentenced to life imprisonment.
  234
  Mr. Howard
  Two of my predecessors as Secretary of State, the right hon. Sir Leon Brittan and my right hon. Friend the member for Witney (Mr. Hurd) made statements in 1983 and 1987 respectively, about the review arrangements for life sentence prisoners. Under those arrangements, the first review by the Parole Board takes place three years before the expiry of the period thought necessary to satisfy the requirements of retribution and deterrence—commonly referred to as "the tariff". However, no life sentence prisoner is detained for more than 17 years without a Parole Board review of his or her case, even where the period in question exceeds 20 years. The Secretary of State also reviews the case of every life sentence prisoner who has been detained for 10 years.

  From now on, all life sentence prisoners will have a Parole Board review three years before the expiry of their tariff. Since all prisoners will now know the length of their tariff and also the date of this review, I consider that the automatic review at the 17-year point no longer serves any useful purpose. The 17-year review will therefore be discontinued, save in respect of those existing prisoners for whom such a review has already been fixed.

  This means that the review three years before the expiry of the tariff will be the first review for all prisoners. The setting of a review at this point is intended to allow sufficient time for preparing the release of those life sentence prisoners who may be considered an acceptable risk. This is subject, in the case of mandatory life prisoners, to the question of the public acceptability of early release.

  In recent years, successive Secretaries of State have recognised that, for the majority of life sentence prisoners, a period in open prison conditions is generally vital in terms of testing the prisoner's suitability for release and in preparing him or her for a successful return to the community. It is, therefore, now normally the practice to require the prisoner to spend some time in open conditions before release and to arrange a further review while the prisoner is in an open prison for a formal assessment of his or her progress. I intend to continue with this practice and the first Parole Board review will therefore normally serve the purpose of assessing the prisoner for open conditions.

  The purpose of the 10-year ministerial review is to consider whether there are any grounds for bringing forward the date of the first review by the Parole Board. This review is now redundant as far as discretionary life sentence prisoners are concerned since their cases are dealt with in accordance with the arrangements introduced by part II of the Criminal Justice Act 1991. However, the 10-year ministerial review will continue to take place for mandatory life sentence prisoners.

  In addition, I have decided that for those life sentence prisoners for whom it is decided that the requirements of retribution and deterrence can be satisfied only by their remaining in prison for the whole of their life, there will in future be an additional ministerial review when the prisoner has been in custody for 25 years. The purpose of this review will be solely to consider whether the whole life tariff should be converted to a tariff of a determinate period. The review will be confined to the considerations of retribution and deterrence. Where appropriate, further ministerial reviews will normally take place at five-yearly intervals thereafter. Existing prisoners who fall into this category and who have already served 25 years or more

  235
  in custody will not be disadvantaged. Their cases will be reviewed by Ministers as soon as is practicable and after any representations they may wish to make.

  As I announced in reply to a question by my hon. and learned Friend the Member for Burton (Sir I. Lawrence) on 27 July 1993, Official Report, columns 863–65, successive Secretaries of State have been, and I continue to be, willing to consider any written representations by life sentence prisoners about their tariff. They will also continue to be afforded the opportunity to submit such written representations at the beginning of the sentence and before I have formed a view as to the appropriate period in question.

  Group 4 Security Services
  Dr. Lynne Jones
  To ask the Secretary of State for the Home Department how many complaints he has received about Group 4 security services in the past year.

  Mr. Michael Forsyth
  I have received very few complaints about Group 4 in the last year, either for its work with the Prison Service or the Immigration Service. The exact number of complaints could be ascertained only at disproportionate cost.

  There is evidence that Group 4 has been performing very well in its contracts with the Home Office. Her Majesty's Chief Inspector of Prisons praised the quality of staff at HMP Wolds, which is managed by Group 4, and said the prison was "very nearly an enormous success".

  The court escorting service provided by Group 4 provides better value for money, costing 24 per cent. less than the previous system. Escapes from escort are now over 40 per cent. lower than when the service was provided by the police and Prison Service, despite the fact that the number of remand prisoners has increased significantly, therefore necessitating more escort journeys.

  A recent Home Office survey of customers in the east midlands and Humberside, where Group 4 provides the court escort and custody service, has shown high levels of satisfaction amongst the police, prisons and courts. Some 86 per cent. were either satisfied or very satisfied with Group 4's overall performance and 90 per cent. Of court staff rated Group 4's performance as better, or at least as good as, the service that went before. Some 83 per cent. of the sample agreed or strongly agreed that Group 4 had settled into its job well in the first year of operation.

DEFENCE

  Low Flying
  Mr. Llwyd
  To ask the Secretary of State for Defence (1) how many complaints he has received from people living in England about low-flying military aircraft in 1991, 1992, 1993 and during the current year;

  (2) how many complaints about low-flying military aircraft he has received from people living in Wales in 1991, 1992, 1993 and during the current year;

  (3) how many complaints he has had about low-flying military aircraft from people living in the north of Ireland during 1991, 1992, 1993 and the present year;
  236
  (4) how many complaints he has received from people living in Scotland about low-flying military aircraft in 1991, 1992, 1993 and during the current year.

  Mr. Soames
  The information requested is as follows:

  Year

  England

  Wales

  Scotland

  1991

  3,412

  791

  643

  1992

  4,401

  904

  990

  1993

  4,141

  556

  1,041

  19941

  3,899

  592

  996

  1 Up to 30 November 1994.

  Most low flying in Northern Ireland is of an operational nature, with only a limited number of training sorties. Complaints arising from this activity are dealt with locally, and no central record is available of the number received.

  Defence Export Services Organisation
  Mr. Campbell-Savours
  To ask the Secretary of State for Defence how many people are employed by or attached to the Defence Export Services Organisation.

  Mr. Freeman
  I refer the hon. Member to the replies I gave to the hon. Member for Nottingham, South (Mr. Simpson) on 30 November,Official Report, columns 778–79.

  Airfields
  Mr. Colvin
  To ask the Secretary of State for Defence how many of his Department's airfields are occupied by United States forces; what is the form of tenure; and which ones are now surplus to requirements.

  Mr. Soames
  The United States Air Force currently operates four of my Department's airfields at the main operating bases of RAF Alconbury, RAF Lakenheath and RAF Mildenhall, and the standby deployment base of RAF Fairford. United States visiting forces are based in the United Kingdom under the general provisions of the NATO status of forces agreement 1951 and the visiting forces act 1952. These airfields will remain available for as long as, in the opinion of both the UK and US governments, the presence of the United States visiting forces at them is considered desirable in the interest of common defence. The airfield at RAF Alconbury is no longer required for USAF operations and the station will become a non-flying base by 31 March 1995.

  Building Refurbishment
  Mr. Milburn
  To ask the Secretary of State for Defence if he will itemise the refurbishment works undertaken on buildings housing departmental staff in the last three years, indicating the costs involved and the nature of the refurbishments.

  Mr. Soames
  The information requested is not available centrally and could be provided only at disproportionate cost.

  Cyprus
  Mr. Cox
  To ask the Secretary of State for Defence what has been the number of British service personnel convicted by a civilian court for a criminal offence in Cyprus in each of the last three years; and if he will list the offences concerned.
  237
  Mr. Soames
  Details of Royal Air Force personnel convicted of criminal offences by a civilian court in Cyprus since 1992 are as follows:

  Year

  Number

  Charge

  1992

  6

  Five cases of drink-related driving offences. One public order offence.

  1993

  12

  All cases of drink-related driving offences.

  1994

  7

  Six cases drink-related driving offences. One case of larceny.

  The Army maintains central records of the numbers of personnel convicted of criminal offences by a civilian court in Cyprus only where, if convicted, personnel receive a penal sentence. No such cases were notified in 1992 or 1993, but there have been two cases in 1994; one individual was charged with cheque fraud and the other with criminal damage.

  Mr. Cox
  To ask the Secretary of State for Defence what has been the number of British service personnel court-martialed in Cyprus in each of the last three years; and if he will give the offences on which they were charged.

  Mr. Soames
  The information requested is as follows:

  Year

  Number1

  Charge

  1992

  6

  Drinking on duty and stating a falsehood.

  Possession of a weapon and ammunition and escaping from custody.

  Assault Occasioning Actual Bodily Harm (OABH).

  Burglary (seven charges) and theft.

  Impaired Driving.

  Nuisance phone calls.2

  1993

  9

  Unauthorised phone calls.

  Attempted arson/arson.

  Common assault and assault OABH.

  Four cases of Assault OABH.

  Obtaining property by deception, avoiding liability by deception (two charges) and forgery.2

  Theft.

  1994

  16

  Improperly entering the female accommodation.

  False accounting.

  Common assault and assault OABH.

  Three cases of drink-related driving offences.

  Two cases of disobedience to standing orders.

  Two cases of assault OABH.3

  Failing to provide a specimen of breath after an accident.2

  Theft.

  Two cases of absence without leave.

  Wounding.

  Theft (two charges), false instrument (eight charges) and forgery (3 charges).

  Notes:

  1 Figures exclude courts material held in Cyprus but where the offences were committed elsewhere.

  2 Found not guilty.

  3 One found not guilty.

  Cambridge Military Hospital, Aldershot
  Mr. Critchley
  To ask the Secretary of State for Defence (1) what was the estimate for the cost of building a new hospital on the site of the Cambridge military hospital, Aldershot, including the refurbishment of the existing building;

  (2) what plans he has for the listed buildings on the site of the Cambridge military hospital;

  (3) what is the estimated cost of closing the Cambridge Military hospital.

  Mr. Soames
  Essential rebuilding and refurbishment works costs which would be necessary if the Cambridge military hospital were to become the tri-Service core hospital are estimated at over £66 million. Final decisions on disposal or redevelopment of the hospital site have not yet been made and any future plan will take account of listed buildings. Residual running and rundown costs of the site following closure are estimated at £1.1 million in the financial year 1996–97 and thereafter about £0.383 million a year against an anticipated overall saving from the defence costs study proposal of some £50 million a year.

  Mr. Critchley
  To ask the Secretary of State for Defence (1) what estimate has been made of the additional cost of treating service men and women from the Aldershot Garrison at Haslar;

  (2) what is the estimated cost of transferring the staff and equipment from the Cambridge military hospital to Haslar.

  Mr. Soames
  Service personnel from Aldershot garrison might be treated in future either at Haslar or one of the new Ministry of Defence hospital units. Until these are selected, no precise travel or treatment cost comparisons can be made. Similarly, transfer costs for medical staff now at the Cambridge military hospital cannot be calculated until the location of the new Ministry of Defence hospital units, where some will serve, is known. Estimated equipment transfer costs, net of disposal receipts, are not available at this stage of the defence costs study implementation process. It is assumed, however, that any such costs will be minimal and will be far outweighed by the assessed overall savings to the Defence budget accruing from the reorganisation of the defence medical services of some £50,000,000 a year from 1996–97.

  Military District Hospitals
  Mr. Critchley
  To ask the Secretary of State for Defence what is the most recent estimated cost of establishing and running each of the proposed military district hospital units.

  Mr. Soames
  At Derriford, where arrangements to establish a unit are most advanced, the capital expenditure committed by my Department to the project has been £5 million and estimated total annual running costs are approximately £6.5 million. The capital and annual running costs of the two new proposed Ministry of Defence district hospital units will depend upon the state of facilities and the costs at the host district general hospital selected. Decisions on the location of the two new military district hospital units, and therefore whether or not capital work will be required, have not yet been made.

  RAF Elvington
  Mr. Redmond
  To ask the Secretary of State for Defence (1) if he has yet made a decision as to whether RAF Elvington is surplus to his Department's requirements; and if he will make a statement;

  (2) what consideration he has given to the future of RAF Elvington; and if he will make a statement.

  Mr. Soames
  The future requirement for RAF Elvington is being examined at present. No decisions have been taken, but if no defence use is identified the site will be disposed of in the normal way.

  HMS Raleigh
  Mr. Byers
  To ask the Secretary of State for Defence how many officers from other countries have received retinue briefings at HMS Raleigh in the last five years; how much income was received; how many officers came from each country; and how much each country paid.

  Mr. Soames
  According to available records, there have been no instances of officers from other countries receiving retinue briefings at HMS Raleigh during the last five years.

  Arms Exports
  Mr. Olner
  To ask the Secretary of State for Defence what arms are currently being exported from the United Kingdom and for which countries they are destined.

  Mrs. Clwyd
  To ask the Secretary of State for Defence if he will list the armaments sold to Indonesia between 1986 and 1994, and the financial value of these sales.

  Mr. Freeman
  I refer the hon. Members to the reply I gave to the hon. Member for Ilford, South (Mr. Gapes) on 28 November 1994,Official Report, column 501.

  Positive Vetting
  Mrs. Clwyd
  To ask the Secretary of State for Defence how many past and present elected representatives have been positively vetted by his Department; how many have requested to see their own positive vetting files; and how many have subsequently corrected entries on their files as a result.

  Mr. Freeman
  None.

  LSD Experiments
  Dr. David Clark
  To ask the Secretary of State for Defence (1) what was the nature and purpose of the medical and psychological screening of service volunteers who were tested with LSD at Porton Down;

  (2) pursuant to his answer of 21 November 1994, Official Report, columns 55–6, which outside organisations or industrial firms were involved in the LSD tests; and what accidents or mishaps occurred during these experiments with LSD;

  (3) pursuant to his answer of 21 November 1994, Official Report, columns 55–6, under which defence agreement was the LSD provided to Porton Down by the then United States army chemical centre at Edge wood in Maryland; what quantity was provided; and in which years was it provided;

  (4) pursuant to his answer of 21 November, Official Report, columns 55–6, what follow-up medical checks have been carried out on the mental and physical health
  240
  of the 72 service volunteers tested with LSD at Porton Down; how many of these volunteers were checked after they left Porton Down; how often these checks were carried out; and who carried them out.

  Mr. Soames
  These are matters for the Chemical and Biological Defence Establishment, Porton Down under its framework document. I have asked the chief executive, CBDE to write to the hon. Member.

  Letter from Dr. Graham Pearson to Dr. David Clark, dated 7 December 1994:

  1. Your Parliamentary Questions to the Secretary of State for Defence about work carried out by the Ministry of Defence with LSD at Porton Down have been passed to me to reply as Chief Executive of the Chemical and Biological Defence Establishment.

  2. The role of the Chemical and Biological Defence Establishment (CBDE) is to carry out work to ensure that the UK Armed Forces are provided with effective protective measures against the threat that chemical or biological weapons may be used against them. As part of that programme, evaluation is carried out of chemicals that may be utilised by an aggressor as a chemical warfare agent.

  3. In order to carry out this work, it is necessary to use Service volunteers to:

  a. Assess the ability of Service personnel to function with new equipment and procedures.

  b. Develop medical countermeasures to protect Service personnel

  c. Evaluate the effects of very low and medically safe concentrations of chemical warfare agents on the ability of unprotected personnel to operate normally.

  No studies involving volunteers are carried out unless there is a clear military need and a detailed protocol has been reviewed and approved by an independent Ethics Committee in accordance with the guidelines laid down by the Royal College of Physicians.

  4. Volunteers on arrival at CBDE Porton Down are given a full medical examination, have the study explained to them in lay terms by an officer who is not involved in the study, are advised that they may leave the study at any stage without any explanation and at the end of the study are given a further medical examination to ensure that they have suffered no harm. In addition, there is no history of Service doctors in their units seeking advice from CBDE Porton Down on any subsequent illnesses that may have been reported by volunteers. Medical screening is part of the standard medical examination to ensure that no pre-existing medical condition could be aggravated by participation in any trial and consists of standard medical tests. The standard medical examinations consists of a full medical history, a full clinical examination and an electro cardiogram.

  5. The same approach is adopted for psychological screening in order to ensure that a short acting, potent psychotropic drug such as LSD could not aggravate a pre-existing mental disorder. This screening and testing also forms an important part of the scientific assessment of the effects of such drugs so that pre-dose normal effects can be compared to those short term effects seen following administration. The psychological tests employed were the standard psychology tests used in research which were the Maudsley Personality Inventory (MPI), Raven's Progressive Matrices (RPM) and the Heron, Allport-Vernon and Taylor personality and intelligence tests.

  6. In my earlier answer to you of 21 November 1994 (Official Report, Columns 54–56) I stated that one of the sources of the LSD used in the work and studies carried out at CBDE was the then US Army Chemical Centre at Edgewood, Maryland. According to our records we received 10 grams of LSD in December 1965 and 10 grams in June 1966. The LSD was provided under the American, British, Canadian and Australian Armies (ABCA) agreement Quadripartite Working Group (QWG) on NBC defence.

  7. No external organisations or industrial firms were involved with the LSD tests undertaken at Porton Down between 1962 and 1971. According to our records no accidents or mishaps occurred with experiments with LSD. At the end of the study all the volunteers would have been given a medical examination and in addition there is no history of Service doctors in their units seeking

  241
  advice from CBDE Porton Down on any subsequent illnesses that may have been reported by volunteers who took part in the volunteer programme. Indeed, CBDE Porton Down has no evidence that participation in volunteer studies over the past 40 years have resulted in any harm to those concerned.

  8. From time to time, Service volunteers have been recalled so that checks on their medical health can be made. There is no particular frequency or pattern to such recalls. In addition some volunteers return voluntarily to CBDE to take part in subsequent unrelated studies. It would require a disproportionate effort to search our records to see if any of the 72 Service volunteers had returned subsequently to CBDE for further studies.

  9. I should add that the Ministry of Defence is very grateful to all Service personnel who have served as volunteers in studies at CBDE Porton Down as their participation has been vital to ensuring that the members of the UK Armed Forces are provided with the most effective protective measures possible against the threat that chemical or biological weapons may be used against them. Such studies are vital to the defence of the realm and we are very grateful to the Servicemen who have helped achieve the high standards of protection that are available for the members of the UK Armed Forces.

DUCHY OF LANCASTER

  Advanced Manufacturing Technology Committee
  Mr. Harvey
  To ask the Chancellor of the Duchy of Lancaster if he will list the functions and objectives of the Advanced Manufacturing Technology Committee.

  Mr. Robert G. Hughes
  The Advanced Manufacturing Technology Committee provided advice to the Department of Trade of Industry and the former Science and Engineering Research Council on research and development requirements in advanced manufacturing. The committee was disbanded on 31 March 1994. The committee's terms of reference in respect of the SERC and the DTI were as follows:

  DTI
  To identify and update the R and D industrial and technological innovation requirements in the area of advanced manufacturing;
  to advise on the objectives, balance and strategy for Departmental expenditure on R and D in the area of advanced manufacturing;
  to advise DTI on the allocation of funds necessary to secure those objectives; to consider and advise on proposals referred by the DTI to the Committee; and to make recommendations to DTI on longer-term or more speculative programmes; and
  to propose measures which would further the application of science and technology within advanced manufacturing.

  SERC
  To advise on the development of the SERC programme and on the resources that should be provided for it;
  to monitor the SERC programme generally and advise on its implementation;
  to approve SERC expenditure within the powers delegated to the Committee; and
  to make reports on its activities as required by SERC.

  Mr. Harvey
  To ask the Chancellor of the Duchy of Lancaster if he will publish a table showing the number of meetings held, the secretarial and advisory arrangements, the budgeted and actual expenditure and the subjects of any reports and submissions produced by the Advanced Manufacturing Technology Committee in each of the last three years.

  Mr. Robert G. Hughes
  Responsibility for servicing the Advanced Manufacturing Technology Committee 242
  rested with the Science and Engineering Research Council before the Committee was disbanded on 31 March 1994.

  1992

  1993

  1994

  Number of meetings held

  8

  6

  1

  Budgeted expenditure

  0

  0

  0

  Actual expenditure

  0

  0

  0

  The AMTC was a joint committee of the Department of Trade and Industry and the SERC. It was jointly serviced by the DTI and the SERC, with DTI in the lead until 31 September 1993, and the SERC thereafter. No report was published by the Committee. Its advice was channelled through the internal organisation of the DTI and the SERC.

  Science
  Mr. Harry Greenway
  To ask the Chancellor of the Duchy of Lancaster what measures his Department is taking to promote public understanding of science.

  Mr. Robert G. Hughes
  The Office of Science and Technology will be spending in 1994–95 about £1 million on initiatives designed to improve public understanding and appreciation of the contribution that science, engineering and technology make to our society. These initiatives support work in schools through such schemes as the CREST—creativity in science and technology—awards and young engineers clubs. They also promote science, engineering and technology among the wider public through major events like the national science and engineering week, the British Association's science festival and the Edinburgh international science festival.

  Next Steps Initiative
  Mr. Sykes
  To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the progress of the next steps initiative.

  Mr. Robert G. Hughes
  The Government today published the fifth "Next Steps Review"—Cm 2750. It brings together information on the 102 agencies within Government, and the executive organisations of HM Customs and Excise and the Inland Revenue, which now constitute 62 per cent. of the civil service.

  Within central Government, agencies are delivering the citizens charter commitment to improved customer service and value for money. The review highlights how, under the charter, agencies focus on the needs of the users of their services and gives examples of what individual agencies have achieved. Thirty charter marks have been awarded to agencies in the first three years of the competition, reflecting the commitment of agency chief executives and their staff to high standards of customer service.

  The review reports the targets set for agencies and their performance against them in 1993–94 and lists key targets for 1994–95. In 1993–94, agencies met around 80 per cent. of their key targets, compared with 77 per cent. last year. Most targets have also become progressively more demanding year on year.

  The Government's aim is that every public service should be provided in the most appropriate and cost-effective way. All the executive functions of the civil service are therefore being examined against the following

  243
  tests: whether they need to continue to be performed at all; whether they need to remain the responsibility of Government; where the Government do need to remain responsible for an activity, do the Government have to carry out the task or can they buy in from outside providers; and whether they should become the responsibility of an agency within Government. The review reports further progress in this work.,

  Once established, agencies are subject to periodic review, now normally after five years of operation. To ensure that the widest possible range of views are taken into account, both the initial examination of an activity and these reviews are publicly announced, including through the next steps review. The review also demonstrates many ways in which agencies are entering into partnership with the private sector, for example, by contracting out existing work to the private sector under a partnership arrangement or through joint ventures.

  Over the last six years, the next steps initiative has fundamentally altered the way in which the civil service is managed. It is a key part of the programme of change outlined in the White Paper "The Civil Service: Continuity and Change". The White Paper also proposed extending throughout the civil service many of the principles of next steps, including maximum clarity about objectives and targets, delegation of management responsibility and a clear focus on outputs and outcomes. The aim is a flexible and cost-effective civil service well-equipped to provide support for Ministers on policy matters and in the management of public services which meet the needs of their users.

  Information Technology Advisory Board
  Mr. Harvey
  To ask the Chancellor of the Duchy of Lancaster if he will publish a table showing the number of meetings held, the secretarial and advisory arrangements, the budgeted and actual expenditure and the subjects of any reports and submissions produced by the Information Technology Advisory Board in each of the last three years.

  Mr. Robert G. Hughes
  The Information Technology Advisory Board was a joint committee of the DTI and the Science and Engineering Research Council. It was disbanded in March 1994.

  Financial Year

  1991–92 £000

  1992–93 £000

  1993–94 £000

  Number of meetings held

  6

  5

  4

  Budgeted Expenditure1

  30,712

  36,599

  38,457

  Actual Expenditure1

  30,955

  37,152

  38,026

  Secretariat arrangements

  shared equally between DTI and SERC at official level

  1 Excludes postgraduate training and support costs which were operated centrally.

  Advisory Arrangements: ITAB received external advice from joint SERC/DTI committees comprising of scientific and technical experts from academe and industry. The Committees drew on peer review referees and other expert advice when planning their programmes and assessing proposals for funding. In addition, membership of ITAB was designed to reflect different aspects of the technology chain.

  Reports and Submissions:

  Annual Reports—1991, 1992, 1993: a comprehensive summary of ITAB activities.

  The Government Strategy for IT—1993: sets out the aims, objectives and remit of ITAB and its advisory Committees.
  244
  The Impact of IT—1994: published after ITAB was disbanded. Illustrates achievements and practical impact of the former joint programmes in an industrial and social context.

  Submissions: annual contribution to the SERC PES submission.

SOCIAL SECURITY

  Buildings Refurbishment
  Mr. Milburn
  To ask the Secretary of State for Social Security if he will itemise the refurbishment works undertaken on buildings housing departmental staff in the last three years, indicating the costs involved and the nature of the refurbishments.

  Mr. Roger Evans
  The information is not available in the form requested and could be obtained only at disproportionate cost. However, figures for refurbishment projects costing more then £5,000 are available.

  A total of £111,600,423 was spent on refurbishing the DSS estate during the last three years.

  Child Support Agency
  Mr. Devlin
  To ask the Secretary of State for Social Security what steps he intends to take to ensure that Mr. Peter Stevenson, Ref. 7000102373, will have his maintenance payments reassessed by the Child Support Agency in the very near future and be paid the rebate due.

  Mr. Burt
  The administration of the Chid Support Agency is a matter for Miss Ann Chant, the chief executive. She will write to my hon. Friend.

  Letter from Tony Ward to Mr. Tim Devlin, dated 7 December 1994:
  In the absence of Miss Chant, I am replying to your recent Parliamentary Question to the Secretary of State for Social Security about your constituent Mr. Peter Stevenson.
  Mr. Stevenson's maintenance liability was reassessed on 1 December 1994. On the evidence received, there is no indication that there has been an overpayment of child maintenance.
  I hope that this reply is helpful.

  Cold Weather Payments
  Mr. Bradley
  To ask the Secretary of State for Social Security how many cold weather payments have been paid out in the Manchester region for each of the past three years.

  Mr. Roger Evans
  The administration of the social fund, which includes cold weather payments, is the responsibility of Mr. Michael Bichard, the chief executive of the Benefits Agency. He will write to the hon. Member.

  Letter from Michael Bichard to Mr. Keith Bradley, dated 6 December 1994:
  The Secretary of State has asked me to reply to your recent Parliamentary Question about the number of Cold Weather Payments made in the Manchester region in the past three years.
  Cold Weather Payments are dependent on temperature data supplied by designated weather stations. In the Manchester region, this is the Meteorological Weather Station situated at Manchester Airport. In 1993–94, the temperatures recorded at Manchester Airport were not low enough to satisfy the conditions for Cold Weather Payments.
  Details of the Cold Weather Payments made in the Manchester area during 1991–92 and 1992–93 are available from the statistical information already held in the Library.
  I hope this reply has been helpful.

  Anti-fraud Work
  Mr. Bradley
  To ask the Secretary of State for Social Security what has been(a) the personnel and other cost of anti-fraud work and (b) the amount recouped as a result of anti-fraud work in each year since 1979.

  Mr. Arbuthnot
  The administration of fraud work is a matter for Michael Bichard, the chief executive of the Benefits Agency. He will write to the hon. Member with such information as is available.

  Letter from Michael Bichard to Mr. Keith Bradley, dated 6 December 1994:
  The Secretary of State for Social Security has asked me to reply to your recent Parliamentary Question about the costs of anti-fraud work and the amounts recovered as the result of such work since 1979.
  Not all of the information you requested in available. Prior to the formation of the Benefits Agency (BA), most anti-fraud work was integrated with benefit claims processing and other mainstream local office activities and separate cost data was not kept. However, the bulk of investigations are now carried out by separately managed units - know as Fraud Sectors - which report to Area Directors rather than District Managers. Other investigations are conducted by the BA's separate Organised Fraud command. These organisational changes have enabled estimated costs of the main anti-fraud effort to be published in the two most recent BA Annual Fraud Reports. The figures are:

  1992–93

  £72.4m

  includes estimated £6.4m accommodation costs for Sector Fraud Teams, which are normally minor occupants of premises.

  1993–94

  £69.0m

  excludes accommodation costs for Sector Fraud Teams.

  Estimated benefit savings from anti-fraud work during the same period were £558m (1992–93) and £654m (1993–94). Recoveries of benefit overpaid, including fraud cases, totalled £38m (1992–93) and £80m (1993–94). Information relating to the amount of benefit recovered directly as a result of anti-fraud work is not readily available and could be obtained only at a disproportionate cost.
  I hope you find this reply helpful.

  Appeals
  Mr. Betts
  To ask the Secretary of State for Social Security if it is the practice for his Department to refuse to make benefit payment in line with the ruling of the Social Security Commissioner where such rulings are the subject of appeal to either the United Kingdom or European courts; how many such benefits are currently

  figures rounded to the nearest thousand2

  Benefit

  Claimants total £ thousands

  Total adult dependants £ thousands

  Total child dependants £ thousands

  Date of enquiry

  Non-means tested benefits

  Attendance Allowance

  996

  n/app

  n/app

  March 1994

  Child Benefit1

  6,883

  n/app

  12,496

  November 1994

  Child's Special Allowance4

  299

  n/app

  2127

  December 1993

  Disability Living Allowance4

  1,400

  n/app

  n/app

  August 1994

  Guardians Allowance1

  21,977

  n/app

  22,486

  December 1993

  Invalid Care Allowance

  261

  5

  33

  September 1994

  Industrial Death Benefit

  22

  n/app

  1

  September 1994

  Industrial Injuries Disablement Benefit6

  209

  n/app

  n/app

  April 1993

  Invalidity Benefit3

  1,580

  457

  120

  April 1993

  Maternity Allowance3

  40

  2100

  n/av

  April 1992

  Non Contributory Retirement Pension6

  28

  n/av

  n/av

  March 1994

  246
  affected; and how much money in each case is being withheld from claimants.

  Mr. Roger Evans
  It is our practice to suspend payment in cases which are the subject of an appeal to the courts or in cases where benefit would be affected by the outcome of such an appeal. There are currently a number of appeals which have resulted, or may result, in suspension of benefit. The benefits affected are income support, family credit, severe disablement allowance, invalidity benefit, invalid care allowance, attendance allowance and the care component of disability living allowance. The average weekly amount involved in the family credit cases is £20.39. No information is available on the amount involved in other cases.

  Invalidity Benefit
  Mr. Betts
  To ask the Secretary of State for Social Security how many women are currently being paid reduced invalidity benefit because they have reached retirement age; how many have appealed against this reduction; how many have applied to be treated as cases of hardship; and how many such applications have been accepted.

  Mr. Hague
  The only figures available are those being kept as a result of the case of Mrs. Rose Graham.

  At the end of March 1994, the latest date for which information is held, 41,560 women were being paid reduced rate invalidity benefit because they had reached state pension age.

  A total of 1,604 hardship applications had been received; 994 hardship applications had been accepted and the suspension lifted.

  Information is not held on the total number of appeals received and could be obtained only at disproportionate cost.

  Benefit Statistics
  Mr. Frank Field
  To ask the Secretary of State for Social Security if he will list each of the(a) non-means-tested benefits and (b) means-tested benefits run by his Department; and if he will give the number of claimants and dependants covered by each benefit at the latest available date.

  Mr. Hague
  The information available is in the table.
  247

  figures rounded to the nearest thousand2

  Benefit

  Claimants total £ thousands

  Total adult dependants £ thousands

  Total child dependants £ thousands

  Date of enquiry

  One Parent Benefit1

  902

  n/app

  1,424

  November 1994

  Other Industrial Injuries Benefits

  1

  n/app

  n/app

  March 1994

  Reduced Earnings Allowance/Retirement Allowance6

  155

  n/app

  n/app

  April 1993

  Retirement Pension6

  10,090

  92

  25

  March 1994

  Sickness Benefit3

  147

  24

  n/app

  April 1993

  Severe Disablement Allowance3

  316

  4

  3

  April 1993

  Unemployment Benefit4

  541

  73

  n/app

  May 1994

  Widows Benefit6

  330

  n/app

  84

  March 1994

  War Pension

  306

  n/app

  2

  September 1994

  Means tested benefits

  Council Tax Benefit9, 3

  5,253

  1,618

  2,751

  31 May 1993

  Disability Working Allowance

  24,536

  21,767

  23,289

  July 1994

  Family Credit4

  542

  308

  1,103

  April 1994

  Housing Benefit9, 3

  Rent Rebate

  3,050

  838

  1,889

  May 1993

  Rent Allowance

  1,480

  270

  643

  May 1993

  Income Support4

  5,791

  1,231

  3,028

  February 1994

  Notes:

  1 Total claimants reflects the total of families in receipt and the child dependents reflect the children in those families.

  2 Denotes where the actual unrounded figures have been Shown Sample Size is 100 per cent, unless indicated:

  3 Based on a 1 per cent, sample of claims.

  4 Based on a 5 per cent, sample of awards.

  5 Based on a 4 per cent, sample of awards.

  6 Based on a 10 per cent, sample with an allowance for late returns for industrial injuries disablement benefit and reduced earnings allowance.

  7 Number of assessments in payment not recipients.

  8 Benefit replaced attendance Allowance for persons under 65 years and mobility allowance for 5 April 1992.

  9 Includes a small number of cases where the claimant is eligible for council tax benefit but the actual amount payable is nil after non-dependant deductions have been accounted for.

  Expenditure Levels
  Mr. Frank Field
  To ask the Secretary of State for Social Security if he will list the annual percentage

  Total benefit expenditure 1978–79 to 1993–94 as a percentage of GDP

  Total benefit expenditure £ billion1

  Money GDP £ billion2

  Benefit expenditure as percentage of GDP

  1978–79

  15.9

  173.7

  9.15

  1979–80

  18.8

  208.6

  9.01

  1980–81

  22.7

  237.7

  9.55

  1981–82

  27.7

  261

  10.61

  1982–83

  31.6

  285.8

  11.06

  1983–84

  35.3

  310

  11.39

  1984–85

  38.3

  332.1

  11.53

  1985–86

  41.8

  364.9

  11.46

  1986–87

  44.9

  392.7

  11.43

  1987–88

  46.7

  434.8

  10.74

  1988–89

  47.3

  484.1

  9.77

  1989–90

  50.1

  525.8

  9.53

  1990–91

  56.2

  556.8

  10.09

  1991–92

  65.3

  580.8

  11.24

  1992–93

  74.7

  604.8

  12.35

  1993–94

  80.9

  639

  12.66

  1 The growth of social security.

  2 Financial Statement and Budget Report 1995–96.

  Residential Care Homes
  Mrs. Lait
  To ask the Secretary of State for Social Security what is the average length of time of residence
  248
  changes in social security expenditure as a proportion of gross domestic product in each year since 1979 cumulatively.

  Mr. Hague
  The information is in the table.

  of people in a long stay part 3 home (a) in the private sector and (b) in the voluntary sector.

  Mr. Roger Evans
  Data on the length of stay in residential homes is not collected by this Department.

TRADE AND INDUSTRY

  Industrial Development
  Mr. John Morris
  To ask the President of the Board of Trade what new industries from overseas were sited in England, Wales and Scotland, respectively, in each year between and including 1971 to 1980; and what major expansions or new plants of existing industries were set up or announced during the same years.

  Mr. Charles Wardle
  The total number of projects in England, Scotland, and Wales respectively in 1979 were 119, 28 and 18. Similarly, the number of projects in 1980 were 88, 31 and 16 respectively. These figures are based on information provided to the Department's invest in Britain bureau by companies themselves at the time of their decision to invest. Foreign investors are under no obligation to inform the IBB of their investment decisions.

  No records exist for years before 1979 and a more detailed breakdown of the figures for 1979 and 1980 could be obtained only at disproportionate cost.

  Advisory Bodies
  Mr. Harvey
  To ask the President of the Board of Trade if he will publish a table showing the number of meetings held, the secretarial and advisory arrangements, the budgeted and actual expenditure and the subjects of any reports and submissions produced by the Advisory Council on Research and Development for Fuel and Power in each of the last three years.

  Mr. Charles Wardle
  The Advisory Council on Research and Development for Fuel and Power met seven times in 1992 and five times in 1993, before it was dissolved in October of that year. Secretariat duties were carried out by DTI officials. There were no advisors. ACORD's budget covered principally member's travel and subsistence expenses and meeting costs. These cost

  Coal task force/advisory committee on coal research meetings

  Financial year

  Number of meetings (C= CTF A= ACCR)

  Proposals to Committee

  Strategy papers reviewed

  Information papers discussed

  Cost of running Committee £k

  Total programme spend £million

  1990–91

  2C

  0

  2

  2

  7.0

  11.40 (outturn)

  1991–92

  4C

  13

  1

  4

  14.0

  4.67 (outturn)

  1992–93

  2C

  6

  1

  4

  7.0

  3.93 (outturn)

  1993–94

  2C

  12

  7

  5

  14.0

  7.83 (outturn)

  2A

  1994–95(to date)

  3A (+2 planned)

  5

  5

  6

  10.5

  7.5(budget)

  Notes:

  1 This excludes small value proposals, which are dealt with by committee members by post.

  The Coal Task Force was inaugurated on 22 November 1990. The last meeting of the Coal Task Force was on 16 July 1993.

  The Advisory Committee on Coal Research was inaugurated on 11 November 1993.

  Secretariat and administrative support to these committees is provided by ETSU as part of the programme management arrangements which ETSU provides to the DTI.

  An annual progress report for the DTI is agreed by the committee at the end of each financial year: copies of reports for 1990–91, 1991–92, 1992–93 and 1993–94 are available in the House of Commons Library.

  The budget for the ACCR in financial year 1994–95 is £17.5k.
  250
  the Department some £3,300 in 1992–93 and 2,500 in 1993–94.

  ACORD's remit was to offer views on the energy Research and Development programmes of the Department and of British Coal and Nuclear Electric. The council's views were communicated to Ministers by means of a letter from the chairman after each meeting. ACORD was responsible for commissioning "Energy Paper 61", an appraisal of United Kingdom energy technologies, which was published in May 1994.

  Mr. Harvey
  To ask the President of the Board of Trade if he will publish a table showing the number of meetings held, the secretarial and advisory arrangements, the budgeted and actual expenditure and the subjects of any reports and submissions produced by the Industrial Development Advisory Board in each of the last three years.

  Mr. Charles Wardle
  Information on the board's activities is published each year in the Industrial Development Act 1982 annual report, copies of which are available in the Library of the House.

  The estimated cost of administrative support provided for the board by the Department was £20,000 in 1993–94.

  Mr. Harvey
  To ask the President of the Board of Trade (1) if he will publish a table showing the number of meetings held, the secretarial and advisory arrangements, the budgeted and actual expenditure and the subjects of any reports and submissions produced by the coal task force in each of the last three years;

  (2) if he will publish a table showing the number of meetings held, the secretarial and advisory arrangements, the budgeted and actual expenditure and the subjects of any reports and submissions produced by the Advisory Committee on Coal Research in each of the last three years.

  Mr. Charles Wardle
  The following table details the activities of the Advisory Committee on Coal Research and its predecessor, the Coal Task Force.
  251
  Mr. Harvey
  To ask the President of the Board of Trade if he will publish a table showing the number of meetings held, the secretarial and advisory arrangements, the budgeted and actual expenditure and the subjects of any reports and submissions produced by the Offshore Industry Liaison Committee in each of the last three years.

  Mr. Charles Wardle
  The Offshore Industry Liaison Committee has met twice in each of the last three years. The secretariat is provided by the offshore supplies office.

  The committee has no advisors or budget and has not published any reports or submissions.

  Mr. Harvey
  To ask the President of the Board of Trade if he will publish a table showing the number of meetings held, the secretarial and advisory arrangements, the budgeted and actual expenditure and the subjects of any reports and submissions produced by the Energy Advisory Panel in each of the last three years.

  Mr. Charles Wardle
  The Energy Advisory Panel met for the first time on 23 November 1993 and has met six times to date; once in 1993 and five times so far in 1994. Three more meetings are expected to be held in the current financial year. Secretariat duties are carried out by DTI officials, but no advisors to the panel have been engaged. The panel's budget covers principally members' travel and subsistence expenses and meeting costs. These were some £3,400 in 1993–94 and £5,000 in 1994–95 to date.

  The panel has contributed to the production of the Government's annual energy report, published in June 1994, but it has not produced specific reports or submissions.

  Mr. Harvey
  To ask the President of the Board of Trade if he will publish a table showing the number of meetings held, the secretarial and advisory arrangements, the budgeted and actual expenditure and the subjects of any reports and submissions produced by the advisory committee for the Joint Environmental Markets Unit in each of the last three years.

  Mr. Charles Wardle
  The Joint Environmental Markets Unit advisory committee met for the first time in March 1994 and has had two further meetings since then. The secretariat for the advisory committee is drawn from the staff of JEMU. The committee has no allocated budget; committee members are entitled to claim travel and subsistence in accordance with the DTI's rules for external members of advisory committees. No formal reports or submissions have been produced.

  Indonesia
  Mr. Campbell-Savours
  To ask the President of the Board of Trade what has been the value of British arms sales to Indonesia in each of the last 15 years at current prices.

  Mr. Needham
  I refer the hon. Member to the answer I gave to the hon. Member for Leeds, Central, (Mr. Fatchett) on 24 November 1994,Official Report, column 300.

  Mrs. Clwyd
  To ask the President of the Board of Trade what was the financial value of United Kingdom exports to Indonesia in the last year for which figures are available; and if he will list the products.

  Mr. Needham
  The latest annual information is published in the December 1993 issue of business monitor MM20, "Overseas Trade Statistics of the United 252
  Kingdom", a copy of which is available in the Library of the House. Table 4 gives United Kingdom exports by country and product.

  Domestic Coal Consumers Council
  Mr. Wolfson
  To ask the President of the Board of Trade whether he intends to exercise his powers under section 24 of the Coal Industry Act 1994 to abolish the Domestic Coal Consumers Council; and if he will make a statement.

  Mr. Charles Wardle
  In the light of the privatisation of British Coal and the alternative arrangements for the representation of domestic coal consumers' interests which the coal trade is developing, my right hon. Friend the President of the Board of Trade has decided to abolish the council on 28 February 1995, when the members' current terms of appointment expire. The members are being informed accordingly.

  The necessary order abolishing the council as of 28 February 1995 will be made in due course.

  The coal trade, under the umbrella of the Chamber of Coal Traders, is establishing alternative private sector consumer arrangements. Progress has already been made with the establishment of a quality grading system by the Solid Fuel Association and the publication by the approved coal merchants scheme of a consumer charter. In addition, the Solid Fuel Association and HETAS— heating equipment testing and approval scheme—are working together to ensure that consumers have access to competent installers and approved appliances. Improvements to the body of consumer protection legislation, the keystones of which are the Trade Descriptions Act 1968 and the Consumer Protection Act 1987 continue to be made: the General Product Safety Regulations 1994 came into effect on 3 October.

  To ensure that the smooth transition towards private sector arrangements is maintained, my right hon. Friend has appointed the out-going chairman of the council, Mrs. Ann Scully, to advise him on progress. Mrs. Scully will be assisted by Mr. Donald Mockett and Mr. Douglas Barrett MBE, who will offer local advice on the interests of consumers in Scotland and Northern Ireland respectively. The terms of reference of the advisory group are:
  —to advise on such further specific arrangements as may need to be established in the interests of domestic coal consumers following the sale of British Coal and its subsidiaries;
  —in particular, to assist in developing with coal producers, coal merchants and other organisations in the coal trade arrangements by them for the continuation of fume checks, and the establishment of commercial arrangements for the resolution of complaints, the maintenance of quality standards and dissemination of information and advice about the safe burning of solid fuel; and
  —to report by 30 September 1995.

  The Government recognise the enormous contribution which the Domestic Coal Consumers Council's members have made to protecting the interests of domestic coal users over the last 50 years, particularly during the passage of the Coal Industry Act 1994. But the market has changed and the time has come to place responsibility for users' interests where they should lie—with the coal trade. Mrs. Scully and her co-advisers will be able to assist the trade in this.

  Aerospace Exports
  Mr. Barry Jones
  To ask the President of the Board of Trade what was the amount of cash earned by exports by the United Kingdom aerospace industry in each year since 1989, and if he will make a statement.

  Mr. Charles Wardle
  The value of exports by the United Kingdom aerospace equipment manufacturing and repairing industry, defined as group 364 of the standard industrial classification, 1980 is given in the following table:

  Year

  UK export £ billion

  1989

  7.2

  1990

  7.4

  1991

  7.3

  1992

  6.9

  The information for 1993 is due to be published soon in the CSO's business monitor series MQ10, "Overseas Trade analysed in terms of industries".

  Atomic Energy Authority
  Mr. Cousins
  To ask the President of the Board of Trade what proposals are in hand to outsource the operational responsibility for the management and supervision of pipelines or outfalls that are or have been used for the disposal of nuclear waste from AEA sites in Dorset.

  Mr. Charles Wardle
  Responsibility for this activity currently rests with the United Kingdom Atomic Energy Authority Government division's radioactive waste services. Government division announced in September that it intends to contractorise the operation as part of its strategy for creating a more competitive market in decommissioning and waste management services. It will continue, however, to determine the programme of work and ensure that the operations are carried out consistent with safety and environmental requirements. Government division is currently considering options for taking forward the process of contractorisation in consultation with employee representatives.

  Official Receivers
  Mr. Austin Mitchell
  To ask the President of the Board of Trade, pursuant to his answer of 2 November,Official Report, column 1131, what is his definition of official receivers' case administrative work.

  Mr. Jonathan Evans
  The case administration work of official receivers covers the functions exercised in relation to the estates of insolvent companies and individuals rather than those functions which relate to official receivers' investigatory and regulatory roles.

  Disqualification Reports
  Mr. Austin Mitchell
  To ask the President of the Board of Trade what proportion of disqualification returns or reports submitted by insolvency practitioners during the past four years, and what proportion of disqualification returns or reports submitted by official receivers during the same period, have resulted in disqualification orders being made against directors.
  254
  Mr. Jonathan Evans
  The answer is as follows:

  Insolvency Practitioner Cases

  Total number Submitted

  Financial year

  Returns

  Reports

  Number of orders

  1991–92

  15,615

  3,602

  146

  1992–93

  18,233

  3,901

  211

  1993–94

  16,124

  3,727

  194

  1994–951

  7,698

  1,927

  90

  1 to 31 October 1994

  The number of cases reported on relate to the number of companies, whereas the number of disqualification orders made relate to the number of directors disqualified. The figures cannot be related to each other as it can take a number of years from when the report is submitted to the date when the order is made.

  Official receiver reports

  Financial year

  Total number of reports submitted

  Number of orders

  1991–92

  2,402

  155

  1992–93

  2,657

  182

  1993–94

  3,532

  147

  1994–951

  1,537

  48

  1 to 31 October 1994

  The number of cases reported on are quoted in terms of the number of companies. The number of disqualification orders made relate to the number of individual directors disqualified. The figures cannot be related to each other as it can take a number of years for a disqualification order to be made following the submission of a report.

  The number of unfitted returns for individual directors in official receivers cases is not held.

  Mr. Austin Mitchell
  To ask the President of the Board of Trade how many initial unfit conduct reports made, pursuant to the Company Directors Disqualification Act 1986 and submitted by (a) insolvency practitioners and (b) official receivers were rejected for not being evidentially strong enough in each of the last three years.

  Mr. Jonathan Evans
  The answer is as follows:

  Insolvency practitioner reports

  Financial year

  Total number of reports submitted

  Number rejected

  1991–92

  3,602

  3,796

  1992–93

  3,901

  3,320

  1993–94

  3,727

  3,604

  1994–951

  1,927

  1,774

  1 To 31 October 1994.

  The number rejected for a particular year does not bear any relation to those reports actually submitted for that year. Whilst a high proportion will be rejected in the year that the report was submitted—approximately 70 to 75 per cent.—some will not actually be rejected for some time due to the time taken to investigate the matter further.

  The totals for rejections also include those not proceeded with because of parallel criminal proceedings, the bankruptcy of the potential respondent or the discovery of evidence which would refute or mitigate the allegation of misconduct.
  255

  Official receivers reports

  Total number of reports submitted

  Financial year

  Without full report

  With full report

  Number of full reports rejected

  1991–92

  2,166

  236

  31

  1992–93

  2,536

  121

  32

  1993–94

  3,425

  107

  13

  1994–951

  1,443

  94

  12

  1 To 31 October 1994

  The total rejections for a particular year relate only to the cases which have been submitted with a full report. Some of them will also related to cases which have been submitted in an earlier financial year.

  The rejection figures include those which have riot been proceeded with because there are already criminal proceedings afoot, the individual concerned has become bankrupt, or there has been evidence discovered which would refute or mitigate the allegations of misconduct.

  Insolvency Service
  Mr. Austin Mitchell
  To ask the President of the Board of Trade what criteria he will use to determine whether or not a pilot scheme will be implemented to evaluate the costs and benefits of contracting out parts of the Insolvency Service.

  Mr. Jonathan Evans
  Any decision to contract out official receivers' functions will be made on the basis of value for money. A pilot scheme would be appropriate if it were felt that the practical details of a contract needed to be tested.

  Mr. Austin Mitchell
  To ask the President of the Board of Trade what assessment he has made of the resources which it will be necessary to provide to the Insolvency Service Agency to concentrate its investigative role if the recommendations of Stoy Hayward Consulting are implemented in full, indicating the numbers of professional and administrative civil servants.

  Mr. Jonathan Evans
  No assessment has yet been made of the resources that would be needed to enable the Insolvency Service to pursue its investigative role. In any decision to contract out the administrative work of official receivers' offices, the resource implications of all residual work will be considered.

  Mr. Austin Mitchell
  To ask the President of the Board of Trade what proposals he will include in the specifications to contract out the initial interview of bankrupts and directors of companies in compulsory liquidation to ensure that they are conducted by adequately qualified staff in the private sector.

  Mr. Jonathan Evans
  My officials are currently in the process of inviting firms to tender for a contract to work up a specification, bid documentation and evaluation criteria to enable the work of official receivers to be contracted out in the event that such a decision is taken. As part of this work, the successful contractor will be asked to determine performance criteria for all aspects of any work to be contracted out, including the initial interviews of bankrupts and company directors.

  Mr. Austin Mitchell
  To ask the President of the Board of Trade what plans he has to consult insolvency practitioners, trade associations, chambers of trade and commerce and other interested bodies over his proposal 256
  to contract out part of the official receiver's statutory functions.

  Mr. Jonathan Evans
  Any contracting out of the official receivers' functions would require them to be consulted pursuant to section 69(3) of the Deregulation and Contracting Out Act 1994. I and my officials have received representations from a variety of sources on this issue and expect to receive further representations if any decision to proceed with contracting out is made.

  British Gas
  Mr. Gordon Prentice
  To ask the President of the Board of Trade what estimate he has made of the percentage of the revenue base of British Gas which is unregulated and open to competition.

  Mr. Eggar
  Approximately 40 per cent. of British Gas's revenue base is in the competitive sector. In 1993, the British Gas Group turnover totalled approximately £11.2 billion. The tariff sector, which is both regulated by Ofgas and a monopoly business, accounted for approximately £6.5 billion, leaving around £4.8 billion revenue, or 40 per cent., derived from the competitive sector.

  Competitiveness
  Mr. Austin Mitchell
  To ask the President of the Board of Trade, pursuant to his oral answer of 23 November,Official Report, column 583, if he will publish any evidence that British industry's level of competitiveness has changed relative to the rest of the EEC since 1979.

  Mr. Needham
  The Government's White Paper "Helping Business To Win"—Cm 2563—set out a detailed analysis of the improvements in British industry's competitive position relative to our international competitors since 1979. The White Paper contained a formidable agenda of actions and initiatives committing the Government to work with industry to build on this success.

  Environmental Advice
  Mr. Ainger
  To ask the President of the Board of Trade, pursuant to his answers of 30 November,Official Report, column 706, regarding the provision of environmental advice, if he will specify the advice he received from each organisation.

  Mr. Charles Wardle
  [holding answer 5 December 1994]: Consultation of other Departments and organisations took place on the understanding that the information provided would be treated in confidence. This is our established practice with regard to consultation on blocks offered for licensing.

  Officials took account of the concerns of the Joint Nature Conservation Committee and the Countryside Council for Wales, regarding the ecological status of the area. It was agreed that blocks could be offered and special conditions should be attached to each licence. These special conditions have been agreed with, among others, the Department of the Environment, Ministry of Agriculture, Fisheries and Food, and the JNCC, which has consulted the CCW.

  Coal Board Properties
  Mr. Enright
  To ask the President of the Board of Trade what guarantees have been given in respect of the rights of the owners of former Coal Board properties within the curtilage of the pits.

  Mr. Charles Wardle
  [holding answer 6 December 1994]: The Coal Industry Act 1994 has preserved the rights of claimants in respect of subsidence under the Coal Mining Subsidence Act 1991.

  Regional Development Funding
  Mr. Milburn
  To ask the President of the Board of Trade if he will list those public projects which received European regional development funding and were subsequently privatised over the last 10 years, indicating (a) the level of funding and (b) the dates when it was received.

  Mr. Charles Wardle
  [holding answer 24 November 1994]: The bodies that have been privatised during the last 10 years and received European regional development funding for projects were British Gas, British Telecommunications and the Electricity Boards. The dates and amounts of grants are listed in the following table:

  British Telecom

  £

  1984

  17 May

  Manchester

  102,000

  17 September

  Newcastle

  1,058,400

  North Tyneside

  1,118,400

  South Tyneside

  405,600

  South Tyneside

  1,355,100

  South Tyneside

  116,700

  Sunderland

  560,100

  Middlesborough

  274,800

  Durham

  1,194,300

  Darlington

  230,400

  Darlington

  300,000

  Northumberland

  210,600

  Northumberland

  24,900

  Bradford

  895,200

  Rotherham

  231,600

  Doncastor

  394,200

  Barnsley

  201,000

  Redruth/Hayle

  872,700

  Liskeard/ Newquay/Roche

  1,070,700

  Birmingham

  96,900

  Birmingham

  298,800

  Birmingham

  935,400

  Birmingham

  688,500

  Birmingham

  85,200

  Birmingham

  111,900

  Birmingham

  233,400

  Birmingham

  29,100

  Birmingham

  647,400

  Birmingham

  506,400

  Birmingham

  488,400

  Coventry

  38,700

  Coventry

  175,500

  Wolverhampton

  577,500

  Wolverhampton

  77,400

  Wolverhampton

  905,400

  Wolverhampton

  83,400

  Walsall

  560,400

  West Bromwich

  122,400

  Birmingham

  541,800

  Liverpool

  102,600

  Wirral

  24,000

  258

  British Telecom

  £

  Liverpool

  38,700

  Liverpool

  38,100

  Liverpool

  31,500

  Liverpool

  159,600

  Liverpool

  95,400

  Sefton

  87,000

  Sefton

  97,200

  St. Helens

  63,900

  St. Helens

  54,900

  Sefton

  704,700

  Wirral

  669,300

  Liverpool

  139,200

  Liverpool

  732,300

  Liverpool

  45,300

  Liverpool

  74,700

  Liverpool

  391,200

  Rossendale

  18,000

  Rochdale

  29,400

  Electricity Companies

  £

  1984

  17 September

  Burnley

  79,500

  Wigan

  816,600

  1985

  24 January

  Blaydon

  74,100

  Hull

  45,000

  Hull

  30,900

  Torridge

  25,600

  Tavistock

  46,500

  Lynton

  259,800

  30 September(Various)

  889,500

  1986

  29 January

  Rossendale

  1,830,000

  1987

  27 January

  Manchester

  255,000

  The Wrekin

  80,500

  1988

  27 January

  Chester

  440,000

  Salford

  76,000

  (Various)

  436,000

  Manchester

  45,000

  Hartlepool

  512,500

  British Gas

  £

  1984

  12 January

  Washington.

  48,000

  17 May

  Sheffield

  58,800

  17 September

  Barnsley

  619,500

  Bradford

  43,800

  Halton

  151,200

  259

  British Gas

  £

  1985

  24 January

  Consett

  28,800

  Rotherham

  811,500

  Bideford

  88,500

  Birmingham

  18,200

  Blackburn

  116,400

  Liverpool

  134,400

  Rochdale

  66,600

  30 September

  Sheffield

  643,500

  Bradford

  39,500

  Bradford

  28,000

  Wolverhampton

  430,000

  Halton

  29,250

  £ million

  1989

  1990

  1991

  1992

  1993

  Jan-Sept 1993

  Jan-Sept 1994

  UK exports

  13.6

  36.0

  69.7

  118.7

  179.3

  115.3

  163.7

  UK imports

  99.0

  144.2

  135.6

  124.6

  141.1

  98.3

  131.3

  Balance

  -85.4

  -108.2

  -65.9

  -5.9

  38.2

  17.0

  32.4

  Source:

  Overseas Trade Statistics of the UK

NORTHERN IRELAND

  Myalgic Encephalomyelitis
  Ms Hoey
  To ask the Secretary of State for Northern Ireland what plans he has to set up a centre for myalgic encephalomyelitis in Northern Ireland.

  Mr. Moss
  There are no plans at present to set up such a centre.

  Wild Animals Legislation
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland what proposals he has to extend the control of wild animals legislation to, or to propose similar legislation for Northern Ireland.

  Mr. Moss
  There are no plans at present to introduce legislation to extend the control of wild animals. In Northern Ireland the keeping of non-domestic animals is controlled under public health and animal welfare legislation. Native species of wild animals are subject to the Wildlife (Northern Ireland) Order 1985, which among other things controls the keeping of protected species listed in the order.

  Ministerial Speeches
  Mr. Campbell-Savours
  To ask the Secretary of State for Northern Ireland on what occasions since 1979 civil servants in his Department have been asked to draft speeches of a constituency nature for use in a Minister's own constituency.

  Sir John Wheeler
  I am aware of none. Civil servants may provide briefing of a factual nature for Ministers on matters relating to their own Departments. In addition, Ministers in preparing for a constituency speech can draw on material produced by their Department during the normal course of business.

  Argentina
  Mr. Parry
  To ask the President of the Board of Trade if he will make a statement on present trading relations with Argentina; and what has been the import/export level during the last five years.

  Mr. Needham
  [holding answer 5 December 1994]: Our trade relations with Argentina continue to develop strongly. Not only are our exports growing rapidly but some of our best-known companies have invested over US$1 billion in Argentina over the last two years. In addition, there have been a growing number of trade missions to Argentina, including one which I led in July 1994.

  Figures for visible United Kingdom exports to and imports from Argentina over the last full five years and in 1994 to end September are:

  Hill Livestock Compensatory Allowances
  Mr. McGrady
  To ask the Secretary of State for Northern Ireland what steps will be taken to prevent the erosion of hill livestock compensatory allowances and restore the HLCA rates to 1992–93 levels; and if he will make a statement.

  Mr. Ancram
  The recently announced decision that HLCA rates for 1995 would remain at their 1994 levels was taken following the Government's completion of the annual review of economic conditions in the hills and uplands. The rates announced apply throughout the United Kingdom. The same procedure will apply again next year.

  Voluntary Organisations
  Ms Mowlam
  To ask the Secretary of State for Northern Ireland what plans he has to revise the Hurd principles as they apply to the activities of voluntary organisations in Northern Ireland.

  Sir Patrick Mayhew
  I have no plans at present to revise what has come to be known as the Hurd policy but I will of course keep the policy under review in the light of developments in Northern Ireland.

  Child Support Agency
  Mr. Matthew Banks
  To ask the Secretary of State for Northern Ireland, what plans he has to publish details of the targets of the Child Support Agency; and if he will make a statement.

  Mr. Moss
  The Child Support Agency will publish its 1994–95 business plan today. Copies will be placed in the House.
  261
  The targets that I have set for the Child Support Agency for 1994–95 are as follows:
  —50 per cent. of people with care of children making eligible applications to the Child Support Agency to have maintenance arranged;
  —a score of 65 out of 100 on an index of client satisfaction with the agency's service, as determined by an independent survey;
  —annual benefit savings of £10.2 million;
  —to manage the agency's resources so as to deliver its business plan within a total budget of £5.7 million;
  —by the end of March 1995, no more than 55 per cent. of outstanding maintenance applications to be over 13-weeks-old, no more than 25 per cent. over 26-weeks-old, and no more than 1 per cent. over 52-weeks-old.

  The agency is making a number of operational and procedural changes this year which should significantly improve performance. The new targets take this expected improvement into account. They are higher than the agency's achievements last year; and they will be challenging but they should be achievable.

  Labour Statistics
  Mr. McNamara
  To ask the Secretary of State for Northern Ireland what estimate he has made of the reduction in the number of persons by grade and gender employed by his Department and associated offices and agencies, nationally and regionally over the next three years, as a result of the Chancellor of the Exchequer's Budget statement of 29 November, indicating which branch, agency and region will be affected and stating his estimate of the number of job losses in each year which will be by (a) natural wastage, (b) voluntary redundancy and (c) compulsory redundancy; and what estimate he has made of the yearly total of savings in wages and associated costs as a result of these reductions in each Department, branch and agency.

  Sir John Wheeler
  [holding answer 5 December 1994]The information requested is not yet available. It is likely, however, that further reductions will be necessary over and above the 500 voluntary redundancies in the Northern Ireland civil service which will take place before 31 March 1995. The Department's staffing plans for 1995–6, 1996–97 and 1997–98 will be set out in the departmental report, to be published on 10 March 1995.

  The Government's aim has been, and will continue to be, that reductions in the size of the civil service should, as far as possible, be achieved without compulsory redundancies.

TREASURY

  Insurance Premium Tax
  Mr. Dewar
  To ask the Chancellor of the Exchequer if the insurance premium tax applies to insurance policies taken out to protect mortgage interest payments against the risk of sickness or unemployment.

  Mr. Heathcoat-Amory
  In common with most other forms of general insurance, policies taken out to protect mortgage interest payments against the risk of sickness or unemployment are subject to insurance premium tax.

  Betting Duty
  Mr. John Greenway
  To ask the Chancellor of the Exchequer (1) what assessment he has made of the potential impact on general betting duty receipts of the introduction of Sunday racing;

  (2) what assessment he has made of the impact on general betting duty receipts of the deregulation of licensed betting offices up to and including those measures announced by the Home Secretary in July 1994;

  (3) what assessment he has made of the potential impact on general betting duty receipts of the removal of restrictions on advertising of licensed betting offices.

  Mr. Heathcoat-Amory
  No such assessment has been made.

  Mr. John Greenway
  To ask the Chancellor of the Exchequer what was the rate of general betting duty receipts and the total revenue from that tax in each of the last five years.

  Mr. Heathcoat-Amory
  The rate of general betting duty and the total revenue received in the last five years are as follows:

  Rate of duty—

  On-course—no liability to general betting duty from 29 March 1987

  Off-course—12 July 1981 to 1 April 1992—8 per cent. 1 April 1992 to present—7.75 per cent.

  Receipts

  £ million

  1989–90

  458.7

  1990–91

  479.1

  1991–92

  482.1

  1992–93

  473.7

  1993–94

  494.9

  Mr. John Greenway
  To ask the Chancellor of the Exchequer what assessment he has made of the impact on general betting duty receipts of the introduction of evening opening of licenced betting offices.

  Mr. Heathcoat-Amory
  General betting duty receipts for the months April to August, using 1992 as a baseline, increased by 11.7 per cent. in 1993 and 16.1 per cent. in 1994. General betting duty receipts for the fiscal year 1993–94 were 4.5 per cent. up on 1992–93 and those for 1994–95 will be approximately 6 per cent. up.

  VAT Refunds
  Mr. Pendry
  To ask the Chancellor of the Exchequer, pursuant to his answer of 22 November,Official Report, column 71, if he will publish a table showing, for each recognised sport where VAT payments have been refunded to non-profit making organisations supplying sporting services, (a) the name of the sports clubs or associations and (b) the value of the VAT refunded.

  Mr. Heathcoat-Amory
  No. I regret that this information is either not available or confidential.

  Taxation Revenue
  Mr. Chidgey
  To ask the Chancellor of the Exchequer what proportion of total Government taxation revenue was raised by the taxation of inherited wealth and income in each year since 1979.
  263
  Sir George Young
  The information requested is given in the table. Inheritance tax is charged on estates passing on death, and on certain lifetime gifts and settled property.

  Financial year

  Inheritance tax1 as a percentage of total government taxation2

  1979–80

  0.6

  1980–81

  0.5

  1981–82

  0.5

  1982–83

  0.5

  1983–84

  0.5

  1984–85

  0.5

  1985–86

  0.6

  1986–87

  0.7

  1987–88

  0.7

  1988–89

  0.6

  1989–90

  0.7

  1990–91

  0.6

  1991–92

  0.6

  1992–93

  0.6

  1993–94

  0.6

  Footnotes:

  1 Includes small residual receipts from estate duty and receipts from capital transfer tax. Estate duty was replaced by capital transfer tax in 1975 which was in turn replaced by inheritance tax in 1986.

  2 Taxes on income, on expenditure, on capital, rates/community charge/council tax, royalties and social security contributions.

  Mr. Betts
  To ask the Chancellor of the Exchequer if he will estimate the direct revenue yield in a full year at 1994–95 levels of income from restricting (a) personal allowances, (b) relief from pension contributions and (c) other reliefs to relief at (i) 25p and (ii) 20p, giving in each case the number of people affected.

  Sir George Young
  Estimated full-year yields at 1994–95 income levels based on a projection of the 1992–93 survey of personal incomes and other survey data in line with the assumptions in the "Financial Statement and Budget Report 1995–96" are given in the table. The figures do not take account of any behavioural effects which might result from the introduction of such changes, and show the yield from restructuring each allowance or relief separately. If two or more were restricted the total yield would be greater than the sum of individual figures.

  Restriction to

  Basic Rate

  20p

  Effect of restricting

  Yield £ million

  Numbers affected millions

  Yield £million

  Numbers affected millions

  (a) Personal allowances

  1,450

  3.3

  5,600

  26.1

  (b) Relief for pension contributions

  680

  1.9

  1,330

  11.5

  (c) Other reliefs

  140

  0.7

  n/a1

  n/a

  1 Information on reliefs given at source is not available from the Survey of Personal Incomes so it is not possible to estimate the effect of restricting other reliefs to 20 per cent.

  EU Anti-fraud Budget
  Sir Teddy Taylor
  To ask the Chancellor of the Exchequer what arguments were advanced at the Council of Finance Ministers in favour of reducing the anti-fraud budget at its meeting in November; and if he will make a statement.
  264
  Mr. Heathcoat-Amory
  The Commission's preliminary bid for anti-fraud lines in the 1995 budget was for 133.1 mecu, or £103.8 million which was a reduction of 6.1 mecu, or £4.8 million, over the budget for 1994. This is due to a reduction in one-off studies and start-up costs and capital expenditure in agriculture. But the Commission's bid ensured that the amounts for staff and running costs were maintained at their 1994 levels.

  The European Parliament sought an increase of 7 mecu, or £5.5 million, over the Commission's bid, made up of: 3 mecu, or £2.3 million, for measures for inspection of animals in the agricultural section; and 3.95 mecu, or £3.1 million, transferred from various programmes to a number of small amounts in administrative expenditure in the operational section of the budget. The latter is contrary to Council policy.

  The United Kingdom supported the European Parliament's proposals in this area, although it had considerable sympathy with the Council's view on not creating administrative expenditure lines within the operational expenditure section of the budget because this makes control of the Commission's administration budget more difficult. In the event, the majority's view prevailed and the European Parliament's bid was cut back at the 16 November Budget Council to the Commission's original bid, which both the Commission and the Council considered appropriate for what is required for the fight against fraud. But the majority of the European Parliament's proposals are for non-compulsory expenditure on which final decisions are taken by the European Parliament, and it is still able to reinstate part of this increase in the Budget if it so wishes.

FOREIGN AND COMMONWEALTH AFFAIRS

  Indonesia
  Mr. Andrew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will ban the export of certain classes of weapons to Indonesia while violations of human rights continue.

  Mr. Goodlad
  The export to any destination of arms and other goods listed in the Export of Goods (Control) Order 1994 is prohibited without a licence issued by my right hon. Friend the President of the Board of Trade. All applications for export licences for defence equipment are considered on a case by case basis in the light of established criteria. In the case of Indonesia, we would not, for example, licence for export equipment likely to be used for internal repression.

  Private Consultants
  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many private consultants were employed by his Department in the last year for which figures are available; and what was the total cost.

  Mr. Goodlad
  There are three categories of external consultants as defined by the Cabinet Office efficiency scrutiny. This is: "Investigating problems, providing analysis or advice, or assisting with the development of new systems, new structures or new capabilities within the organisation".

  The diplomatic wing spent £704,542 on the hire of management consultants, £8,600,000 on the commission

  265
  of estate and building works consultants and £4,915,000 on technical support in the information technology area.

  The total number of contracts was 460 at a total cost of £14,219,542. The aid wing spent £681,123 on the hire of management consultants, £55,000 on IT consultancies and £234,045,056 on consultants involved in the aid programme overseas. The total number of contracts was 1,181 at a total cost of £234,781,179.

  Official Entertainment Costs
  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what was the cost of official entertainment in each diplomatic residence owned by Her Majesty's Government in each of the last three years.

  Mr. Goodlad
  The entertainment provision for heads of mission covers activities both at diplomatic residences, whether owned or rented, and elsewhere in the country of accreditation. The cost of entertainment in each residence cannot be disaggregated from the figure for overall entertainment. For the financial years 1991–92, 1992–93 and 1993–94 the total FCO expenditure by heads of mission on entertainment was £2,077,868, £2,301,382 and £2,594,023, respectively.

  Overseas Travel
  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what was the number and cost of (a) first-class tickets, (b) business-class tickets and (c) economy-class tickets for overseas flights taken by Ministers located in Britain and paid for by his Department, in each of the last three years.

  Mr. Goodlad
  Our central records are unable to break down ministerial and civil servants commercial overseas flights. The information could be provided only at disproportionate cost.

  Mrs. Clwyd
  To ask the secretary of State for Foreign and Commonwealth Affairs what was the number and cost of (a) first-class tickets, (b) business-class tickets and (c) economy-class tickets for overseas flights taken by civil servants located in Britain and paid for by his Department, in each of the last three years.

  Mr. Goodlad
  The details for overseas flights by FCO and ODA Ministers and civil servants based in Britain in 1993 and 1994 are:

  Class of travel

  Number

  Cost

  1993

  £

  First class

  293

  543,449

  Club class

  6,825

  5,734,311

  Economy

  1,598

  392,460

  266

  Class of travel

  Number

  Cost

  1994 (January–October)

  £

  First class

  380

  437,597

  Club class

  6,071

  5,884,290

  Economy

  1,281

  328,666

  Apportioning expenditure between Ministers and civil servants would incur disproportionate cost.

  For expenditure incurred in 1992, it is not possible to provide a breakdown by class and mode of travel. Nor is it possible to distinguish between overseas and domestic travel. Total expenditure on official travel by UK-based Ministers and officials in the FCO and ODA that year was £9,291,235.

  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what was the total cost of overseas flights taken by (a) Ministers and (b) civil servants located in Britain and paid for by his Department in each of the last three years.

  Mr. Goodlad
  Expenditure for overseas travel in the FCO is as follows:

  1992 £10,256,192

  This 1992 figure includes all forms of travel—rail, road, ship and air. It is not possible to give a more detailed breakdown.

  1993 Commercial and charter flights £7,407,489

  1994 Commercial and charter flights £7,454,498

  As stated in replies to other written questions, our central records are unable to break down ministerial and civil servants' flights without incurring disproportionate costs.

  Drug Production and Trafficking
  Mr. Heald
  To ask the Secretary of State for Foreign and Commonwealth Affairs what contribution his Department is making to the development of international co-operation against illicit drugs production and trafficking.

  Mr. Baldry
  The Government's consultative paper "Tackling Drugs Together" launched on 19 October demonstrates the Government's firm commitment to tackling the menace of illicit drugs both at home and abroad.

  In his reply of 24 November to my hon. Friend the Member for Swindon (Mr. Coombs), my right hon. Friend the Home Secretary set out the action that the Government are taking to improve the effectiveness of international co-operation against drug traffickers. The Foreign and Commonwealth Office is actively involved in supporting these activities.

  In this context, we have raised the profile and priority of drugs in our bilateral contacts with other countries, taking advantage on ministerial contacts where this would be useful and through our diplomatic missions abroad.

  At the multilateral level, my right hon. Friend the Foreign Secretary stressed at the United Nations General Assembly on 28 September that "the international community needs to give full support to the UN International Drugs Control Programme, which has responsibility for leading the global effort in this field. The UN is the best resource for tackling this global menace". We are providing an extra £1.2 million to fund UNDCP projects. This will bring total United Kingdom

  267
  assistance to other Governments, including through UNDCP to £8 million in this financial year.

  The United Kingdom, as chairman of the group of UNDCP major donors, will continue to encourage others to increase their contributions to UNDCP. We are moreover actively encouraging the international financial and development institutions to give higher priority to drugs and crime in their country programmes.

  We also play a prominent role in other international meetings, for example in the Dublin group of donors, which seeks to develop a dialogue with governments of producer and transit countries on drugs issues. We are also encouraging the EU to be more active in combating drug trafficking, particularly in areas of intergovernmental co-operation. We have, for example, been at the forefront of efforts to associate countries of central and eastern Europe with EU work on drugs and organised crime and we have taken a leading part in EU efforts to develop co-operation with other neighbouring countries in the Mahgreb and Levant. We are furthermore encouraging the Commonwealth to give the issue of drugs and crime a higher political priority.

  Israel
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what progress there has recently been in allowing Palestinians back to jobs held in Israel.

  Mr. Douglas Hogg
  On 20 November the Israeli Cabinet increased by 4,500 the number of work permits available for Palestinians throughout the occupied territories, bringing the total to 33,500.

  Prisoners of War, Iraq
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth affairs whether progress has been made on the release of Kuwaiti prisoners since Saddam Hussein recognised Kuwaiti borders; and what representations he has made about their release.

  Mr. Douglas Hogg
  Iraq is beginning to co-operate with the International Committee of the Red Cross in commenting on ICRC case files on missing persons passed to Iraq over 18 months ago. It has so far offered an incomplete response on 127 of the 609 case files. The tripartite commission will meet again on 8 December to review progress and approve the establishment of a technical sub-commission to speed up the substantive review of the case files. We have made it clear to the Iraqi regime that we expect to see substantive progress soon.

  Zaire
  Miss Lestor
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make it his policy to support the United Nations Secretary-General's proposal for a United Nations peacekeeping force to be dispatched to Zaire with the object of securing the delivery of humanitarian aid, protecting British aid workers and ensuring safe passage for those refugees wishing to return to Rwanda.

  Mr. Douglas Hogg
  The President of the United Nations Security Council issued a statement on 30 November in response to the Secretary-General's report on the situation in the refugee camps in Zaire and the proposals put forward in that report. The United Kingdom 268
  played a constructive role in the negotiation of that statement, which it fully supports. A copy will be placed in the House of Commons Library shortly.

  Syria
  Mr. Patrick Thompson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the Government's policy with regard to arms sales to Syria.

  Mr. Douglas Hogg
  The EU arms embargo on Syria was lifted on 28 November. All applications for the sale of arms will be considered on a case by case basis in the light of the international guidelines to which we are committed. These include whether a proposed transfer would be likely to increase tension in the region or contribute to regional instability.

  Liberia
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the present situation in the attempt to find peace in Liberia.

  Mr. Baldry
  We strongly support the continued efforts by the Ghanaian President Rawlings to encourage a new agreement among the Liberian factions, but are disappointed that the latest round of talks in Accra ended on 29 November without making progress.

  A high level UN mission has been visiting Liberia and is due to report to the Security Council shortly. The present mandate of the UN observer mission, UNOMIL, is due to end on 13 January.

  Commonwealth Institute
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is his responsibility for the work of the Commonwealth Institute in Scotland.

  Mr. Baldry
  Section 5(2) of the Imperial Institute Act 1925 established a board of governors for the purpose of carrying on the management of the institute under the responsible Minister, my right hon. Friend the Foreign Secretary. The chairman of the Commonwealth Institute, Scotland, is a member of the board of governors of the Commonwealth Institute.

  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what requests he has received regarding his future role in the continued functioning of the Commonwealth Institute in Scotland and from whom; and what response he gave.

  Mr. Baldry
  On 28 April 1994, the chairman of the Commonwealth Institute, Scotland requested that the Government provide an annual core grant of £116,000 after March 1996. My noble Friend Baroness Chalker of Wallasey informed the chairman on 17 July 1994 that the Government could not meet his request, but that there would be no objection from the Government to the Commonwealth Institute, Scotland requesting the board of the institute in London to make available post-1996 a proportion of its funding.

WALES

  Council Tenants
  Mr. Barry Jones
  To ask the Secretary of State for Wales if he will make a statement on his policies on anti-social tenants in council housing; and what is his estimate of the number of such tenants.

  Mr. Gwilym Jones
  Policy for dealing with anti-social council tenants is a matter for the housing authorities. The tenants' charter sets out what residents might expect of their council in managing nuisance. Councils are required to inform their tenants about their policy for dealing with anti-social problems. The Welsh Office has provided a grant to Cynon Valley borough council to research and advise on dealing with neighbourhood disputes and disruptive behaviour on council estates. The findings will shortly be made available to other housing authorities in Wales.

  Dental Services
  Mr. Llwyd
  To ask the Secretary of State for Wales (1) how many representations he has received on the subject of the provision of dental services in the NHS in the county of South Glamorgan in the last year; and if he will make a statement;

  (2) how many representations he has received from people living in Gwynedd about the provision of dental services on the NHS in the last year; and if he will make a statement;

  (3) how many representations he has about the provision of dental services on the NHS in the county of Clwyd in the last year; and if he will make a statement;

  1989–90

  1990–91

  1991–92

  1992–93

  1993–94

  Nursing and midwifery1

  In-patient cases

  Nursing and midwifery1

  In-patient cases

  Nursing and midwifery1

  In-patient cases

  Nursing and midwifery

  1In-patient cases

  Nursing and midwifery

  1In-patient cases

  Clwyd

  3,165

  63,186

  3,174

  63,002

  3,270

  70,191

  3,347

  73,209

  3,327

  72,612

  East Dyfed

  1,947

  36,262

  2,043

  36,879

  2,018

  39,090

  2,052

  40,606

  2,061

  42,480

  Gwent

  4,060

  72,584

  4,014

  75,349

  3,924

  74,696

  3,864

  74,455

  3,746

  75,452

  Gwynedd

  1,895

  37,858

  1,912

  37,592

  1,920

  38,817

  1,968

  39,567

  2,049

  40,133

  Mid Glamorgan

  4,745

  87,080

  4,777

  89,782

  4,777

  93,566

  4,901

  96,152

  4,808

  97,420

  Pembrokeshire

  696

  15,435

  677

  16,995

  708

  16,734

  747

  17,613

  760

  17,132

  Powys

  1,086

  7,698

  1,059

  7,993

  1,084

  8,818

  1,044

  9,180

  1,010

  9,217

  South Glamorgan

  4,300

  86,546

  4,309

  84,392

  4,197

  88,072

  4,378

  83,250

  4,359

  84,105

  West Glamorgan

  3,018

  68,866

  3,043

  70,489

  3,080

  70,352

  3,181

  69,625

  3,222

  69,811

  Wales2

  24,919

  475,515

  25,017

  482,473

  25,050

  500,336

  25,555

  503,657

  25,422

  508,362

  1 At 30 September. All nursing and midwifery staff (excluding pre-registration learners) are shown: because of the use of local pay scales it is no longer possible to identify qualified nurses separately. Staff employed by (and patients treated in) NHS trusts have been allocated to the health authority area in which the trust is situated.

  2 The nursing and midwifery figure includes staff employed by the Welsh Health Common Services Authority.

  Tinnitus
  Mr. Barry Jones
  To ask the Secretary of State for Wales if he will list those counties in Wales where tinnitus sufferers may gain advice and assistance; and if he will make a statement.

  Mr. Richards
  All counties in Wales. Tinnitus sufferers may consult their general practitioners for advice
  270
  (4) how many representations he has received on the subject of provision of dental services on the NHS in Powys in the last year; and if he will make a statement;

  (5) how many representations he has received on the subject of provision of dental services on the NHS in the county of Dyfed in the last year; and if he will make a statement;

  (6) how many representations he has received on the subject of provision of dental services on the NHS in the county of West Glamorgan in the last year; and if he will make a statement;

  (7) how many representations he has received on the subject of provision of dental services on the NHS in the county of Mid Glamorgan in the last year; and if he will make a statement;

  (8) how many representations he has received on the subject of provision of dental services on the NHS in the county of Gwent in the last year; and if he will make a statement.

  Mr. Richards
  The following table shows the number of written representations, about NHS dental services, received by the Secretary of State from members of the public and from Members of the House, during the period 1 January 1994 to 30 November 1994. During the same period, 31 questions have been asked by Members of the House about NHS dental services in various parts of Wales.

  County

  Number of representations

  Clwyd

  7

  Dyfed

  12

  Gwent

  2

  Gwynedd

  41

  Mid Glamorgan

  4

  Powys

  6

  South Glamorgan

  7

  West Glamorgan

  8

  and assistance. The GP may then refer the patient to an ear, nose and throat consultant for further advice or management.

  The Welsh hearing institute at the University hospital of Wales, Cardiff provides a specialist service for tinnitus.

  Mr. Barry Jones
  To ask the Secretary of State for Wales what guidance he has given to health authorities
  271
  regarding special provision for people suffering from tinnitus.

  Mr. Richards
  No central direction has been given as it is a matter for each health authority to decide on the appropriate provision in the light of local health needs and best clinical practice.

  Planning Policy Guidance Notes
  Mr. Win Griffiths
  To ask the Secretary of State for Wales what plans he has to publish versions appropriate for Wales of the Department for the Environment PPG6 on mineral planning, PPG13 on transport, PPG15 on museums and PPG23 on pollution; and when they will be available for public consultation.

  Mr. Gwilym Jones
  There has already been consultation in Wales on the draft planning guidance for these issues. My right hon. Friend the Secretary of State for Wales is now considering what guidance is needed for Wales. Consideration will be given as to whether a further round of consultation is necessary.

  Recycling
  Mr. Win Griffiths
  To ask the Secretary of State for Wales how many local authorities have submitted their plans to achieve the target for the recycling of domestic waste; and to what extent each local authority has produced a plan to achieve the targets of the Government.

  Mr. Gwilym Jones
  All 37 authorities have submitted their draft plans, of which 34 have been approved to date; each plan provides for an increase in recycling activity and will contribute to the Government's target.

  Quangos
  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for Wales when he will publish the report of KPMG Peat Marwick on the operation of major Welsh quangos; what was the cost of the report; and if he will make a statement.

  Mr. Redwood
  [holding answer 5 December 1994]: I am writing to the hon. Member today and placing a copy of my letter in the Library of the House.

  Public Authorities (Rent Payments)
  Mr. Dafis
  To ask the Secretary of State for Wales if he will publish for the last three years the total amount paid in rent by each department, together with the total amounts for each year.

  Mr. Redwood
  [holding answer 5 December 1994]: Information is not available in the form requested. Where properties are occupied jointly by different Welsh Office departments and groups, costs are not apportioned separately to the administrative units involved. For reasons of commercial confidentiality it is also Government policy not to disclose information about rent levels for individual properties. The total amount of rent paid in each year is:

  £

  1991–92

  3,469,771

  1992–93

  3,768,323

  1993–94

  3,629,326

  Darland High School
  Mr. Barry Jones
  To ask the Secretary of State for Wales (1) if he will visit Darland high school, Clwyd; and if he will meet the chairman and vice chairman of Darland high school, Clwyd, to discuss the needs of special needs pupils;

  (2) if he will visit Darland high school, Clwyd, to discuss with the staff and governors Her Majesty's Government's policies concerning staffing and budgets for high schools.

  Mr. Richards
  Neither my right hon. Friend nor I have any plans at present to visit Darland high school. The budget for any local education authority maintained school is a matter for the authority concerned.

  General Practitioners
  Mr. Roy Hughes
  To ask the Secretary of State for Wales when the terms of service for general practitioners will next be reviewed.

  Mr. Richards
  Items included in the general practitioners' terms of service are amended from time to time but there are no plans for a general review.

  Information Technology
  Mr. Llwyd
  To ask the Secretary of State for Wales what date he has set for the completion of the tendering process for information technology for Welsh local authorities; and if he will make a statement.

  Mr. Gwilym Jones
  The Welsh Office issued on 9 November 1994 a consultation paper on the Government's proposals for the extension of competitive tendering to information technology services. This paper proposed that the implementation date for local authorities in Wales should be 1 October 1999.

SCOTLAND

  Football
  Mr. Maxton
  To ask the Secretary of State for Scotland when he next intends to meet the Scottish Football Association to discuss the future of the national stadium.

  Sir Hector Monro
  My right hon. Friend and I meet representatives of the Scottish Football Association from time to time, both formally and informally. Scottish Office officials will shortly be meeting representatives of national stadium committee to hear about the committee's plans for further redevelopment at Hampden Park.

  Fuel Poverty
  Mrs. Ewing
  To ask the Secretary of State for Scotland when he last met(a) local authorities and (b) other interested parties to discuss the incidence of fuel poverty in Scotland; and if he will make a statement.

  Mr. Lang
  My officials and I regularly meet representatives of local authorities and other interested parties to discuss a range of social and health concerns.

  Schools (League Tables)
  Mr. Harry Greenway
  To ask the Secretary of State for Scotland if he has any proposals to introduce league tables for Scottish Schools; and if he will make a statement.

  Lord James Douglas-Hamilton
  A wide range of information relating to individual schools in Scotland is already published annually, following our commitment in the parents charter to do so. This covers exam results, school leavers' destinations, school costs and attendance and truancy rates.

  Primary Schools
  Sir David Knox
  To ask the Secretary of State for Scotland how much was spent per pupil in primary schools in Scotland in the most recent year for which figures are available; and what the figure was in 1978–79, at constant prices.

  Lord James Douglas-Hamilton
  Current expenditure per primary pupil in 1992–93 was 62 per cent. higher in real terms than in 1979. The latest figure is £1,766 per primary pupil.

  New information on budgeted school running costs per pupil for 1994–95, for individual primary and secondary schools in Scotland, will be published next week.

  Violent Crime
  Mr. David Marshall
  To ask the Secretary of State for Scotland what plans he has to tackle the problems of violent crime and drug-related deaths in Scotland; and if he will make a statement.

  Lord James Douglas-Hamilton
  The detection and prevention of violent crime will continue to be given a high priority by police forces in Scotland. Forces are also very active in taking measures to curb the acquisition and supply of illicit drugs. Our strategy for tackling the problems associated with the misuse of drugs, including drug-related deaths, is set out in the report of the drugs task force led by my noble and learned Friend, the Minister of State, which was published on 19 October.

  Secondary Schools
  Mr. Raymond S. Robertson
  To ask the Secretary of State for Scotland what plans he has to develop value-added indicators when publishing performance data with regard to Scottish secondary schools.

  Lord James Douglas-Hamilton
  The Scottish Office education department and COSLA have set up a working group to investigate value-added indicators of school performance. The Scottish Office has also commissioned a major research study on school effectiveness, including ways of measuring value added.

  Manufacturing Industry
  Mrs. Adams
  To ask the Secretary of State for Scotland when he next plans to meet the Scottish Trades Union Congress to discuss the manufacturing industry in Scotland.

  Mr. Stewart
  My right hon. Friend and I meet representatives of the Scottish Trades Union Congress from time to time to discuss a range of matters concerning the Scottish economy.

  Water Authorities
  Mr. Gallie
  To ask the Secretary of State for Scotland what plans he has to call in major proposed new water and sewerage capital investments by local authorities during the run-up to transfer of responsibilities to the new water and sewerage authorities.

  Mr. Stewart
  My right hon. Friend has no plans at present to call in any major water and sewerage proposals during the run up to the transfer of responsibilities to the new water and sewerage authorities.

  Hill Farming
  Mrs. Ray Michie
  To ask the Secretary of State for Scotland when he will next meet the president of the National Farmers Union of Scotland to discuss the future of hill farming in Scotland.

  Sir Hector Monro
  My right hon. Friend and I met the president of the National Farmers Union of Scotland on 26 October as part of the annual review of hill farming. We have no plans for a further meeting, although I meet the president from time to time on a range of issues.

  A9
  Mr. Bill Walker
  To ask the Secretary of State for Scotland what representations he has received about accidents on the single carriageway sections of the A9 north of Perth.

  Lord James Douglas-Hamilton
  The Scottish Office has received no representations about accidents on the single carriageway sections of the A9 between Perth and Inverness.

  Local Government Reform
  Mr. Norman Hogg
  To ask the Secretary of State for Scotland if he will postpone the elections to the new local authorities until Thursday 4 May 1995; and if he will make a statement.

  Mr. Stewart
  I believe that the timetable that has been set is the right one. It strikes the best possible balance between giving the existing councils sufficient time to prepare for the elections and giving the new councils additional time to prepare for the change on 1 April 1996.

  Economy
  Dr. Reid
  To ask the Secretary of State for Scotland what recent discussions he has had with the chairman of Scottish Enterprise regarding the Scottish economy; and if he will make a statement.

  Mr. Stewart
  My right hon. Friend and I last met the chairman of Scottish Enterprise on 23 November.

  Second Forth Road Bridge
  Mr. Chisholm
  To ask the Secretary of State for Scotland what account he has taken of the findings of the Royal Commission on environmental pollution in coming to conclusions about a second Forth road bridge.

  Lord James Douglas-Hamilton
  My right hon. Friend and I welcome the recent report of the Royal Commission on environmental pollution as a valuable contribution to public debate of the issues it considers. My right hon. Friend has reached no conclusions about a second Forth road bridge.

  Toxic Waste
  Mr. McAvoy
  To ask the Secretary of State for Scotland what provision he has made in the current financial year in financial allocations to Scottish Enterprise and the Glasgow Development Agency for making safe land contaminated by toxic waste.

  Mr. Stewart
  No specific allocations are made to Scottish Enterprise or to local enterprise companies for expenditure on dealing with land contaminated by toxic waste. Such expenditure is met from the block allocation for environmental expenditure. The expenditure provision for Scottish Enterprise on the environment block in 1994–95 amounts to £78 million.

  The distribution of expenditure resources among local enterprise companies is a matter for decision by Scottish Enterprise. Glasgow Development Agency's budget allocation for 1994–95 on the environment block amounts to £13.680 million.

  Public Sector Housing
  Mr. Dunnachie
  To ask the Secretary of State for Scotland when he next plans to meet representatives of tenants' organisations to discuss public sector housing in Scotland.

  Lord James Douglas-Hamilton
  There are no plans at present to meet tenants' organisations to discuss housing in Scotland, but I often meet tenants in the course of my housing visits throughout Scotland.

  Mr. McMaster
  To ask the Secretary of State for Scotland when he next plans to meet representatives of tenants' organisations to discuss public sector housing in Scotland.

  Lord James Douglas-Hamilton
  My right hon. Friend has no plans to meet tenants' organisations to discuss housing in Scotland, but I often meet tenants in the course of my housing visits throughout Scotland.

  Mr. Nigel Griffiths
  To ask the Secretary of State for Scotland what further steps he is taking to combat homelessness in Scotland.

  Lord James Douglas-Hamilton
  I refer the hon. Gentleman to the answer that I gave the hon. Member for Angus, East (Mr. Welsh).

  Skillseekers Training Scheme
  Mr. Watson
  To ask the Secretary of State for Scotland what discussions he plans to have with the Glasgow development agency on the operation of the skillseekers training scheme.

  Mr. Stewart
  My right hon. Friend has no plans for such discussions. In Scotland the operation of Skillseekers is the responsibility of Scottish Enterprise and Highlands and Islands Enterprise and its networks of local enterprise companies, which include the Glasgow Development Agency.

  Economic Deprivation (Ill Health)
  Mrs. Liddell
  To ask the Secretary of State for Scotland when he last met Lanarkshire health board to discuss ill health as a result of economic deprivation.

  Lord James Douglas-Hamilton
  My right hon. Friend and my noble and learned Friend the Minister of State regularly meet representatives from all health boards to 276
  discuss health issues. There are no immediate plans for further meetings at present.

  Hawick Cottage Hospital
  Mr. Kirkwood
  To ask the Secretary of State for Scotland when he next expects to meet the chairman of the Borders health board in order to discuss the need for a custom built replacement for Hawick cottage hospital; and if he will make a statement.

  Lord James Douglas-Hamilton
  My noble and learned Friend, the Minister of State meets chairmen of health boards regularly to discuss a wide range of strategic issues affecting the management of the NHS in Scotland. I understand that Borders health board is appraising options for the future provision of community hospital services in Hawick and that these considerations are at a preliminary stage.

  Youth Unemployment, Glasgow
  Mr. Davidson
  To ask the Secretary of State for Scotland what measures he is taking to combat youth unemployment in south-west Glasgow.

  Mr. Stewart
  The Government's economic policies are designed to create a climate in which all employers, including those in Glasgow, can maintain existing jobs and create new ones. The Skillseekers programme, operational in Glasgow since April this year, gives young people the opportunity to receive high-quality training, often while in employment, in the occupational area of their choice, and our youth training guarantee ensures that all young people under 18 who are not in full-time education or employment will receive the offer of a training place, with the prospect of gaining a qualification and thus an improved chance of securing employment.

  Local Government Reorganisation
  Mr. Ingram
  To ask the Secretary of State for Scotland when he next expects to meet the chairman of the Local Government Staff Commission to discuss the arrangements for staff transfers to the new authorities.

  Mr. Stewart
  I met the Chairman and Secretary of the Local Government Staff Commission (Scotland) on Friday 18 November.

  Scottish Homes
  Mr. Darling
  To ask the Secretary of State for Scotland when he proposes to meet the board of Scottish Homes to discuss its spending programme in 1995–96; and if he will make a statement.

  Lord James Douglas-Hamilton
  My right hon. Friend and I meet the board from time to time to discuss a range of issues, the last occasion being on 7 November 1994. I shall consider Scottish Homes' proposed programme for 1995–96 around the end of February next year.

  Growth Rate
  Lady Olga Maitland
  To ask the Secretary of State for Scotland what representations he has received from Scottish industry about the rate of growth.

  Mr. Stewart
  My right hon. Friend and I are in continual contact with representatives of Scottish industry,
  277
  in order that we remain fully aware of their interests and concerns.

  The average projection of the independent forecasters monitored by the Scottish Office industry department is for gross domestic product to grow by between 2.5 and 3 per cent. in both 1994 and 1995. This is a steady and sustainable rate of economic expansion.

  Unemployment
  Mr. McKelvey
  To ask the Secretary of State for Scotland how many people have been out of work for more than one year; and what steps he has taken to reduce the number.

  Mr. Stewart
  Latest figures as at October 1994 show that 75,752 people in Scotland have been out of work for more than one year. This figure is 7.9 per cent. of the relative United Kingdom figure and is a reduction of 9.1 per cent. over the October 1993 figure.

  The Government have introduced a comprehensive range of measures aimed at reducing long-term unemployment through the Employment Service and through Scottish Enterprise and Highlands and Islands Enterprise and the local enterprise companies and we have created the right conditions for growth in employment through tight control over inflation and harmonisation of business rates.

  House Building
  Mr. Graham
  To ask the Secretary of State for Scotland how many houses have been built for rent by(a) Renfrew district council and (b) Inverclyde district council in the last two years.

  Lord James Douglas-Hamilton
  Information on tenders accepted, houses started, under construction and completed in each local authority area is available in the quarterly housing series of Scottish Office statistical bulletins, copies of which are in the Library.

  Labour Statistics
  Mr. John Marshall
  To ask the Secretary of State for Scotland what has been the change in the number of unemployed since December 1992.

  Mr. Stewart
  Between December 1992 and October 1994, the seasonally adjusted level of unemployment in Scotland fell by 28,700.

  Grant Assistance
  Mr. Butcher
  To ask the Secretary of State for Scotland what assessment he has made of the compliance of the second application of assistance from Bell Woven Brakel to set up a woven label factory in Dunoon with his Department's criteria for such grant assistance; and if, as part of this application, he will examine the potential impact of the grant on existing woven name tape manufacturers in the United Kingdom.

  Lord James Douglas-Hamilton
  Bell Woven Brakel received financial assistance from Highlands and-Islands Enterprise, the Government's economic development agency for the highlands and islands. Consideration of individual assistance cases is a matter for the enterprise body and I have asked the chairman to provide my hon. Friend with the information requested.

  M74
  Mr. David Marshall
  To ask the Secretary of State for Scotland when he expects work(a) to commence and (b) to be completed on the M74 between Fullarton and the south side of the Kingston bridge at the M8; and if he will make a statement.

  Lord James Douglas-Hamilton
  The question of any extension to the M74 in Glasgow is at present a matter for Strathclyde regional council. My right hon. Friend the Secretary of State recently issued a consultation document on proposals for trunking certain routes, including the proposed M74 within Glasgow, but no decisions have yet been taken.

  Departmental Travel Contracts
  Mr. David Marshall
  To ask the Secretary of State for Scotland which airline has won the contract to transport Scottish Office staff travelling to Europe on official business; and if he will make a statement.

  Mr. Lang
  My Department does not have contracts with particular carriers to transport staff on routes between the United Kingdom and Europe. It is a member of a consortium of Government Departments which, following an open tendering exercise with all the carriers on a number of heavily used routes, has awarded preferred-carrier status to Sabena for travel to Brussels and Air France for Paris. There are no arrangements for other European destinations. Bookings are made taking account of price and airline schedules. These arrangements will be reviewed at 31 March 1995.

  Ministerial Speeches
  Mr. Campbell-Savours
  To ask the Secretary of State for Scotland on what occasions since 1979 civil servants in his Department have been asked to draft speeches of a constituency nature for use in a Minister's own constituency.

  Mr. Lang
  None. Civil servants may provide briefing of a factual nature for Ministers on matters relating to their own Departments. In addition, Ministers in preparing for a constituency speech can draw on material produced by their Department during the normal course of business.

  NHS Spending
  Mr. Campbell-Savours
  To ask the Secretary of State for Scotland what is the level of spending per head of population on NHS provision in each Scottish health district.

  Lord James Douglas-Hamilton
  The latest available information is set out in the table:

  Health Board Area

  NHS Expenditure Per Head of Population 1993–94 £

  Argyll and Clyde

  753

  Ayrshire and Arran

  729

  Borders

  770

  Dumfries and Galloway

  754

  Fife

  675

  Forth Valley

  719

  Grampian

  736

  Greater Glasgow

  886

  Highland

  773

  279

  Health Board Area

  NHS Expenditure Per Head of Population 1993–94 £

  Lanarkshire

  642

  Lothian

  766

  Orkney

  868

  Shetland

  885

  Tayside

  840

  Western Isles

  1,084

  Total health boards

  767

  Forestry Commission
  Sir Thomas Arnold
  To ask the Secretary of State for Scotland what is his current policy towards the Forestry Commission.

  Mr. Lang
  The Forestry Commission will continue as the Government Department that advises on and implements our forestry policy.

  Medical Complaints
  Mr. Flynn
  To ask the Secretary of State for Scotland how many medical complaints were heard in Scotland in each of the past five years; and in what percentage of cases complaints of patients were upheld.

  Lord James Douglas-Hamilton
  [holding answer 5 December 1994]: This information is not available for the full period requested. Information about complaints since January 1993 is now published in a series of quarterly NHS complaints bulletins, copies of which are held in the Library of the House.

  A global figure in respect of primary care service committee complaints in 1993–94 is provided in the most recent bulletin for the quarter ending 31 March 1994. The number of complaints made specifically against general medical practitioners was 141 of whom 13.5 per cent. were found to be wholly or partially in breach of their terms and conditions of service.

  Community Care
  Ms Rachel Squire
  To ask the Secretary of State for Scotland what plans he has to require a set proportion of local authority expenditure on community care to be spent in the voluntary and private sectors; what considerations underlie those plans; and what consultation will take place before their implementation.

  Lord James Douglas-Hamilton
  [holding answer 5 December 1994]: The Local Government etc. (Scotland) Act 1994 has provided the Secretary of State with the power to direct authorities on the use of the considerable resources provided to them for community care. Where the use of these resources by an authority is judged to be inconsistent with Government policy and against the best interests of its clients, this new power will prove useful. Any authority in this position will generally have been in discussion with The Scottish Office prior to a decision to use the power.

  Grant-maintained Schools
  Mr. Flynn
  To ask the Secretary of State for Scotland what plans he has to ensure that the same standards of financial and managerial control that do not apply to local 280
  education authority schools will be required for grant-maintained schools.

  Lord James Douglas-Hamilton
  [holding answer 5 December 1994]: A self-governing school in Scotland is subject to a range of provisions to ensure that the highest possible standards of financial and managerial control apply. In addition to inspection by Her Majesty's inspectors of schools, these provisions include: a scheme of Government prescribing such a school's articles of constitution and articles of management; the Self-Governing Schools (Application and Amendment of Regulations) (Scotland) Regulations 1994; the Self-Governing Schools (Change in Characteristics) (Scotland) Regulations 1994; the Self-Governing Schools Grant and Recovery (Scotland) Regulations 1994; and detailed financial management procedures and audit arrangements set out in a financial memorandum and other requirements and other guidance.

NATIONAL HERITAGE

  Spitfire
  Mr. Redmond
  To ask the Secretary of State for National Heritage what action he is taking to preserve the Battle of Britain Flight Supermarine P.R. XIX Spitfire; and if he will make a statement.

  Mr. Dorrell
  My right hon. Friend the Secretary of State for Defence is responsible for the operation of the Battle of Britain Flight. However, under the export control system, an export licence will be required from my Department if an owner wishes to export the aircraft, if it was manufactured or produced 50 years before the date of exportation and if it is valued at or above £39,600. In such a case there would be an opportunity for an objection to the export to be raised on the grounds that the Spitfire was of national importance under the Waverley criteria and for a decision on the export licence application to be deferred to enable a compensating offer to purchase to be made to retain the Spitfire.

  Turner Bequest
  Mr. Booth
  To ask the Secretary of State for National Heritage how many of the finished pictures in the Turner bequest are now on public view in the United Kingdom.

  Mr. Dorrell
  The Turner bequest of 1856 makes provision for the display of approximately 100 unspecified paintings in his possession at the time of his death. The bequest currently comprises around 30,000 items, as it now includes unfinished work and sketches. The bequest is under the supervision of the trustees of the national gallery and of the Tate gallery, which administer, The Clore gallery.

  The national gallery has nine Turner paintings on display, its entire collection. The Clore gallery currently displays 160 oil paintings on its main floor, most of which are finished, and another 53 items in the reserve gallery, including studies and finished work. Other work is shown in rotation at the Clore. The Clore displays all finished works in its possession except for items on which conservation work is needed.

  Tourism
  Mr. Barry Field
  To ask the Secretary of State for National Heritage if he will list those initiatives taken on behalf of domestic tourism in the last 12 months.

  Mr. Dorrell
  Information on initiatives undertaken by the English Tourist Board is published in the ETB's annual report, which may be obtained from the Library of the House. In addition to providing grant-in-aid to the ETB, my Department has undertaken a number of activities in support of the domestic tourism sector. These include pursuing with other Government Departments many issues of concern to the tourism industry; helping to encourage and publicise a wide range of events to mark the 50th anniversary of D-day; and working, with the ETB and the British tourist authority, on a tourism strategy which will identify priorities for action by my Department and the tourist boards.

  Mr. Pendry
  To ask the Secretary of State for National Heritage if he will publish details of the remit given to McKinsey and Co. Inc., with regard to its present study on behalf of his Department, the British Tourist Authority and the English tourist board; what was the value of his Department's contribution to that study; and what is the likely completion date of the study and the number and identity of the other firms bidding for the contract to complete the study.

  Mr. Dorrell
  McKinsey and Co. Inc., was engaged to assist on work which my Department is undertaking with the British Tourist Authority and the English tourist board to identify opportunities for growth and constraints on performance and areas where Government intervention can assist, in the tourism industry. KPMG Peat Marwick and Touche Ross also bid for the contract.

  The first phase of this work, for which my Department contributed £35,000, is now complete. McKinsey is now developing certain parts of the original analysis. My Department has committed £15,000 to this work which should be completed by the early part of next year.

  Mr. Pendry
  To ask the Secretary of State for National Heritage what was the value of the expenses claimed by KPMG for its work on behalf of the British Tourist Authority and the English tourist board into information needs and IT strategy.

  Mr. Dorrell
  The total expenses claimed by KMPG Peat Marwick from the British Tourist Authority and the English tourist board for its study were £2,652.06.

  Mr. Pendry
  To ask the Secretary of State for National Heritage what was the value of the expenses claimed by McKinsey and Co. Inc., and incurred during its work for the British Tourist Authority entitled, "Meeting the Challenge".

  Mr. Dorrell
  The total expenses claimed by McKinsey and Co. from the British Tourist Authority were £3,591.

  Civil Servants
  Mr. Pendry
  To ask the Secretary of State for National Heritage how many civil servants are employed in the sport and recreation department of his Department; if he will list at what grade, at what salary and at what location they are employed; and for each of those civil servants seconded from other Departments, what was the Department from which they were seconded and the length of their secondment.
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  Mr. Sproat
  The Department's sport and recreation division, which is located at Cockspur street, is currently 21 strong and staffed as in the following table. The salaries of individual members of the division are, in every case, within the minimum to maximum band for the grade, as shown.

  Grade

  Number in post

  Salary minimum £

  Salary maximum £

  Grade 5

  1

  38,341

  56,953

  Grade 7

  3

  25,837

  40,012

  HEO

  5

  16,000

  21,059

  EO

  6

  11,673

  16,835

  AO

  3

  9,393

  12,450

  AA

  1

  7,412

  10,513

  Personal Secretary

  1

  9,937

  12,880

  Typist

  1

  7,755

  10,513

  In addition, all of the listed staff receive Inner London Weighting of £1 ,776 (on a "reserve rights" basis).

  Six members of staff have been seconded from the Department of the Environment, 5 since April 1992 who will be returning by March 1995 and 1 since June 1994 who is on a two-year secondment.

  Television Licences
  Mr. Llwyd
  To ask the Secretary of State for National Heritage how many representations he has received on the subject of increasing the discount for purchase of television licenses by partially sighted people in the last year; and if he will make a statement.

  Mr. Dorrell
  In the year to 30 November 1994, I have received three letters on this subject. As I explained in my reply to the hon. Member's question of 28 June this year,Official Report, columns 470–71, registered partially sighted people are not entitled to a reduction in their television licence fee on account of being partially sighted.

  "Sport for the 21st Century"
  Mr. Alton
  To ask the Secretary of State for National Heritage what timetable he proposes for the implementation of "Sport for the 21st Century"; who will be consulted; what procedures will be used for the consultation process; what representations have been received from the North-West Federation for Sport, Recreation and Conservation; and if he will make a statement.

  Mr. Sproat
  The extent of consultation on the Government's proposals for restructuring the Sports Council was set out in my statement to the House on 8 July,Official Report, columns 584–92. I am currently considering a wide range of responses, including written representations from the North-West Federation for Sport, Recreation and Conservation. I have subsequently asked the GB Sports Council to provide me with its view of how its current functions and staffing might be re-aligned to take account of the Government's proposals. I shall then take final decisions on policy and the timing of implementation.

  Library Services
  Mr. Fisher
  To ask the Secretary of State for National Heritage when he intends to publish the review of public library services.

  Mr. Sproat
  I hope to receive the final report from the review consultants early in the New Year. I will make a further statement on publication in due course.

  Broadcasting
  Sir Anthony Durant
  To ask the Secretary of State for National Heritage (1) what is his policy regarding the European Audiovisual Green Paper's suggestion of tightening the enforcement rules on the level of European programme content in broadcast television;

  (2) what is his policy towards the continuance of the quotas on the levels of European programmes set out in article 4 of the broadcasting directive; and when the directive is to be reviewed.

  Mr. Dorrell
  In the Government's view, the flexibility in applying the European programme content requirements afforded by the present wording of the EC broadcasting directive must be retained to avoid risking damage to the growth and development of the sector. We would not favour any proposal to remove this flexibility. We expect the European Commission's conclusions, following the review of the directive which it has conducted, to be published before the end of the year.

  Sir Anthony Durant
  To ask the Secretary of State for National Heritage what assessment he has made of the compliance with existing GATT rules of article 4 of the European broadcasting directive.

  Mr. Dorrell
  As we said in our response to the European Commission's Green Paper on European Union audiovisual policy, we would oppose any steps which would undermine the existing flexibility and relative openness to competition from outside the Union. We noted that even the existing provisions of article 4 of the directive carried the risk of successful challenge by our trading partners under the existing GATT rules.

AGRICULTURE, FISHERIES AND FOOD

  Sheep Lice
  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food to what insecticides sheep lice have developed resistance in other countries;; what resistance in sheep lice to insecticides has been suspected or detected in the United Kingdom; what percentage of sheep flocks in the United Kingdom are currently affected by sheep lice infestations; and what assessment he has made of the rate of spread of sheep lice infestation.

  Mr. Waldegrave
  In Australia, the chewing louse of sheep—Bovicola Damalinia ovis—has been shown to be resistant to the synthetic pyrethroid cypermethrin, both by laboratory bioassay and under field conditions.

  Monitoring for insecticide resistance within United Kingdom populations of sheep ectoparasites—including the sheep chewing louse—has been undertaken for the past three years, under a Government-funded research project. There is no evidence to suggest that chewing lice are resistant to any licensed synthetic pyrethroid or ornaophosphorus formulation applied to sheep in the
  284
  United Kingdom. Suspected resistance to organochlorine insecticides, which are no longer used, was reported in sheep lice in Cumbria in 1965.

  In the United Kingdom, the compulsory national dipping of sheep in organochlorine, organophosphate or synthetic pyrethroid plunge dip formulations between 1974 and 1992 for scab control, dramatically reduced the prevalence of B. ovis. During this period, a total of 24 incidences of infestation were recorded. These were located on Bodmin moor, Dartmoor, the North Yorkshire moors, the Peak district, the Lake district, the Pennine regions of Cumbria and County Durham, Mid Glamorgan and the Scottish islands. No assessment has been made of the incidence of sheep lice infestation since 1992.

  Goat Lice
  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food what approved products are available for treating lice on goats; and what approved products are available for treating lice on goats in the event of the ineffectivity of pyrethroid products.

  Mr. Waldegrave
  Two veterinary medicines are licensed for the treatment of lice on goats—Cypor and Parosol Pour-on. Both are pyrethroid products. Any evidence of lack of efficacy of these products, or any other veterinary medicines, should be reported as suspected adverse reactions to the Veterinary Medicines Directorate. In the absence of any other products specifically licensed for the treatment of lice on goats, the advice of a veterinary surgeon should be sought on what alternative products may be appropriate for use in the particular circumstances.

  Drug Registration
  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food what plans(a) the United Kingdom Government and (b) the European Union have to introduce a system for the registration of drugs for use in minor species.

  Mr. Waldegrave
  Both EC and national law already provide for a system of registration of drugs for all animal species. The requirements for an application for an individual authorisation will reflect the target species and the use to which the drug is likely to be put.

  Warble Fly
  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food what is his policy in respect of the eradication of warble fly in the United Kingdom; what is his estimate of the number of years by which the eradication of warble fly was set back by the introduction of warbled cattle from France; and what is his estimate of the extra cost incurred to public funds in 1993 by the import of warbled cattle.

  Mr. Waldegrave
  The Government are committed to maintain the United Kingdom's warble free status. Warble fly was eradicated from the United Kingdom in 1992 but was reintroduced in imported cattle during 1993. The reinfestation from imports is now well under control. Only two compulsory treatment areas have been established this autumn because of warble fly outbreaks and within these areas only five premises remain under movement restrictions pending confirmation of appropriate treatment.
  285
  The state veterinary service has provided for increased checks on imported animals, for a number of diseases, within existing manpower levels by adjusting priorities. It is not possible to cost out separately resources expended on checks for warble fly. The cost of warble fly operations within Great Britain for 1993 was approximately £237,000.

  Pigs
  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food what surveys for anthelmintic resistance in oesophagostomum have been undertaken in the United Kingdom in the nematodes of pigs; and what steps are being taken to ensure that resistant worms are not imported in pigs from Denmark.

  Mr. Waldegrave
  I am not aware of any surveys for anthelmintic resistance in the pig nematode, oesophagostomum, or any indications that this is a significant problem that calls for Government action. There are no EU requirements to check for resistant worms and no justification for taking special action in relation to imports from Denmark.

  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food what information he has on the change in parasite burdens in pigs maintained out of doors.

  Mr. Waldegrave
  No data are maintained specifically on this subject. The management of parasitic problems would be carried out normally by the veterinary practitioner responsible for the herd. However, in the course of routine investigations, the veterinary investigation service has discovered the following numbers of cases of intestinal parasites in pigs since 1985. These figures do not differentiate between indoor and outdoor pigs.

  1985: 21

  1986: 22

  1987: 16

  1988: 21

  1989: 13

  1990: 14

  1991: 7

  1992: 11

  1993: 7

  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food which 10 diseases of pigs in the United Kingdom cause the greatest economic losses to the agriculture industry; what is his Department's estimate of the loss caused to the agriculture industry by each disease; what significant changes he has predicted in the incidence of each of these diseases in the next 10 to 20 years; how much money the Government are spending on research and development on each of these diseases in the current financial year; and what differences in diseases are being observed between pigs reared indoors and out of doors.

  Mr. Waldegrave
  This question can be answered only at disproportionate cost.

  Sheep
  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food what is his estimate of(a) the percentage and (b) the number of sheep which are seropositive for maedia visna; and what steps are being taken to control the disease and to warn farmers of the dangers of buying infected animals.
  286
  Mr. Waldegrave
  A survey carried out by MAFF in 1993 suggests that around 0.4 per cent.—70,000 sheep—of the national flock may be infected by Maedi visna.

  We have taken a number of steps to alert veterinary surgeons and sheep farmers to the risks of infection in sheep. In particular, representatives of the state veterinary service have addressed the Sheep Veterinary Society and briefed individual breed societies. An information sheet is also available for veterinary surgeons and sheep farmers.

  Maedi visna is not a notifiable disease. Responsibility for protecting sheep lies primarily with flock owners. Effective disease control measures are part of the basic principles of good stock management. The sheep and goat health scheme operates a maedi visna accreditation scheme for farmers wishing to achieve disease-free status, and to provide an accredited source of unaffected sheep for other flock owners.

  Caseous Lymphadenitis
  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food what reliable diagnostic tests are available for the detection of animals infected with caseous lymphadenitis; what is the total of Government spending on the development of improved diagnostic tests for caseous lymphadentitis; and what steps are being taken to warn farmers of the dangers of buying infected animals.

  Mr. Waldegrave
  The only available reliable diagnostic test for caseous lymphadenitis is to identify the causative organism from material from animals suspected of having the disease.

  Caseous lymphadenitis is not a notifiable disease and there is no Government spending on the development of diagnostic tests. Responsibility for control measures lies with the sheep and goat industries, and individual farmers who have been advised to protect their flocks and herds using good husbandry practices.

  Anticoccidial Drugs
  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food how many types of anticoccidial drugs are available in the United Kingdom.

  Mr. Waldegrave
  Our records indicate that there are approximately 30 anticoccidial veterinary medicines licensed in the United Kingdom. They cover a wide range of substances, but fall into three main types:

  ionophore antibiotics, sulphonamides and potentiated sulphonamides and antiprotozoals.

  The majority of these are administered in feed or drinking water. Two formulations are prepared in tablet form, and three are administered by injection.

  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food to which anticoccidial drugs resistance has developed in the United Kingdom; how widespread is this resistance; and what assessment he has made of the threat resistant coccidia pose to the production and welfare of broiler chickens.

  Mr. Waldegrave
  Anticoccidial resistance has been reported to amprolium, thiamine analogue; arprinocid, Purine analogue; clopidol, hydroxyquinalone; decoquinate, hydroxyquinalone; methylbenzoquate, hydroxyquinalone; monensin, ionophore; and zoalene, nitrobenzamide, in the United Kingdom. The use of anticoccidials is closely monitored by the veterinary
  287
  pharmaceutical industry and, although anecdotal evidence suggests that resistance has developed to other chemicals, strategies for the control of avian coccidia remain generally effective.

  The Government are currently funding several research projects into avian coccidiosis. Some of this research is aimed at assessing the threat of resistant coccidia to the protection and welfare of broiler and laying chickens. Results are awaited.

  Bovine Immunodeficiency Virus
  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food in which countries there are(a) virulent and (b) non-virulent strains of the bovine immunodeficiency virus; and what plans the Government have for the eradication of virulent BIV from the United Kingdom.

  Mr. Waldegrave
  To date, only three isolations of bovine immunodeficiency-like virus have been recorded from two herds in the United States of America. It has not been possible as yet to ascribe virulence or non-virulence to this virus. There is, however, serological evidence that BIV exists in cattle in a number of countries, including the United States of America, Canada, the Netherlands, Switzerland, Australia, New Zealand, Venezuela and Costa Rica, and the virus probably has a worldwide distribution. Experience to date in those countries would suggest that the virus does not produce a specific disease condition and we understand that no control measures are applied in any country. The Government have considered all the available evidence about the virus very carefully and do not consider it necessary to introduce an eradication programme.

  Dogs (Tapeworms)
  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food where are the main foci in the United Kingdom of infection of dogs with the tapeworm echinococcus granulosus; and what is his estimate of the cost of treating dogs in these areas to ensure eradication of the infection.

  Mr. Waldegrave
  The main focus of the tapeworm echinococcus granulosus infecting dogs in the United Kingdom is north Gwent, Powys and west Herefordshire. The cost of treating and eradicating the disease cannot be estimated until a survey is carried out, but that cannot be done until a reliable cost-effective diagnostic test becomes available.

  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food which 10 diseases of sheep in the United Kingdom cause the greatest economic losses to the agriculture industry; what is his Department's estimate of the loss caused to the agriculture industry by each disease; what significant changes he has predicted in the incidence of each of these diseases in the next 10 to 20 years; how much money the Government are spending on research and development on each of these diseases in the current financial year; and what action is being taken by the Government to inform farmers of the optimal way to control each of these diseases.

  Mr. Waldegrave
  This question can be answered only at disproportionate cost.

  Cattle Diseases
  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food which 10 diseases of cattle in the United Kingdom cause the greatest economic losses to the agriculture industry; what is his Department's estimate of the loss caused to the agriculture industry by each disease; what significant changes he has predicted in the incidence of each of these diseases in the next 10 to 20 years; how much money the Government are spending on research and development on each of these diseases in the current financial year; and what action is being taken by the Government to inform farmers of the optimal way to control each of these diseases.

  Mr. Waldergrave
  This question can be answered only at disproportionate cost.

  Leather Trade
  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food what estimate he has made of the losses to the farming, skin and leather industry from poor quality sheep skins; what assessment he has made of the causes of damage to sheep skins; what changes have been observed in the causes of damage to sheep skins since the deregulation of sheep scab; and what percentage of sheep skins are now top quality.

  Mr. Waldegrave
  As far as the farming industry is concerned, there is no direct correlation between the quality of sheep skins and the prices paid for animals going for slaughter. My Department produced a leaflet this autumn in conjunction with the industry, encouraging farmers to treat their sheep against sheep scab. This initiative should help reduce the amount of damage caused by all ectoparasites. The skin and leather industries are the responsibility of the President of the Board of Trade. However, I understand that no Government studies are available to provide answers to the questions the hon. Gentleman raises.

  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food what estimate he has made of the losses to the farming, hide and leather industry from poor quality cattle hides; what assessment he has made of the major causes of damage to cattle hides; and what percentage of(a) United Kingdom, (b) Danish and (c) German cattle hides are now top quality.

  Mr. Waldegrave
  As far as the farming industry is concerned, there is no direct correlation between the quality of cattle hides and the prices paid for animals going for slaughter. The Government have mounted over a number of years a successful campaign to eradicate warble fly which is considered to be a major threat to the quality of cattle hides. The skin and leather industries are the responsibility of the President of the Board of Trade. However, I understand that no Government studies are available to provide answers to the questions the hon. Gentleman raises.

  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food what is his estimate of the number of jobs lost in the United Kingdom leather trade in the last five years as a result of the decrease in quality of sheep skins and cattle hides.

  Mr. Waldegrave
  The skin and leather industries are the responsibility of the President of the Board of Trade. However, I understand the Government have no firm
  289
  information on the impact of the quality of sheep skins or cattle hides on employment levels in the leather industry.

  Sheep Scab
  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food what is the total number of outbreaks of sheep scab in the United Kingdom in the 12 months prior to deregulation; how many outbreaks of sheep scab there have been in the United Kingdom in the last 12 months; and in which areas of the United Kingdom sheep scab has been found since the deregulation of the disease.

  Mr. Waldegrave
  The total number of confirmed cases of sheep scab in the United Kingdom between 1 July 1991 and 30 June 1992 was 195. The collation of official records on the number of sheep scab outbreaks in Great Britain was discontinued after deregulation. In Northern Ireland, where sheep scab remains a notifiable disease, there have been 61 outbreaks over the last 12 months.

  Industry reports have indicated that sheep scab has been discovered in every county in Britain. A surveillance exercise during the spring identified 177 batches of sheep suspected of having sheep scab from 869 visits to sheep sales and markets. These and other reports confirm that the disease is probably spread across the whole country.

  The Government announced on 17 May that they would conduct a publicity campaign and increase the official veterinary presence at sheep markets. Surveillance at 766 market days since 1 September has resulted in 44 animals with sheep scab being withdrawn from sale and treated. These animals were found at markets in north Humberside, south Wales, the highland region and borders region of Scotland.

  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food what steps are being taken to monitor the development of resistance of sheep scab to insecticides in the United Kingdom; and what information he has on the insecticides sheep scab has developed resistance to in other Countries.

  Mr. Waldegrave
  Sheep scab was notifiable in the United Kingdom between 1974 and 1992, with the compulsory national dipping of sheep in organochlorine, organophosphate or synthetic pyrethroid plunge dip formulations. During this period, there were no reported incidences of dip formulations failing to be effective. Monitoring for insecticide resistance in United Kingdom populations of sheep ectoparasites—including the sheep scab mite Psoroptes ovis—has been undertaken for the past three years, under a Government-funded research project. There is no current evidence to suggest that the scab mite is resistant to any licensed synthetic pyrethroid or organophosphate formulation applied to sheep in the United Kingdom.

  In Argentina, the sheep scab mite developed resistance to the organochlorine insecticide BHC—HCH, benzene hexachloride, hexachlorocyclohexane or lindane—in 1962 and then to the OP, diazinon, in 1970. The development of resistance in both cases was directly related to the standard of Argentinian sheep husbandry. There is no evidence that similar resistance has developed elsewhere.

  Chicken Diseases
  Dr. Strang
  To ask the Minister of Agriculture, Fisheries and Food which 10 diseases of chickens in the United Kingdom cause the greatest economic losses to the 290
  agriculture industry; what is his Department's estimate of the loss caused to the agriculture industry by each disease; what significant changes he has predicted in the incidence of each of these diseases in the next 10 to 20 years; and how much money the government are spending on research and development on each of these diseases in the current financial year.

  Mr. Waldegrave
  This question can be answered only at disproportionate cost.

  Animal Transportation
  Mr. Morley
  To ask the Minister of Agriculture, Fisheries and Food (1) what steps he has taken to satisfy himself that all the animals shipped from Plymouth to France on the night of 1 December were fed and watered within 15 hours of the start of their journey, and that all aspects of the journey plan for these animals were complied with;

  (2) what plans he has to stop the transport of livestock in unattended lorries;

  (3) how many livestock transporting lorries were left unattended for the voyage between Plymouth and France on the night of 1 December; how long the animals in these lorries were left unattended; and if he will make a statement.

  Mrs. Browning
  I am informed that five livestock lorries were without drivers on landing at Calais after the aircraft which was to carry the drivers across the channel had been prevented from taking off by fog. Drivers were found for all of them and the longest period of delay was about three hours. During this period, the lorries were under the direct supervision of a veterinary surgeon employed by the shipping company to accompany the animals during the voyage. He has reported that the livestock were unaffected by the delay. Nevertheless, it is possible that delays of this sort could result in animals travelling for more than 15 hours without food and water, and as a result of this incident a notice has been served on the shipper prohibiting the carriage of livestock in lorries unaccompanied by their drivers.

  Farm Animal Mutilations
  Dr. Lynne Jones
  To ask the Minister of Agriculture, Fisheries and Food how many prosecutions have been brought under the Agriculture (Miscellaneous Provisions) Act 1968 in each of the last five years in respect of unnecessary pain or distress caused by farm animal mutilations.

  Mrs. Browning
  Information on the number of prosecutions in respect of pain or distress caused specifically by farm animal mutilations is not available.

  Veterinary Inspectors
  Sir Peter Fry
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the role of veterinary inspection centres in promoting good animal health practices.

  Mrs. Browning
  One of the functions of the veterinary investigation service is to provide a diagnostic, advisory and consultancy service to private veterinary surgeons in agricultural practice and when an advisory farm visit is undertaken within this service, when a further investigation is carried out for disease surveillance purposes or when the service arranges promotional
  291
  activities, every opportunity is taken to promote good animal health practices.

  Sir Peter Fry
  To ask the Minister of Agriculture, Fisheries and Food what time veterinary investigation officers are allocated for research and investigating changes in endemic diseases.

  Mrs. Browning
  Approximately one-third of the time of veterinary investigation officers is allocated towards the monitoring of endemic disease, the detection of trends in such diseases and the investigation of new and emerging diseases. Basic research is not a function of the veterinary investigation service.

  Sir Peter Fry
  To ask the Minister of Agriculture, Fisheries and Food what has been the effect of time recording in the veterinary investigation service; and what is done with the information collected.

  Mrs. Browning
  Work recording in the veterinary investigation service is a normal management function used to monitor activities and to apportion staff time to the various programmes of the Department in which they are involved.

  Sir Peter Fry
  To ask the Minister of Agriculture, Fisheries and Food what literature the veterinary investigation service has produced in the last year for distribution to farmers or veterinary surgeons.

  Mrs. Browning
  Eleven out of 13 veterinary investigation centres send out a regular monthly newsletter to veterinary practices. The other two centres send out either an amended monthly report or a newsletter at less frequent intervals. A large number of advisory leaflets are also produced by the centres for veterinary surgeons in relation to specific disease topics. The veterinary investigation service is a frequent contributor to agricultural sections of local newspapers and contributes to local radio broadcasts. In the last year, 45 articles, short communications or letters have been published in scientific journals by the veterinary 292
  investigation service and staff have contributed to a further 19 articles in the scientific press.

  Sir Peter Fry
  To ask the Minister of Agriculture, Fisheries and Food what will be the future involvement of veterinary inspection centres in animal health schemes.

  Mrs. Browning
  The future of the animal health schemes is currently under review as a result of the review of the animal health and veterinary group.

  Sir Peter Fry
  To ask the Minister of Agriculture, Fisheries and Food what plans has he to further reduce the number of veterinary inspection centres.

  Mrs. Browning
  I have no current plans to reduce the number of veterinary investigation centres.

  Ministerial Speeches
  Mr. Campbell-Savours
  To ask the Minister of Agriculture, Fisheries and Food on what occasions since 1979 civil servants in his Department have been asked to draft speeches of a constituency nature for use in a Minister's own constituency.

  Mr. Waldegrave
  As far as we are aware, none. Civil servants may provide factual briefing for Ministers on matters relating to their own Departments. In addition, Ministers in preparing for a constituency speech can draw on material produced by their Department during the normal course of business.

  Animals (Drowning)
  Mr. Morley
  To ask the Minister of Agriculture, Fisheries and Food in what circumstances drowning is permitted as an acceptable or humane method for killing animals.

  Mrs. Browning
  I know of no circumstances in which I would consider the intentional drowning of conscious animals for which the Department has responsibility to be either acceptable or humane. The EC directive on the welfare of livestock when slaughtered or killed, which will be implemented next year, does not permit drowning.

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

Life Prisoners: Tariff
The Earl of Longford The Earl of Longford asked Her Majesty's Government:
What prisoners, if any, have at any time been informed that a life sentence in their case would mean life.
The Minister of State, Home Office (Baroness Blatch): My Lords, no prisoner has been so informed; but the exercise in tariff disclosure has not yet been completed. All mandatory life prisoners will have been informed of their tariff by early in the New Year.
The Earl of Longford: My Lords, the noble Baroness makes total nonsense of the remark made by the Minister on an earlier occasion. However, I am not involved in debating aspects. Is she aware that I am full of sympathy for her at the moment? I have paid repeated tributes to her as a good Christian, and here she is defending some absolutely obscene proposal that a number of people should be confined to prison and rot in prison for life.
Baroness Blatch: My Lords, I am not absolutely certain what the noble Earl means by his first remark. I think he could save his energy in being sorry for me at the moment; I am not sure that I can be defensive or over-defensive of my position. I believe that disclosure of tariffs to prisoners is a good thing.
Lord McIntosh of Haringey: My Lords, of course, the Minister's first Answer to my noble friend was, as always from her, entirely correct. She answered the Question properly. However, what she did not indicate was whether the tariffs which are now being prepared and will be announced to prisoners, as she said, by early next year will ever include the provision that a prisoner should stay for life. That is, in other words, until death, without release on licence.
Baroness Blatch: My Lords, there are some people who are serving a mandatory life sentence who are subject to life meaning life. What will happen as a result of the Doody judgment and the Government's commitment to honour it is that all life prisoners will be informed of the original recommendation by the judge, the recommendation by the Lord Chief Justice and the decision of the Home Secretary at the time. That information will be made available to prisoners and then the prisoner's comments, the responses to them and the
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historical information will be presented to my right honourable friend the Home Secretary. He will then review the tariff in the light of all that information.
The Earl of Longford: My Lords, what does the Minister mean by saying that some prisoners are subject to a decision that life means life? They have not been informed of that, so in what sense are they subject to it?
Baroness Blatch: My Lords, there are prisoners serving mandatory life sentences about whom previous Home Secretaries have said that life should be life.
The noble Earl says from a sedentary position, "Not publicly"; no, of course not publicly. What I am saying now is that in reply to a Question for Written Answer, the new procedures will be laid later today, therefore all noble Lords will be able to see what the procedures are. What is in process at the moment is that as a result of the Doody judgment, prisoners will be informed not only of what the tariff is but also of what the historical decisions were; what the tariff was at the time it was recommended by the judge; what the Lord Chief Justice's views were at the time; and what the recommendation and determination by the Home Secretary were at the time. In addition, the historical data will be coupled with the response of the prisoner to that information. That will be presented to the Home Secretary at the time, who will review it and either confirm the tariff or modify it.
Lord Hylton: My Lords, will the noble Baroness undertake to look again at those cases where prisoners were retrospectively affected by Sir Leon Brittan's decision that life would normally mean 20 years? Will she look with particular care at the cases of those prisoners who have been of good behaviour during their term of imprisonment?
Baroness Blatch: My Lords, we need to make a distinction here. We are talking about people serving mandatory life sentences at this moment. Those serving mandatory life sentences can ask for a review of their tariff at any time. It is up to any Home Secretary in office to consider that.
What is changing now is that that information will be made available to the prisoner with all the historical information. The Home Secretary in office will make a determination either to confirm the original tariff, with life meaning life, or to modify it in the light of a great deal of information. As to the decision about a minimum of 20 years, the present Home Secretary and his predecessors take the view that for very serious crimes of murder a minimum of 20 years is probably appropriate.
Lord Wigoder: My Lords, is there not therefore a possibility that some prisoners will be told that they will be kept in prison for the whole of their lives?
Baroness Blatch: My Lords, I am saying just that. There are prisoners whose tariff states that life should mean life as a result of previous decisions. It is possible for my right honourable friend the Home Secretary to

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confirm that or in the light of all present information—including the response of the prisoner himself to that information—to modify it.
Lord Tebbit: My Lords, will my noble friend confirm that at the time of the abolition of capital punishment it was widely suggested by the abolitionists that life imprisonment should mean life imprisonment? Have we not moved a long way since then?
Baroness Blatch: My Lords, I was not party to that debate, so I am not able to answer very specifically. I cannot respond in any pedantic way. What I can say is that the particular consideration for any Home Secretary is what is the appropriate time that would properly address retribution and deterrence. That is uppermost in the mind of the Home Secretary when he makes that determination.
Lord Ennals: My Lords, will the Minister accept, from one who was involved in the matter in 1967, that there really was no such suggestion as has been referred to by the noble Lord, Lord Tebbit?
Baroness Blatch: My Lords, of course I have to bow to the noble Lord if he was present. As a Home Office Minister, I can say that when somebody has been convicted of a very serious crime—for example, murder—which carries a mandatory sentence, there is a great deal of concern that sometimes the period served in prison does not properly address retribution and deterrence. It is up to my right honourable friend to make sure that those issues are properly addressed in determining the tariff.
Lord McIntosh of Haringey: My Lords, the Minister has given a very important and to some extent welcome announcement today that there will be an Answer to a Written Question later today. Will she communicate to her side of the usual channels what I am sure will be a universal wish on this side of the Chamber; namely, that there should be an early opportunity for a full debate on this issue as soon as the process of notifying prisoners has been completed?
Baroness Blatch: My Lords, whether there is to be a debate on this matter is very much a question for Members of this House, and of course the usual channels. I believe that there is a misunderstanding which I ought to put on record at this moment. We do not have an official policy of making these decisions public. If we are asked for this information, once the disclosure process has been gone through, then the department has an obligation to answer such questions. The prisoner will know; but we will not make public statements at the time of disclosing to the prisoner what the tariff is to be.
Lord McIntosh of Haringey: My Lords, perhaps the House will forgive me for coming back on this point; it is really a matter for information. Nobody would suggest that the details, with names, should be made
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public. But can we presume that the Government will wish to issue some statistical review of the announcements that have been made to prisoners?
Baroness Blatch: My Lords, I am not sure whether they are included in the statutory statistics. But certainly if that information is called for or asked for we will reply publicly.

Buses: Construction Standards
2.45 p.m.
Lord Pearson of Rannoch Lord Pearson of Rannoch asked Her Majesty's Government:
Whether they will invoke the principle of subsidiarity or otherwise secure the future of the London double-decker bus and of the British midi-bus in the current negotiations on European Community draft vehicle harmonisation directives.
The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen): My Lords, these proposals are designed to form one of a number of directives designed to harmonise vehicle construction standards. We cannot accept this as an issue on which the doctrine of subsidiarity should apply. We shall, however, need to ensure that United Kingdom manufacturers will be able to accommodate the eventual standards, particularly in respect of double-decker buses and midi-buses.
Lord Pearson of Rannoch: My Lords, I thank my noble friend for that reply, which I fear will not bring much comfort to the British bus industry. Could I remind my noble friend that our bus industry is privatised and deregulated, unlike its European competitors, and it therefore needs to be able to respond to international and national market requirements without being fettered by red tape from Europe? In this context, is my noble friend aware that the British and Irish members of the Vehicle Working Group in Brussels are isolated from the other Community countries, so the proposed annex to the draft directives, which seeks to alleviate the position, does not in fact meet our requirements at all? Finally, could I ask my noble friend if he is aware not only that the annex would prevent our buses from circulating in Europe, but also that it would prevent them from being sold in the Far East, where at the moment they are doing extremely well in the interests of this country?
Viscount Goschen: My Lords, I quite agree with my noble friends that there are clear benefits from being able to operate double-decker buses and midi-buses in this country. They are popular, and we feel that they should be able to continue. We aim to ensure that the eventual standards that do come forward will take that fully into account. Progress is being made on this issue, but indeed there is a long way to go in order to convince the Commission and other European countries of the value of our position.
Lord Stoddart of Swindon: My Lords, can the noble Viscount tell the House what on earth the sort of buses we run in London and elsewhere in this country has to

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do with the interfering busybodies in Brussels? Is this not a case of Europe interfering in the nooks and crannies of our national life, which the Foreign Secretary said would not happen, particularly after the passing of the Maastricht Bill and the Maastricht Treaty? Will the Minister give the assurance that, if possible, any suggestion of doing away with our double-decker buses will be vetoed, or that at least the European Commission will be told that it will not be implemented?
Viscount Goschen: My Lords, I do not agree with the noble Lord at all. We aim to establish a single market for vehicles. That will be to the benefit of manufacturers. It will be to the benefit of the United Kingdom bus and coach industry. I simply do not accept that this is a matter of subsidiarity.
Noble Lords: Oh!
Lord Stoddart of Swindon: What is then?
Viscount Goschen: However, we will put forward the case very strongly to ensure that our double-decker buses and midi-buses will be able to continue to be manufactured and sold.
The Earl of Lauderdale: My Lords, why can this not be treated as a matter of subsidiarity?
Viscount Goschen: My Lords, the directive, when adopted, will be one of a number under Article 100a of the treaty designed to harmonise construction standards for motor vehicles. That will complete the single market for vehicles to the benefit of manufacturers. That is the reason why it is not an issue of subsidiarity.
Lord Monson: My Lords, does the noble Viscount agree that Continental manufacturers wanting to sell into the British market are far more handicapped by having to convert from left-hand to right-hand drive than they are by having to adapt to the characteristics of the traditional British double-decker bus, and that therefore that particular argument is a totally spurious one?
Viscount Goschen: No, my Lords, absolutely not. But I agree that there is clearly a left-hand drive/right-hand drive problem. That is obvious. We wish to see proposals which are not design restrictive, which cope with the safety requirements but are not over-prescriptive in terms of comfort and design of the interior of the vehicles, for instance.
Lord Bruce of Donington: My Lords, is the noble Viscount aware that the only reason why this duff draft directive has come about is because the French and the Germans do not have the expertise to produce a double-decker bus? Will he accept that they have no capacity to deal with it at all and are well aware that they cannot compete with us in either South America or Asia? Does he agree that that is the reason why the whole issue has arisen?
Viscount Goschen: My Lords, I agree with the noble Lord to the extent that the United Kingdom is the leader in the double-decker bus field.
Lord Cockfield: My Lords, does the Minister agree that a degree of harmonisation is absolutely essential,
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otherwise the Germans or the Italians, for example, would be able to block the export of buses from this country? Does he further agree that the lack of harmonisation in the case of motor vehicles was one of the grounds on which the French, Italians and others tried to obstruct the export of Nissan motor cars manufactured in this country?
Viscount Goschen: My Lords, my noble friend's question has given a clear explanation of the benefits of harmonisation in the industry.
Lord Carmichael of Kelvingrove: My Lords, I should like to emphasise that I am not by any means anti-Europe. But will he accept that such regulations and directives test the patience of the British public? So far as I remember, the one that most nearly approached this case was the directive on Arbroath smokies. Can the Minister tell the House whether we have a bus industry which is capable of meeting all the requirements of the British bus fleet? Will these directives be an excuse to allow big imports from Europe of buses from Italy, Germany and perhaps France?
Viscount Goschen: My Lords, I cannot answer the noble Lord on the matter of Arbroath smokies. But we do indeed have a very good bus industry in this country. It is well capable of producing buses to the highest specification. The important point is that we and the industry see the clear benefits of harmonisation. We are trying to achieve that without at the same time being over-prescriptive.
Lord Tebbit: My Lords, will my noble friend not simply give the assurance which would satisfy everyone in the House that under no circumstances will Her Majesty's Government allow the Germans, Italians, French, Greeks or others to cook up a set of regulations which will prevent us from manufacturing, using and exporting double-decker buses? Will he accept that, if he were to say that, he would have the support of the whole House?
Viscount Goschen: My Lords, I believe that I said very clearly that our aim in these negotiations is to produce proposals which our bus industry will be able to fit in with and that any moves which will require major design changes to our buses without taking into account safety considerations will be resisted.
Lord Peston: My Lords, will the noble Viscount accept that I find his answer very strange? Is he aware that, quite independently of whether one is for or against the Community, if ever there were a case in which a directive was not needed and competition was needed, this is it? All that is required is open competition, is it not? Why does he not agree, since I understand that that is part of the Government's policy anyway?
Viscount Goschen: My Lords, open competition is a major plank of the Government's policy. Yet we still see the very clear benefits that will come from harmonisation of this industry within the European Community.
Lord Teviot: My Lords, I can speak for the industry and the industry is supportive of the Government in

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what they are doing. Are not all these questions hares in relation to the issue of double-decker buses? Contrary to what my noble friend Lord Pearson said, the industry regards this hare about double-decker buses as being a Euro-myth?
Viscount Goschen: My Lords, I agree with my noble friend that we are keeping in very close contact with the bus industry on this point and will continue to do so.

British Rail: Privatisation Expenditure
2.55 p.m.
Lord Taylor of Gryfe Lord Taylor of Gryfe asked Her Majesty's Government:
What is the total expenditure incurred in consultancy, legal and accountancy fees in the privatisation of British Rail, including Railtrack, and the anticipated expenditure on franchising.
Viscount Goschen: My Lords, total expenditure on external consultancy fees for railways privatisation, including legal and accountancy fees, incurred by the Department of Transport, the Office of Passenger Rail Franchising and the Rail Regulator between 1991–92 and 1993–94 was £19 million. Consultancy costs incurred by BR and Railtrack are a matter for them, but I understand that they were in the order of £30 million up to March 1994. Total planned expenditure by the Office of Passenger Rail Franchising for 1994–95 is £7 million.
Lord Taylor of Gryfe: My Lords, will the Minister accept that I was very interested in the figures quoted? I understand from the annual accounts of British Rail that it has taken 50 per cent. of those costs and the 50 per cent. in its accounts represents £40 million. That suggests that the total amount of fees that I mentioned in my Question are in the region of £80 million. Even if we accept the Minister's figures, does he consider it a reasonable contribution to an efficient railway system when, at the same time that those substantial fees are being incurred, the investment budget of British Rail last year was reduced by 21 per cent.? The public service obligation, which is the subsidy for the day to day running of the railways, apart from investment, was also substantially reduced. Can he justify the expenditure on consultants' fees while there is a reduction in investment in new rolling stock, etcetera, which will make the railway efficient?
Viscount Goschen: My Lords, it is extremely important to put these sums in the context of the major transition that is taking place in the railway industry. It is a major privatisation and we simply do not believe that it would be good value to maintain the kind and level of specific expertise within the department for what is a short-term transition period. That is why these moneys have been spent on consultants. We see them as being good value.
Lord Marsh: My Lords, will the Minister address his mind to the extent to which British Rail, or Railtrack, will have to carry the cost of these consultancy fees—
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which arise wholly and solely out of government policy—in their accounts, which presumably will have a direct effect upon levels of subsidy that have nothing to do with this exercise? Alternatively, can he give the House an assurance that those very large sums in regard to either Railtrack or British Rail will not be taken into account in any way when addressing the levels of subsidy in those companies?
Viscount Goschen: My Lords, the noble Lord is right and the levels of subsidy are another issue. They will be based on the services that the franchising director will require, which will be based broadly on the existing timetable and the contracts made with the train operating companies. The consultancy fees represent the provision of very specialised services, which we do not believe exist within the department or within Railtrack, British Rail and the Office of Passenger Rail Franchising. That is why we brought them in and why we feel that they are good value.
Lord Ewing of Kirkford: My Lords, will the Minister answer a simple question? Who will pay the consultancy fees? Will it be the British taxpayer or the railway companies?
Viscount Goschen: My Lords, at the moment, of course, the taxpayer pays everything for the railways. That is the historic position. As the noble Lord knows, we are now going forward to a position where we are putting the railway companies into the private sector. Once those companies are in the private sector they will be responsible for their own costs.
Lord Clinton-Davis: My Lords, is the Minister aware that the figures he put forward seem to coincide more with Disney World than with reality? It was reliably estimated that the total costs of actual and projected expenditure in relation to privatisation, including the costs borne in the City, are nearer £1,000 million than the figure he stated. Whatever the position, does he agree with the statement made by the chairman of British Rail, Sir Bob Reid, on 4th December that the Government would have to make a long-term commitment to subsidise the railways if Railtrack is to be saleable at all? Is it right that the taxpayer should provide this life support machine for the franchisees?
Viscount Goschen: My Lords, the figure quoted by the noble Lord totally misrepresents the situation. He was talking about the total cost of privatisation, which is by no means the same as the total cost of consultancies. The larger figure includes the smaller, but I dispute vigorously his assessment of the larger figure. It is grossly overstated. The noble Lord then asked a supplementary question which had nothing to do with the consultation cost. We stated that we will provide a

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subsidy to the railway industry, as long as it is needed, to provide the services required by the franchising director.
Lord Clinton-Davis: My Lords, if the Minister disputes my figure, what is his view of the total cost of privatisation?
Viscount Goschen: My Lords, British Rail estimates that it has incurred reorganisation costs of £102 million up to March 1994 and that includes £30 million consultancy costs.

Territorial Army: Restructuring
3.1 p.m.
Lord Richard Lord Richard asked Her Majesty's Government:
Whether, as part of the proposed restructuring of the Territorial Army, the two TA battalions of the Parachute Regiment are to have an endorsed role as reserves in support of 5 Airborne Brigade; and whether they are to retain their support weapons.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Henley): My Lords, as we announced yesterday, the support weapons platoons of TA infantry battalions will be concentrated in four fire support battalions. The two TA battalions of the Parachute Regiment will restructure on a three rifle company basis without support weapons. On mobilisation, both battalions will be available to meet NATO or national requirements; in other circumstances they will, like the rest of the TA, serve as a general reserve to the Army. This may involve the battalions or parts of them augmenting the Regular Army on operations either in support of 5 Airborne Brigade or other formations, or independently.
Lord Richard: My Lords, I am obliged to the Minister for that Answer. I do not have a direct interest in this matter since I am not a member of the TA. I have never jumped out of an aeroplane either with or without a parachute. But this is a matter which was brought to my attention and is causing anxiety, particularly in those two battalions.
Can the Minister give us a specific statement this afternoon that the role of those two TA battalions is to act as reserves in support of the 5 Airborne Brigade? If he can say that, he will quell a great deal of anxiety. If that is not their role, presumably they have some role other than that of teaching men to jump out of aeroplanes with parachutes on, and perhaps he can tell us what that is.
Lord Henley: My Lords, I suspected that the noble Lord would not have an interest to declare. I thought it unlikely that he jumped out of aeroplanes either now or in the past. My first Answer gave the noble Lord the assurance he wanted. I was trying to make clear that those battalions do not have a specific endorsed role in support of 5 Airborne Brigade. If 5 Airborne Brigade needed reinforcement, it may come from those battalions or it may come from others. But, like other
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TA infantry battalions, they continue to have an important role in the restructured TA as part of the general reserve for the Armed Forces.
I understand that the changes can cause some anxiety. We looked at other alternatives, possibly re-roling one battalion of the TA paras as a fire support battalion. But that would cause even greater anxiety because it would reduce the number of parachute trained soldiers in that the establishment of a support battalion would be 336 as opposed to 519 for an ordinary battalion.
Lord Mason of Barnsley: My Lords, the Minister said in a written reply in the Official Report that,
"The 8th Battalion, the Light Infantry, will re-role as a National Defence Reconnaissance Regiment in the Royal Armoured Corps, taking over the current role of the Royal Yeomanry which will become the Army's Nuclear, Biological and Chemical Defence Regiment".—[Official Report, 6/12/94; col. WA 76.]
Though I accept that the 8th Battalion, the Yorkshire Light Infantry, is to be given a new role, can I take it that its members will be able to maintain their present cap badges and titles?
Lord Henley: My Lords, I can give that confirmation to the noble Lord. They will be able to retain their cap badge and title.
Viscount Ridley: My Lords, is the Minister aware that the great majority of the Territorial Army will welcome yesterday's statement about its future, not least as an end to a long period of uncertainty? Is he further aware that what is needed now is a long period of stability to implement these sensible changes?
Lord Henley: My Lords, I am grateful for the noble Viscount's comments. I agree that the vast majority of the TA is happy with the changes. It is obviously difficult, when announcing a restructuring of this sort, to avoid any disturbance whatever. We tried to avoid any excessive disturbance. As I said, some units will find their role changed but I hope that the vast majority of units will be happy without their existing role or in the new role to which they have been assigned.
Lord Gisborough: My Lords, can my noble friend say why the recce role, which is essentially that of the cavalry, was given to an infantry regiment rather than to one of the cavalry regiments?
Lord Henley: My Lords, in the restructuring we were reducing the number of infantry units and increasing other corps. To retain the loyalties and cap badges that have been built up it was necessary to restructure on that basis.
Lord Molloy: My Lords, bearing in mind the magnificent history of Britain's Territorial Army, particularly in times of need, can the Minister say that there will be no serious change in relation to our Territorial Army without a debate in this House?
Lord Henley: My Lords, if a debate is necessary I am sure that the usual channels will note what the noble Lord said. I shall be more than happy to debate the role and future of the TA on some future occasion.

Business
3.6 p.m.
Lord Strathclyde: My Lords, at a convenient moment after 3.30 p.m. my noble friend Lady Chalker of Wallasey will, with the leave of the House, repeat a Statement that is to be made in another place on the situation in Bosnia.

National Health Patient Accommodation Bill [H.L.]
Lord Stoddart of Swindon: My Lords, I beg to introduce a Bill to provide a right to single sex accommodation for National Health Service patients. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Stoddart of Swindon.)
On Question, Bill read a first time, and to be printed.

Manufacturing Industry
3.8 p.m.
Lord Trefgarne Lord Trefgarne rose to call attention to the importance of increased output from United Kingdom manufacturing industry, with particular reference to the contribution made by small and medium sized enterprises; and to move for Papers.
The noble Lord said: My Lords, in rising to move the Motion standing in my name on the Order Paper, perhaps I may start by quoting from the Government's White Paper on competitiveness published in May 1994. At that time they said:
"A competitive manufacturing sector is essential for our long term prosperity. The share of manufacturing in total output has fallen over time in the UK and in other major economies. But manufacturing is a major employer and its output, more than any other sector, is tested on international markets".
Let me emphasise that if our manufacturing companies are to compete successfully there is an urgent need for improved efficiency in the areas of manufacturing production, marketing and sales. At its simplest that is ensuring that we have the right product at the right price available in the right markets. In order to achieve those aims there is a vital need for sound and stable financial policies, leading to investment in plant, people, the infrastructure and, above all, education and training.
One area where government support is of importance is in the promotion and support of exports, both in European and world markets. Thus the work of ECGD in long and medium-term credit guarantees is of continuing and vital importance. Shorter term facilities are now provided by the privatised NCM company which appears to be going pretty well. But even in that market a continuing element of government involvement continues to be essential, if only in relation to political risk.
Turning to the position of our companies within the European Union and hence the single European market, I warmly applaud the position taken by Her Majesty's
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Government, not least in their rejection of the social chapter of the Maastricht Treaty which I believe would lead to reduced employment opportunities in the United Kingdom and greater difficulty for employers in other ways also. I should mention in parenthesis at this stage that I am the Honorary President of the Mechanical and Metal Trades Confederation and I know that my views are almost universally shared by METCOM members.
Within the broad scope of manufacturing, I should like to draw your Lordships' attention to the significant role played by small and medium-sized enterprises. These firms are defined as employing fewer than 500 people and are generally known as SMEs. It may come as a surprise to learn that more than half of all people employed in the United Kingdom work for such companies. Many of these firms employ only one or two people and empirical evidence gathered from research carried out at Warwick University suggests that such tiny organisations tend to stay small. But, of course, just one more employee for all of them would make a huge difference to our unemployment figures. The Smaller Firms Council of the CBI has estimated that there are some 100,000 firms employing between 20 and 500 people. Of those, 25,000 have been identified as expecting to grow substantially. These surely are the companies which need help and support.
What are the characteristics of these companies and what kind of support do they need? First, there must be motivational and entrepreneurial drive by the owners and the key managers. This must come from within the business itself. Without it nothing can be achieved.
Secondly, there must be a carefully planned product policy which requires both R&D and market research which is often beyond the resources of smaller companies. It has to be said that these smaller companies sometimes eschew this approach to business and, rather than focusing on becoming winners and leaders in their chosen field, become diffused in their efforts and end up "Jack-of-all-trades and master of none"! Clearly, that is wholly undesirable. One of the very important services provided over recent years by the DTI has been the availability of consultancy services, especially to smaller companies, for the purposes to which I have referred. I believe that these arrangements have made a most valuable contribution to improving the competitiveness of companies in this sector, and I hope that they will continue.
Thirdly, there is a need for professional marketing and selling of the product and, again, small companies often lack real experience and training in these areas. This is a matter on which consultants can no doubt offer some guidance, but perhaps more importantly—particularly in overseas markets—is the selection of appropriate agents in the countries concerned. Here I wish to applaud the work of our missions overseas which are able to identify suitable local partners and bring them together with British exporters. I should perhaps remind your Lordships at this point that much of the work of small companies is very often as sub-contractors to larger enterprises, so the fact that I am, on this occasion, focusing on the needs of the smaller companies should not blind us to the important consideration that their health is equally dependent upon

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that of their larger cousins. So much, if not all, of the encouragement I seek for SMEs should apply equally to the larger enterprises.
Fourthly, finance is the lifeblood of any business and is especially vital as small and medium-sized companies strive to grow, especially when operating in the export field. I am not sure that the range of sources of finance available to SMEs is adequate—too many rely almost solely on their bank—but let us discuss that on another occasion.
Perhaps the most important area in which the Government can assist in the creation, growth and continued health of smaller companies is in the reduction of bureaucracy and regulation. Here I must applaud the various initiatives which have emerged recently from the DTI from the personal spur, we understand, of the President of the Board of Trade himself. There is still a long way to go, not least in containing the plethora of directives, rules and regulations which emerge from Brussels—we had a flavour of that at Question Time—but I urge my right honourable friend to redouble his efforts in this area. It is, in my view, the single most important aspect of government oversight of business generally and small businesses in particular.
I now turn to the vital area of training and education. I quote my right honourable friend the Prime Minister who, in the introduction to the White Paper to which I referred, said:
"I believe we must give our young people the highest standards of education and training. These skills will be the key to our future".
Perhaps I should say, in parenthesis again, that I have recently been appointed chairman of the Engineering Training Authority, so clearly I must take the Prime Minister's words closely to heart.
To compete effectively in international markets, the United Kingdom must address the immediate issue of skills training. In the longer term, we need to examine how our education system must develop to bring about greater levels of achievement. Compared with our main international competitors, the United Kingdom is consistently shown to be well behind in this area. This is the case in all levels of skills but especially for the intermediate levels—those traditionally described as craft, technician and supervisory skills.
Recent research carried out by the Engineering Training Authority shows that an encouraging 80 per cent. of engineering sites with 500 or more employees are implementing the new national vocational qualifications. Equally promising is the significant interest employers expressed in using NVQs at the higher levels—the very levels appropriate to the crucial intermediate skills, to which I have referred. But there is some evidence that smaller companies are not in the vanguard of these welcome developments. I hope that they will be in the future.
Investors in People is an important mechanism for employers to develop workforce skills and competence as an integrated part of the organisation's business plan. The importance of this initiative was underlined in the White Paper, to which I referred, and rightly so. There is, however, a risk that smaller companies may tend to dismiss these ideas as irrelevant to their needs. I do not
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agree. No company is too small to benefit from the proper management of its human resources, and Investors in People helps them to do just that.
The Government's firm commitment to modern apprenticeships is to be applauded. Prototype schemes are currently running in 17 sectors, the largest of those being engineering manufacturing. The Employment Department has pledged further major funds over the next three years to support launches in other sectors. Let us hope that they do not fall foul of whatever changes my right honourable friend the Chancellor of the Exchequer may announce tomorrow, following his "little local difficulty" in the other place last night.
Modern apprenticeships are an excellent means of giving quality training, providing young people with a foundation on which to develop a career or a route to higher education. Whatever the chosen path, modern apprenticeships, with their educational and core skills components, offer a sound basis for life-long learning which is so necessary in helping young people to adapt to change and cope flexibly with varying demands.
In an industry which has seen the number of trainees fall by about a third in fewer than three years, this initiative is an excellent opportunity to reverse this trend and to raise our intermediate skills levels to international standards.
Turning now to education, as distinct from training, the United Kingdom's failure to rank high in the industry league can, in part, be attributed to a comparatively poor output from our nation's schools. A study showed that in 1991, only 27 per cent. of 16 year-olds in the United Kingdom achieved GCSE grades A to C in the national language, maths and science, compared with 62 per cent. in Germany and 66 per cent. in France. United Kingdom pupils achieving two A-levels or equivalent numbered only 28 per cent. compared with 68 per cent. and 48 per cent. in the same countries. This country's highly selective approach to education, together with its emphasis on academic study, serve the minority well, no doubt, but the majority poorly. A fundamental cultural change is needed to bring about the acceptance of vocational courses. This change is crucially important if the manufacturing industry is not to lose out.
My Motion calls attention to the importance of increased output from all sectors of UK manufacturing industry including, in particular, smaller companies. But this vitally important increased output depends crucially upon our companies increasing their efficiency and hence their competitiveness if they are to compete not only here at home but more widely across Europe and the world. We have made enormous strides in the right direction in recent years as our economic recovery now demonstrates. But there is still much to be done. I believe that the main thrust of government policy is in the right direction and I commend the enthusiasm and drive of Ministers in this regard. But in the end our

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future depends not upon Ministers, regardless of their political complexion, but on the companies themselves. My Lords, I beg to move for Papers.
3.20 p.m.
Lord Haskel: My Lords, I start by apologising to the House for the fact that I may have to leave before the end of this debate in view of the delay that will arise from the Statement which is to be made. I shall read the Minister's response and the last few contributions in Hansard with great interest.
I am most grateful to the noble Lord, Lord Trefgarne, for moving this Motion because in it he states precisely the objective of the Department of Trade and Industry. It is to increase the output from United Kingdom manufacturing industry while maintaining and expanding the wealth of every citizen. The short answer is to produce more world-class products in the United Kingdom and for the small and medium-sized enterprises to become suppliers to those companies producing them, if they are not end-producers themselves.
We must start from the point of view that international comparisons indicate that there is plenty of under-performance by our manufacturing sector, particularly among the small and medium-sized enterprises, and we must catch up. How are we to achieve that objective?
Much research shows that most manufacturing small and medium-sized enterprises are single product companies often supplying niche markets. Their future is often tied to the life cycle of their product, or to where the economy is in the economic cycle. When their product becomes obsolete, or the market moves on, everything depends on the owner or manager. Does he or she have the ability, the money, the vision or the wish to move on also?
Again, research has shown that the small and medium-sized enterprise will progress if at this stage it is a supplier to a world-class manufacturer, or to a major original equipment manufacturer or to an important retailer. The close association with such a company will have forced the small and medium-sized enterprise to progress. Their customers will have forced the company to introduce new technology, new best practice, to innovate and to become competitive. These relationships are extremely important. We have all read about retailers and manufacturers cutting back on the number of their suppliers. They do this to concentrate on improving the performance of their suppliers. The hope is that these suppliers become world class and continue to be world class. This culture of buying by developing relationships and not purely on price is becoming more important in UK manufacturing. Not only in the private sector but also large public-sector purchasers, such as the Post Office and the National Health Service, are playing an important role in this.
Of course, the customers of small and medium-sized enterprises can be in the United Kingdom, in Europe or anywhere in the world. In manufacturing it is developing these relationships which is important, and if we wish to increase the output from the United
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Kingdom manufacturers it is up to the DTI to encourage this activity. Perhaps the Minister will tell us what plans his department has to speed up this work.
If one believes in that scenario, as I do, a number of things follow. First, it is long term. The main element for a successful long-term strategy of this kind is for government to get away from the stop-go roller coaster economy that we have experienced during my business life. I hear what the Government say about the current positive economic outlook, but many believe that nothing fundamental has changed and that we are at the start of a period of go after a long period of stop. Perhaps that is why the current levels of investment are disappointingly low.
A second principle that follows from my scenario concerns the people working in manufacturing. My experience is rather different to that of the noble Lord, Lord Trefgarne. To create a prosperous manufacturing sector we must move away from the casualisation of the workforce. A modern manufacturing economy demands more training, skill, versatility, commitment, education, and initiative from its workforce. But you do not achieve that by punishing people with fewer social benefits than their colleagues in the rest of Europe and by casualising the labour market.
Thirdly, the relationship between government and industry changes. Most successful manufacturing nations have governments which have developed a partnership with industry to the overall benefit of the nation as a whole. This partnership provides investment in the infrastructure necessary for manufacturing to be competitive. Between 1980 and 1990 the Japanese Government invested 5.1 per cent. of their gross domestic product and their growth rate was 3.8 per cent. We invested 1.9 per cent. of our gross domestic product and our growth rate was only 1.7 per cent. I leave your Lordships to draw the conclusions.
Another element of this partnership is that government should welcome the desire of purchasers to improve their suppliers rather than to continually shop around for alternative sources. Even though this leads to customers and suppliers becoming interdependent, it is nevertheless the task of government to encourage a vigorous competition policy. At present they are failing to do this.
Part of this partnership is also for government to discourage unrealistically high expectations from returns on investment and to deter short-termism in investment in manufacturing industry. I was pleased to see in the Financial Times of 5th December that the investigation into why UK companies need to pay higher dividends than companies elsewhere is being reinstated after it was cancelled earlier this year because the noble Lord, Lord Hanson, wrote to the Financial Secretary to the Treasury and accused him of acting like a socialist.
A word about inward investment. This is a welcome addition to our weak manufacturing base. It has brought jobs, new technology, and raised standards, but it is not an alternative and it is expensive in grants. Remember that the employment created is dependent on continued support from overseas investors. If we become too dependent on overseas investors, then our own ability to create manufacturing businesses will decrease.

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In 1993, £9.5 billion was invested in Britain by overseas companies, but UK companies invested £17.2 billion overseas. UK manufacturing needs investment. Perhaps the Minister can say how we can redress this balance.
There are thus many elements in increasing the output of UK manufacturing and the balance is changing all the time. It is essential to get the balance right. If we improve training and fall down on quality, then all we will do is end up with a better educated army of unemployed. I welcome the research being carried out by the Warwick Business School and the Federation for Manufacturing Industry in this area.
Growth in UK manufacturing depends on our ability to produce world-class products. We will do it by the methods I have outlined which we on these Benches call "an active modern industrial policy". We do not seek intervention for intervention's sake. We see it as a means of working in partnership with manufacturing to make the market economy really dynamic.
3.29 p.m.
Lord Weatherill: My Lords, we are all indebted to the noble Lord, Lord Trefgarne, for initiating a debate on the very important subject of the contribution that is made by small and medium-sized businesses. I am pleased to return to the subject of my maiden speech not only in this House but also, incidentally, in another place many years ago when I spoke about the youth employment service. It is a plain fact that important though big businesses are in the manufacturing sector, it is to small firms and, in particular, new businesses that we must look to provide the jobs of the future and at the same time to make a vitally important contribution to solving many of our country's social problems which arise undoubtedly from unemployment.
I seek to intervene today on behalf of new businesses. I trust that I am qualified to do so from personal experience. I was apprenticed to the business that had been started by my father way back in 1912. I was not apprenticed in 1912, although some people may think so! My father had led the last successful strike of tailors. He was crippled and unemployed. I regularly go round schools these days talking about the good old days; but they were not so good if you were poor and had very little education. As my father was unemployable, he therefore had to set up on his own account. We still have the bicycle with a small wheel at the front and a bigger wheel at the back on which he used to cycle out to take the orders and then cycle back and deliver the clothes when he had made them. I entered a business which started in South Ascot and which, I am proud to say, is now in Savile Row. It is not a big business, but it employs a considerable number of people, and two-thirds of our turnover is in overseas markets.
Self-employment offers a way out of unemployment, particularly for those who are made redundant, and especially for young people for whom the inability to find a job breeds a cycle of alienation which is a threat to the quality of life in our country. No organisation knows more about those problems than the Prince's Youth Business Trust, of which I am proud to be a trustee. The trust started through the personal initiative
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of His Royal Highness the Prince of Wales and can claim to be the biggest—the No. 1—youth start-up organisation in the country. If a Japanese company comes to our country and creates 1,000 jobs, we lay a red carpet half way down the M.1 to congratulate it, yet the Prince's Youth Business Trust has established 24,000 new businesses since its inception, with 3,000 being created in the past year. Of those new businesses, 40 per cent. were started by females; 15 per cent. by the ethnic minority communities; 5 per cent. by the disabled; and a number were begun by former young offenders. It is a remarkable success story which should be better known, more widely appreciated and more positively supported.
The trust provides "soft" loans, small grants and post-start-up advice to those between the ages of 18 and 29, who the banks will not consider. However, no one is given money without being assigned a business adviser. That has ensured that two-thirds of the new businesses started in the past three years are still trading today. That is a much higher success rate than any of the banks can claim. Those who assist as business advisers do so voluntarily. They are all experienced people. Some are retired, but others are still working as managers in large firms and successful businesses.
The average net cost of taking someone off the unemployment register and putting him or her to work in this way is £2,500 per annum. That is far far less than the cost of a year of unemployment. The trust is able to be so successful and cost-effective because a high proportion of its staff are seconded from the private sector, and because some 6,000 people give their time voluntarily to support its work. One of them is the noble Lord, Lord Mason of Barnsley, who has been chairman of the South Yorkshire Board of the Prince's Youth Business Trust since its inception. He is one of 38 such chairmen throughout the United Kingdom. It must be true that the Prince's Youth Business Trust is the largest free consultancy service in the world.
I am also patron of Croydon Business Ventures, an enterprise agency in my former constituency of Croydon, North-East. Some 13 years ago, shortly after I was chosen as Speaker of another place, I attempted to attend a party on the ground floor of the House of Commons. I was dragged into a room by the honourable Member for Bow and Poplar who, pulling me in, said, "I am very anxious to introduce you all to our new Speaker, Sir Jasper More". I said, "I suppose that I ought to know your name". The name of that organisation was the Tower Hamlets Enterprise Agency. I went to visit it and resolved that we would have such an agency in my constituency. I wrote a letter to 12 friends saying, "Please send me £1,000", and giving a telephone number. All of them rang me up, asking why I wanted the money. I said, "To finance your future competitors". We have been in business now for 10 years, during which time we have established 1,170 new businesses and provided, we estimate, 5,300 new jobs in Croydon. Despite difficult times, three-quarters of those businesses have survived. We estimate that Croydon Business Ventures generates £100 million turnover per year. Some of those businesses, which started from

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scratch, have grown into quite big firms. The average turnover is £76,000, and 37 per cent. of the firms have a turnover of between £100,000 and £500,000.
It is good that the Minister who is responsible for small firms is a Member of your Lordships' House because I should like to address a number of concerns directly to the noble Earl, Lord Ferrers, who is to reply to the debate. First, both the Prince's Youth Business Trust and Croydon Business Ventures, like other enterprise agencies, are concerned about the business start-up scheme, which was previously known as the enterprise allowance. The latter seemed a good phrase and it is a pity that it has been dropped. Many small enterprises have depended on that allowance to help them through the crucial start-up phase. I hope that the noble Earl will be able to reassure the House that that crucially important allowance will not be neutered, let alone done away with.
A further worry is the trend to focus TEC and the Business Links support on firms with between 20 and 200 employees. Few firms start with 20 employees, and to reduce support from the very small enterprises and new businesses that have been nurtured by the PYBT and the enterprise agencies is to cut off at source one of the key features of healthy industrial and commercial birth. I must tell the Minister that there is considerable concern that local enterprise agencies, which as I have sought to prove have been highly successful in helping to establish new businesses, may themselves not survive if, as seems possible, TECs and Business Links put a lower priority on the future of small enterprises. For many small businesses, the loss of the business start-up scheme would be a major blow; but the loss of the associated start-up training would, if anything, be worse leading inevitably to a higher rate of business failure. I hope therefore that the Minister will intervene on their behalf to ensure that those important sources of funding are not cut off.
Napoleon never did say that we were a nation of shopkeepers. What he did say was that we were a nation of merchant adventurers. Britain's prosperity in the past, and also in the future, is, and will be, dependent upon trade, and in particular upon a healthy manufacturing base. We must not be simply a nation of shopkeepers selling other people's goods. Of course, as other noble Lords have said, big businesses, as major employers, must be the concern of the Government; but employment in that sector has declined steadily since 1980, while employment in small and medium-sized enterprises has grown steadily.
The figures have been quoted already; but it is worth repeating them: firms with fewer than 10 employees comprise 90 per cent. of all enterprises and contribute 25 per cent. to our GDP. It therefore seems inevitable that we must look to small firms to provide jobs for the future, and in doing so, that sector will be making a vital contribution towards the solution of social consequences—the social consequences of unemployment which besides costing millions of pounds a year is a source of deep frustration which is potentially a threat to the life of us all in this country.

Bosnia
3.40 p.m.
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, with the leave of the House, I shall now repeat a Statement on Bosnia which is being made in another place by my right honourable friend the Foreign Secretary. The Statement is as follows:
"The situation on the ground deteriorated over the last month. Around the Bihac pocket, Bosnian Government forces launched an attack but were then forced back by the Bosnian Serbs. The Bosnian Serbs, with support from Croatian Serb forces and rebel Bosnian Moslems, have taken the fighting into the United Nations safe area. The contravention of Security Council resolutions led the commanders of the UN force and NATO to call for and carry out air strikes to deter attacks against the safe area.
"The fighting has also intensified in central Bosnia with Bosnian Government forces making gains against the Bosnian Serbs. In the safe areas of Sarajevo, Gorazde and Srebrenica the civilian populations and the UN contingents are short of supplies as convoys have been held up. Over 400 UN troops had their movements limited by the Bosnian Serbs. Some were effectively held hostage.
"That was the situation which faced the ministerial meeting of the Contact Group on 2nd December. The Contact Group countries—Britain, France, Germany, Russia and the United States—united in calling for an immediate ceasefire in the Bihac pocket, including the withdrawal of Bosnian Serb and Croatian Serb forces from the safe area. We also called for talks to begin on a comprehensive agreement to cease hostilities throughout Bosnia. The Contact Group supported UNPROFOR's mission and demanded immediate freedom of movement for UNPROFOR and for humanitarian supplies throughout the country. Only once these steps have been taken and the Bosnian Serbs have accepted the Contact Group plan as the basis for a settlement can negotiations continue.
"The Contact Group reaffirmed the plan adopted last July. Under this plan the integrity of Bosnia-Hercegovina would be preserved. The Bosnian Serbs would hold 49 per cent. of the territory, the Bosnian Federation of Croats and Moslems 51 per cent. We reiterated that the territorial proposal—that is, the map of the 51 per cent. and 49 per cent.—can be adjusted by mutual agreement between the parties. Constitutional arrangements agreeable to the parties will also need to be drawn up which preserve the integrity of Bosnia-Hercegovina and allow equitable and balanced arrangements for the Bosnian-Croat Federation and the Bosnian-Serb entity. The Contact Group agreed that its officials would help the parties reach a settlement on these issues. We did not discuss the lifting of the arms embargo or any change in the arrangements for the use of NATO airpower in support of the UN.

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"The purpose of the Contact Group meeting was to help relaunch the political process following agreement, which we hope will come soon, on a ceasefire.
"To carry this forward, I travelled to Belgrade with my French colleague, M. Juppé, for talks with President Milosevic. Mr. Milosevic welcomed the clarifications we were able to provide. He said that they would help him to put again to the Bosnian Serb Assembly the case for accepting the peace plan. The next day over 20 members—more than a quarter of the Bosnian Serb Assembly—saw Mr. Milosevic in Belgrade. They issued a statement saying that in the light of the clarifications made to the Contact Group plan, the Pale Assembly should consider accepting it and entering negotiations on the map and the constitution to reach a final settlement. This is an encouraging step forward, but not enough. The Bosnian Serb leadership has yet to accept the plan.
"At the summit of the Conference on Security and Co-operation in Europe, which my right honourable friend the Prime Minister and I attended in Budapest on 5th and 6th December, I met President Izetbegovic of Bosnia, President Tudjman of Croatia and the Secretaries-General of the United Nations and NATO.
"The three presidents—Milosevic, Izetbegovic and Tudjman —all support the Contact Group plan for Bosnia and the continued presence of the UN force. They are all willing in principle to agree to a ceasefire throughout Bosnia, as are the Bosnian Serbs, though there remains a disagreement over its duration. We hope that the UN special representative, Mr. Akashi, will be able to make progress on a ceasefire this week.
"The British Government want the UN force to be able to continue its mission and the British contingent to continue to play a major part. But we must be clear about its role. It is not there to impose solutions on unwilling parties. It cannot fight on one side. It does not defend one army's territory against the attacks of another. It is there to support the impressive aid effort, much of it British, delivered by ODA teams, to buttress ceasefires where they exist and, within its limitations, to underpin the safe areas and exclusion zones designated by the United Nations and NATO.
"Withdrawal would be a difficult operation in itself. The consequences for the civilians whom the force are there to protect would be severe. But UNPROFOR can only continue its mission if it can do so without unacceptable risk and if it can continue to fulfil its mandate. As with all military operations, planning is in hand to cover a variety of eventualities, including withdrawal. These are constantly updated. The Government are not considering unilateral withdrawal of the British contingent. We are working with our partners in NATO and the United Nations.
"The Government's preferred way forward is clear: first, a ceasefire in the Bihac safe area and throughout Bosnia; secondly, agreement on the free movement of UNPROFOR and for aid convoys; thirdly, resumption of urgent negotiations for a peace settlement on the basis of the Contact Group plan; and, fourthly, once
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agreement has been reached, withdrawal by the Bosnian Serbs from the land they hold to the new lines agreed.
"Before I end, I should also record welcome progress between the Croatian Government and the Croatian Serbs. Last week they signed an economic agreement which provides for the resumption of oil, water and electricity links between the Serb held areas of Croatia and the rest of the country and for re-opening the highway between Zagreb and Belgrade. I pay tribute to the months of patient and persistent diplomacy by the noble Lord, Lord Owen, and Mr. Stoltenberg which was needed to achieve this. I hope the agreement can be implemented soon. It improves the prospects for negotiations leading to a lasting political settlement in Croatia and for normalisation of ties between Croatia and Serbia."
My Lords, that concludes the Statement.
Baroness Blackstone: My Lords, I am grateful to the Minister for repeating the Statement. I welcome the progress that has been made in negotiating at least a modicum of agreement between the Croatian Government and the Croatian Serbs. I share with the Minister our gratitude to the noble Lord, Lord Owen, and Mr. Stoltenberg for their work in achieving that. I also welcome the decision to maintain British troops as part of the UN forces in Bosnia. While lives continue to be saved and while humanitarian aid is provided as a direct result of the presence of UN troops in Bosnia, we on this side of the House hope that members of the British Armed Forces will continue to be part of that presence.
There has been in the press a great deal of loose talk about the withdrawal of our troops without sufficient consideration of the effects on the Bosnian civilian community. Many more lives would be at risk if UN troops, among whom British troops play such a crucial part, were to be withdrawn. We also accept, as the Statement makes absolutely clear, that the role of British troops is not to fight on one side or the other or to defend one army's territory against another. We agree that, provided that their future safety is not seriously threatened, they are there to monitor the cease-fire and to ensure that UN resolutions on the exclusion areas and the safe havens are implemented. However, what has happened in Bihac during the past couple of weeks has shown only too clearly that, as we predicted, the safe haven policy has not worked and it is still not working.
Will the Minister tell the House how the United Nations and NATO intend to ensure that what happened in Bihac during the past two or three weeks is not repeated elsewhere in the near future? Will she also tell the House what steps will be taken to stop other Bosnian Serbs taking more UN troops hostage? Surely it is totally unacceptable that Bosnian Serbs, with the support of rebel Bosnian Moslems and Croatian Serbs, should have mounted an attack on one of the designated safe havens. That attack had considerable success and led to 400 United Nations troops being denied basic supplies and the ability to move freely.

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It is not clear what political steps are being taken to deal with that in the ongoing negotiations with the Bosnian Serbs. Does the Minister agree that in such circumstances it is entirely wrong to make concessions to the Bosnian Serbs? In offering an association between the Bosnian Serbs and the state of Serbia, is not the international community making just such a concession? Moreover, will not this concession jeopardise the long-term independence of Bosnia and the future of the Bosnian Moslem community.
The Statement indicates that at the recent meeting of the Contact Group there was no discussion on the lifting of the arms embargo. Will the Minister confirm that there are to be no further changes to the current position on the arms embargo? Does she agree that to provide American, British or French arms to the Bosnian Moslems at this delicate stage will serve only to inflame the military situation and to damage progress towards a political settlement?
The Statement strikes a note of optimism about the Contact Group's planned basis for a settlement which is difficult to share. The Minister has given no assessment of the chances of the Bosnian Serb leadership accepting it after the Minister's right honourable friend the Foreign Secretary and the French Minister for Foreign Affairs visited Belgrade. Perhaps she is now able to give such an assessment.
I wish to pay tribute again to the brave and courageous role played by our troops in Bosnia. As I said earlier, they have saved many lives. We hope that the international community will be more successful in obtaining the political settlement which will allow the troops to return home safely as soon as possible.
Lord Thomson of Monifieth: My Lords, I join the noble Baroness, Lady Blackstone, in thanking the Minister for repeating the Statement. I, too, pay tribute to the noble Lord, Lord Owen, and Mr. Stoltenberg for the patient efforts that they have made on the Croatian Serbian front. Useful progress has been made and we hope that that will contribute to a wider settlement.
The Statement is one of some gravity. The situation has deteriorated and the implications of a further deterioration are serious indeed. Against that background, we wish to pay tribute to the patience and persistence of the Foreign Secretary and his efforts to try to arrest that deterioration. Clearly, the first step is to try to bring about a cease-fire in the Bihac area. We would be grateful for any further information that the Minister can give us on that matter.
I echo the words of the noble Baroness, Lady Blackstone, that what happened in Bihac was an ominous event as regards the possibility of the same deterioration taking place in other safe havens. We would all like to know what steps the Government believe can be taken by the Contact Group, the NATO forces and the United Nations to try to prevent that possibility. It is unacceptable that 400 United Nations soldiers should, in effect, be turned into hostages.
Finally, we welcome the statement that the Government are not contemplating any unilateral withdrawal of the British contribution to the United
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Nations contingent and that they are dealing with the problems collectively with our colleagues and allies. At the same time, all our thoughts are with the British Armed Forces and civilian aid workers in Bosnia. They are doing fine work in terms of humanitarian aid in alleviating suffering. I too pay tribute to the role that they are undertaking in Bosnia, but we need every possible reassurance that their safety and security is paramount in the mind of Her Majesty's Government.
Baroness Chalker of Wallasey: My Lords, I thank the noble Baroness, Lady Blackstone, and the noble Lord, Lord Thomson of Monifieth, for the tributes that they paid not only to the noble Lord, Lord Owen, and Mr. Stoltenberg but also to my right honourable friend the Foreign Secretary. I assure your Lordships that the British Government—and, I believe, the French Government, too—will not cease in their efforts to stop the extension of the terrible situation that we have seen in Bihac. We will use every means at our disposal to stop its spread.
Of course, the spread can best be stopped by the agreement that President Milosevic is seeking with some members of the Bosnian Serb Parliament. I mentioned in the Statement that more than 20 members had issued a statement and we believe that there may be more. There is a total of 83 members of that Bosnian Serb Parliament in Pale. The majority would have to be convinced to achieve acceptance of that plan. That is quite clearly what everyone hopes will happen because only when there has been an acceptance of the Contact Group plan can we begin to see the beginning of real progress.
The noble Baroness said that safe havens are not working. She knows that if you do not give support to the implementation of safe havens it is very difficult for the safe areas to work in the way that was first envisaged. Although Britain has more than played her part as one of the main force contributors among the 39,000 or so troops who are there, there are countries which have not played a role in UNPROFOR. From what I have seen on the ground, I am firmly convinced that you can make safe havens really safe only when you have people on the ground so to do.
The noble Baroness asked how we could prevent the Bihac tragedy being repeated elsewhere and how we could stop Bosnian Serbs taking servicemen and, indeed, others hostage while making no concessions. A very active role is being played not only by Mr. Akashi who secured the release of 160 troops last week, 60 of whom were British, but also work is going on to secure the release of the other 350 UNPROFOR troops from France, Russia, the Ukraine and Canada and the UNMOs who are being held to ransom. That can be done only through patient negotiation and not through concessions because they would indeed jeopardise the future.
I assure your Lordships that there are no changes with regard to lifting the arms embargo. Although it was not discussed at the meeting none of the members of the Contact Group, with the exception of certain members of Congress in the United States, is envisaging a lifting

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of the embargo. I believe that that is absolutely right because putting more arms into an already febrile situation would do nothing to help the people of Bosnia.
I close by thanking the noble Lord, Lord Thomson of Monifieth, for the tribute that he paid to the aid workers. There are many from non-governmental organisations as well as our own ODA personnel who are there on the ground. If they cannot get into one area, they will deliver to another area. They are keeping men, women and children alive and giving them some hope for the future. Without UNPROFOR and without the aid workers, that simply could not have happened.
4.2 p.m.
The Earl of Lauderdale: My Lords, perhaps I may ask my noble friend about the assembly at Pale. She gave us the interesting information that some 20 out of 83 members went to Belgrade and issued a statement. Do we know when the assembly will meet and when it will reach a decision? Do we know whether the Russians are actively helping to encourage those members of the assembly to agree to peace?
In addition, will the Minister say something about the unhappy plight, which we read about, of the Bangladeshi troops. Apparently they have one rifle to five men and are shivering in an unfamiliar climate.
Baroness Chalker of Wallasey: My Lords, I thank my noble friend for his questions. The answer to his first question is that I cannot give him any more detail about when the discussion will take place in Pale. We believe that the Russians are helping but I am not privy to exactly how that is being done, so cannot pass on that information to my noble friend.
My noble friend asked about the 1,400 brave Bangladeshi troops. They are in the Bihac pocket. I am glad to say that a convoy of rations and fuel arrived for them on 4th December. They are doing a very valuable job under the most difficult conditions. There are a number of problems for them in the area but we are quite determined that they, as well as the ordinary people in Bihac who are suffering too, should have supplies. I assure my noble friend that we shall play a full role in helping to ensure that they are so supplied.
Lord Taylor of Gryfe: My Lords, one of the most, helpful aspects of the Statement and the recent developments in Yugoslavia has been the role of Mr. Milosevic. He has supported and endorsed the Contact Group's plan, despite the hostility of many of his fellow Serbs. As a result of that, there has been some relaxation of the severe sanctions—the opening of the airport and the resumption of cultural activities, including football matches, is now permitted. However, most pressing of all is the need for medical supplies. I was recently in Belgrade and I visited hospitals in which doctors had to make a decision on which child to save because they had supplies for only one. Will the Minister give me an assurance—and it would be a useful gesture in the light of the role of Mr. Milosevic—that the question of sanctions as applied to medical supplies might be reviewed?
Baroness Chalker of Wallasey: My Lords, we have made it clear that medical supplies are certainly to be
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sent and they are not caught by the sanctions provisions. It is true that doctors have to make difficult decisions in any country where there is war and conflict. But there is no way in which we stand in the way of medical supplies. Medical supplies are indeed going into Belgrade and some are travelling on from Belgrade with the convoys into some of the areas to the east of Bosnia-Hercegovina where there is much need.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that we all hope that the present proposals referred to in the Statement will bring about a satisfactory result? But is there not some risk in stating categorically that British troops should not be removed, because uncertainty with regard to the possibility of that happening may have played some part in creating an atmosphere among people who at present are intransigent on meeting any reasonable request?
Baroness Chalker of Wallasey: My Lords, I thank my noble friend for allowing me to make clear once again, as I did in repeating the Statement, that British troops, or indeed UNPROFOR as a whole, can continue their mission only if they can do so without unacceptable risk and if they continue to fulfil their mandate. That is why we have made contingency plans for a withdrawal, if that had to happen. We hope sincerely that it will not because the troops are carrying out a most valuable role. But we have never said that we shall not withdraw them if they faced an unacceptable risk or if they could not continue to fulfil their mandate.
Lord Mackie of Benshie: My Lords, is it not true that the whole treatment of this crisis has been an absolute disgrace to Western Europe and to the countries of the United Nations? Is it not a fact that the Serbs have played up Western Europe and NATO in the most disgraceful manner and that we have retreated from saying that no territory conquered by force would be held but are now proposing to let the Serbs get away with the vast majority of their conquests?
Is it not a fact that we have threatened force with overwhelming air power at our disposal but failed to use it? Is not what is happening today similar to what happened to the League of Nations? The UN resolve and the political will of the governments of Europe is at such a low ebb that we shall probably go on to further disasters because potential aggressors in their own territory will know that the governments of Western Europe will never use force to stop them?
Baroness Chalker of Wallasey: My Lords, the mandate does not entitle UNPROFOR or NATO to use force to stop one party against another. The mandate is absolutely clear. I believe that the noble Lord was most unfair in what he said. It is very easy to be an armchair critic of this highly complicated situation. It is not simple because one is not even talking—for example, in the Bihac pocket—of Bosnian Serbs fighting Bosnian Moslems; one is talking of a third group, a breakaway group, and of the complexities of the Serbs in Krajina. Indeed, the situation is continually changing. That does not make it easy to carry through the mandate in the first place.

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Secondly, in no way have the Contact Group or the allies been giving in to the Serbs in the way implied by the noble Lord. There simply is no alternative to the Contact Group plan. That is why the role that Mr. Milosevic has begun to play is so important. I can say that we are certainly encouraged by the statement from the Bosnian Serb Assembly delegation supporting the Contact Group plan. It remains to be seen whether that view will be acceptable in Pale and acceptable to a larger number of the Bosnian Serb Assembly. However, that does not alter the fact that the Bosnian Serb leadership knows that it cannot return to normality until the war ends. That is why we are working so hard for a peace settlement.
I should point out to the noble Lord that anyone who had read the detail of the discussions which my right honourable friend the Foreign Secretary and Alain Juppé, and others, have had over the past five days, could not put the questions that he has just put to me.
Lord Ennals: My Lords, will the Minister accept my great satisfaction that she dealt as firmly as she did with what I thought was the grossly oversimplified interpretation of the situation presented by the noble Lord, Lord Mackie of Benshie? Looking especially at the role of the UN, with which I obviously have a particular interest as an officer of the United Nations Association, perhaps I may say how glad I am that the Minister referred to the task carried out by Mr. Akashi who has absolutely, and with persistence, sought to find a way through a very complicated situation.
Bearing in mind the Minister's words about the possibility of imposing solutions on unwilling partners—a statement which seems to me to be absolutely accurate—can she confirm that the UN is not there in order to fight a war but to do what it can mainly by humanitarian means? Will the Minister condemn some of the statements made in the newspapers, which rather reflect what the noble Lord, Lord Mackie of Benshie, said, suggesting that, somehow or other, it showed a failure of an organisation; namely, the United Nations or, for that matter, NATO? Such organisations simply cannot force people to do what they are not willing to do.
As regards the treatment of the Bangladeshi forces of UNPROFOR, will the Minister openly condemn the quite appalling behaviour of the Bosnian Serbs in treating them as hostages when, under very difficult circumstances, they have been acting in the name and in the duty of the United Nations?
Baroness Chalker of Wallasey: My Lords, it is quite right that the noble Lord, Lord Ennals, should also pay tribute to Mr. Akashi who has a nearly impossible task. He has been at the forefront of seeking the release of those troops detained by the Bosnian Serb army. As I said, his intervention on behalf of Dutch and British troops has already been successful. We hope that he will very soon be successful in securing the release of others.
Of course we unequivocally condemn the holding of all military personnel or civilians by the Bosnian Serbs. That goes back to the situation nearly two years ago when we went in to try to help. There is absolutely no
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question that the Bangladeshi battalion has carried out a very valuable job. Indeed, those troops have worked under very difficult conditions in an area of former Yugoslavia, which is very difficult to police because of its sheer terrain. But in addition, I should stress that all that is the art of the possible. That is why the work that is carried out on the ground, whether by the commander of UNPROFOR, General Sir Michael Rose, or by Mr. Akashi, needs to be viewed with great care.
There are far too many armchair critics in this country who think that they know best. As for some of the attacks in the media and by certain other people on General Sir Michael Rose, I have been appalled by what I have read. It is so far from the truth that it defies reason. Perhaps I may join the noble Lord, Lord Ennals, and repeat something that I said in a debate in the House on Monday. Where people are determined to go on fighting, it is very difficult to stop them until there is a break in that determination. What we hope we are seeing in the Bosnian Serb Assembly is a willingness to bring the fighting to an end and let the negotiation and the peace process really begin again.
Lord Monson: My Lords, in her reply to the noble Earl, Lord Lauderdale, the Minister expressed the belief that Russia was being helpful. However, does the noble Baroness agree that the Russian veto of a recent resolution condemning Bosnian-Serb aggression is an ominous sign? Does it not appear to indicate that Russia is now taking a blatantly partisan approach to the conflict and that it is effectively condoning Bosnian-Serb aggression?
Baroness Chalker of Wallasey: My Lords, it is very easy to believe that the use of the veto by the Russians indicates such a mood. One fact that is quite clear is that the Russians are asking for much earlier consultation about events and about planning. We have taken that very much on board. I told my noble friend that, while we believe the Russians were being helpful in some ways, I could not go into the detail of how they were acting.
Baroness Strange: My Lords, can my noble friend the Minister tell us whether supplies have been getting through to the troops in Sarajevo? Perhaps I may also reiterate what has been said by noble Lords on all sides of the House; namely, how very proud and grateful we are of our British forces in the United Nations. While we are going about our normal business at this time of the year, buying turkeys and tangerines, we are thinking a great deal about those who are not able to do so.
Baroness Chalker of Wallasey: My Lords, supplies do get through, but we had to suspend the airlift into Sarajevo on 21st November because neither party would guarantee the security of the aircraft. That remains the case today. I hope that we shall be able to secure guarantees from the parties; indeed, UNPROFOR and UNHCR are seeking to do so at this very moment. The United Kingdom provides some 20 per cent. of the airlift capacity into Sarajevo. UK aircraft run by my department and the Royal Air Force remain committed to the operation. We are at least in a situation at present where there are some supplies available. While the

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critical state of supplies varies from area to area, we believe that we shall get further resupply for the population across the country. The most urgent area is probably Sebrenica. However, our troops are not in danger at the moment.
Lord Hylton: My Lords, will the Government find a suitable opportunity to remind the Russians that the Croatians and the Bosnian Moslems are just as much Slays as their Serb cousins and that a substantial proportion even of the Bosnian Serbs are opposed to Mr. Karadzic?
Baroness Chalker of Wallasey: My Lords, I can assure the noble Lord, Lord Hylton, that that point has already been made. My right honourable friend the Foreign Secretary was able to spend quite a long while talking directly to Mr. Kozyrev and not one of those points was left out of the discussion.
Lord Whaddon: My Lords, the noble Baroness has rightly paid tribute to the constructive part played recently by President Milosevic. Perhaps I may also pay tribute to the balanced and delicate way that the Minister has acted in this most tricky situation. However, is it not most important that Britain should be seen to keep the spirit as well as the letter of any agreements that we make? Further, is the Minister aware that when the easing of flights to Belgrade was agreed in September by the United Nations, flights between Belgrade and Frankfurt, Zurich, Amsterdam and Paris were started within 10 days but that the flights from Belgrade to London have still not been restored, or certainly had not been a week ago? This is due to difficulties arising from a whole series of technical objections, such as the fact that the Serbs were not allowed to pay for their landing fees at London Airport. Can the Minister help to overcome those technical objections so that we are seen to be keeping the spirit as well as the letter of agreements?
Baroness Chalker of Wallasey: My Lords, I thank the noble Lord, Lord Whaddon, for his kind comments. I agree with him that the spirit as well as the letter of our intention should be kept. I will look into what he said about landing fees at Heathrow, but I am not aware 'of the problem as he outlined it to your Lordships. I shall write to him.
Lord Craig of Radley: My Lords, the noble Baroness said that we would use every means at our disposal in dealing with problems such as have happened recently in Bihac. Could she tell us whether General Rose is content with the level of forces which he has at his disposal and, if he is not, whether Her Majesty's Government would consider sending additional forces?
Baroness Chalker of Wallasey: My Lords, I have not for some time personally spoken to General Sir Michael Rose, but I believe that he considers that they can do a good job with the forces they have. If he had need for further forces I am sure that he would have asked my right honourable friend the Secretary of State
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for Defence who has been in the area recently. I am sure that he would ask my right honourable friend Mr. Hogg and myself when we are there in the weeks to come.
Lord McNair: My Lords, may I ask the Minister for a reassurance that the more helpful attitude by Mr. Milosevic towards the plan put forward by the five nation Contact Group will not win him any concessions on the stance that the British Government are taking on the situation in Kosovo?
Baroness Chalker of Wallasey: My Lords, I can give the noble Lord that assurance.
Lord Mackie of Benshie: My Lords, may I ask one more question? Does the noble Baroness consider that Mr. Milosevic's helpful attitude is due to his good nature or the effects of the blockade on his country?
Baroness Chalker of Wallasey: My Lords, I am quite sure that any sane man when deprived of resources starts to take notice and that is exactly why Britain was among the first to believe that we should have sanctions against Serbia, but we wait to see whether that is fully successful. However, I have said that medical supplies are a different matter from that of supplies which are caught by the sanctions.

Manufacturing Industry
4.22 p.m.
Debate resumed.
Lord Skelmersdale: My Lords, it seems to me that the time has come to move on. I am most grateful to my noble friend Lord Trefgarne for giving me the opportunity to speak on a subject that I have slept with for over 20 years now. Being a director of a micro family business is something that constantly engages your thoughts, even if, like myself, you no longer run it on a daily basis.
So far we have heard of the best in the small and medium-sized business sector, but I would like just briefly to paint a rather different picture. My picture is of a small, cluttered, sometimes smoke-filled room with a desk, two telephones ringing loudly, a filing cabinet, an in-tray, a pending tray, a boiling kettle, two shelves and a man with tears rolling down his face. He sits at the desk answering one telephone with one hand, picking up stamps with the other and sticking them on envelopes in front of the overflowing in-tray. With one foot he is trying to turn off the kettle, with the other he is trying, unsuccessfully, to shut an overstuffed filing cabinet. The pending tray overflows on to the floor. On the wall behind him are the two shelves. On the bottom one are four box files. The first is marked "Tax", the second "VAT", the third "Invoices" and the fourth "Receipts". On the shelf above are four bowler hats marked "Development Manager", "Marketing Manager", "Finance Director" and "Personnel Manager", and last but not least a white helmet marked "Safety".
This cartoon, which still hangs in the office at home, shows the very model of an embryonic small businessman, and something that small businessmen try very hard to get out of at the earliest opportunity.

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Governments and civil servants, it seems, often forget what it is like out there in what we sometimes refer to as the real world. That causes them to pile on the regulations, change the rate of VAT overnight; in a word, doing things without warning. They give the impression that businessmen and women are well-educated and well-organised from the time they get up in the morning till they sink, overtired, under the duvet at night. Life is not like that. From the smile on his face I anticipate that the noble Lord, Lord Weatherill, for one, will acknowledge and understand exactly what I am talking about.
Over the years I have identified four types of small business, which the noble Lord, Lord Haskel, touched on, one of which has, I believe, all but disappeared. When I was doing my vocational education in horticulture it was still quite common for there to be businesses that were designed to make a tax loss in order to mop up excess profits made in another trade or profession. Then there is the hobby business designed to break even financially but most definitely not to pay tax. There is the business which sets out from the beginning to make money, to pay fair taxes and to grow into what my noble friend's Motion calls a "medium sized" business, and eventually a corporation. The Body Shop for example would fit this description. I believe that the conglomerate chaired by my noble friend Lord Hanson also fits that description, although obviously over a very much longer timescale. Then—this is something we sometimes forget—there are the charities in which many of your Lordships are involved in one way or another. Arguably they could be said to be slightly different but there is more than one that I could think of running an obvious business which covenants its profits back to the parent charity.
Yet we are sometimes given the impression that the DTI believes that it is invariable that from little acorns mighty oaks do grow. In that well-worn phrase from the musical, "It ain't necessarily so". Horticulturally speaking, it is comparatively few acorns that grow at all. They must be given the right conditions either in the nursery, where their chances are better—or they should be if it is a decently run nursery—or in the wild. As oily seeds they must not dry out before putting down their first root.
In fact that is not a bad analogy. Experience has taught us that of those small businesses that fail, a high proportion fail in the first year. Another dangerous time is that of expansion when the embryonic businessman delegates one or more of the hats I spoke about earlier, or when, later, he tries to execute a major expansion plan. It is small wonder that there are not many Hansons or Roddicks about.
I think that the department would do well to ponder upon this, and my right honourable friend the Chancellor too. I believe that over the past 10 years or so they have become better at this and realise that they can make life easier for business. What small and medium-sized business needs is well known. The noble Lord, Lord Haskel, summed it up in two words—economic stability. They need low real interest rates so that they can afford to reinvest; a planned pay-back time
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that the banks do not suddenly change; a steady rate of inflation, preferably a low one, so that their customers are not put off by sudden swings in prices; the minimum of regulation; easily accessible information; low taxes and achievable training as my noble friend Lord Trefgarne pointed out. They also need a constant rate of VAT. Twice now I have had a catalogue just despatched to my customers when the VAT rate changed. The hidden cost of chasing up small amounts of extra money is high and one must make a difficult assessment as to whether the business can or should bear the rise in VAT from its profits. I only hope that my right honourable friend the Chancellor will not try to recoup his missing billion pounds by a small but general hike in value added tax. I am prepared to bet that if that is the case, the rate of first year failures will increase.
That said, the Government have much to be proud of: the introduction of the single market has done wonders for exports at little cost to business; the introduction of one-stop shops which save time and effort for a busy person; the reduction of corporation tax from 42 to 25 per cent., so pegging it to the basic rate of income tax; keeping VAT stable; managing to reduce interest rates to affordable levels; and, most important of all, a low rate of inflation. I believe that when the figures come out for new businesses in 1994–95 we shall see an upturn in start-ups and a drop in failures. We all have high hopes for deregulation. I look forward to the first fruits of this policy after Christmas.
The corollary of deregulation is, of course, more regulation. Small businesses are great employers of part-time labour, sometimes throughout the year and sometimes on a seasonal basis. Many of those employees are women who are prepared to work for a lower income than men to top up the general pool of the family income. Some are semi-retired men who have taken early retirement—those whom the noble Lord, Lord Desai, might call potentially economically semi-active. Those workers represent a major part of the workforce of this country. The party opposite sneers that they are not real jobs. But they are very real for the people holding them and for the businesses who employ those workers. However, the Opposition seem to wish to damage that sector of the employment market by introducing not only a minimum wage but the social chapter, giving those workers the same rights as full-time employees. I can think of no policy more damaging to small businesses and their employees.
That brings me to charities. There are 170,000 charities registered with the charity commissioners, employing 482,000 people. That represents 2 per cent. of the total workforce, 8 per cent. more than the motor industry employs today and as many as the combined water and energy industries employ. Of the top 500 fund-raising charities, 200 are in the medical field supporting the salaries of well over 500 people in British universities. The House will be as amazed as I was to learn that the 21 cancer charities provide £120 million for research. That amounts to 70 per cent. of the total spent on cancer research in this country. If that is not a business activity, I do not know what is.

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Over and above that, we increasingly expect charities to take on work in social services and in environmental protection, and government and quangos pay them to do so. More and more of that work is by contract. It makes for enormous pressures on the charities' income because the overheads cannot normally be allocated. According to the Charities Aid Foundation, the top 200 fund-raising charities raised their income by 4 per cent. in 1992 and increased their expenditure by the same amount. The second 200 charities show a different picture: a drop of 9 per cent. in income matched by an 8 per cent. drop in expenditure. From that we can see that the smaller charities are being squeezed. Why, my Lords? I believe that, as with any other small business, charities suffer from the problems of employing part-time female labour. Increases in maternity leave and the reduction in statutory maternity pay have hit them hard. So, too, would compulsory occupational pension schemes if they were introduced.
However, I wish to congratulate the Government on two fronts; on making covenant forms both shorter and easier, and on the introduction of gift aid. Alas, the figures show that only 10 per cent. of donations are made tax effectively. However, it is as much for the charities themselves as for the Government to increase that figure. What is in the Government's hands is the ability to do something about the £350 million a year which charities pay in VAT. The amount is worked out by a very complicated formula. Essentially, it means that the charities can only claim back the input tax in the ratio provided by the proportion of VAT attracting income to their total income. In other words, if 20 per cent. of their income arises from contracts or subscriptions, or a mixture of both, and the remainder from donations, charities can claim back only 20 per cent. of the tax they have paid out. The charities tax reform group has been told by Customs and Excise that there is no technical reason why that cannot be changed. It seems that the political will is lacking.
My conclusion is that with that one exception the problems of charities are identical with the problems besetting small businesses. The Government should recognise the great value that small businesses bring to this country, whether or not in the charitable sector. I believe that the Government recognise that, but they could do more in the ways already proposed and, I am sure, still to be suggested in the debate. Above all, they should always bend over backwards not to kill the goose that just sometimes lays the golden egg.
4.35 p.m.
Lord Desai: My Lords, we are grateful to the noble Lord, Lord Trefgarne, for giving us the opportunity for this debate. Like the noble Lord, Lord Weatherill, I made my maiden speech on this very question about three years ago. I shall confine my attention to the first part of the Motion—the importance of increased output from the United Kingdom manufacturing industry.
I do not know much about actual business. I am an economist and economists have a fond relationship with the real world: they know about it but do not want to be anywhere near it if they can help it. I wish my life to be comfortable. After what the noble Lord, Lord
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Skelmersdale, said, I am glad that I am not in the real world; I am in academia. It is hard work in the real world.
I wish to talk about the general state of manufacturing industry. My points are not made in a partisan spirit. Manufacturing industry is an important part of the economy. But increasingly there is a contrast between the ability of the manufacturing sector to generate wealth and its ability to generate jobs. Increasingly, because productivity increases have had to be rather fast in this competitive world, manufacturing industry can generate wealth but cannot always generate jobs at the rate it once did.
Virtually everything that I say arises from Economic Trends. It is an excellent publication; I recommend everyone to study it. Since 1970 production industries—manufacturing and other aspects such as North Sea oil—have grown but more slowly than any other sector of the British economy. Since 1970 there has been growth of approximately a third, from 73 to 98 in index number form. The recession has meant that we have not caught up with the previous peak in output in 1989. But there has been growth in manufacturing industry.
By the same token we have to be aware that as employers of people manufacturing industry has shrunk quite remarkably. In 1970 about 8 million people were employed. About 4 million people are now employed. That means that while output has grown by about a third, employment has declined by about a half. Of course, the balance lies in increased productivity.
When considering productivity, one achievement has been noticeable—a good rate of productivity growth in manufacturing industry. I believe that increasingly that will be so. Another good feature is that since 1980 productivity growth has been very rapid. We had slow productivity growth in the 1970s and good, rapid productivity growth in the 1980s. That means that productivity growth has to be kept up. We cannot look benignly to the manufacturing sector to provide us with jobs. We have to be sure that manufacturing industry stays competitive and generates wealth, especially manufacturing exports which are absolutely vital for the national economy.
I have to point out a disturbing trend. The rate of investment in our manufacturing industry is no longer as high as it was. With proper allowance for inflation, in real terms investment in our manufacturing industry is lower today than it was in 1970. I have to admit that it reached a peak in 1989 when about £15 billion was invested. Today the figure is only about £11 billion, compared with £13 billion in 1970.
We should approach the problem of manufacturing investment much more seriously. We may differ across party lines as to methods but encouraging manufacturing investment is urgent and central for our economic future. Whether we do that by inviting foreign investment or by encouraging domestic investment, or whether it takes place in small or large firms, are matters of choice. Indeed, I believe that one should do everything across the board.
Encouraging manufacturing investment in every way we can is central to the problem of British manufacturing industry. Our outward growth is slowed

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to the extent that our manufacturing investment is not rapid. Of course, by the same token, we get more out of our investment than other countries. We are very efficient at getting more out of the pound than others. That has to be said. However, it is true that we are not investing enough. It is a matter of diverting resources from other uses—consumption, government spending or whatever it is—to manufacturing investment. Perhaps on another occasion we should debate the best ways of encouraging manufacturing investment in the British economy.
What I think is happening, not just in the UK but throughout the world in the modern context of the global economy, is that countries who wish to survive as manufacturing nations must continue innovating at a rapid rate. They must put a great deal of money into research and development. They must move along the product front because the products we used to make can be made much more cheaply and better elsewhere in the world. We shall not be able to resist the tide of free trade. It is a delusion to think that we could. I would not even advocate it.
We live in a climate of growing free trade; we face global competition. Unless we invest a lot of money in manufacturing industry, unless we research and develop new products rapidly, we shall fall behind. It is a matter of vital national policy that we concentrate on quality output in manufacturing industry. Through debates like this we can draw the attention of our policy makers to the matter. Therefore, I am doubly grateful to the noble Lord, Lord Trefgarne, for having introduced this subject.
4.43 p.m.
The Viscount of Oxfuird: My Lords, there are few in your Lordships' House who are so eminently qualified as my noble friend Lord Trefgarne to speak on this subject, an area in which he made such a significant contribution in his days as a Minister of State at the Department of Trade and Industry. He is still so much involved with manufacturing industry by virtue of his presidency of the Mechanical and Metal Trades Confederation, METCOM, which numbers many small and medium-sized enterprises within its membership.
It has been obvious from the contributions from all parts of the House this afternoon that there are few of us who have not grieved at the decline of some sectors of the United Kingdom's manufacturing infrastructure over the past decades or alternatively have been heartened by the reversal of that trend in recent years. That reversal has been seriously spearheaded by our small and medium-sized enterprises—the SMEs.
There is growing evidence—and it has been highlighted by a number of noble Lords already—that we have turned the corner. In the three months to September 1994, manufacturing productivity was up 6 per cent. on the previous year, a level of growth not seen since the mid-1980s, but against a backdrop of the lowest inflation for generations. Manufactured exports are at record levels, having grown by 80 per cent. since 1981 and by over 10 per cent. in the past year.
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However, encouraging as these statistics are, they are frankly not good enough. In the British manufacturing company with which I was so closely involved for many years, the introduction of the principles of total quality management became one of the prime philosophies. That experience taught me that constant vigilance was needed for continuous improvement. No enterprise or institution, of whatever size, should forget this constant requirement for continuous improvement. Those who do will in the end decline and perish.
So what factors do we need to study and address in looking for greater improvements in output within our manufacturing enterprises? It was, as some noble Lords may recall, Rudyard Kipling who referred to the,
"Dear hearts across the seas".
Perhaps I could, first of all, recall the thinking of some of the industrial leaders from beyond our shores. I think, first, of some points I made in a debate back in 1988 proposed by my noble friend Lord Joseph, recorded in the Official Report of 4th May, vol. 496, col. 620. I spoke of the research of the learned American, Professor Birch of the Massachusetts Institute of Technology and of his emphasis on the importance of training our manufacturing workforce in the new technologies. He also emphasised how important the small business was in reducing unemployment. This business is by nature dynamic; it has young entrepreneurs and a very high percentage effect on the unemployment figures.
However, it is equally important to consider the training of people. How heartening it is that we are beginning to see the fruits of some of the investments that the Government have made in this field since that time.
I confess that I have also been somewhat influenced by the works of the American writer, Tom Peters, and I was reading one of his books this weekend, Thriving on Chaos. In it, he contrasts the American penchant for what he describes as "giantism" with the Japanese passion for smallness. He argues that part of the Japanese economic miracle since the Second World War can be explained by their exploitation of the "smaller is better" strategy. He quotes from the book: Smaller is better: Japan's Mastery of the Miniature by the Korean writer O-Young Lee who emphasises the "smaller is better" philosophy. He argues that this is a major factor in explaining the reasons for Japan's economic success since the Second World War.
He is thinking in part, of course, of the success that the miniaturisation of consumer electronic products has brought to the Japanese electronics industry, but he also highlights that the small business sector in Japan is more vital than that in the West and that even the largest Japanese corporations are less vertically integrated and count upon a network of smaller subcontractors for a significant part of their innovation. This helps to foster their commitment to continuous improvement.
This theme is taken up most positively in the recent White Paper to which some noble Lords have already referred, Competitiveness—Helping Business to Win.
The White Paper emphasises that to become more competitive companies need to change the climate within their organisations to stimulate innovation, to

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train their people, to invest in new technology, to take advantage of external skills and knowhow and to use, adapt and develop novel processes.
It is often in these very areas that our small and medium-sized enterprises tend to be more responsive and faster on their feet. That is why a significant and growing proportion of total employment, not just in the United Kingdom but in most of the developed economies of the world, is in small and medium-sized enterprises.
The White Paper on competitiveness highlights the need to improve the effectiveness of our financial institutions in supplying funds to SMEs. It seems that there is an over-reliance in the United Kingdom on the part of small firms on the use of overdraft facilities to provide the funding to sustain growth. In the United Kingdom, overdrafts account for 56 per cent. of small firms debt, compared with 14 per cent. in Germany. It seems that there is a need for both the banks and the SMEs to place greater emphasis on longer term finance.
It is encouraging that the Chancellor took heed of that need in last week's Budget in his plan to create venture capital trusts (VCTs). These are investment trusts which will be owned by individual shareholders and which will attract generous tax relief. They are designed to encourage investors to put their money into equity for small businesses. The trusts will be able to make investments up to £1 million in companies whose net assets cannot exceed £10 million. As an inducement, investors will be able to claim tax relief at 20 per cent. on the investment and to defer capital gains tax that is due on other asset sales if the proceeds are invested in such a trust. Profits and dividends from the trusts will be tax free.
There were also measures to shelter the small and medium-sized enterprises from some of the more onerous requirements of government regulation until they are strong enough to cope with them. The proposal to extend the number of businesses which can pay their PAYE and national insurance contributions quarterly rather than monthly will help an estimated 100,000 employers. The gradual rise in the VAT threshold to £46,000 will also help, as will the proposal to move to annual simplified VAT accounting for small businesses.
I spoke of a Korean observation earlier which asserted confidently with respect to Japanese economic success that "smaller is better". Let me be extremely careful to make it clear that I do not believe that smallness should be an end in itself. Smallness is at its best when it acts as a precursor for growth—a fact that was excellently illustrated by the Financial Times a couple of years ago when it changed the name of its regular "Small Businesses Column" to the "Growing Businesses Column".
A very real example of what I am trying to say is provided by the common agricultural policy of the European Community. The CAP insulates European farmers from market forces and encourages uneconomic farmers to stay in business. Most British farms would still fall within the DTI's definition of small and medium-sized enterprises; but the size of farms in the
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United Kingdom tends to be larger than elsewhere in the Community. They are hindered from exploiting their competitive advantage by the millstone of the CAP.
Smallness is not an advantage in itself if it encourages the Luddite forces of reactionism to resist change and shun improvement. The farming community in parts of our European Union should take note, and the Government should continue to press for further reforms of the CAP and seek further reductions in support prices.
Our British farms are successful medium-sized enterprises and might well be described in the phrase that was immortalised by William Cowper in the late 18th century in his Tirocinium,
"Tenants of life's middle state,
Securely plac'd between the small and great".
I conclude on a note of optimism. Our debate this afternoon has emphasised the need for improved manufacturing output and has given us all a number of valuable indicators of the direction that we should take. The outlook is improving. About 226,000 new businesses were started in the first half of 1994, an increase of 10 per cent. over the first half of 1993. The DTI's Business Link initiative is beginning to provide a most effective support network for our businesses, particularly our small and medium-sized enterprises. With hard work and a commitment to continuous improvement, I believe that we can succeed.
4.54 p.m.
The Earl of Kintore: My Lords, I also thank the noble Lord, Lord Trefgarne, for introducing this important debate. I should like to address a few points about small and medium-sized businesses which not only do not increase their output but actually cease trading, not because they are making the wrong product at the wrong price but because their internal financial procedures are poor or even non-existent.
I must immediately declare an interest as president of the International Association of Bookkeepers. The association, founded over 20 years ago, offers a professional qualification in manual bookkeeping. It also offers diploma courses in computerised bookkeeping, small business financial management and payroll administration. I am delighted to learn that my noble friend Lord Weatherill still has the office bike. I hope that the noble Lord also has good internal financial procedures, as many small and medium-sized companies do. But, sadly, far too many businesses are going into liquidation. Many will have gone under from lack of financial control. Very basic mistakes are made, such as failing to send out invoices; taking too long to chase up moneys that are owing; and taking too much cash out of the business too early.
I believe that some companies really do still put all their paperwork into a box and present the box to their accountants at the end of the year. Apart from considerable expense, it means—unless the accountants work considerably more sharply than many whom I know—that the financial state of the business will not be known for 10 to 12 months after the year end, and vital information that the chairman's Rolls costs more to run per month than the company is making may not be available until it is too late. The Inland Revenue and

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Customs and Excise—and, I imagine, the banks—feel rather unloved over this period as they do not receive the returns that are required. I know that the Inland Revenue starts with blue-coloured demands, and then, round about Easter, the demands change to a rather fetching shade of red. I imagine that, red being the final colour, once it is ignored the game is up. It probably comes as no surprise that, in desperation, both the Inland Revenue and Customs and Excise institute insolvency proceedings.
I was pleased to read in the Budget snapshot, HMT1, published on 29th November, that there are to be consultations on the reform of the insolvency law to help firms in difficulty and to help avoid wasteful liquidations. But surely problems must be identified at a much earlier stage. I therefore welcome the Government's initiative which appears on page 2 of the Budget Day press release, HMT5, under the heading, "To Widen Small Firms' Access to External Finance". I quote:
"Representatives of small business and others will shortly be consulted on the development of a financial management certificate. The aim would be to devise a certificate that provided a clear signal of a firm's financial competence, thus providing an additional incentive for firms to improve and implement their financial management skills".
I appreciate that the Government are to consult, but I should like to ask the noble Earl the Minister two questions, of which I have tried to give him prior notification. The first is: can he give any more details about the financial management certificate than appeared in the press release? Secondly: can he say whom the "others" who are to be consulted are likely to be?
5 p.m.
Viscount Caldecote: My Lords, in the welter of discussion on the economy—inflation, interest rates, PSBR, competitiveness, productivity and a stable currency to encourage growth in the GDP—I believe that, important though they are, we are in danger of failing to see the wood for the trees. We need to remember that the ultimate objective of all economic policy is to give everyone the opportunity to lead a full and satisfying life. Unemployment is a major obstacle to achieving that. So I very much welcome the subject of today's debate, so ably introduced by my noble friend Lord Trefgarne, with its emphasis on increased output and on SMEs (small and medium-sized enterprises), both of which create jobs.
Everywhere, increased output is largely dependent on investment. Recent OECD and IMF data show the connection clearly in the figures averaged over the past 30 years—which may account for the slight difference from the figures given by the noble Lord, Lord Haskel. The United Kingdom's GDP growth averaged 2¼ per cent. per annum. With fixed investment at 18 per cent. of GDP, we were at the bottom of the league, compared with Japanese growth of 6 per cent. and investment of over 30 per cent. of GDP. Other competitors were between those two limits. Nevertheless, the UK has
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made huge improvements in productivity and competitiveness, particularly over the past 15 years. But others have improved, too.
The figures quoted earlier are for fixed investment. Of equal importance—as the noble Lord, Lord Desai, so clearly said—is investment in innovation in competitive products which will sell all over the world. For price is not the only factor which affects sales. Quality and value for money are just as relevant. Switzerland is a good example. The products that they make are usually very expensive but of the highest quality, and they have a very good record in the export field.
Those considerations apply to every company, from the biggest to the smallest. Among them are many world-class companies which make a full contribution to output growth. But there are too few of them. There are many reasons for inadequate investment—for example, short termism; bias of taxation in favour of earnings distribution rather than investment, which means that more of the earnings are used in consumption rather than being reinvested in the company for innovation and the like; and a lack of confidence in demand in the future and in a stable value for sterling.
We have often discussed this topic in this Chamber. I shall not go into the issues today because there is not the time. They have been well covered in the past. I should like to emphasise the enormous progress that has been made under this Government in creating the right climate for investment. But the fact is that, overall, industry has not taken full advantage of it. So there is much more to do.
SMEs can make a major contribution. Many of them—probably the great majority—are owner-managed. That gives them greater flexibility to react to market conditions and invest for the future. There is no short-termism there. Just as important is that investment in SMEs is almost always investment for expansion of both output and employment, whereas in larger companies the objective of investment is frequently to produce the same output with fewer people employed.
What then are the main obstacles to even greater growth in the sector? They are, I believe, largely financial. Adequate cash flow is vital to the success of SMEs or even their existence. In that connection I hope that the Government, the CBI and others will continue to press for measures to deal with the great problem of late payment of bills to small companies. It is a very important issue which must be dealt with.
Also, funding for smaller companies is a major problem. I regret that the Budget did little to help SMEs by, for instance, granting 100 per cent. capital allowances for the purchase of plant and equipment up to a limit, say, of £250,000, as was widely recommended. Similar allowances to encourage investment in innovation should also receive high priority. But much more can be done by the financial institutions and industry itself, without waiting for government action. There is genuine difficulty in raising relatively small amounts of risk capital. Owing to the setting up and administration charges, no venture capitalist will consider investing less than £250,000 and

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more often less than £1 million. There is a major problem for fledgling SMEs and it is important to find a solution.
The noble Lord, Lord Weatherill, mentioned the Prince's Youth Business Trust, of which I once had the privilege of being a trustee. That is an example of how the problem is overcome at the lowest level of investment—probably under £5,000, unless it has changed very much since my day. The administration costs, advice given and so on are either undertaken by voluntary workers or paid for by money subscribed on a charitable basis. Perhaps for larger companies—those that are not dealt with through the Prince's Youth Business Trust—there could be a fund contributed to by banks and other big financial institutions which would facilitate smaller investments to SMEs by contributing to the administrative costs. Thereby, they would benefit from the resulting growth in the longer term future.
But, as has been said, many SMEs depend heavily on overdraft and other forms of bank lending. That makes them very vulnerable to a recession, when cash flow comes under pressure. Banks should be more flexible and not too greedy in providing fixed term loans. That gives great confidence to a smaller company that the overdraft facility or other type of loan will not be withdrawn at a difficult moment. Above all, it should be made absolutely clear by bank managers at the start of negotiations when dealing with SMEs whether they are acting as principals with power to make a binding agreement or simply as messengers making recommendations to some higher authority.
A few years ago I was chairman of a very small company. At a difficult time, we thought that we had made a satisfactory and firm agreement with the bank manager with whom we had dealt for several years, only to find some three weeks later that a higher authority had vetoed the agreement. That was certainly a factor in the ultimate collapse of the company.
Lastly, I should like to see more SMEs prepared to fund their growth by selling, say, 20 per cent. of their equity, as an alternative to more bank loan finance of whatever kind. It is better to own 80 per cent. of a successful company than 100 per cent. of a failure. I hope that investors, especially those taking advantage of investment through the new venture capital trusts, which my noble friend Lord Oxfuird mentioned, will make a real contribution to solving the problem and will not be too greedy in the terms of the agreements that they make with SMEs.
I emphasise again that much has already been achieved in the past 15 years in encouraging enterprise and investment. But we must always remember that our competitors too are improving all the time. We have to get and remain ahead of them. Greater investment is essential to achieve that.
5.10 p.m.
Lord Cochrane of Cults: My Lords, I start by thanking my noble friend Lord Trefgarne for introducing this subject today. It is right, as said by others, that he plays an important part in the engineering training organisations. I should mention also that he is a non-executive director of an interesting SME which
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has perhaps become more large than small, as I shall relate in a moment. I refer to Siebe, a company with a history extending back 170 years. It was founded by an Austrian artillery man by the name of Augustus Siebe who came to this country in 1816. In due time he invented, among other things, a better method for making screws—a vital engineering component—but is now predominantly remembered for the invention of the first serviceable and durable method of working underwater, the traditional hard-hat diver as it later became known.
Siebe is an interesting company. For a long time, it remained quite small, describing its activities as those of submarine engineers. It remained with the descendants of Siebe for a long time and came to the market in the 1950s. I should perhaps declare an interest. I have been a shareholder fairly continuously ever since. The vicissitudes of school fees and so forth perhaps led me to reduce my shareholding; otherwise I might not feel quite so poor as I sometimes do.
Siebe is now an immense company. It has a huge turnover. The profits published today are a great improvement. It is not particularly highly geared. That has all taken place due to a change of ethos in the company and the arrival of determined and skilful managers on the board of directors. At one stage it looked as though they had slightly overdone it but in fact they got it exactly right. The results we see today illustrate how growth is possible if it is well aimed and well controlled. The traditional manufacturer is often described as a maker of "widgets". I gather that that word is now obsolete because widgets are those things which cause beer to shoot out of tins. While useful that is not quite what was originally intended.
As the last Back Bench speaker I do not want to bore your Lordships with a multitude of figures or anything else. But I shall make one or two points and reiterate what was said earlier, particularly by my noble friend Lord Caldecote, on the role of banks. In this country small businesses rely immensely—as I know personally—on bank finance. Banks get cold feet at intervals. I mentioned that the other day in another context. A bank manager was overplaying his hand; he received a rude answer from me; eventually he lost the account and lost a good many other people's accounts too. That merely shows that not all bank managers are wise. We know that, but there was a chap determined that a certain class of business within his branch was unacceptable.
The role of the banks must be continually supportive. They must support us from the word go. In order to do that they need information. In order to give them the information, as my noble friend Lord Caldecote said, we need a decent financial system. That is of prime importance. Again, it tells us whether or not we are actually making money. There was a famous case many years ago of Crittall Engineering which could not get stuff out of the factory quick enough. Yet, mysteriously, it never seemed to have more money in the bank. It was during the period of Nye Bevan's housing boom. The company made steel windows. Unfortunately, it was receiving five shillings a window less than the cost of making them; so gradually it went down and down.

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I saw something similar in my father's time with his mineral supply business. When my brother and I picked it up after his death we discovered that we were popping a 10 shilling note into every lorry-load of stuff we sold. Nobody realised that. Therefore, if one can persuade the banks to be more supportive on a continuing basis they will lose less money, feel less endangered and will not ultimately find themselves in the situation which was put to me by an experienced bank manager who said, "It is all very well having security of this factory and that factory, but they are worthless when the whole industrial estate is empty."
Another role which could be played by the banks in relation to companies is to put in a part-time, non-executive director who acts as liaison. He can say, "I do not think that that is a good idea; perhaps we should go this way rather than that way". That happened to my grandfather. The Royal Bank put him as signatory and director into a privately-owned coal company many years ago. Following the death of the head of that family, the coal company was discovered to be immensely in debt. I believe the personal guarantee of the executors was well over £7 million at the turn of the century. Through the energy of the next generation and possibly the wise guidance given by my grandfather and the bank, they all lived happily ever after, although they did have to mine under the castle gardens. I am sure that the noble Lord, Lord Ezra, appreciates the risks of mining, especially when one already has a huge bank overdraft.
I shall not continue except to say that in relation to part-time expertise in finance—picking up a point made by the noble Earl, Lord Kintore—there are plenty of retired executives with good financial experience who could be obtained to attend one day a week to keep control of a company's finances. That is particularly important when it is at the dangerous stage when, the idea having taken off, capacity needs to be expanded. The question is: more money is needed but how will it be obtained?
In a recent speech the Chancellor of the Exchequer eased the climate. But if those running small businesses think more carefully about the financial implications of what they are doing, they are more likely to prosper in the way we all want.
5.17 p.m.
Lord Ezra: My Lords, although there have been a number of debates in this House on manufacturing in recent years, the noble Lord, Lord Trefgarne, was right to introduce this debate today. Manufacturing remains a vital ingredient in the future economic development of the country. That is shown by the large number of important reports recently published on the subject. They include the Government's White Paper on competitiveness, the European Commission's White Paper on growth, competitiveness and employment, the House of Commons Trade and Industry Committee report on the competitiveness of the UK manufacturing industry, the CBI series of reports issued by the National Manufacturing Council and the report by UNICEE (the
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European equivalent of the CBI) on making Europe more competitive. All those centred on the vital role of manufacturing.
I have participated in most of the debates on manufacturing in this House over the past 10 years. I believe that the most significant development has been the changing attitude of the Government. In the 1980s the Government's attitude was that manufacturing represented only one element in the economy and it did not really matter how wealth was created so long as that was achieved. As we moved into the 1990s, however, the Government have increasingly recognised the importance of manufacturing, and they are right to do so. Fifty per cent. of consumer spending and 70 per cent. of exports of goods and related services are accounted for by manufacturing. In spite of the diminution in the industrial base, to which the noble Lord, Lord Desai, referred, there are still 4 million people employed in manufacturing with at least as many more supplying supporting services. There is therefore little doubt that manufacturing remains a crucial element in the economy.
The Government repeatedly draw our attention, and I am sure will do so again today, to the various positive signs in the economy, such as improved growth, better exports and reduced inflation. It is perfectly true that those developments have taken place. However, the impression created by the repetition of these positive developments is one of complacency. That is regrettable.
While the present indicators may be positive, the underlying trends are not. As the CBI and others have shown, we are still lagging some 20 per cent. to 40 per cent. in average levels of productivity below our principal competitors, even though there has been a narrowing of the gap in recent times. Our investment in manufacturing and related activities has been sluggish to say the least and leads to capacity restraints even at an early stage of economic recovery, such as we are beginning to witness at the present time. We have noticeably lower levels of skills than our main competitors. The noble Lord, Lord Trefgarne, and others referred to that. Finally, our inadequate capacity shows up in terms of a major trade deficit in manufactured goods, which is still running at the level of £10 billion a year, in spite of recent improvements in export performance. It is to these long-term problems, particularly the role of the smaller firms in overcoming them, that we should be addressing ourselves.
If we were asked to encapsulate in a very few words the major weakness which has developed in the British economy for several years past, I believe the answer must be lack of adequate investment, both of a physical nature and in people. Let us look for a moment at physical investment in the public sector, which is very necessary to create the conditions under which private enterprise can thrive. In spite of repeated pleas that the last thing that should be cut is investment in capital projects which are intended to provide an improved infrastructure, this seems to be the first thing the Government turn to when they wish to reduce the public sector borrowing requirement. I am afraid that we saw evidence of that in the recent Budget, when expenditure

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on transport infrastructure was cut from £10.8 billion to £8.8 billion. The main argument for doing that, according to the Chancellor, was that the private finance initiative would close the gap. All I can say is that that is by no means certain. In the meantime, industry, and in particular manufacturing industry, will go on suffering from continued congestion and delays.
Much reference has been made to the inadequacy of investment in manufacturing industry, a point made by the noble Lord, Lord Desai, the noble Viscount, Lord Caldecote, and others. One of the reasons for this inadequacy has been the uncertainty about demand caused by macro-economic volatility. We have just lived through a classic example of this, with the major stimulus to consumption in the late 1980s leading to overheating and then a massive cutback. It is no wonder, with these memories of not so long ago, that manufacturers are cautious about moving ahead too fast with investment and are insisting on high rates of return, to which the CBI, the Governor of the Bank and others have recently drawn attention, in spite of the current low level of inflation. I believe that there is a major role for the Government at the present time to try to put this right.
Of course the Government must continue to take the necessary measures—we saw one of them today—to keep inflation under control. But in addition—this is what is lacking so far—they must take complementary measures to stimulate investment. In this connection, I share with the noble Viscount, Lord Caldecote, the regret that the Government did not follow the advice of the CBI, the Engineering Employers Federation and many others in introducing fiscal measures in the recent Budget to stimulate investment. One of the measures proposed, as the noble Viscount pointed out, was for a 100 per cent. capital allowance on the first £200,000 of investment in any one year. That would have been particularly helpful to small firms.
As many other speakers have emphasised in the debate today, small firms play a crucial role in the economy. Within manufacturing industry almost a third of employment and a quarter of output are accounted for by such firms. Access to finance and the cost of finance are crucial elements in their success. In addition to capital allowances directed at small firms, to which I have referred, there is a strong case for considering an investment bank on lines which have existed for many years in France and Germany, and which are now being looked at in many quarters, to offer debt finance to small firms on terms which are at the very least no worse than those obtainable by larger firms. To get bank money these days small firms have to pay 3, 4, 5 or 6 per cent. above bank rate, whereas a large firm, with all its connections and its ability to go anywhere in the world to raise its money, can usually achieve a rate of between I and 2 per cent. That is a big impediment to the small firm.
What is required is a long-term strategy for stimulating investment in essential public infrastructure and in manufacturing to offset the uncertainties which have been created by past policies. No one can be certain that those policies will be avoided in the future. The upturn through which we are now going is being
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seen in many other countries. As we noted in the recent debate on the economy, while we have done very well in containing inflation, some of our neighbours have done even better, such as France which has inflation at only 1.6 per cent.
There is a need, agreed on all sides, in addition to a stimulus to investment, for greater resources and efforts to be devoted to training. Differences in skill levels are a significant factor contributing to the UK's lower productivity compared with its main trading partners. The noble Lord, Lord Trefgarne, referred to that point in his opening speech and the noble Lord, Lord Weatherill, gave us good examples of voluntary efforts to try to deal with this matter. More than 60 per cent. of the UK's manufacturing labourforce have no vocational qualifications compared with 50 per cent. in France, 40 per cent. in Holland and 25 per cent. in Germany. The gap is most pronounced in people with intermediate skills. This is therefore the area where the greatest efforts need to be made.
The Government repeatedly state that the economy is set on a virtuous path of sustained growth with minimum inflation. Well, that has yet to be proved. The recovery in Britain has been mirrored elsewhere. The test will come when a cyclical downturn sets in. In such circumstances, will the British economy suffer less than it has in the past? If manufacturing is to thrive in spite of future possible cyclical recession, the Government will need to set a framework within which there is a consistent macro-economic policy, a point made by many noble Lords. A major impetus on a continuing basis must be given to investment in physical assets in the public and private sectors and to the development of the necessary skills to make the best use of those assets.
5.29 p.m.
Lord Peston: My Lords, the noble Lord, Lord Trefgarne, introduced this important debate in an interesting and effective way. Indeed, he was no help to me because most of what he said made perfectly good sense and I agreed with him, which does not make for much of a debate. Happily, he will soon know that there are at least one or two things with which I disagree with him and that, at least, might enable me to add a certain amount of life to what would otherwise be an extremely boring progression of, "Yes, he said that and I agree with him".
Certainly, all of us now agree about the importance of manufacturing and there is no argument there. There is no argument about the importance of small and medium-sized firms. In that regard one should not forget that every year large numbers of firms start up but, regretfully, within about three years most of them have gone. I was extremely interested in the intervention of the noble Lord, Lord Weatherill. He referred to an institutional arrangement which not only helped firms to start but to survive. I believe that he is aware, as all noble Lords are, that going into business as a small firm is highly risky. As I say, the odds are overwhelmingly that the firm will not be there for very long. It is very hard to start a surviving business. I believe that the noble Lord, Lord Skelmersdale, also pointed that out.

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In a way, of course, that is the basis of a free market economy. Essentially, entrepreneurship is risk taking. If it were a stone cold certainty it would not be entrepreneurship. Risks are taken and some firms survive and some do not. What is important is to create an environment in which it is easier to survive, particularly if one has products which consumers want. Again, we have to remind ourselves that the ultimate test is: are you producing goods and services which can meet the test of the market? Are you producing things which people want? I hope we all agree—I have said this several times—that firms do not exist for their own sake but in order ultimately to meet demand.
In that regard we have to ask ourselves this question: what is it that the small and medium-sized firm wants? Again, I believe that we all agree that what they want is a stable economic environment. They want an environment in which markets are growing, but what they do not particularly want is a highly fluctuating economy. Given that when this Government first came into power they intended to produce a serious change in economic policy-making, the puzzle is that the economy has fluctuated just as much under this Government as it ever did before. I say it is a puzzle because I thought that perhaps some of the things they were doing might lead to more stability, but they have not.
The manufacturing sector in particular has shown wild swings. Manufacturing output did fall between 1989 to 1992. It has only just risen, almost this very month, to its previous peak. That means that over the whole of the period there has been no growth, although over the longer period there has been growth. Manufacturing investment has not yet got back to its previous peak. We all agree about the importance of investment, as the noble Viscount, Lord Caldecote, emphasised. We have to ask: what is conducive to investment? My own judgment of what is most conducive to investment is that the market should be there when one has the new capital equipment. It is a commonplace to say that it takes time to get the new equipment in. What one does not want is to bring it in during the good times and to find that it is fully operational when the market has gone. That is why economic stability and growth are so tremendously important.
I said that I would introduce an occasional remark of a controversial kind. I certainly do not believe that what the Chancellor of the Exchequer did today in raising the bank rate is remotely of any help to small businesses. We may have a chance to discuss that, I am told, tomorrow, but since I may not be speaking tomorrow I must say that raising the bank rate today makes no economic sense to me whatever. I say to noble Lords opposite that it does not make any political sense to behave in such a panicky way either, but that is for them to reflect on.
I turn to the whole question of finance which other noble Lords have mentioned. I am with them all the way. What a small business wants is a helpful financial environment, but in particular it wants help on a rainy day. To offer a small business funds when times are good is not bad, but what it really wants is that when
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things are going wrong help will be available from the financial institutions, which we all agree are, for the most part, the banks. Help is wanted at that time. It does not seem to me that within recent years the banking system has been as helpful to business as it might have been and as I hope it will become again.
In fact, the noble Lord, Lord Trefgarne, said—and I nearly decided to agree with him on the point—that we should discuss this matter on another day. I am not sure when the next day is to be so I thought that I should at least mention the importance of financial arrangements and liquidity to small businesses. I agree with the point made by the noble Lord, Lord Ezra, about interest rates. There must be some loading of interest rates because small business is riskier than big business, but the difference does not seem to me to be justified by market forces. We should consider changed institutional arrangements that might help us.
I believe that there is no difference between us as regards education and vocational training. We simply have to do more, but what we do has to be more effective. One of the matters which concerns me is that there are far too many courses which are not very good. I am delighted that the noble Lord, Lord Trefgarne, has been appointed chairman of the engineering training board. I am sure he will ensure that from now on training is effective and produces the kind of people we want. I am not saying that if I were chairman I could not do the job better. That may well happen within the not too distant future.
There is another point as regards finance which we should bear in mind. The small businessman wants to engage in his business. He or she wants to make the goods or provide the services. Very often finance is not of great interest and the small businessman does not want to get involved. That is why such businesses need a sympathetic financial environment. That is why in the old days the bank manager was a help. He coaxed them along and would say, "Do it this way and it will work out, while you do what you know how to do". As I say, I believe that the problem today is that the sympathetic bank manager has gone. I cannot remember the last time I had an opportunity to see a bank manager. I see either a computer screen or a person who is clearly not a manager with any authority.
I found the contribution of the noble Earl, Lord Kintore, absolutely fascinating. I did not know that there was an international body concerned with bookkeepers, so I have learned something definite today. I have a very sophisticated computer package which I am supposed to use in order to manage my finances. But my experience is that you cannot beat the old box in which you put all the papers. It is the only system I have ever come across which does not fail. All the stuff is in the box and when the time comes you can work through it. I am as much a modernist in these areas as anybody and I am a great believer in optimal information flows, and all that. I keep a box and I always put every piece of paper in it. If any noble Lord wants to know how to run his finances my advice is, first, to get a box and, secondly, put every piece of paper in it and never throw anything away. That is the secret of first-class financial management.

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One topic which arose in the debate was our old friend deregulation. Of course one wants to create an environment in which small firms are not over-regulated so that they can get on with what they want to do. The noble Lord, Lord Trefgarne, made a point which is not exactly apposite. He referred to the plethora of directions from Brussels. As I pointed out several times during the passage of the deregulation Bill, we cannot do anything about Brussels. The Brussels directives cannot be overcome via the deregulation procedure. Noble Lords may not like it, but that, I am afraid, is the world in which we now live. The way to deal with directives from Brussels is to try to stop them at source before they get here, as we discussed at Question Time today in relation to buses. So we do not disagree on certain aspects of deregulation, but I do not think that we should be too optimistic.
Reference has been made to the social chapter and the minimum wage. The noble Lord, Lord Skelmersdale, mentioned the latter. I suppose that we just have to disagree on that. A minimum wage policy raises the average cost per employee, but it lowers the marginal cost of an employee. Putting on my old teaching hat, perhaps I may say that what matters is the marginal cost, not the average cost. If I had a blackboard I could demonstrate as part of elementary economic theory that a minimum wage may just as likely be employment-creating as employment-destroying. Therefore, one needs to look at the evidence. And looking at the evidence—without boasting I think that I can say that I have read all of it—the evidence does not tell us one way or the other. There are studies showing that a minimum wage can lose jobs and other studies, interestingly enough, showing that such a policy can create jobs. Therefore, I am a bit puzzled by the strength of some noble Lords' opposition to a minimum wage. To put it at its mildest, which is all that I want to do today, the point is arguable.
I am also puzzled by the attitude that is sometimes taken even now towards the social chapter. I refer particularly to the attitude of the Confederation of British Industry. I know that I shall offend one or two noble Lords by saying this, but I do not expect rationality and good sense from the Institute of Directors. However, although the CBI tends mostly to support the party of noble Lords opposite, it occasionally gives the impression that it is interested in serious argument. Therefore, I simply do not understand why the CBI fails to see that the social chapter is part of good industrial relations which, if appropriately applied, will raise productivity and lower costs.
I reiterate the main point, which we have argued before. There is no possibility of this country being able to compete with, say, the Pacific Rim countries on low wages. There is no way in which we can ever get our wages low enough to become competitive with such countries. Therefore, returning to a point on which we agree, we need high levels of skills, flexibility, worker co-operation and excellent management. I believe that the social chapter provides the economic environment for that. Old-fashioned distant management, which simply wants to give orders to a poorly paid, supine labour force, cannot deliver the hyper-efficiency that we
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need. Low wages are like devaluation; they are the easy way out for a management that cannot do its job properly. That is not what we want.
In conclusion, I am extremely pleased that at long last we are having a meeting of minds in this area. When I first became a Member of your Lordships' House, noble Lords opposite could see little or no role for government except perhaps to deal with inflation, and my noble friends and I seemed to be saying that every problem was to be solved by government intervention. As today's debate shows, we have now moved closer together. Noble Lords opposite now see a more positive role for government—they have said so today —and I hope that I have made it clear on this occasion and others that we recognise the limits of government intervention. That does not mean that we agree—I hasten to add, in case any of your Lordships end up in a state of shock—but it does mean that we can argue more constructively and rationally on economic and industrial subjects. I hope that we continue to do that.
5.43 p.m.
The Minister of State, Department of Trade and Industry (Earl Ferrers): My Lords, we have had a most interesting debate, initiated by my noble friend Lord Trefgarne. I should like to repeat what others have said and thank my noble friend for having given the House the opportunity of discussing the important subject of manufacturing industry.
A thriving manufacturing industry means a healthy small firms sector. There are nearly 3 million firms in the country, and 96 per cent. of them employ fewer than 20 people. Therefore, a thriving manufacturing industry implies, and is dependent on, a thriving small firms sector.
I agree with my noble friend Lord Skelmersdale that small firms are important. My noble friend also referred to charities which are important too. He raised some specific points about charities which I should like to look into before writing to him. I am unable to give him an answer immediately on what is obviously an important matter.
The Motion brings together the two strands that are at the very heart of the Government's industrial policy. I refer to the small firms sector and the need for a thriving manufacturing sector. I would want to leave your Lordships in no doubt as to the Government's commitment to a strong and vibrant manufacturing sector. Manufacturing has traditionally been the way by which a country can increase its growth, whether it is a third world country or a developed country. After decades of decline, the 1980s saw a significant improvement in the competitiveness of our own manufacturing industries.
Since 1981 manufacturing output in the UK has risen by 25 per cent.; productivity has risen by over 75 per cent.; and exports are up by well over 80 per cent. That is a good performance, particularly when we bear in mind that it has taken place over a period when we have witnessed a world recession of almost unparallelled severity. But this strong performance is continuing.

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Manufacturing output is 5 per cent. higher now than it was a year ago—and that is the strongest growth since 1989.
I know that in making these remarks I shall upset the noble Lord, Lord Ezra. He says that the fact that we always mention the good points shows that we are complacent. I do not think that that is the case. I make no apology for mentioning the good points. I believe that as a country all too often we denigrate ourselves and mention only the bad points. Yet when we do well and say so, the noble Lord, Lord Ezra, says, "You're complacent". The noble Lord's speech was, as always, fascinating. But it was also a bit depressing. The noble Lord said, "We'll have to wait and see what happens to firms when we have the next economic cyclical downturn". That reminded me of the lovely song that Stanley Holloway used to sing, "Oh my word, you do look ill". That almost encapsulates the otherwise fascinating speech of the noble Lord, Lord Ezra.
Manufacturing is important, but so also is the service sector. The two are vital. It is not a matter of trading one off against the other. We need both to be competitive. What is more, they need each other. The Government also recognise the true value of small firms. Many of your Lordships have referred to their importance. They are a vital source of new ideas and new products. They also provide services and, very importantly, new jobs. They stimulate competition and they help individuals to realise their personal ambitions. That is no bad thing. From among their ranks some of the great names of tomorrow will emerge.
Small businesses are built up by hard work, by dedication, and, very often, by personal sacrifice. I welcome this opportunity to applaud the success of those who are involved in small businesses and to assure your Lordships that the Government are determined to see that their well being continues.
Taken as a whole, the role of the small firms sector in creating jobs has been particularly impressive. It is worth reminding ourselves that in just two years, between 1989 and 1991, firms with fewer than 20 employees created an additional 350,000 jobs. When one looks at the number of extra jobs created and the number of small firms that have started up, it is interesting to note that six out of 10 were initiated by people with no prior business experience. I do not think that that is something to be ashamed of; I think we can take great pride in the fact that there is an entrepreneurial spirit in our people and a determination to try to do their bit for their families and their country.
Taken as a whole, the role of the small firms sector in creating jobs has been particularly impressive. The number of business start-ups remains buoyant at about 400,000 a year. There is every indication that firms of that nature will remain a crucial and vital source of new jobs. Small firms have a powerful influence on the economy. They are at the forefront of economic recovery. We have only to look at the survey of smaller manufacturing firms carried out in the summer by the CBI in conjunction with Panell Kerr Forster. It shows that output and new orders, particularly export orders, have increased strongly. No less importantly, but rather
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less tangibly, the survey shows an increase in business optimism, in employment, and in export confidence. I hope that that will encourage the noble Lord, Lord Ezra.
There is further evidence of the prospects for small manufacturing firms. The last Quarterly Survey of Small Businesses in Britain undertaken by the NatWest and the Small Business Research Trust shows that throughout 1994 manufacturing was one of the most optimistic sectors in terms of expected sales and that it remains the single most optimistic sector for growth in employment. Those are encouraging facts.
The objective of the Government's policies for all businesses, small and large, can be summed up in one word. I make no apology for using it. That word is "competitiveness". Competitiveness means having what it takes to obtain business in world markets against the competition of others. It is the only way to guarantee our future prosperity. It does not necessarily mean producing the cheapest item, although cheapness is of course important. It means providing the best value for money; it means producing goods of the right type, at the right time and in the right place; and it means creating confidence in the purchaser. People will often buy something which is not the cheapest, merely because they have confidence in the product and, in particular, in the manufacturer.
Markets are increasingly global rather than national. The pace of change is accelerating. It is not slowing down. When I was a young man I went to Singapore. The journey took four weeks. I went there two months ago; it took 13 hours. Everyone said what a terribly long journey it was. But, of course, it is not. It is, relatively speaking, around the corner. So are all the other places in that part of the world. There are tremendous opportunities there for us. But there are threats too. I agree only marginally with the noble Lord, Lord Peston, when he says that countries in the Far East are producing goods at a rate we cannot possibly match. To some extent, that is true. However, I was surprised to be told the other day that women's wages in Korea are higher than those in Northern Ireland. That was as much a surprise to me as I dare say it is to the noble Lord.
Lord Peston: It is indeed.
Earl Ferrers: What all this means is that our companies are operating in an increasingly competitive world, especially with the emergence of the fast-growing nations of the Far East and the new markets in eastern Europe. Those changes bring tremendous opportunities but they also bring threats. Improving competitiveness is essential; it is fundamentally down to individual companies and their managers to achieve it.
I agree with my noble friend Lord Caldecote that governments have to set the conditions. On the whole he felt that industry had not made the best use of them in the past. He said that much has been done, and he is right. Much has been done. But it is also, as he said, being done by our competitors too. We cannot stop the search for increasing competitiveness. That is something which will go on and on.

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Earlier this year the Government published a White Paper. It was not a DTI White Paper. It was a White Paper which articulated, for the first time, policies across all government departments which have a bearing on the competitiveness of industry. It is, I suppose, the first time that any government have said, as a matter of policy, that before they bring forward any legislation they must first ask the question, "How will this affect the competitiveness of industry?".
Enhancing competitiveness is not something one can achieve by turning a knob, issuing a diktat, or passing a law. Competitiveness is a culture of continuous improvement. Everyone has to play his part in that, including smaller companies. They have a crucial role to play.
New regulations are framed with small businesses in mind. We require that all legislative proposals brought before Parliament, which impact on business, must have an assessment of their compliance costs. That must include a small business test to show how the regulation will impact on small businesses. My noble friend Lord Skelmersdale said that he wanted the climate to be right. He wanted low inflation, low interest rates, more deregulation, and less tax. I agree. In some ways he asks for Utopia. We have already done a great deal. The policies the Government have been pursuing have resulted in inflation running at its lowest level now for over a quarter of a century; interest rates being brought down to their lowest level for 17 years; and unemployment dropping by 400,000 since the beginning of 1993. That means that more people are employed.
An essential ingredient in getting the climate right, particularly for smaller enterprises, is to minimise the burden of bureaucracy. Industry cannot get on with its job of producing and selling if it is perpetually strapped around with red tape. Deregulation is an essential part of the Government's strategy for improving competitiveness. Our aim is not just to strike out regulations which are unnecessarily burdensome on industry but to ensure that regulation which is necessary is thought out properly and soundly and properly based. The new powers available to us under the Deregulation and Contracting Out Act are a major advance in the deregulation campaign.
My noble friend Lord Trefgarne was right when he said that industry must become more efficient. I agree. It must. Much of it is, but a great deal of it has a long way to go. My noble friend was also right to applaud the fact that we are not part of the social chapter. The noble Lord, Lord Peston, said that he could not see that being out of the social chapter could be good for staff relationships. The noble Lord looks worried. I am paraphrasing what he said. He looks less worried now, so perhaps I have it right. I can tell him why it is good for staff relationships. It means that other people invest in this country. Forty per cent. of investment from Japan into the EU comes to this country; 43 per cent. of all investment from America into the EU comes to this country. Why does it come to this country? It is because
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we have a better climate; our labour costs are more competitive than those of other countries. That produces good jobs, and that is good labour relations.
Lord Peston: My Lords, perhaps I may interrupt the Minister. Will he say why so much of British capital is invested in the rest of the EU where they do have the social chapter? The argument should work both ways, but it does not. We invest enormously over there where the social chapter is in operation and will continue. It is more complicated than the Minister suggests.
Earl Ferrers: My Lords, I should not try to make things too complicated. The answer to that question is simple. British firms invest their money where they find it attractive and important to do so. That does not rely only on the social chapter. It may well be that in order to supply what they want to supply in France and Germany they find that they have to have their own firms in those countries. It is not as simple as the noble Lord, Lord Peston, makes out either.
My noble friends Lord Skelmersdale and Lord Oxfuird, and the noble Lords, Lord Haskel and Lord Weatherill, referred to small and medium-sized enterprises. They were right in what they said. My noble friend Lord Skelmersdale said that some businesses stay small and have only one or two employees. The businesses with one or two people do not get bigger because they do not want to or they cannot. Often those who run such firms are the ones producing and selling the goods; keeping the books; going to the bank manager; doing everything. They want advice. That is why we have set up the Business Link system. It will enable people to have business advisers who will be friends and who will ask, "Can we help you over this?". The man may say, "Yes, this is the trouble that I have", and be told, "Yes, I have seen someone else down the road and he has got out of it this way". The business advisers will be able to help such people. Business Link will include advisers on design and export promotion. It is an essential part of what the Government are trying to achieve, referred to by several noble Lords as a partnership between government and industry. I agree with my noble friend that the future depends not on Ministers but on companies themselves.
The noble Lord, Lord Haskel, said that there was inward investment in a weak manufacturing industry. The noble Lord, Lord Preston, made a similar point. The noble Lord, Lord Haskel, said that we have £9.2 billion of inward investment and £17.2 billion of investment outside this country. That is good both ways. Traditionally, Britain has been an investor in the outside world, which is good for this country and good for business. Often companies, for the reason that I gave to the noble Lord, Lord Desai, have to locate themselves in other countries in order to carry out their business. Equally, it is good for other countries to invest in this country. That stimulates work, business and employment and often it stimulates other companies in this country to supply the new companies with products.
The noble Lord, Lord Desai, gave his views on these matters. I agree with his comments on investment from abroad. He said that he was an economist and he did not want to go anywhere near the real world. I understand

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that feeling but say to him that sometimes those who are in the real world say that they do not want to go anywhere near an economist. They certainly do not want to go anywhere near three economists because they will receive four answers, which is not particularly helpful.
We had a lovely speech from the noble Lord, Lord Weatherill. I was intrigued to hear that his father led a strike of tailors. I did not realise that but I am sure that it must have been in a good cause. Whatever the cause, it is good to learn that his small family firm has prospered and that it now exports two-thirds of its product. Perhaps I may say, without being too platitudinous, that the noble Lord's father would have been as proud of his son as he was of his business.
The noble Lord, Lord Weatherill, reminded us that Napoleon did not say that we were a nation of shopkeepers but that we were a nation of merchants and adventurers. He regaled us with a story about his family; perhaps I may say that my family also played a part by being adventurers. One member went abroad and taught the Persians how to use gunpowder. I am not sure whether that was a good form of trading but he was so successful that he returned as the Persian Ambassador to the Court of St. James's. That was a glittering career.
The noble Lord mentioned the Prince's Youth Business Trust. It is an important trust and has undertaken remarkable work, as I have been lucky enough to be told. He was also concerned about the Croydon Business Venture which resulted in his writing to 12 people asking them for £1,000 each and getting it. I am glad that he did not write to me.
A certain amount of money has been available for business start-up. The noble Lord was fearful that that will not be specifically available in the future because it forms a part of the single regeneration budget. I know that the fragmentation of start-up support has been the cause of anxiety in a number of organisations, in particular the local enterprise agency network. I realise too that there may be some short-term difficulties. Real opportunities exist in the longer term for local partners to bid for the funds that will be available through the single regeneration budget. In looking to the future, we consider that local enterprise agencies will be important partners in the Business Link. I hope that the individual enterprise agencies will work closely with their local Business Link partnerships. Businesses are starting up effectively and I hope that that will continue.
A number of noble Lords referred to the financial arrangements. My noble friend Lord Trefgarne referred to finance for industry, as did my noble friends Lord Oxfuird, Lord Caldecote and Lord Cochrane of Cults. The noble Lord, Lord Ezra, said that businesses fail too and the noble Lord, Lord Peston, said that banks have not always been helpful. In some respects, people have found that to be the case. However, a recession scythes through everything. Both banks and small businesses are vulnerable but I agree with the noble Lord, Lord Peston, that within prudent guidelines there should be a relatively long-term commitment. If that can be done by medium-term loans that the banks are prepared to make that would be good.
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Small businesses are reliant on short-term finance and overdrafts. The Government encourage small firms to consider alternative forms of finance. Informal investment by the Business Angels is one of them. There is access to the right kind of finance at the right time. That is vital if businesses are to succeed and prosper. It is true that banks are likely to remain the main providers of finance for small businesses. Currently they are providing approximately £40 billion to small firms, mainly as loans and overdrafts. It is vital that there should be a relationship of trust and mutual understanding between the banks and small businesses. There is also in existence the small firms loan guarantee scheme. That was changed last year; the maximum loan was increased from £100,000 to £250,000 to firms which have been trading for two years or more and for some firms the guarantee level was increased from 75 per cent. to 85 per cent. There has been a reduction in premium for all firms.
The noble Lord, Lord Ezra, referred to the commercial investment bank. In some parts of government there is not too much enthusiasm for that but my department is to undertake a review of the issue in order to establish whether small firms and enterprises in the United Kingdom are disadvantaged and what role the banks should play. I should have liked to have referred to many other issues but time runs out. Perhaps I may write to noble Lords.
The noble Lord, Lord Desai, referred to manufacturing investment. Business investment is estimated to have risen by 1.25 per cent. in the year to the third quarter. The Treasury forecasts this to rise to 2 per cent. for the year as a whole and to 10.75 per cent. for 1995. Manufacturing investment accounts for about one-fifth of the total business investment and is expected to increase strongly next year. The CBI has forecast a growth of more than 11 per cent. Those are encouraging facts.
I return to the point made by my noble friend Lord Trefgarne at the end of his speech. On the whole, government's contribution to industry can best be made by supporting and helping businesses but as far as possible by getting out of their hair. We can help by providing information and advice, by making available specific schemes and special initiatives and by providing all kinds of statistics. But it is not the Government who create wealth; it is individuals and the businesses. That is what we want to encourage.
It is always tempting to think that the past was easier than the present. That is nonsense. Many years ago my noble friend Lord Waldegrave said something that I have never forgotten. He said, "Always remember that there is a better opportunity tomorrow". So there is. We are leading Europe out of recession. There are stacks of opportunities and it is our business, whether as government playing their part or businessmen playing their part, to grab those opportunities and to make the best of them that we can.
6.10 p.m.
Lord Trefgarne: My Lords, at this stage in the evening, with an important debate to follow, it is not for me to do more than thank every noble Lord who has

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taken part in the debate. The speeches were uniformly interesting and informative and I am grateful to each and every noble Lord.
I am particularly grateful to my noble friend Lord Ferrers for replying to the debate today. I know that being here today has caused difficulties for him with regard to commitments in his diary and therefore I am doubly grateful to him. With that, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

War Crimes (Supplementary Provisions) Bill [H.L.]
6.11 p.m.
Lord Campbell of Alloway: My Lords, I beg to move that this Bill be now read a second time.
The purpose of the Bill is to afford a fair administration of justice in the context of the War Crimes Act in two distinct ways which are not mutually dependent, so each requires separate consideration. The Bill does not amend any provisions of the Act and to some extent, Clause 1 reflects the sense of urgency as regards implementation of the Act, as appears from the Official Reports to have been the understanding of another place.
If this Bill is given a Second Reading and reaches another place, there would be a long period of time before it could ever receive Royal Assent during which investigations could be ended. A decision could be made as to whether to charge or exclude on the available evidence. Only on the passing of the Act would the limitation provisions of Clause 1 bite. Proceedings instituted before that date would not be affected in any way.
Clause 2 imports from Scotland a pre-trial appellate procedure on which I took advice from the noble and learned Lords, Lord Jauncey of Tullichettle and Lord Morton of Shuna. That is with regard to applications to quash the indictment on grounds of delay. The reason for its introduction is to avoid abortive trials which should not have taken place, because in England those trials must take place as there is no appellate jurisdiction until after conviction.
The Bill has the support of many noble and learned Lords to whom I have spoken informally, including the noble and learned Lord the Lord Chief Justice, who are not able to attend. The right reverend Prelate the Bishop of St. Albans, whose annual meeting is taking place at this very moment, has written to say that he wishes well for these laudable efforts on an important moral and legal issue.
Let it be said at the outset with respect to the memory of millions who suffered, some of whom are still suffering, that it is proven beyond doubt that mass murders were perpetrated—a policy of extermination—by the Third German Reich to the everlasting shame of all mankind. But since the War Crimes Act received Royal Assent on 9th May 1991, no charges have been made. And even today, it is not known whether and
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indeed, if so, when the continuing investigations may end or whether any charges will be made. Already one-third of the suspects interrogated have died.
When the War Crimes Bill was before another place, there was an air of urgency, of resolve, to implement the recommendations of Part I of the Hetherington-Chalmers Report on the basis of the evidence of 301 case files and other material in Part II of that report which was not disclosed in either House. But another place was permitted to labour under a crucial misunderstanding, a crucial misapprehension, which was repeated in your Lordships' House by my noble friend Lord Waddington, that on that evidence, which the noble Lord said that he had read, those trials were warranted and so would ensue with dispatch.
There was no sufficient evidence on which to charge anyone. Another place, in good faith, had to take for granted the supposed quality and cogency of that evidence in Part II to avoid prejudicing a fair trial in impending proceedings, and did so. Even today, there is no sufficient evidence on which to charge anyone and as yet, the Crown Prosecution Service has not even decided whether to seek the consent of Mr. Attorney to institute proceedings in any single case.
It was never envisaged by another place that a delay of that order could possibly arise; that 15 of the 301 people who have been under investigation since 1988 would still be under investigation today; that new investigations would have been initiated as late as March this year; that by today, a decision as to whether or not to prosecute would not have been taken in all cases; and that by now, those trials would not have been either instituted or concluded.
Indeed, on the contrary, it was common ground among all Members of both Houses that if those trials were to ensue, they must be fair trials in accordance with our concepts of justice. Each year of delay infects the prospects of a fair trial as prejudicial to the defence: especially so where the alleged conduct took place so very long ago and the crucial issue is one of identity.
Clause 1 proposes a time limit on the institution of proceedings. Why so? That is because the Crown Prosecution Service, having received substantive reports from the police on which charges could not be laid, remitted the matter to the police for further investigation. Both my noble friend Lord Ferrers and my noble and learned friend the Lord Chancellor have informed your Lordships' House that the end of those investigations cannot be predicted. It is also because in Scotland, all were excluded from prosecution before 27th June 1994 in exactly the same circumstances in which the Crown Prosecution Service remitted the matter to the police for further investigation. A disparate regime for exclusion on either side of the Border, operating under the same statute, all but beggars belief.
Your Lordships may well think that the only fair and just approach was that adopted by the noble and learned Lord the Lord Advocate, which was explained in a Written Answer on 11th July of this year. It read:
"After extensive enquiries in the United Kingdom and overseas, Crown Counsel decided that there was not sufficient available evidence for a criminal prosecution in any of the cases".—[Official Report, 11/7/94; col. WA 93.]

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The book was closed in Scotland by the noble and learned Lord the Lord Advocate on that basis before 27th July, yet the Crown Prosecution Service continues investigations on the same basis, the end of which, the Government take the view, cannot be predicted.
The purpose of Clause 2 is to remove the disparity of procedure in an act of general application and to introduce in England and Wales and in Northern Ireland the appellate procedure as it existed for many years in Scotland. The justification is to avoid a long, complex and costly trial with unusually emotive overtones conducted so long after the event which should not have taken place, and to avoid the "backlash" factor to which the right reverend Prelate the Bishop of St. Albans referred on Second Reading of the Bill. In all those cases, it is inevitable that an application will be made to the court to quash the indictment on grounds of delay, as being prejudicial to a fair trial.
As to the present position and the attitude of government, noble Lords will be grateful to my noble friend the Minister for what she said on 28th November this year (at col. 473 of Hansard). There are now 24 men who have been candidates for prosecution since before 27th June 1994. As I have mentioned, 15 of them have been under investigation since 1988; three since July 1991; and the rest since February, April and December 1993 and January and March 1994 respectively. Of the 369 suspects investigated, 233 have been excluded and 112 have died.
What is the attitude of government? Parliament has had its say. There is no limitation period for murder at common law, so none will be introduced. The continuance of those investigations, whatever delay may be involved, is entirely a matter for the Crown Prosecution Service and must be left to the CPS. It is a matter for the courts to decide whether to quash the indictment on grounds of delay as from 1st September 1939 up to and including the date of trial, or on grounds of abuse of process.
As to Parliament having had its say, having read the Official Reports, perhaps I may say with great respect to my noble friend Lord Tonypandy and to my noble friend the Minister that, on any objective analysis, Parliament has not had its say on either of the procedural matters, the subject of this Bill, which were neither envisaged nor discussed in either House.
There is of course no period of limitation at common law; we know that. But the common law was introduced by a statute with retrospective effect as from 1st September 1939 over persons who owed no allegiance and to whom the common law did not apply. It was a unique and wholly exceptional assumption of retroactive extra-territorial jurisdiction which may no longer be questioned. But your Lordships may well think that some form of control, some form of limitation, is called for in those exceptional circumstances where investigations continue, the end of which cannot be predicted.
Investigations to gather up evidence against a set of octogenarians, some 50 or 60 years after the alleged event, has little to do with my personal concept of the fair administration of justice.
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As regards leaving matters to the Crown Prosecution Service, perhaps enough has been said about the disparate regime operating either side of the Border and about the continuance of the unpredictable delay under the aegis of the CPS which the Government are apparently prepared to countenance. This is not the occasion upon which to consider the judgment, efficiency or competence of the CPS, either generally or in context with this affair in which, perhaps, it may speak for itself. But if the Government are prepared to leave the matter in the hands of the Crown Prosecution Service without any control over continuing delay, then surely a case is made out for some limitation on the institution of proceedings.
Moved, That the Bill be now read a second time.—(Lord Campbell of Alloway.)
6.26 p.m.
Lord Merlyn-Rees: My Lords, I should, first, declare an interest in the matter of war crimes as chairman for many years of the all-party group on war crimes. I am glad to say that we played a part in getting the Hetherington-Chalmers Report published. We also played some part, along with my colleagues in another place, in getting an overwhelming vote in favour of the War Crimes Bill when it appeared before that place. It is my view that if today's Bill were to get to the other place—although I do not believe that it will—it would be overwhelmingly defeated.
I have been two years in your Lordships' House and I am second to none in my appreciation of the role of this place as a revising Chamber. Very often the quality of debates here is far better than those in another place. The purpose of the Bill now before us is to overturn the Act which was passed overwhelmingly in the other place; indeed, it would nullify it. I should like to argue the case for leaving things as they are.
Even if the effect of the Bill were not to nullify the Act, as came out in the discussion that we had during Question Time recently it is not the role of Home Office Ministers to interfere in any way with the police through their War Crimes Unit. The police are independent. The glory of the police—sometimes it is not so; indeed, it never used to happen in Northern Ireland where the police were the creatures of the state—is that they are independent when they are investigating crimes. The Home Office is quite clear on that fact. There have been one or two occasions in recent years when I believed, with no knowledge perhaps, that there had been an overstepping of the mark in that respect. The independence of the Crown Prosecution Service and of the War Crimes Unit is, I believe, most important.
However, that is not to say that one cannot ask questions. Nevertheless, it is not the job of the Home Office to hasten progress and ask, "What are you doing about this?", or say, "Drop that, and do something else". It must be a matter for the independence of the police. I was going to crack a joke, but this is the wrong place for doing so.
As regards my own role as Home Secretary, I often used to reflect on the fact that Winston Churchill said, "Never make a lawyer a Home Secretary." I believe that he had in mind Sir John Simon. The obverse of that

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remark, of course, is that it does not mean that if you are not a lawyer you would be a good Home Secretary. I believe that sometimes judgment has to take over from the detail of the matter—it can be left to other people.
There is no need for me to rehearse the facts that led to the Act of Parliament, and its antecedents in the Hetherington-Chalmers Report. The report came to a conclusion which I mentioned during the first reading of the Act in another place. I shall not quote the whole thing again, just the following sentences:
"The cases we have investigated disclose horrific instances of mass murders, and we do not consider that the lapse of time since the offences were committed, or the age of the offenders, provide sufficient reason for taking no action in such cases. We therefore recommend that some action should be taken in each case in which the evidence is adequate".—[Official Report, Commons, 12/12/89; col. 886.]
I shall return to that point. When I quoted those sentences in another place Mr. Edward Heath interrupted me and asked if I would read on. He was being helpful. I said that I would willingly do so and continued, at col. 886:
"In paragraph 9.18 we describe possible courses of action. We do not recommend deprivation of citizenship and deportation".
That would have constituted another way of dealing with this matter. The noble and learned Lord, Lord Hailsham, discussed this matter in this place. The people we are talking about had entered this country too easily at the time of a Labour Government, which I supported as an ex-serviceman. I had been active in the Labour Party as a kid before the war. People entered this country from Italy —a country I know well—and from Austria too easily. That situation was badly handled. People were not checked. One course of action is not to accuse these people of war crimes but to say that they did not tell the truth when they filled in the forms at the time they entered this country as cheap labour in 1945 and 1946. The young men of South Wales and Yorkshire did not work in the pits at that time because of all the cheap labour entering the country. Many of those people who entered this country wanted a job and I do not blame them for that. Many of them played an important role in the areas to which they moved, but they did not tell the truth about their situation when they entered the country.
The Hetherington-Chalmers Report referred to English and Scots law. I believe this matter has already been mentioned tonight. The report stated that neither English nor Scots law have imposed time limits in the prosecution of indictable crime. The War Crimes Unit has taken its time over this matter. The noble and learned Lord, Lord Scarman, the noble Lord, Lord Jenkins of Hillhead, the Cardinal of Westminster and I have formed ourselves into a committee which has sought new legislation to deal with miscarriages of justice. We have dealt with the case of the Guildford Four and that of the Maguires. I have not checked my papers but I believe that when I was Home Secretary I sent the Maguire case back to the Appeal Court. I was given a dusty answer and told not to waste the court's time. The Maguires are now out and so are the Guildford Four.
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I am the last person to want miscarriages of justice to occur. There must be a cloud over parts of the judiciary and the police, otherwise the Government would not be about to introduce legislation to deal with miscarriages of justice. As interested as I am in war crimes, I do not wish to see miscarriages of justice. I would not care if no one who was investigated was charged if the evidence does not stand up. That is the glory of our system. I am not seeking to catch people for alleged crimes because of what I witnessed at an impressionable period in my life.
As regards miscarriages of justice, I understand that a body, separate from the Court of Appeal, and separate from the Home Office, is to be set up to deal with this. However, I believe the Court of Appeal will be involved. I am not worried about delay. What is important is that this work must be carefully carried out.
I wish to say a few words about the nature of these war crimes. I am an oldish man now but sometimes when one is inside this place one feels younger than when one is outside it. As an old man I sometimes talk with my young sons. They ask me about Dresden. I was proud to serve in the RAF but I was not at Dresden. But I also talk to my sons about the rocket attacks on London and on Lewisham. A ceremony was held in Lewisham recently to mark the anniversary of a rocket attack. However, those events are not war crimes according to the definition of the law.
I have just revisited—as I do every year—war graves in those parts of the world in which I served. I visited Sicily to see the graves of the 51st Highlanders and the 50th Northumbrians. Some of my friends are buried there. My father died as a result of the First World War; he was gassed. I have taken my children to see the war graves of north eastern France. What a society there was at that time, but millions of Germans, French, British and other nationalities died in the First World War and no wonder in the inter-war years the cream of manhood had disappeared.
I regard those events as war crimes in the non-legal sense. However, the war crimes we are discussing are of a different nature. They were committed away from the front. The Hetherington-Chalmers Report describes various crimes. It describes how people were lined up in front of a trench and shot so that they would fall into the trench. What happened at Dresden was terrible, as were the rocket attacks on London, the bombing of Rotterdam and the heavy bombing of the German cities. But the crimes we are talking about must not be forgotten. I shall return to that matter in a moment.
I served in the Air Force but I also spent some time working with Army personnel. Recently I returned to the south of France. When I served in that area I was astonished to discover that the German soldiers who wore Iron Crosses came from eastern Europe. I had been fed the idea that Europe was waiting to be liberated and that most of the people in Europe were waiting to be liberated by us and were not on the side of the Germans. I did not find that to be true. They had fought willingly for the Germans. I found that was the case in Yugoslavia and as regards the troops who were streaming from the Hungarian front. I understand, although I do not know

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about this, that there were similar soldiers —not soldiers of fortune, but working with the Germans—in pockets on the second front.
It was those people from eastern Europe who found their way into this country. That is why we should examine how they entered this country rather than actual war crimes. Some of those people committed heinous crimes.
In the past few years I have talked to Jewish friends who were in concentration camps. My friends told me that the personnel in those camps, who came from the Baltic states and parts of eastern Europe, were worse than the Germans. They tried to outdo the Germans in their behaviour. Only some of those crimes will be able to be proven. I do not want revenge. I have fought against capital punishment. I do not wish those people to be hung if they are found guilty. All I want is for the world to face up to what has happened.
We need to face up to what is happening in Yugoslavia now. The Government have embarked on a scheme with the UN to establish war crimes tribunals, and then trials, in Yugoslavia. Therefore, that process will happen again there. However, I should have thought it would be extremely difficult to obtain evidence. I believe it is a mistake to hurry things up. I have no knowledge of how many cases have been considered. Let the matter be dealt with but at least let it be known that we in the Parliament in this country have stood up and declared that war crimes are evil. Let us not be sidetracked from that.
I saw Barbie's Lyon. I saw Lyon airfield bombed to smithereens. The light bombers—or the posh name for them, the tactical bombers—bombed the airfield. The French kids cheered and they were shot. I saw their legs sticking through the earth. That is a war crime and it is that sort of war crime—not the events that occurred in battle in north eastern France that I describe to my sons—that was perpetrated, mainly on members of the Jewish faith in eastern Europe, that we need to consider. The other House, in which I was proud to play a part, stood clearly for dealing with such war crimes. We should not renege on that. Let us see what happens.
6.40 p.m.
Lord Mayhew: My Lords, supporters of war crimes trials are fortunate indeed to have as their leader, and chairman, someone who speaks not only in a most agreeable and persuasive manner but who was also a Home Secretary—and a much better Home Secretary than Sir John Simon whom he mentioned.
I confess that I had hoped that the experience that we have had since the passage of the Act might have modified the enthusiasm of the noble Lord, Lord Merlyn-Rees, for pursuing the war crimes trials. I think, for instance, of the experience of other countries. I recall that during those debates the noble Lord and others urged us to follow the example of Canada, Australia and Israel. Experience since confirms all the worst fears of those who opposed the Act at that time. All the trials were disasters, especially the one in Israel, which
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illustrated in the most dramatic way how right those noble and learned Lords were who said that it is impossible to identify people after all this time.
The trial of Demjanjuk was a show trial. It was televised. Schoolchildren were bused in. I recall seeing on the television, on the BBC news, the eye witnesses advancing on the accused, Demjanjuk, saying, with complete sincerity and conviction, "That's the man, how could I possibly mistake him?" The Israeli judiciary, and everyone, now knows that those witnesses were wrong. On that occasion it did not stop Demjanjuk being sentenced—to death, as I recall. But it was a tremendous warning of how such war crimes trials can go wrong and it fulfils all the forebodings that we had at the time. I had hoped that that might have modified the attitude of the noble Lord, Lord Merlyn-Rees.
Other events have occurred since the Act was passed. We have had a revelation of the amount of money and the substantial quantity of skilled servicemen who have been devoted not to anti-drug or anti-terrorist activities in the United Kingdom but to searching out in remote parts of Eastern Europe people who might have committed war crimes. Those people were not even British at the time.
Since the Act, there has been the passage of time itself. The noble Lord, Lord Merlyn-Rees, said—I believe I quote him—"I am not worried about delay". But we ought to be greatly worried about delay. Let us consider the Hetherington report which was the basis upon which the Government took up the cause, framed the Act, and pushed it through. The report stated,
"Given the age of the suspects and witnesses any proposed legislation should be introduced and brought into force as quickly as possible".
That was stated five and a half years ago. In describing their investigations in eastern Europe, the authors of the report stated:
"The greatest difficulty we encountered was simply the age of the suspects and witnesses".
That was their finding, six and a half years ago.
The offences were committed more than 50 years ago. The noble Lord states that he is not worried by the delay. But, of course, that is not the end of the delay. Justice will be further delayed. Let us assume for a moment that the Crown Prosecution Service puts a case to the Attorney-General and the Attorney-General judges in favour of the prosecution. That might occur within a month or weeks. But what then, my Lords? The defence starts to build its case. It will have to go to eastern Europe, with translators and interpreters. It will have to examine records and archives. It will have to start a desperate, almost certainly futile, search for defence witnesses. I should have thought it likely that all possible defence witnesses will either be untraceable or dead.
Eventually the trial may begin. The Act contains some unprecedented aspects, especially in relation to retrospection. Therefore there will be an enormous number of points of procedure during the trial. The trial will drag on for a long time. When the verdict is eventually reached, how old will the accused be? If he had a rather senior post when his alleged crime was committed, he will at that time be in his nineties. If he

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were a smaller fry, he will be in his eighties. That is too old. It is far too long since the offence was committed. People's memories are wholly unreliable. Defence witnesses cannot be found. Such a prosecution is wrong.
Those of us who as soldiers took part in the liberation of Europe were brought very close indeed in the concentration camps to the horrors of which the noble Lord spoke. However, despite the appalling nature and seriousness of the charges, the passage of time has made it, in my view, not only unfair but actually indecent to bring charges under the Act.
Perhaps I may say a word about the attitude of the Government. In this House Ministers have not attempted recently to defend the Act or its purposes. Their constant cry has been, "It's on the statute book. The Commons passed it. Therefore we have to carry it out". I believe that that is a little disingenuous. After all, it was the Government who started it. The author of the report, Sir Thomas Hetherington, was asked at a meeting here, "Seeing that the Government ended war crimes trials with the support of all parties in 1948, what has caused this sudden recurrence of a demand for war crimes trials?" He put as one of the major factors the visit to Israel of the then Prime Minister, the noble Baroness, Lady Thatcher. It was perfectly legitimate. I do not complain. However, the fact is that the Government took the initiative in producing the Bill. They passed the Bill; they supported it in both Houses. They are now relentlessly seeking to implement it. The Government cannot avoid responsibility. They cannot simply say, "The House of Commons passed it and we are carrying out what is on the statute book".
Furthermore, the Bill before us now is not on the statute book. We are in a new situation as a result of the passage of time and the Government are perfectly free if they wish to support the Bill. Nothing that the House of Commons has done should stand in their way if they wish to do so. All that the Government have done meanwhile is to devote a lot of money and much badly needed trained security personnel to investigate atrocities committed more than 50 years ago in remote parts of Eastern Europe by people who were not then British. It is hard to imagine a more perverse sense of priorities than that.
6.49 p.m.
Lord Jakobovits: My Lords, this is the third time that we are debating the subject of war crimes. Looking through the list of speakers today, it appears to me that those who are taking part have previously expressed their opinions—or at least the great majority of them. It appears from the speeches made so far that the opinions have not changed, nor is it likely that they will because these are matters of deep conviction. I wonder therefore why the debate has been introduced and why efforts are now being made in the supplementary provisions to undo what Parliament has decided by an overwhelming overall majority on two previous occasions.
The noble Lord, Lord Mayhew, cited the experience of Israel as an example of the dangers involved in bringing such prosecutions. I think that it proves the opposite. It proves that despite the legislation, the courts are still powerful enough to discern the truth, or at least
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to question allegations if they cannot be absolutely proved. Therefore, in that case, as in so many other cases, the law has not been changed. None of the countries changed its legislation; all that was done was to apply the rigours of the law to ensure that there should be no miscarriage of justice.
But let me come to a more fundamental point. Even though I too have spoken in the two previous debates and can offer little originality in my contribution to the renewed discussion, I wish to add a couple of questions. Is it really suggested that the millions of victims are any less dead now than they were 50 years ago or, for that matter, than they were a couple of years ago when Parliament overwhelmingly passed certain legislation? Is our debt to those who have been exterminated with such fearful and unprecedented horrors any less now than it was then?
That leads me to perhaps a more topical question. As this current year is about to conclude and we usher in the new year 1995, the world will observe the 50th anniversary of the liberation of Auschwitz and Majdanek, of Dachau and of Belsen, when we first discovered the horrors that had occurred. This commemoration will be marked throughout the world. There will be gatherings in which the world will be reminded of what took place and what the rest of the world tolerated at the time. In Europe in particular, occupied as it was, there will be countless efforts made to recall, remind and remember. Shall we in this country—because by the grace of God we were spared occupation by the Nazis—be the only or nearly the only European country that will move in the opposite direction? Instead of recalling and perpetuating what happened, shall we expunge it and say that because a number of years have passed we are no longer interested in the execution of justice? It would be inconceivable that we should be the odd man out in this impending year of the 50th anniversary by giving a signal that we care less than others who suffered so much more than we did in this country.
I believe that here I can apply the final verse of the Book of Ecclesiastes the Preacher, written, as our tradition has it, by the wisest of all men. He said:
"This is the end of the matter; all has been heard. Fear God and observe His commandments, for this is the whole duty of man".
None of the commandments is more sacred than the one in the fifth Book of Moses:
"Justice, justice shall you pursue".
Justice needs to be pursued, and not only done when it comes our way.
I hope that even if we never find a single criminal whose guilt can be proved by all the rigid tests that we apply—and rightly—at least our statute books will record that we will for ever remember the ultimate in injustice and in cruelty that has been perpetrated and will wish to count ourselves during the coming year among those who will remember, will recall and will warn future generations that mankind will never again tolerate that fearful slight, not just on human rights but on human life by the million.

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I believe that by sending out this message from this venerated House to our country and to the rest of the world we shall be counted among those who have not failed in the fulfilment of the law—to ensure that justice will be pursued even if it cannot always be done.
6.56 p.m.
Lord Campbell of Croy: My Lords, my contribution in the debate is aimed at helping to find the answer to the question: what was it that put the United Kingdom in a thoroughly unsatisfactory situation in 1989? There had been no way of dealing with any alleged war criminals from World War II who were resident in the United Kingdom. Any new legislation in 1989 would be for events nearly 50 years earlier, with all the difficulties of obtaining clear evidence and certain identification.
The situation arose because in 1948 nothing was done to ensure that there would be legislation in the United Kingdom to deal with any war criminals who had entered this country in disguise. It is important to recognise this crucial omission. The Nuremberg tribunal was established by the victorious allies after World War II. It tried Hitler's accomplices—Goering and Hess, plus military and other leaders who had perpetrated horrors. These were the ringleaders. They and some others who were prominently suspected of war crimes were tried by that tribunal.
Some who should have been tried had escaped and were later found in South America and elsewhere, long after 1948. Others were never found. After three years, the Nuremberg tribunal was brought to an end. It was never intended to have a long life. The big fish had been dealt with. Lesser suspects had been tried in courts in the British and other zones of Germany and these were the smaller fry.
This process was handed over by the British in our zone to the newly formed German courts in the newly democratic West Germany, which continued to try cases over the next 40 years. Other countries in continental Europe also retained the means to try alleged war crimes from World War II. Britain was a notable exception. It was presumed that no war criminal would have found a place in our society here. This was an idle assumption because large numbers of refugees from areas such as the Baltic States, the Ukraine and other parts of Europe entered Britain in the late 1940s with very little screening. It was not difficult for a war criminal who was not widely or easily recognisable to conceal himself among those refugees. With false papers, he was then safe.
Until the War Crimes Act 1991, there was no way in which an accused in this country could be brought to trial in the United Kingdom for a war crime committed in World War II. In 1957 it was made possible for prosecutions to be brought in the UK, but not for war crimes that had taken place before that year. The legislation was not retrospective to World War II. The noble Lord, Lord Merlyn-Rees, recalled cases in the late 1940s when refugees came to this country from south and central Europe. I remember similar events in the late 1940s—I worked in the Foreign Office from 1946 to 1949, dealing with Eastern Europe. The alleged war
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criminals involving our department were Yugoslavs in the United Kingdom, some of whom were sent back to Yugoslavia for trial. But the refugees who had come in from the Baltic States and the Ukraine had been behind the German and Russian front and very little was known about their background. In brief, anyone who thought in 1948 that all war criminals had been brought to trial deluded himself. Any deliberate amnesty then or calling a halt to the process in this country had the effect of a reprieve for the war criminal who had so far escaped arrest by means of disguise and deceit. Trials continued in other countries into the 1950s and later.
In my opinion, the 1991 Act was many years too late. Although the Statute of Limitations does not apply to murder, firm evidence and indisputable identification is very difficult to collect after 50 years. I take an illustration in Scotland. Recently, in a Scottish court, an individual was found to be a war criminal after he had brought a defamation case and after investigation in the Baltic States. However, no prosecutions are to be initiated in Scotland under the 1991 Act because sufficient hard evidence is not available. That is an anomalous and very unsatisfactory situation. Of course the individual should not have brought the defamation case. He must have thought that he was even safer than he was.
The noble Lord, Lord Mayhew, for whom I have the highest regard and for whom I worked in those days when I was a Foreign Office official and he was a Parliamentary Secretary at the Foreign Office, rightly recorded that the Nuremberg tribunal and the trials in the British zone were brought to an end in 1948 with general support. Unfortunately, there was a gap in UK legislation for any person in this country who might be suspected or accused. In the late 1940s I was sending notes to the noble Lord from the Official Box up there because the Commons was sitting in this Chamber after the bombing of the other place. I also sent notes to Mr. Ernest Bevin and Mr. Hector McNeil. The noble Lord, Lord Mayhew, took more notice of my notes, of course, then than he would now.
I shall end by recounting a personal experience. Leading elements of the Scottish division in which I was serving, with our accompanying armoured units, discovered Belsen. That was on 15th April 1945, exactly two weeks before I was wounded and disabled. The concentration camp happened to be on our line of advance. Many of our officers and men had witnessed horror and carnage in the previous 11 months, but they felt a sense of outrage at what they found. There had been rumours that such camps existed but this was the first one to be discovered in the West. Here was the awful proof. The press arrived as we were moving on towards the Elbe, and in the following days newspapers were full of accounts and photographs. Belsen had no

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gas chambers but its victims were left to expire miserably from starvation and disease. We were several months too late to save Anne Frank.
7.5 p.m.
Lord Houghton of Sowerby: My Lords, I shall be brief; at present late hours are not good for me, and I do not think that I ought to take up the time of the House if I cannot stay to the end of the debate. I apologise.
However, I wish to register my position. I am in support of the noble Lord who introduced the Bill. I am fully in support of everything that was just said by the noble Lord, Lord Campbell of Croy, and also the remarks of the noble Lord, Lord Mayhew, who spoke before him. Therefore a good deal of what I might say would be to underline what they said. But perhaps I may just offer the following advice.
The whole of this debate in favour of the course upon which we are now set ignores the fact that we have a jury system. The three countries which have joined in the compact to carry out these prosecutions for war crimes and which have our judicial system have found that their first case has been their last and nothing but frustration and social discontent has followed. We are on a course that we shall regret if we pursue it. It is far too late. Our system of judicial treatment is much more exacting and fastidious than most. When we hear about evidence that is adequate, we probably do not take into account that members of the jury have to be convinced that the evidence they hear is fully corroborated and is the basis upon which they can reach a verdict without reasonable doubt. That is a very severe test to apply to their judgment.
It is not convictions that we have to worry about—it is acquittals. Acquittals are the disaster. Other countries do not have the "fitness to plead" rules that we have. In Canada the accused was so ill during the nine months of his trial that he was able to be in the dock only for limited times on doctor's orders. At other times he appeared wilting and listless and paid no attention to the proceedings. I hope that we can avert a repetition of the social discontent and racial disharmony which follows acquittals in these cases.
Those who press for retribution through the trial of war crimes are after what they conceive to be justice and which is in fact punishment. When they do not bring about the punishment, they cannot be satisfied with the system; and they cannot be content that justice has been done.
I hope that circumstances will allow us to come out of this with honour and dignity. Next year we shall commemorate the 50th year after the ending of the war. No trials relating to events that took place over 50 years previously can possibly succeed under our system. Let us think of what the Canadian case imposed on all concerned. The noble Lord, Lord Shaughnessy, can tell your Lordships a great deal more about that case than I can. The jury listened to evidence for six months. Six months! Let us think of that jury then taking three months to consider their verdict: they came to a unanimous conclusion which led to acquittal. Then the balloon went up. It was very sad and it is still sad. They have not had another.
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In Australia, the question arose of fitness to plead, when the accused in the first case shot himself in the chest and rendered himself incapable of going to trial. The question arose as to how long one waited for the accused to be fit to plead before going ahead. We do not realise what we are in for. I hope that wiser counsels will prevail. Let us get the emotion out of the issue now. It is a practical matter.
In Canada, 43 witnesses from eastern Europe had to be kept in Toronto for nine months while the case proceeded. There were six months of listening to testimony, with translations; the examination of witnesses had to be translated. How can that be a practical basis for a trial? In the Canadian case the defending counsel offered no defence and called no witnesses on the ground that he had no facilities for getting witnesses. The prosecution had all the opportunity and time that they cared to take to find witnesses; but the defence had no similar facilities in order to find evidence to the contrary. Let us pay attention to what noble Lords are saying in that direction.
7.11 p.m.
Lord Lester of Herne Hill: My Lords, unlike other noble Lords who have already spoken or who will speak in this debate, I was not a Member of your Lordships' House during the turbulent and painful passage of the War Crimes Bill. Therefore I may be the only Member of the House to speak on this subject for the first time. However, I have carefully read the remarkable, protracted and sometimes emotive debates. Like most noble Lords, I wish that the Bill had never been introduced, though I do not hold that view for the reasons given by many of its harshest critics.
I do not believe that the rule of law was violated by the coming into force of the War Crimes Act 1991. It gave jurisdiction to our courts to try offences of murder or manslaughter committed as war crimes in Germany or German-occupied territory during the Second World War. It did not change the law retrospectively to make someone liable to prosecution and punishment for an act which, when he did it, he had no reason to believe was a criminal act.
The cold-blooded and sadistic crimes covered by the Act were individual crimes of mass murder, as the noble Lord, Lord Merlyn-Rees, so forcefully reminded us. They flagrantly violated the laws and customs of war as well as of peace. What was done by the perpetrators was criminal according to the general principles of law recognised by all civilised nations, including pre-war Germany.
The 1991 Act removed immunity from prosecution for those war criminals who were not British citizens during the Holocaust and its bestial atrocities. But it did not take them by surprise as to the criminality of their horrific acts. The Act was therefore fully in accordance with the international human rights codes.
Nor do I believe that the fact that the Labour Government decided in 1948, with Sir Winston Churchill's support, not to proceed with war crimes trials in the British-occupied zone, in any way precluded Parliament from passing that Act giving jurisdiction to

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our courts. As the noble Lord, Lord Campbell of Croy, rightly observed, what was done in the late 1940s was and remains controversial. It has been powerfully criticised by writers such as Mr. Tom Bower, in his disturbing and dispiriting book Blind Eye to Murder. But what was done by the British Government (rather than Parliament) in that bleak Cold War era did not in any way decide that Nazi war criminals could obtain a safe and permanent haven from justice in this country by deceiving the Home Office and obtaining British citizenship.
Nor do I consider that the Act has authorised, still less required, unfair criminal trials. It did not create some newfangled procedure for Soviet-style or McCarthyite show trials. Rather, it included the public interest safeguard (in Section 1(3)) for the accused that cases can only come to trial with the consent of the Attorney General or, in Scotland, the Lord Advocate. That is an important safeguard in preventing miscarriages of justice. So is the even more vital safeguard of the independent judiciary in securing a fair trial by jury in accordance with the presumption of innocence, the rights of the accused and the stringent standards to which the noble Lord, Lord Houghton of Sowerby, referred.
The strongest argument made during the debates against the Bill was that it was futile because a fair trial would be very difficult to achieve for a man in his seventies, a half century after the alleged crime was committed. Such a trial would be unlikely to succeed and would be a daunting undertaking for the judge and jury as well as for the prosecution and defence.
I agree with that powerful objection. But another and more troubling reason for wishing that the Bill had never been introduced is that the controversy about its passage stirred that very light sleeper, antisemitism. It did so without contributing in a positive way to public education about the evil banalities of the Nazi atrocities and the lessons still to be learnt, especially at a time when ethnic and religious hatred and antisemitism again stalk across Europe.
In my view, the Bill and its passage revived terrible memories and nightmares. At times there seemed almost to be more concern in some quarters for septuagenarian war criminals than for the traumatic memories and feelings of the survivors who escaped them. Supporters of the Bill were accused, insensitively and unfairly, of harbouring feelings of revenge and retribution rather than the quality of mercy.
That was an exorbitant price to pay for enacting a statute that at best could not result in more than a handful of successful prosecutions. That is why I was firmly opposed to the original Bill and would have voted against it. But —I emphasise—that is past history.
So strong was the opposition in this House, led by the noble Lords, Lord Campbell of Alloway and Lord Houghton of Sowerby, and my noble friend Lord Mayhew, all of whom have spoken this evening, that the Government were compelled to invoke the Parliament Act to secure the Bill's passage. Those noble Lords should be content with their victory in forcing the Government to invoke the Parliament Act to give effect
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to the will of the democratically elected other place. It is regrettable that now, instead of leaving matters to take their course, they seek to stultify the Act altogether by preventing proceedings from being brought in the future and by empowering the Court of Appeal (Criminal Division) to stifle any pending prosecution at its birth. That is a wholly unnecessary power because paragraphs 6 and 11 of the Schedule to the 1991 Act give the Crown Court a specific power to dismiss a charge and quash an indictment if it appears to the judge that the evidence would not be sufficient for a jury properly to convict.
I am sorry to say that this Bill reopens the wounds inflicted during the passage of the 1991 Act three years ago. It seeks to override the Act just when police investigations are concluding and the responsible public authorities are deciding whether or not it is in the public interest to bring a prosecution against suspected war criminals.
Surely we should respect the will of Parliament, as expressed in the 1991 Act, and leave it to the prosecuting authorities, the law officers and the courts to decide whether anyone should now face trial. If the noble Lord presses his Bill further we will send a message to the world that this House is so concerned with the well-being of a handful of suspected war criminals living here that the House is prepared to attempt to take power away from those entrusted by Parliament with the task of reviewing the evidence, so painstakingly obtained, and from those entrusted by Parliament with deciding whether a prosecution is or is not in the public interest. That would suggest a curious scale of values and priorities. It would also imply, without any rational basis, that we in this House lack confidence in the prosecuting authorities and the law officers, and ultimately in our independent courts including the Lord Chief Justice, to pursue justice or not to pursue justice according to the law of the land. That is why I devoutly hope that the noble Lord, Lord Campbell of Alloway, will not proceed further with his unnecessary, divisive and untimely Bill.
7.20 p.m.
Lord Bridge of Harwich: My Lords, I have always thought that by far the gravest objection to the jurisdiction which the War Crimes Act conferred on the English courts was the near impossibility that anyone tried in the exercise of that jurisdiction could be guaranteed a fair trial. It was a near impossibility at the time when the Act went on the statute book. As the years pass the prospect of a fair trial becomes more and more remote.
The noble Lord, Lord Merlyn-Rees, spoke of miscarriages of justice. He spoke of the judiciary being under a cloud, which implies that he thinks those miscarriages were due to judicial incompetence. I hope he is wrong. I do not believe they were. I believe that the miscarriages of justice were due to the fallibility of the criminal justice system. Any criminal justice system must be fallible and regrettably will always remain so. I do not know how it can be made infallible. But however those miscarriages of justice occurred, they vividly brought home to us that an English jury, on apparently credible evidence, trying someone for a

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crime committed in recent times and in the familiar social environment of this country, can still be shown to have been wrong and to have caused a miscarriage of justice. To ask an English jury to try an old man of my generation for one of the gravest crimes in the calendar on the basis of evidence presumably given by witnesses of similar advanced age about events which occurred in eastern Europe in circumstances of great social upheaval is surely to invite a miscarriage of justice.
Before the Bill can reach the statute book, if ever it does, more than 50 years will have passed since the latest date when any of the crimes to which the 1991 Act is directed were committed, and that is a long enough limitation period for any crime, however serious. That is why I support the principle of Clause 1 of the Bill.
That said, of course I recognise the sincerity and understand the depth of feeling of those who take the view that the crimes to which the 1991 Act was directed were of such enormity that the attempt to bring the perpetrators to justice is one which can never properly be abandoned. They must presumably proceed on the basis that, even after so long a time, a fair trial is still theoretically possible. In one of the debates on the Bill which became the 1991 Act the noble Lord, Lord Mishcon, by virtue of a vivid exercise of his fertile imagination, gave an example of how such a case may arise. He envisaged my noble friend Lord Campbell of Alloway walking along Piccadilly and recognising someone with a peculiar scar on his face as being a guard at Colditz who had subsequently murdered a prisoner. When one imagines a case of that kind it is theoretically possible that there may still be a fair trial; but the theory is a remote one.
Even the most passionate advocate of continued prosecution must recognise that whether or not there can be a fair trial in a specific case must depend on the nature of the issues and the character of the evidence involved. When the Bill which became the 1991 Act was before the House for the second time, I urged the House, having opposed a Second Reading when it was before the House on the first occasion, to give it a Second Reading in the hope that the procedures involved could be amended and improved. But the House was not persuaded with the inevitable result that, under the Parliament Act, the Bill immediately received Royal Assent without amendment. If this Bill proceeds there will be an opportunity to enhance the procedure in ways I believe are necessary.
The 1991 Act does not spell out in terms that despite its retrospective character in one sense it is still open to the courts to exercise their jurisdiction to stay a prosecution on the grounds that the defence would be substantially prejudiced by delay or that delay would make a fair trial impossible. I understand the Government's position always to have been that the courts will have that power and now that they can look at Hansard perhaps that will cure the ambiguity. But in principle it is wrong that a statute should remain ambiguous on the basis that Hansard will cure the ambiguity. I hope that if this Bill proceeds it will be possible in Committee to introduce a suitable provision making it perfectly clear that the courts have that unfettered discretion.
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When it comes to the exercise of the discretion, had the Bill in 1991 received a Second Reading, I was minded to table an amendment on the lines of the provision in Clause 2 of this Bill. To my mind there should be an appeal either way. An application to stay a prosecution on the ground of prejudice by delay comes before the single trial judge and, as the law stands at the moment, there is no appeal from his decision. In the special circumstances of a war crimes prosecution—so long as they can and do continue—it seems to me entirely right that the onerous responsibility of deciding on an application whether, in the circumstances of a specific case, there is such prejudice that the prosecution should be stayed or whether there cannot be a fair trial should not rest on the shoulders of a single judge. Any such decision is bound to be highly controversial and it is only right that the last word and the responsibility for taking the decision should rest on the shoulders of three judges in the Court of Appeal.
7.29 p.m.
Lord Beloff: My Lords, few noble Lords would disagree with me were Ito say that Lords Hansard does not have a very wide circulation in the Balkans. But it might be the case that someone who had perpetrated crimes of equal horror, if not on the same scale, as those alleged against the people we are discussing might come across our debates and say, "Well, it's all right chaps. I have only to get to England and I will find a group of British aristocrats and lawyers who have devoted themselves to preventing the prosecution of war criminals". War crimes, as we now know—though not on the scale of those that have been alluded to by the noble Lord, Lord Merlyn-Rees—are a feature of our world, and although we cannot prevent them, it is not for us, by indulging them, to make them more likely.
People have talked about the changes that have occurred in the past few years since 1988, when the current movement which led to the 1991 Act began, in the circumstances of some of the individuals involved. But more important are the changes that have occurred in the countries where these crimes were perpetrated. In 1988 those countries were still part of the Soviet bloc. It was obviously very difficult for our investigators to be sure of receiving the co-operation of the local police and legal authorities which they would require in order to amass the evidence that they were looking for. Circumstances in those countries have changed. We now have governments which are eager to do what they can to enlist the support and sympathy of the West. That makes it possible—I am not in the confidence of those who are in charge of the investigations—that it will not simply be a question of whether one old man can identify another. There may well be written records which were certainly not available five or six years ago and, as we know, our outlook on the Soviet Union itself—these crimes occurred not in Russia but in places which were then part of the Soviet Union—has changed enormously. For instance, the Katyn massacre was long maintained to be a crime of the Germans but has now turned out not to be so. It therefore seems that we are

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entitled to look at whether or not this is a suitable thing to do in the light of the legislation which is on our statute book.
It is curious, because the argument has been exploded so often, that the noble Lord, Lord Mayhew, continues to insist that the agreement to cease war crimes trials in the British zone of occupation in Germany is binding on the British Parliament in relation to crimes which were not committed by Germans, nor in that territory. The decision, which was a perfectly understandable one, to end those war crimes trials was, as the noble Lord, Lord Campbell of Croy, reminded us, a part of handing over criminal jurisdiction to the burgeoning democratic courts of the new German federal republic. Indeed, to their credit, the German federal government have been from time to time prosecuting, and are still prosecuting, war crimes, where the criminals have been identified. Though they may have a different system of courts and prosecution, as is true of other continental countries, no one has so far suggested that there have been miscarriages of justice there or in the war crimes trials that have taken place in France. In other words, this is a matter which deeply affects Europe and ourselves. As the noble Lord, Lord Jakobovits, said, for many of us it is a matter of conscience.
I agree with the noble Lord, Lord Lester of Herne Hill, that there are problems in raising the issue of the motive of these appalling crimes. On the issue of anti-semitism, I am sure that it has had its effect, in the debates both in this country and in Canada and Australia, on the attitude to these crimes, but that surely is not something which we should take into account. It was wrong to massacre Jews in eastern Europe because they were Jews, just as it is wrong to massacre people in Bosnia because they are Moslems. The identity of the victims is not the important point. The important point is the motive and the conduct of the crimes.
Therefore, I can see no reason why we should, as this Bill would demand of us, suddenly intervene politically in a process which is proceeding, albeit slowly. No doubt the delays will limit the number of prosecutions and possibly the number of convictions. But I feel that it would be sending a signal to every neo-Nazi in Europe if the House of Lords was thought to be in any way acting so as to condone crimes which, as I say, have been repeated but never on the scale of those with which we are dealing.
7.35 p.m.
Lord Shaughnessy: My Lords, to support this Bill, sponsored by the noble Lord, Lord Campbell of Alloway, is not to condone in any way the hideous, almost unbelievable, atrocities that happened in Europe in the course of World War 2. The noble Lords, Lord Mayhew and Lord Campbell of Croy, had a similar experience to mine at the end of the conflict in 1945 and witnessed the liberation—at least the freeing—of the concentration camps in north west Europe. That horrifying experience will be ingrained in the minds of many other noble Lords—it certainly is in mine—and therefore the question of even contemplating the mitigation of such crimes is not a factor so far as I am
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concerned. I do not view this Bill in a technical sense as many other noble Lords have, but as an attempt to limit the whole process which was inaugurated with the War Crimes Act 1991. The biggest problem is the passage of time and the possibility of a fair trial after 50-odd years which have passed since any of these crimes may or may not have been committed.
There is no use repeating the problems of age, identification and the possibility of finding reliable witnesses either for the prosecution or the defence. That has all been discussed before. But if the process continues, the problem becomes bigger. Each month and year that passes the difficulties which face mounting a fair trial are increased.
The noble Lord, Lord Houghton of Sowerby, in what might have been considered as a trailer for my speech, referred to the experience under the Canadian War Crimes Act. I shall refer only to a couple of instances in order to give examples. The first prosecution was against a man called Imre Finta. As a constable under the Nazi regime, he was accused of sending a number of people to their deaths in a concentration camp. He was apprehended. I am not sure whether he was actually indicted, but after his arrest under the Canadian War Crimes Act, it was about two years before he came to trial. The whole process of assembling evidence and whatever else which had to transpire, took that long. He came to trial and in May 1990, shortly before the War Crimes Bill was debated for the first time in your Lordships' House, he was acquitted. Because of a technicality, the Crown in Canada was granted the right to appeal to a higher court. That process had gone on since May 1990. In March of this year the case reached the Supreme Court of Canada, which denied the appeal and at last Finta was discharged.
That is a very long time for a man who is now 82 years old, who has lost his business, his house, and who is now in reduced circumstances, to go through such a process. I raise this point because if that kind of thing were repeated under the War Crimes Act which we are now discussing—it probably would not because I believe that an acquittal cannot be appealed under the British criminal system—it would be a very severe curtailment of human rights and compares to the dreadful experience which people experienced under the Nazis during the war with whom we are concerned in this exercise.
No other prosecutions have been mounted under the Act in Canada. One man was charged but the proceedings were stayed because of his ill-health. He was 83 years of age. Three other prosecutions were mounted and in two of the cases they were stayed because a witness became ill and unfit to attend the trial although, if there is a recovery, the trial can be started again. In another prosecution the key witness died. In a further prosecution an application was made to take evidence in the former Soviet Union, but that was refused by the trial judge. There has been no success in any of these trials in Canada. I shall not dwell on that any more.
As some noble Lords may know, in Australia an investigation under the Special Investigation Unit of the Attorney-General's department has been set up to go

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into the whole question of their war crimes legislation. In its final report, which took four years to prepare and which cost 40 million Australian dollars, the conclusion was that the unit found that 16 members of the Belgrade special police unit were allegedly responsible for the arrest and torture of thousands of Nazi opponents, including 856 inmates who migrated to Australia. On the evidence gathered, the SIU found it insufficient to sustain charges even though investigators believed that suspects were likely or highly likely to have committed war crimes. The report states that the others were too old or infirm to go to trial. That is the Australian experience.
I do not wish to detain your Lordships much longer. If retribution has to be made, we have to think of some other method. The experience of other jurisdictions would indicate that proceeding as Parliament has decreed with this legislation, which I accept, may not be successful. We have had no prosecutions mounted so far although we have been told that there are a number of possibilities. I believe that it was Bacon who said,
"Revenge is a kind of wild justice, which the more man's nature runs to, the more ought the law to weed it out".
I have no proposals about how we should proceed. As I said, I think the Bill gives some hope that we can at least limit the continuing unpleasant legal situation that exists today. The noble Lord, Lord Jakobovits, quoted the Old Testament. The doctrine that is proposed in Exodus of,
"Eye for eye, tooth for tooth",
has little relevance in this context. If we proceed under the existing War Crimes Act without limitation, we shall be doing an injustice to a hapless group of suspects, probably toothless and failing in eyesight.
7.51 p.m.
Lord Archer of Sandwell: My Lords, like my noble friend Lord Merlyn-Rees, I have to declare an interest as an officer of the All-Party Group on War Crimes, and like the noble Lord, Lord Lester, I am speaking on this subject in your Lordships' House for the first time.
A number of threads have run through the debate. The first touches on the constitutional implications of the Bill. The effect of Clause 1 would be to disapply the War Crimes Act in respect of future prosecutions. Since we know as a fact that no prosecutions have been initiated under the Act—indeed, as I understand it, that was the very reason that the noble Lord, Lord Campbell, was induced to introduce the Bill—it would follow that, in effect, it would repeal the 1991 Act—
Lord Campbell of Alloway: My Lords—
Lord Archer of Sandwell: My Lords, if the noble Lord will forgive me for one moment, I believe that I can anticipate his point. If not, I shall certainly give way to him. The noble Lord asked us to remember that if the Bill is given a Second Reading and makes its way in due course onto the statute book, there will be a period of time—a window, as it were—in which the authorities can act. I understand that that was the reason that the noble Lord sought to intervene. I understand the noble Lord's desire that no time should be lost, but I am bound to say that I doubt whether it is conducive to justice to compel those concerned to initiate a prosecution by a
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specific cut-off point, to clear their desks by a specific stroke of the clock. I would be very concerned if that were the effect of what we have done.
Whatever the merits of the 1991 Act, it is on the statute book and it would be curious to seek to repeal it three years later, particularly in view of the overwhelming majority that it received in another place, unless there had been some material and unpredictable change of circumstance since it was passed. So I listened with great care to what the noble Lord said about how the situation had changed. The answer appears to be that when the Act was passed no one knew that by the end of 1994 no proceedings would have been initiated. I believe that there are two answers to that.
First, it was obvious then that investigations would take some time. Their very nature would involve some time-consuming inquiries and no one would have the authority to undertake them in the first place until the Act was on the statute book. Certainly, as the noble Lord, Lord Beloff, pointed out, the way in which the political situation would change was not then wholly predictable. That may have made some difference. However, no one then wanted to see prosecutions being initiated without proper consideration.
Secondly, it was clear in 1991 that even if some prosecutions had been initiated, not every prosecution would have been initiated within three years. Inevitably, some cases would still be outstanding in December 1994, and if it was then considered right to make provision which would necessarily have that effect, it now seems strange that it was not envisaged that prosecutions might run into 1995.
I turn now to the question of whether it is right to impose a time limit on any category of criminal prosecution. That proposal has never found favour in this country. There is something repugnant in the suggestion that if a criminal can by subterfuge or dissimulation contrive to remain undetected for a sufficient period of time, that should earn him exemption from paying the penalty for his crimes. That is an unattractive proposition when applied to any offence. It becomes less enticing with the seriousness of the offence. When it is sought to apply it to some of the most horrifying offences in history, it surely has few attractions. It was considered by the authors of the Hetherington-Chalmers Report, who rejected it on at least two grounds. First, in paragraph 9.19, they pointed out that it is not applied in the criminal law of this country. We would have to make specific provision for a specific category of case. They pointed out the recent example of a domestic murder that was committed 27 years before the trial. Secondly, in paragraphs 5.41 and 5.45, they pointed out that the United Nations, expressing the consensus of the civilised world, had agreed in 1968 on the Convention of the Non-applicability of Statutory Limits to War Crimes and Crimes against Humanity. In 1974 the Council of Europe took the same view in a similar convention. The Bill would fly in the face of that consensus.
What is not in dispute in this debate—it has been clear from virtually every contribution—is that in each case the court should be assiduous to ensure that no injustice arises from any delay and if, in consequence,

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there are no convictions, so be it. Where there is a doubt, clearly the benefit of the doubt should be accorded to the defendant. That is what the noble Lord appears to contemplate in Clause 2.
Whether there is a doubt depends on the facts of each individual case. As the noble and learned Lord, Lord Bridge, reminded us, it depends partly on the question at issue. In some cases, there may be an issue as to identity. Clearly, the court should have in mind that for any of us, alas, appearances change with the years. I am still surprised at how, encountering people I knew in my youth and have not seen for many years, I am frequently able to recognise them. I am sometimes flattered to discover that they recognise me. Of course, the judge should consider with the greatest care the guidance that was given in the case of Turnbull and warn the jury accordingly. Of course, a jury may be wrong. In considering any category of offence, the only way to ensure that a jury is never wrong is never to allow a jury to convict anyone. I have a great respect for British juries and I am not unduly troubled on that score.
Something may turn on a witness's opportunity for recognising the defendant and on any reason that he may have had for paying particular regard to him. I once heard someone who had spent time in a concentration camp say, "If someone is peering into your face and you know that he has absolute power of life and death over you, you are not likely to forget his face".
However, not all war crimes cases turn on the issue of identification. In many cases the defendant admits that he is the person in question; what he disputes are the acts imputed to him. Then the question may turn, as one of your Lordships indicated, on the authenticity of documentary evidence. We have good reason to know how meticulously the Nazis made and retained records even of their vilest crimes and how when they fell into the hands of Communist regimes, they were obsessively concerned to preserve them. The American courts have subjected such documents to the most scrupulous examination and have found them to be reliable. Of course, each case must turn on the issues and the nature of the evidence. No one would recommend any lapse in the usual standards.
This country undertook the exercise because there was a campaign by certain national groups in this country on behalf of those who had reason to anticipate that they might be accused of war crimes. It was a campaign to resist any extradition or deportation of those who might be accused. It was said in response to that campaign that, instead of returning them, the British Government proposed that they should be tried in this country. It would be curious indeed if, having rejected the other alternative, we then withdrew from this one. That would isolate us from the whole community of nations where the question has arisen, and it would occasion great hurt to the families of the victims.
My noble friend Lord Merlyn-Rees has already quoted what was said by the authors of the Hetherington-Chalmers Report on the point of whether crimes so monstrous should ever be forgotten. Perhaps I may quote something else of which they reminded us.
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It was a quotation issued by President Roosevelt, Marshal Stalin and Mr. Churchill at the Moscow Declaration in 1943. They said:
"Let those who have hitherto not imbrued their hands with innocent blood beware lest they join the ranks of the guilty, for most assuredly the three Allied Powers will pursue them to the uttermost ends of the earth and will deliver them to their accusers in order that justice may be done".
That was said before many of the crimes were committed. I hope that we will not now resile from that obligation.
8.1 p.m.
Baroness Elles: My Lords, it is just about five years since the main debates on the Hetherington-Chalmers Report took place in this House and another place. They were sombre and impressive debates. Whatever view Members of either House took, and whichever way they voted, I think that it can be said, without any fear of contradiction, that every vote was cast while conscious of the great devastation and evil that was committed, and was in no way either for or against the Bill, or could be taken as condoning any of the acts that were committed and that we had debated.
I should like at this stage to welcome the presence of the noble Lord, Lord Lester of Herne Hill, and the noble and learned Lord, Lord Archer of Sandwell, who have joined in these debates, because they have contributed great legal knowledge. I should add modestly that I, too, am speaking for the first time, but do not pretend to add to the great legal knowledge which they are contributing to the debate. I did not speak previously because there were so many distinguished noble and learned Lords speaking in the debate of December 1989. It was not because I was not a Member of the House, and perhaps I should explain that.
It is evident that there will be many more Members of your Lordships' House, as compared with Members of another place, who will have had personal knowledge and experience of the effects of the appalling and evil deeds that were committed and about which we have been thinking tonight. We have had several examples of that. I insist on saying, as some people have said before, that old men forget. The issues through which we lived are never to be forgotten. I was a young WAAF officer at Bletchley during the war in the sector dealing with the German airforce. Of course I am still subject to the Official Secret Acts, but I can say that there were things that passed my desk which I shall never forget.
I went to Crete after the war and saw columns of names of people from the age of six to 76 who were killed by the occupying forces in retaliation. Those, again, are matters that remain indelibly on one's mind. There is no question of forgetting what happened. That is why I put the argument that the War Crimes Act which was passed—I accept that it was passed through the functioning of the Parliament Act—was a piece of legislation which was not necessary to remind us and the world at large of the atrocities and evils that were committed so long ago.
I have a cousin who at the time was a young medical student at the Middlesex Hospital. He, with about 100 others, volunteered to help the Army Medical Corp in

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Germany to deal with health and other related problems. He found himself at Belsen having to clear up some of the appalling situations there. I see that my noble friend Lord Campbell of Croy is not in his place. I should like to tell him that those young medical students had to decide who was fit enough to be kept alive. Those for whom they did not have enough medicines they had to leave to die. Those are things which a young medical student does not forget. Of course the situation at Belsen was one of the most appalling.
To return to the Bill, I should like to support it. It limits the time within which these prosecutions can take place, but the memory of the acts and the record of horror —I repeat this—is not eliminated. My noble friend Lord Campbell of Alloway has argued fully and cogently for such a limitation to be imposed for these particular cases, and he has dealt with the legal and moral issues. I believe that I am right in saying, in reply to what my noble friend Lord Beloff said in a very moving speech, that no one would now be able to evade prosecution by coming to this country because of the Geneva Conventions Act 1957. So even if people in the Balkans were to read Hansard, we need not worry that they would be able to escape to this country to avoid prosecution.
Having dealt with those issues, and with so many other noble Lords having dealt with vital and crucial issues, I wish to deal with two or three practical matters. I believe that it is accepted that all the Scottish cases have been dealt with and withdrawn. According to the Answer given by my noble friend Lady Blatch in this House on 28th November, I understand that 233 of the total of 369 cases have been investigated fully and that the CPS has decided that they will not be proceeded with. Secondly, 15 of the 34 remaining cases are still to be investigated and nine are with the CPS. I have given my noble friend the Minister notice of this question: Has there been any common factor in the investigative reports of the 223 cases which have led the CPS to advise against prosecution and which would be likely or certain to apply to the remaining 24 cases? That is important when we consider the effects of the Bill. I ask that also because I noticed in her reply that there are three cases into which the investigations started only this year. That would be relevant to whether the proposed statute of limitation would apply to those cases and which might result in a prosecution.
My second point relates to costs. I realise that this is a delicate subject and that people may think that we should not be talking about finance when we are discussing the tragedies and evils that have been committed, but it is relevant to today. The cases, in which there has not been one prosecution, have cost over £5 million so far. Those of us who sometimes come into contact with the Metropolitan Police, as opposed to the Metropolitan Police War Crimes Unit, and who are so impressed with the valuable work that they do when dealing with crime on the streets and in people's houses know that they are short of financial resources. Is it therefore justifiable to spend that kind of money on these special cases in which most noble Lords have led me to believe that even one prosecution is unlikely.
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Could not that £5 million be better spent by the police authorities in dealing with today's crimes and seeking to protect present and future victims of crime?
The CPS is heavily burdened in reading through the vast number of documents which result from the investigations. They have led it to advise the Attorney General that there should not be any prosecutions. Is it right that that service which is so often criticised—I must confess that I, too, have criticised it from time to time—for failing to be efficient and occasionally failing to be at court, should be burdened by this extra large and important task when the results are again going to be negative?
No one condones the acts that were committed. Nobody who lived during that period will ever forget them. I do not believe that anyone who hears the debates in your Lordships' House, or anywhere else, or who reads a newspaper will ever forget them. However, I believe that the funds and the people who are being made available to deal with the cases should be diverted to deal with today's problems and not left to deal with those of 50 years ago.
8.10 p.m.
Earl Attlee: My Lords, I echo the noble Baroness's final comments about the horror of these crimes. However, I am perhaps one of the youngest Members of your Lordships' House and I believe that we must bear in mind that the majority of any jury may be in the same position. They will not have been alive when these offences were supposed to have been committed.
Difficult moral and ethical questions are posed. I read the Second Reading debates of the original War Crimes Act in Hansard. I found them interesting but the content was heavy. The arguments against the War Crimes Act appeared to be stronger.
I have also listened to many Starred Questions in your Lordships' House and have been dismayed at the reluctance of the various Ministers to give an indication of the age of the youngest suspect. That cannot conceivably be due to a poor brief; it must be possible to anticipate such a simple and obvious question. Clearly, many suspects will be too old or too feeble to plead. Will the Minister say how old the youngest suspect is?
I support the noble Lord's Bill because I do not believe that anyone will be convicted or even prosecuted under the Act. I do not rely upon my own judgment but that of your Lordships' House when debating the original Bill.
8.12 p.m.
Lord Dacre of Glanton: My Lords, after the debates on the War Crimes Bill in 1991 I read in the press about those Peers who believed that time carried away guilt. I do not believe that anyone here today holds that view. We all agree that the crimes to which we are referring should be neither forgiven nor forgotten. They are unexampled in modern history and it is most important that we should remember them. Our generation will never forget them because they passed through our consciousness. But we want them to be remembered by later generations. If we are to achieve that we need an

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emphatic gesture. Several noble Lords have spoken as though these trials will be that gesture. I do not believe that. I believe that the trials will send an indistinct message. Perhaps they will never take place; as we know, none has taken place yet. Time is passing and perhaps none will take place.
I believe that a true history is the proper means of recording these horrible events. The true history is being constructed, I may say, to a large extent by the Germans themselves. When I say that the crimes should never be forgiven I refer to the authors of them and not their descendants who are guiltless in that respect. I should like the real record of this awful period to be in a correct and accurate history and not in muddled trials leading nowhere.
There are enemies of a true history. We all know about the historical revisionists in France, in America and in this country. There were none in Germany but perhaps the situation has changed. Such people wish to argue that these crimes did not take place. There are also well-meaning people who, through failure to understand their true nature and to distinguish between extermination camps and concentration camps, sometimes play into their hands. I wish to ensure that the historical record is clear and emphatic and that it is passed on to the next generation. I do not believe that the lesson will be conveyed by trials if, in fact, they ever take place.
The noble Lord, Lord Mayhew, has made many of the comments I intended to make. I take the liberty of emphasising one point. We heard about the trials which foundered in America, Canada and Australia. But the classic case is that of Ivan Demjenjuk. He was identified as Ivan the Terrible of Treblinka. Inquiries into the case began in 1975. The process dragged on. He was denaturalised in America in 1981 and after a further five years he was extradited to Israel. Two years after that he was sentenced to death. Three years later, in 1991, new evidence was produced which totally destroyed the case that had been based on the evidence of 13 Israeli witnesses. They saw him not on a television screen but face to face in Israel. They all swore, allegedly independently, that he was the man whom they knew. What is the use of people saying that if one has once looked into the eyes of an extermination camp guard or torturer one will recognise him wherever one sees him? Here were 13 Israeli subjects who had looked into the face of Ivan the Terrible in Treblinka and said that they recognised him. In fact, they had "recognised" a man who had never been in Treblinka in his life.
I do not believe that there will be any effective trial. By the time the evidence has been collected, the defence has had time to prepare its cases and the trials have been mounted, all such people will be dead. What will be gained? I do not believe that justice or even the monumental record which people want will be achieved. What will be left will be a fuzzy impression and, to a great extent, acquittal, as was said by the noble Lord, Lord Houghton of Sowerby.
The monument that I should like this generation to leave to the next generation, in order to show how thin is the crust of civilisation and how easily, if the rule of
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law, accepted morality and international order are allowed to lapse, the beast in man can emerge, will not result from the kind of justice that well-meaning people are seeking through trials which will not be effective. The trials may achieve condemnation but they will not leave an effective impression on the next generation. That is what really matters. We need to make an emphatic gesture which will last and make an impression. We do not want a muddle such as will emerge from the trials which are envisaged.
Noble Lords have referred to previous debates in this House and the other place and have said that Parliament voted by an overwhelming majority in favour of the Bill. The noble Lord, Lord Jakobovits, said that, as did other noble Lords. But this House is part of Parliament and this House voted the other way by a substantial majority. Therefore, Parliament did not vote in favour of it by a substantial majority. The House of Commons did but that is only half of Parliament, whatever the respective powers conferred by the constitution. We know that votes in the other place are subject to more discipline and are less independent than they are in this House. That is the message I should like to leave. I support the Bill of my noble friend Lord Campbell of Alloway.
8.20 p.m.
Lady Saltoun of Abernethy: My Lords, like other noble Lords, I have never questioned the heinousness of the crimes, the perpetrators of which the War Crimes Bill was designed to bring to trial. I have never questioned that they took place because on the morning after the press got into Belsen, I saw the newspapers before my parents could hide them from me.
Having said that, I support the Bill. There is very little that I can add to what the noble Lords, Lord Campbell of Alloway, Lord Mayhew, Lord Houghton of Sowerby, Lord Dacre of Glanton, Lord Shaughnessy and the noble and learned Lord, Lord Bridge of Harwich, have said. I support it because I believe that it is very doubtful, after the passage of so much time, whether it is possible for any of the suspects to receive a fair trial.
If we had a statute of limitation in this country we should not be discussing this matter now. I do not know why we do not have that. It may be because Article 4 of the Magna Carta says that justice should not be prolonged, meaning postponed. Since we disregard that, perhaps we should consider introducing a statute of limitation in this country for murder cases. Meanwhile, Clause 1 would provide such a statute in this particular context.
Clause 2 introduces one of the most sensible and practical procedures of the Scottish judicial system in the context of prosecutions under the War Crimes Act. I wonder whether those procedures could not be adopted usefully in England as a general rule.
8.23 p.m.
Lord Cochrane of Cults: My Lords, I am grateful to my noble friend Lord Campbell of Alloway for introducing this Bill. It seeks to rectify a situation which he has described in detail, all the problems which it engenders, and the injustices that it may cause. It is doubtless causing anxiety among many people who, as

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matters stand at present, are innocent and elderly. I do not know whether or not they are innocent but I do know that when I first spoke in your Lordships' House in April 1991 I found it a terrifying experience. I spoke on this subject for the first time in your Lordships' House after the noble and learned Lord, Lord Shawcross. The House was packed, unlike now, and I did not know whether I should be able to cope with a problem of this complexity in the presence of so many experts.
But with the passage of years—and how the years have gone by—the difficulties which I tried to address then about ensuring a fair trial have not diminished. The problem remains intractable and I can see no solution.
In replying to my noble friend on 28th November, my noble friend Lady Blatch said, quite correctly, that there is no limit on the time which needs to elapse before a charge of homicide or murder can be laid. As I see it, that is perfectly true. But what was not said was that it derives from common law and I believe that common law never assumed that anybody would try to lay a charge some 55 years or thereabouts after the events are alleged to have taken place. There is no doubt that a great many of those crimes did take place. But the passage of time is a great impediment.
Perhaps I may remind my noble friend Lady Blatch of another circumstance for which the law made no provision—the opening of shops on a Sunday in Scotland. That was never considered necessary but, with the passage of time, shops opened in Scotland. It was not provided for earlier because it was deemed to be unthinkable. I believe that the same applies to the laying of charges of murder or homicide after very many years. That is why I do not find that particular argument very convincing.
On the last occasion on which this matter was debated, my noble and learned friend Lord Hailsham of Saint Marylebone said that he knew of no case where a charge of murder had been preferred after 27 years. Earlier today I had an opportunity to speak to the noble and learned Lord, who confirmed that as far as he knew—with the qualification that he had not researched it in detail but nobody had complained in the interval—27 years still remained a fair answer.
We are a long way from 1st September 1939. Unlike the noble Lord to whom I was speaking at dinner, on '1st September 1939 I was 12 years, 11 months and one week old. I can remember it. But because of that distance of time there are problems of identification: whether the chap was there, if it happened, and whether he did it.
That was brought to my mind the other day at a dinner given for the former pupils of the prep school which I attended. The first year that was truly represented was 1935 and there were four of us. I had not seen three of them since 1939, as far as I can tell within the limits of evidence and recollection. I did not recognise them and, indeed, I hardly recognised their names until they added a few supporting details. One of the four I had seen once. It is an awfully long time ago. Okay, we were young then and we have matured. If people want to know how I have matured, they can look at my picture in Dod's, which was taken in 1957. It is the best one that I have. Again, a chap may confess and
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say, "Yes, of course I did it", but has he gone dotty, has it been screwed out of him, or does he want to get his name in the Sun? I do not know.
On the day to which I alluded earlier noble and learned Lords remarked, as they have again this evening, on the retrospective enlargement of the jurisdiction. Is that right? I do not think that it is. If we count back, we are now some 55 years from September 1939. Let us go back, those of us who were alive then. I made this argument in my maiden speech and it attracted a modest degree of approbation and I hope that I shall be equally favoured tonight. We can perhaps go back to 1884, the year after my father was born. I looked it up and saw that, in February of that year, General Gordon was sent to the Sudan. In November the Mahdi occupied Omdurman. The annual Army Act was passed which set the billeting allowance for an ordinary soldier at tuppence halfpenny.
I am now convinced, as other noble Lords and other noble and learned Lords have said, that it is time to leave the problem alone. All that can be said has been said. For my part, I believe that it is now time to leave this awful affair for judgment by a greater power than ourselves, as we in time will face in death.
8.30 p.m.
Lord Hylton: My Lords, the noble Lord, Lord Mayhew, and the noble Lord, Lord Dacre of Glanton, both referred to the case of Mr. John Demjanjuk. It so happened that I found myself in January 1992 having breakfast in a hotel in Jerusalem with his American defence counsel. At that time, Mr. Demjanjuk had been convicted in a show trial in Israel of being, as has been mentioned, Ivan the Terrible, a Nazi concentration camp guard in the Ukraine. I am glad to say that that man was later cleared on appeal in Israel. It turned out to have been a case of mistaken identity.
I also happen to have been in contact with members of the groups known as the Birmingham Six, the Guildford Four and the Ulster Defence Regiment Four. The first two cases were heard before juries in England, while the third case was heard before a judge alone in Northern Ireland. All three of them were severe, serious cases of miscarriage of justice. They just go to show that, even in the most esteemed systems of justice, things can go wrong. Indeed, they can even go wrong when the cases are recent and are being tried relatively soon after the events in question.
In my view, there should be a worldwide period of limitation on the prosecution of serious crimes, including murder and genocide. I would suggest a period of 30 years. After all, that is the equivalent of one whole generation. To adopt such a period would be to follow the good precedent set by Belgium.
I trust that the Bill will receive a Second Reading. I support it at the same time as supporting the prosecution of recent war criminals for offences committed in such countries as Croatia and Bosnia. As a layman, I support

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the noble Lord, Lord Campbell of Alloway, because I cannot see how anyone in the circumstances that we are discussing can get a fair trial after 50 years.
8.33 p.m.
Lord Gridley: My Lords, I have not come to your Lordships' House today to be critical of the Government's actions in pursuing those who, in their opinion, were responsible for war crimes. However, I hope to be constructive and I am critical of the delay that has occurred in that operation. Looking back over that period, it seems to me that, basically, the Second World War was about preserving territorial boundaries, the preservation of people when under attack and the preservation of the freedom of those who were suffering in that respect. We also went to war 65 years ago to rid the world of Hitler's Germany and the brutal power wielded by his secret police over the European territories invaded, conquered and occupied by the Germans.
I speak with an interest in the matter because as an hereditary Peer one Christmas I was looked after by Tenno Heika the Emperor of Japan when I was interned in Changi Goal. He sent us some of his excellent brandy. Unfortunately some of us were suffering from sores due to malnutrition, so it was handed to our doctors to use to treat us.
In tonight's debate we have not considered whether it would be normal for people who are active, or those who are rather slow in pursuing obtaining evidence, to bring a suitable case against people in Scotland or Britain which would be evidence of past action during the war.
Also of relevance is the fact that one must realise that the secret police operated in Hitler's Germany. His so-called method of government was to use secret police in his own territory. When he occupied the territories of northern Europe, he brought those individuals with him. The peoples of occupied Europe suffered from the action taken by him in those territories, which lasted for six years until we had our victory.
When victory came I was amazed to find that those in occupation had used that kind of government in a Country. Many people were in dire disorganisation; they were accusing one another of giving evidence against each other. Indeed, there existed grave disorganisation generally.
It seems to me that the only way we can get some evidence—that is, if it is obtainable and reliable after 50 years—would be from those who had suffered. That is where the evidence would be. It would be extremely difficult to get it.
I am not privy to what is going on in Scotland or to the difficulty that people are finding there. However, generally it is very unwise or very unusual for the British to be slow in bringing charges against such people after a lapse of many years. I do not think that they would stand for it. I do not believe that it is acceptable in any court of law in Britain to delay such an action against a person who has to be tried. The
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evidence must be brought against that person. Then he is either cleared and goes free, or he is sentenced for what he has done.
I wrote a great deal about what I was going to say. However, I have tried to meet the spirit of what has been said this evening. Some of the speeches have been quite brilliant. I do not feel capable of arguing the matter from the legal aspect. I can simply speak from my experience of those things about which I have felt so strongly since I have been back in this country. I see the wonderful things that are done or that people try to do and how we carry out our affairs generally—except, of course, what happens in the press. It is a fact that this is a fair place to be.
I remember when the victory came, I went outside and Mountbatten was there in all the glory of his naval uniform. A great load left my mind. There is nothing more terrible than to be defeated, to lose one's freedom and not to know what on earth will happen to get one out of the situation. How different at a time of victory! I am eternally grateful for the way in which we were rescued and for the action that this great country took in bringing that about. I only hope that the debate this evening, which I think and hope will be useful to the Government, will enable them to make things move faster than they are at present.
I praise my noble friend Lord Campbell of Alloway for having brought this matter to our attention again. I warmly support what he has said. I think that we must make some effort to take a decision on this matter and either convict people of crimes which they have committed or let them go free. That is the way that Britain carries out its affairs. I warmly hope, with all my heart, that we will adopt that course.
8.40 p.m.
Lord Belhaven and Stenton: My Lords, in supporting my noble friend Lord Campbell of Alloway, I should like first to say, as other noble Lords have said, that I have no wish to detract in any way from the wickedness of the crimes which we are discussing. I wish that the perpetrators had been caught quite a long time ago; but as many noble Lords have said, "caught" is the relevant word here.
In the 16th century I believe that it was a custom occasionally to dig up corpses and to try them. I suggest that if we keep this up much longer that is what we may have to do in this country. But, seriously, I ask how many more years will have to pass before we bury this matter and take more note of what is happening now in many parts of the world. However, if we must go back 50, 60 or 70 years we will find that Germany was not the only European country to practise mass terrorism. Lenin is quoted—at a period before the events in Germany—as having said,
"Do you imagine that the victory can be ours without the most extreme revolutionary terror"?
Terror there was. And after Lenin, it got worse and worse.
It is astonishing to me, and perhaps to other noble Lords, that in the course of these investigations we are discussing —I apologise if I am wrong—the help of the KGB was enlisted. The KGB, as your Lordships well

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know, is exactly the same organisation as the NKVD, Cheka, OGPU and many other acronyms, but it is one still-existing organisation. I have to say that one might as well, had things turned out otherwise, have enlisted the help of the Gestapo in the investigation of Soviet crimes.
The Hetherington Report gives a brief account of the activities of the NKVD in 1939–40 in the Baltic states and eastern Poland. The full horror of these activities stretches the imagination of those of us who have lived under civilised regimes. I would tell your Lordships in this context that my Polish mother-in-law, having seen her father and many others murdered by the NKVD, fled to the German occupied area of Poland as she thought it was safer than the Russian occupied area. It was not exactly a good area to go to but it was the best thing she could find. That gives one an idea of what it was like in the Soviet occupied area.
My point is this: at that time, crimes were committed by the German and Soviet authorities which beggar belief. Every day nowadays in the Ukraine and other areas of the former Soviet Union more evidence of atrocious Soviet crimes is coming to light. The mass graves at Katyn of Polish soldiers are by no means unique, and evidence of mass murder is being dug up everywhere. Yet no one has suggested that ex-members of the NKVD should be investigated. Some may be living here but not a finger has been lifted against them. Their crimes were as bad or worse as those of others, but they were on the winning side. Soviet judges actually sat on the Nuremberg tribunal. Perhaps they knew something about war crimes.
We would do far better to pay more attention to what is happening in the world today. On Monday the noble Earl, Lord Winchilsea, asked an Unstarred Question on Moroccan atrocities in the Western Sahara. This year appalling atrocities continue to be committed by countries most of which are members of the United Nations. There is Tibet, Rwanda, Bosnia and East Timor to mention but a few. There is a long list. It is nearly 50 years ago since the Gestapo and SS committed their last crimes. The perpetrators are old and almost impossible to identify. I believe we ought now to leave the judgment to Almighty God.
8.45 p.m.
Lord McIntosh of Haringey: My Lords, as in all debates on Private Members' Bills I should make it clear that the Opposition does not have a collective view and that I speak for myself personally.
What is curious about this debate is that although noble Lords have come to very different conclusions, they are really not in disagreement about the fundamental facts behind the issue. No one disagrees with our recognition of the horror of war crimes, particularly not the noble Lord, Lord Belhaven and Stenton, who wishes to extend the discussion beyond German war crimes. He is quite right to do that; but we are talking about German war crimes, and no one believes that the horror of those crimes should go unrecognised in any way.
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I do not believe that anyone is departing from the principle that crimes of this sort should, if possible, in principle be pursued indefinitely, and from the principle that there should be no statute of limitations for crimes of this kind. If convictions can be achieved, the law should make that possible. That is why I believe that the War Crimes Act 1991 was thought to be unwise by a number of people—I am not talking about this House—but it was not thought to be wrong in principle. It was not thought to be wrong in principle to pursue war crimes. At the same time, I sense, even among those who support the War Crimes Act with most conviction, that they feel there will not be any convictions arising from it. That is certainly my view. I believe we are embarking on this exercise because we believe it is right to do so and not because we think that anyone will be convicted, and certainly not from any view that it is desirable to put someone aged 80 in prison for a period of, in theory, 25 years, or whatever length the life sentence may be in their case. Therefore we are not looking at the results; we are looking at the principle behind pursuing war crimes indefinitely.
I have to say that in those circumstances, with those options, I opt for pursuing the principle that we do not impose a statute of limitations on war crimes which we would not impose on any other crime. I support the view that the War Crimes Act 1991, however imprudent it may be in judicial terms, ought not to be overturned. Let us be clear that the Bill of the noble Lord, Lord Campbell of Alloway, would overturn the War Crimes Act. If it were carried, there would he no War Crimes Act.
I now turn to my final argument for disagreeing personally with this Bill, and for wishing that Clause 1, certainly, should not succeed. I have no legal expertise to enable me to assess the virtues of Clause 2 of the Bill. My final argument is as it was when I voted for the War Crimes Bill in 1991, and in the previous Session. This Bill was carried by an overwhelming majority on a free vote in the elected Chamber and I do not think it would be right for us to seek to overturn it now by a Private Member's Bill.
8.49 p.m.
Baroness Blatch: My Lords, my noble friend Lord Campbell will know from the Answer I gave to his Question on 28th November 1994 (at col. 473 of Hansard) that his Bill raises a most important point; indeed a fundamental question of principle. The title of the Bill explains that a purpose of the proposed legislation is to place a time bar on the institution of proceedings under the War Crimes Act 1991. The 1991 Act, as noble Lords will recall from the lengthy and detailed debates in Parliament during the passage of that legislation, is about acts of murder, manslaughter, or, in Scotland, culpable homicide which were committed as war crimes in Europe during the Second World War. Such offences are of the gravest kind it is possible to imagine. That, as the noble Lord, Lord McIntosh, said, is agreed all over the House, whatever side of the debate noble Lords are on. We do not have a time bar in the United Kingdom on bringing charges for murder, manslaughter or culpable homicide and that applies

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irrespective of the circumstances in which such acts are committed. Clearly, therefore, the proposal in the Bill now before us—that, in effect, an exception should be made for such acts committed as violations of the laws and customs of war—requires more than usually careful attention.
Before I go to the detail of the Bill, I do not think that it will come amiss if I remind noble Lords briefly of the background to the War Crimes Act and of the Government's policy on war crimes in relation to the Act. Just over five years ago, the Report of the War Crimes Inquiry (Cm 744) was presented to Parliament. That inquiry was conducted by Sir Thomas Hetherington and Mr. William Chalmers at the request of my right honourable friend the then Home Secretary. The inquiry had been appointed following allegations that persons now living in the United Kingdom committed war crimes during the Second World War. The inquiry was asked, among other things, to obtain and examine relevant material relating to the allegations and to consider, in the light of the likely probative value in court proceedings of the relevant documentary material and the evidence of potential witnesses, whether the law of the United Kingdom should be amended in order to make it possible to prosecute such persons for war crimes.
The inquiry recommended that our courts should indeed be given jurisdiction over such crimes and that consideration should be given to the investigation of a number of cases and to possible prosecutions. The report of the inquiry was published in June 1989 and recommended action as soon as possible. Soon after, in March 1990, the Government introduced into Parliament the War Crimes Bill, now the War Crimes Act.
The Bill proposed, in line with the recommendations of the inquiry, that our courts should be given jurisdiction over murder, manslaughter and culpable homicide committed as violations of the laws and customs of war during the Second World War in Germany or German-held territory by people who are now British citizens or resident in the United Kingdom, the Channel Islands or the Isle of Man.
The Act makes clear that such people may include those who were not British at the material time. I emphasise this because our courts already had jurisdiction over murder, manslaughter and culpable homicide committed abroad by British nationals, by virtue of Section 9 of the Offences Against the Person Act 1861 and Section 6(1) of the Criminal Procedure (Scotland) Act 1975, which was a consolidating statute incorporating the corresponding provision in Section 29 of the Criminal Justice (Scotland) Act 1949. Indeed, our courts already had jurisdiction over grave breaches of the 1949 Geneva Conventions, including wilful killing and torture, wherever in the world the offence was committed and whatever the nationality of the offender, by virtue of the Geneva Conventions Act 1957. But that Act did not apply to grave breaches committed before its enactment.
I should also emphasise that the War Crimes Act did not create any new offences. Violations of the laws and customs of war have long been criminal according to
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the general principles of law recognised by this country and all other members of the community of civilised nations. What the Act did was to make it possible to proceed against people who, at the time of the alleged war crimes, did not have British nationality and who would, therefore, have escaped liability for prosecution before the Act came into force.
The Bill was approved in another place on a free vote by a large majority—to be precise, by 273 votes to 60. Noble Lords will recall that the Bill was then denied a Second Reading in this House, in June 1990, by 207 votes to 74. The Government then reintroduced the Bill in identical form in another place in March 1991, where it was again approved on a free vote, and again by a large majority—by 254 votes to 88. It was subsequently denied once more a Second Reading by noble Lords, in April 1991, by 131 votes to 109. The Bill was enacted in May 1991 through operation of the Parliament Acts 1911 and 1949.
These details of the passage of the Act make clear that the legislation aroused strong feelings and passions—all of which have been illustrated again today. But the War Crimes Act is now law. The police and the prosecuting authorities do, therefore, have a clear remit and clear responsibilities to investigate and prosecute, as appropriate, where there is information that people now living in the United Kingdom committed war crimes in Europe during World War II. The Government stand fully behind the principle of the Act. The Government's declared policy is that those who committed most terrible crimes in Nazi-occupied Europe during the Second World War should not be able to use the privilege of residence in the United Kingdom to escape justice.
I should make clear that the Hetherington-Chalmers Inquiry was just that—an inquiry. It was not a criminal investigation. Investigations with a view to possible prosecutions were not necessarily appropriate or possible until the Act came into force. It came into effect on Royal Assent in May 1991. Investigations began later that month and it was understandable that the police and the prosecuting authorities should have wanted to proceed without delay. They had a formidable task ahead of them. The report of the Hetherington-Chalmers Inquiry included recommendations that investigations be undertaken in no less than 124 cases known to the inquiry team and, both before and after the coming into force of the Act, further information was received. The Government accordingly ensured that the police were resourced to undertake the necessary investigations. These were thought likely to take some time, not only because inquiries had in some cases to be made far away in unfamiliar territory, such as in parts of the former Soviet Union, but also because the events to be investigated took place a long time ago. But there was a clear expectation when the Act came into effect that information that war crimes had been committed should be acted on. As I said in response to my noble friend's Question on 28th November, there is no statutory time bar for laying charges of murder, manslaughter or culpable homicide in the United Kingdom and this applies no less where such acts are committed as war crimes.

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Since May 1991, the Metropolitan Police War Crimes Unit has investigated 369 cases in England and Wales. Of these, a further 112 people who were investigated are now dead. Further to my Answer last week to my noble friend Lord Campbell of Alloway, I understand that 23 people are now being investigated, of whom nine are being considered for prosecution by the Crown Prosecution Service. That leaves 234 cases which have been dropped.
There are no investigations at present in Scotland or Northern Ireland. I cannot, of course, say what decisions will be taken regarding prosecutions or when decisions will be reached. Such matters are for the independent consideration of the Director of Public Prosecutions and the Attorney-General. But the figures clearly show that substantial progress has been made with the investigations.
It is against that background that I turn to the detail of the Bill put forward by my noble friend, Lord Campbell of Alloway. The Bill has two substantive clauses. The first clause provides that no prosecutions shall be instituted for offences in relation to the War Crimes Act 1991 with effect from the coming into force of the Bill, if enacted. Such a provision, if it were passed into law, would render the War Crimes Act ineffective. The clause would be tantamount to repeal of the 1991 Act and would, therefore, mean that people who did not have British nationality at the material time would again be immune from prosecution.
Parliament did not intend at the time the War Crimes Act was enacted that the police and prosecuting authorities should have a prescribed period of time in which to undertake investigations into war crimes and bring charges as appropriate. That point was well made by the noble and learned Lord, Lord Archer. The police and prosecuting authorities were enabled to see their work through to a conclusion, and, as I said, they have already made substantial progress.
But in the context of Clause 1, I must return again to the point of principle to which I have already alluded. I question whether Parliament would ever wish seriously to contemplate a time bar on institution of proceedings for such serious offences as murder, manslaughter and culpable homicide. To do so would be viewed with the utmost concern and alarm. Clause 1 of the Bill does not, of course, propose introduction of a time bar for such acts generally but is nonetheless dangerous in that its effect would be to make an exception for people who did not have British nationality and committed uniquely horrible acts against humanity in Nazi-occupied Europe.
Clause 2 of my noble friend's Bill would confer jurisdiction on the Criminal Division of the Court of Appeal to consider appeals against refusals by the Crown Court to dismiss charges, on grounds of delay or abuse of process, by persons indicted for crimes by virtue of the War Crimes Act 1991. The function of the Criminal Division of the Court of Appeal is to hear appeals against convictions after trial. It is not to determine questions of jurisdiction during trial. That is not to say that where a person has been indicted, whether or not on charges in relation to the 1991 Act, he cannot challenge the indictment. He can, by applying for the proceedings to be stayed on the ground of abuse
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of process, including delay. If such an application were refused, there would be the opportunity to seek judicial review of that decision in the High Court. Like Clause 1, therefore, Clause 2 proposes that in war crimes matters we depart from general criminal law and procedure. Both clauses, therefore, if enacted, would set precedents whose effects would be far-reaching.
My noble friend Lord Campbell said that he aimed, through Clause 2, to put England and Wales on a par with Scotland. But I have to say to him that the different legal systems make such comparisons rather misleading. In particular, Scotland does not have the same system of judicial review as we have in this country.
I think I can fairly say that this Bill is not necessary to remove any possible injustice which might be thought to arise from operation of the War Crimes Act 1991. A prosecution will not be brought on a bare prima facie case. Rather, the test will be whether there is a realistic prospect of conviction. Furthermore, proceedings by virtue of the War Crimes Act may be instituted in this country only with the consent of the Attorney-General. If proceedings are instituted, then, as I explained, the Crown Court has inherent jurisdiction to stay those proceedings on grounds of abuse of process, including delay. But we have to think also of the enormity of war crimes and of those who suffered at the hands of the perpetrators of such crimes. The passage of time and the difficulties in investigating these crimes do not diminish the wrong that was done nor the need, now that the 1991 Act has been enacted, to investigate the evidence as in any other case of murder or manslaughter.
My noble friend Lord Dacre challenged claims that Parliament had agreed. Each time I mentioned the War Crimes Act I referred to it as having been passed by Parliament. It is, of course, true that the House of Commons voted overwhelmingly for it, as I said. But the Parliament Act is a proper part of our process. It was invoked and was accepted, and that ought to be an end to it. I believe that technically one can state that Parliament has had its say.
The question was also asked: could not the money be better spent or put to better use? I have to refer to the overwhelming commitment by the House of Commons and the invoking of the Parliament Act, including the provision of the necessary money for the war crimes legislation. The question of costs in bringing criminal procedures has to be weighed against the gravity of the offences alleged. There can be few, if any, graver allegations than those being dealt with under the War Crimes Act.
The protracted and complicated nature of the inquiry was known to Parliament when the Act was passed. It was also recognised that officers would have to visit scenes of crimes and witnesses in many different countries. It was known that it would be expensive and all matters were reflected in the budget that was set at that time. The same considerations apply to the Crown Prosecution Service which, of course, is the responsibility of my right honourable friend the Attorney-General.

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The noble Earl, Lord Attlee asked whether I could tell him the age of the youngest person under investigation. I am afraid that I am not able to give him that information but I shall write to him if it should become available to me.
My noble friend Lady Elles asked whether there was any common reason for decisions not to prosecute. There are no common reasons for decisions not to prosecute which can be identified. In some cases, there was a lack of credible eye-witness evidence of the alleged crimes; in others, no allegation of murder or manslaughter was made. In some cases, death has intervened. Each case currently under investigation will be considered on its merits.
This is a Private Member's Bill and the Government would not therefore propose to vote against it. But, as I have explained, the provisions of the Bill would have profound implications which the Government do not feel able to accept.
Lord Bridge of Harwich: My Lords, before the noble Baroness sits down, may I ask her one question on a matter of procedure? If I heard her rightly, she said that a decision of a trial judge in a Crown Court is subject to judicial review. My understanding is that that was the law, as pronounced by the divisional court, until the recent decision of your Lordships' House in its judicial capacity to which I was a party and in which we overruled that decision. Unless our decision has in turn been departed from, the present law, as I understand it, is that a decision on an application to stay a prosecution on the grounds of delay or abuse of process is not open to judicial review in the Crown Court. It was for that reason that I gave such wholehearted support to
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my noble friend's Clause 2, so that the ultimate responsibility for such a decision should rest with three judges and not with one.
Baroness Blatch: My Lords, I am incredibly diffident about taking on the noble and learned Lord, Lord Bridge, on the matter. My understanding is that the judicial review process applied. I shall, of course, write to the noble and learned Lord and make my reply available to the House when I have taken proper technical advice on the matter.
9.7 p.m.
Lord Campbell of Alloway: My Lords, this has been a good-natured, balanced debate on a very serious subject. At this hour of night I believe all noble Lords would agree that it is-appropriate that I should thank all those who spoke for and against Clause 1—even the noble Lord, Lord Lester of Herne Hill, who perhaps when he reads the Official Report tomorrow may think that he went a bit over the top.
My heart bleeds for my noble friend the Minister, because the Home Office did not do its homework properly on Clause 2. Anyway, she could not have answered many of the arguments in my speech because obviously her brief was written before the speech was made.
All that having been said, we come to the point that there has been a balanced debate on Clause 1, and nobody has spoken against Clause 2. The two are not mutually dependent. They require separate consideration. I commend this Bill to the House.
On Question, Bill read a second time and committed to a Committee of the Whole House.
House adjourned at nine minutes past nine o'clock.

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