Sitting of 13 December 1994

Preamble
The House met at half-past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
PRIVATE BUSINESS
  BRITISH WATERWAYS BILL [Lords]
  As amended, considered; to be read the Third time.
Oral Answers to Questions
  EDUCATION

    Parental Consultation
    Mr. Mackinlay: To ask the Secretary of State for Education by what methods she consults parents about their view of the level and extent of the education service.
    The Minister of State, Department for Education (Mr. Eric Forth): All the Department's Ministers frequently meet parents and their representatives, both in formal meetings and when visiting schools. We regularly consult parents' organisations on a range of issues.
    Mr. Mackinlay: When contemplating parents' views and representations, does the Minister reflect on the fact that since 1989 there has been a doubling in the number of appeals from parents who have been refused their first choice for their children's school? On appeal, some 17,000 people have had their request for a school rejected. Does that not show a failure of the Education Reform Act 1988, and is it not time that we reviewed it to ensure that parents have true choice about school admissions?
    Mr. Forth: I do not think that the hon. Gentleman has quite caught up with the rest of his party, or certainly with his party leader. There is a new air blowing through certain elements of the Opposition on choice, and we welcome that. We want to give parents the maximum possible choice of schools. Happily, about four out of five parents get their first choice, but every year a certain number are inevitably disappointed and have to go through an appeals procedure. I suspect that that will always happen, because man has yet to devise a scheme under which everybody gets just what he wants all the time.
    Mr. Colvin: Do Ministers' consultations with parents reveal their anxiety about the reorganisation of local government? Can my hon. Friend assure us that new unitary authorities such as that for New Forest, if they
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    come into being, will have the resources to enable them to deliver an education service that is as good as, if not better than, the previous one?
    Mr. Forth: My hon. Friend raises an important point. My right hon. Friend the Secretary of State keeps a close eye on developments in local government reorganisation. We feel that the initial onus is on parents and local people to make representations to the Local Government Commission in the first place if they are uneasy about the possible impact on education of the proposed changes. Beyond that, we think that it should be possible to make arrangements in areas where unitary authorities emerge to protect the education service and to ensure continuity and effective delivery in the newly defined areas. We shall keep a close eye on the matter.
    Mr. Dafis: Local government reorganisation is already under way in Wales and will soon be under way in England. Local authorities will set up transitional committees charged with the task of describing their service delivery plans, including those that relate to education. Will it not be almost impossible to carry out that task properly if there is no certainty for local education authorities about the number of schools for which they will have to cater? In view of that, is it not totally irresponsible at this time—
    Madam Speaker: Order. This is Question Time and hon. Members are drifting towards making statements and putting arguments. I am sure that the Minister has heard the question. Can he make some stab at an answer?
    Mr. Forth: Intriguingly, I do not think that we got to the punchline. I suspect that the hon. Gentleman may have had in mind something to do with grant-maintained schools.
    Mr. Dafis indicated assent.
    Mr. Forth: I thought that it might be that; in that case, the answer is quite clear. It is incumbent on present, future and even transitional authorities to liaise with the Funding Agency for Schools, as was always the intention in the Education Bill, now the Education Act 1994. I recall that the hon. Gentleman served with great distinction on the Committee that examined that Bill. Those bodies should work together to ensure that sufficient places are provided in each locality. I see absolutely no reason why that should not be the case.

    School Inspections
    Mr. Hendry: To ask the Secretary of State for Education how many schools will be inspected each year under the new school inspection arrangements; and if she will make a statement.
    The Secretary of State for Education (Mrs. Gillian Shephard): This is mainly matter for Her Majesty's Chief Inspector of Schools, who heads the independent Office for Standards in Education. However, I can advise that around 3,000 schools will be inspected this year.
    Mr. Hendry: Can my right hon. Friend confirm that the rate of inspection in primary schools will be stepped up to ensure that inspection targets are met? Can she

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    also confirm that the inspectors will give praise where praise is due and that they will be not only rigorous in identifying problems but equally helpful in providing solutions?
    Mrs. Shephard: Clearly, encouragement is also important. I can reassure my hon. Friend that I attach the utmost importance to regular and rigorous inspection of our schools. Around 1,000 secondary schools have been inspected and the cycle is on target to be completed within four years. By the end of this term, about 800 primary schools will have been inspected, and I intend to ensure that the four-year cycle for primary and special schools is successfully completed. I welcome, therefore, the three-point action plan announced by the Office for Standards in Education and will keep it closely monitored.
    Mr. Don Foster: Further to the answer that the Secretary of State has just given, is she aware that, to meet the target for primary schools, the number of schools to be inspected in the three subsequent years after the current academic year will have to be double the number of schools inspected this year? How can that be achieved without reductions in the length of inspections and the number of inspectors at a time when the budget for Ofsted has been reduced for next year compared to what we were told it would be last year?
    Mrs. Shephard: Perhaps the hon. Gentleman is not entirely familiar with the action plan which has been prepared by the chief inspector and which we absolutely intend he should adhere to. I wish to reassure the hon. Gentleman that funding will rise next year to nearly £100 million and in the public expenditure survey period to £121 million, which is hardly a cut.
    Mr. Patrick Thompson: Will the new inspection arrangements focus properly on standards achieved in English and mathematics? Is my right hon. Friend aware that many specialist and advanced teachers cite lack of facility in basic English as the main stumbling block to achievement at a later stage in education?
    Mrs. Shephard: We have made it clear throughout that the reform of the national curriculum and the main thrust of tests must put facility in English, maths and science at a high premium.
    Mr. Blunkett: Will the Secretary of State confirm that the fact that only 60 per cent. of the primary schools that should have been inspected actually had inspections by this autumn is entirely due to the fact that the privatised market tendering system for individual schools has failed? Will she further confirm that the Government's programme and their claim to be interested in standards have been shown to be an entire myth, given that £13 million has been cut from the Ofsted budget for next year and the reading recovery scheme funding programme has been stopped? Is it not time that the Government admitted that their blarney and hot air about standards of achievement are nothing more than a smokescreen for cuts and failure?
    Mrs. Shephard: If Opposition Members were remotely interested in standards—time and again, they have proved that they are not—they would welcome the fact that, after only four terms, 2,200 schools will have been inspected by Christmas and 3,000 inspections
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    will have been completed by the end of the year. Schools and governors welcome the inspection process and the information that it gives them, and, above all, pupils benefit. The new system is operating successfully; it is a huge improvement on what went on before. The hon. Gentleman is right: the chief inspector should take early corrective action to meet the target of four-yearly inspections of all schools. I should have thought that the hon. Gentleman would welcome that.

    Higher Education
    Mr. Evennett: To ask the Secretary of State for Education what proportion of young people are now entering higher education; and what was the figure 10 years ago.
    The Parliamentary Under-Secretary of State for Further and Higher Education (Mr. Tim Boswell): The Government's policies have led to record participation in higher education. Some 30 per cent. of young people now enter full-time higher education compared with 14 per cent. 10 years ago.
    Mr. Evennett: I thank my hon. Friend for that reply and congratulate him and the Department on the excellent figures that he has just provided. I also thank him for taking the time and trouble recently to visit our local university in south-east London, the university of Greenwich. His visit was much appreciated by all concerned. It is an excellent university doing a first-class job. May I ask my hon. Friend what he is doing to encourage more links for research between the universities and industry so that we can develop a good partnership?
    Mr. Boswell: I am grateful to my hon. Friend for his comment and, indeed, his interest in his local university in Greenwich. I was delighted with the provision that I saw there. The message is that local participation and the role of the university in the local community and its link with industry there are extremely important.
    On my hon. Friend's specific point, the Department is taking a number of measures, including enterprise and higher education, and have given a commitment to assess all kinds of research, including contract research, in the funding council's next research selectivity exercise.
    Mr. Pike: Is it not regrettable that many county councils are unable to give people discretionary grants because they simply do not have enough cash? It is no good the Minister saying that they have a choice. If county councils do not have the cash, they cannot give grants. What will the Minister do about that?
    Mr. Boswell: The hon. Gentleman raises an interesting, if somewhat irrelevant, point. I was under the impression that the local authority financial settlement was about £17 billion. I have held a series of discussions with interested parties in the light of the Gulbenkian report on discretionary awards, and the Department is continuing to review the position with a

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    view to securing achievements; but the funding is there and it is open to local authorities to provide that funding for the purpose.
    Mr. Barry Field: Does my hon. Friend agree that one of the great success stories in education was the unshackling of colleges from the control of local authorities? Has that not given greater diversity of choice to sixth form students, who, rather than furthering their education, were held on to by schools because of the budget that they represented? Will he ensure that, in future, the careers service is up to this new challenge?
    Mr. Boswell: I am grateful to my hon. Friend for those remarks. We believe in diversity and choice. We believe in the benefits of unshackling the further education sector, with its natural and characteristic progression towards higher education where appropriate.

    Special Needs
    Mr. Bayley: To ask the Secretary of State for Education what funding has been added to local education authority budgets to meet the extra costs incurred by the implementation of the new code of practice for special educational needs in primary schools.
    Mrs. Gillian Shephard: The code of practice has been widely welcomed as reflecting existing best practice in schools. Many schools will have been following the procedures recommended in the code, and its purpose is to encourage others to do so.
    Mr. Bayley: Given the great demands on the special educational needs co-ordinator, as spelt out in the code of practice, will the Secretary of State say what account she has taken—in the funding that she has made available to local authorities—of the problems of rural authorities such as North Yorkshire, which has a large number of small primary schools, and where the heads of schools, who would normally be the special educational needs co-ordinators there, also have formidable teaching commitments?
    Mrs. Shephard: As the hon. Gentleman will know, the code followed extensive consultation and included points on the work load of teachers, head teachers, and so on. Indeed, it was redrafted in the light of the concerns expressed. The Department is funding research into effective practice by SEN co-ordinators, or those who have to fill that role in small rural schools. We will publish the results and will look at all aspects of implementation, as it is obviously very important, including the question of resources. The main point is that the code is building on existing best practice.
    Sir John Hannam: I congratulate my right hon. Friend on the new code of practice. Will she outline what measures are in place to ensure that schools spend what they should on children with special educational needs?
    Mrs. Shephard: The only extra requirement for schools, resulting from the code, is that they should publish their policy on special educational needs by August next year. In-service funding of £5.6 million
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    will be provided through grants for education support and training to local education authorities to help schools with that.

    Student Loans
    Mr. Steinberg: To ask the Secretary of State for Education what representations she has received regarding delays in the processing of applications for student loans in the current academic year.
    Mr. Boswell: My right hon. Friend has received a copy of a letter from the chairman of the Committee of Vice-Chancellors and Principals of Universities in the United Kingdom to the chief executive of the Student Loans Company, and 14 other letters about delays in the processing of loans. The Department has also received a number of telephone calls from students, their parents and higher education institutions.
    Mr. Steinberg: In terms of what the Minister said, there appears to be chaos in the Student Loans Company. What will he do about the thousands of students who failed to get their loans this year? Will he explain a parliamentary answer that he gave me last week in which he said that he was considering putting private finance into that company? What will be the consequences of that in terms of interest rates for students who took out such a loan afterwards?
    Mr. Boswell: Perhaps characteristically, the hon. Gentleman has managed to muddle two separate issues. First, there is currently what I consider to be an unacceptable delay at the Student Loans Company in relation to the repeat application procedure. I should acknowledge that more than 200,000 loans have been granted in the current year—the number has risen by over one third—but the new procedure has led to delays, partly owing to the inability of students to return their forms.
    The company has written to the Committee of Vice-Chancellors and Principals explaining the position. We have encouraged the company to deal with it as a matter of urgency; it is doing so, and hopes to resolve the problem by Christmas. It has also undertaken, at our request, to examine the repeat application procedure, and we have invited the National Union of Students to join in.
    The involvement of private finance, whether in the Student Loans Company or elsewhere, is kept under constant review.
    Dame Elaine Kellett-Bowman: May I thank my hon. Friend for his efforts to tackle the problem? Students at my local university undoubtedly had problems, particularly—as my hon. Friend pointed out—with the repeat application procedure. I am glad that my hon. Friend has confirmed that he has no intention of privatising the Student Loans Company. The only pressing issue is the financing of loans.
    Mr. Boswell: I am grateful to my hon. Friend for what she has said. We are anxious to tackle the position in conjunction with the Student Loans Company, and it is being addressed as a matter of urgency.
    As for the longer-term prospects, I should remind the House that the whole purpose of the Student Loans Company was to offer students concessionary loans on

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    very favourable terms, thus enabling them to pursue their studies. In a recent study of graduate employment, one of the newspapers listed a series of starting salaries, none of which would have required the initial repayment of loans by any of the employees.
    Mr. Bryan Davies: Does the Minister recognise that the House will be shocked at the complacency with which he has approached the issue? He has issued not a word of apology to the thousands of students who have been deprived of essential resources. If the elderly had been deprived of the chance of obtaining their pensions, or the unemployed prevented from drawing their dole cheques, there would have been a national uproar. How can the Minister address the House with such complacency when students are denied the resources they need to sustain themselves at college?
    Does the Minister not recognise that Members of Parliament are finding it difficult to get through to the Student Loans Company to protest about the situation on behalf of the students whom they represent? When will the Minister do something?
    Mr. Boswell: Interestingly, the hon. Gentleman seems to have drafted his supplementary question before listening to my answer. I readily acknowledge that I was not satisfied with the position; nor, indeed, is the Student Loans Company, which is doing something about it as urgently as possible. As for the hon. Gentleman's specific point, his hon. Friend the Member for City of Durham (Mr. Steinberg) asked me about the number of representations that we had received and I gave him the answer—14. The position became apparent recently, and as soon as it became apparent we tackled it vigorously and urgently.
    Mr. John Marshall: Did my hon. Friend say that there had been a 30 per cent. increase in the number of student loans paid out? Does the problem not lie in the fact that the Student Loans Company listened to inaccurate forecasts from Opposition Members, who said that there would be no demand for student loans? Does the increase not underline the fact that the scheme has become much more popular than the Opposition ever expected?
    Mr. Boswell: The purpose of the loans is to be available to those who wish to avail themselves of them; the facility is intended to enable them to pursue their studies. The figure mentioned by my hon. Friend is not entirely accurate—he may have misheard me. The total increase this year is 35 per cent., and that is despite the administrative difficulties that I mentioned.

    Grant-maintained Schools
    Mr. Bill Michie: To ask the Secretary of State for Education what plans she has to phase out extra capital grants to grant-maintained schools.
    The Parliamentary Under-Secretary of State for Schools (Mr. Robin Squire): The distribution of capital resources continues to reflect Ministers' judgment of appropriate funding levels in each sector, and our commitment to setting up grant-maintained schools on
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    a sound basis. The detail of the capital grants regime for grant-maintained schools is now a matter for the Funding Agency for Schools.
    Mr. Michie: Another Tory pledge has not been fulfilled. Following the Budget settlement, local education authorities now face cuts while grant-maintained schools still receive three times as much capital per head. Is it not about time that the Government treated local education authorities with fairness rather than prejudice, and eliminated a gap that is not only indefensible but immoral?
    Mr. Squire: The hon. Gentleman is misled and his comments are facile. Let me briefly give him some reasons why. He seeks, presumably, to make a pound for pound comparison, yet he knows, or should know, that every GM school is not able to draw on capital receipts or to transfer from revenue expenditure to capital, like local education authorities can. To take one further instance, GM schools attract VAT, and LEA schools do not. Spending £1 in a GM school, therefore, is not the same as spending £1 in an LEA school. The Government are satisfied that the settlement is fair to GM schools, but not excessively fair.
    Mr. Robert Banks: I offer my most sincere thanks to my hon. Friend and to my right hon. Friend the Secretary of State for Education for approving the application for grant-maintained status from Nunmonkton school in my constituency. It is the result of a remarkable campaign by all 19 pupils—[Interruption.]—all the parents and all the villagers. They have led the way against North Yorkshire county council's decision to close the school. It means that the school can go ahead and will be saved, and I pass on the appreciation of all the villagers to my hon. Friend.
    Mr. Squire: I am obviously grateful for my hon. Friend's kind comments. I agree with him that Nunmonkton school has all the prospects of being an excellent school and the House will have no noted the derision with which Opposition Members greeted his announcement that there were 19 pupils at the school. All people worried about small rural schools will know which party not to trust.
    Dr. Wright: Although the Government have talked the language of diversity, have they not given us the practice of discrimination in relation to the funding of GM schools? Has that discrimination not been established both by the Education Select Committee and by the National Audit Office? Once the pot of gold and the bribe are taken away, interest in moving to GM status will wane by the day.
    Mr. Squire: In light of current discussions, I am not sure whether interest in GM schools is waning or whether it would be wise for me to comment on that, if one considers the hon. Gentleman's party. As he should know, revenue funding for GM schools is on the same basis as revenue funding for LEA schools, and he heard my earlier answer on capital funding.

    School Building Programme
    Sir Teddy Taylor: To ask the Secretary of State for Education if she will review the provision of capital expenditure in the school building programme.
    Mr. Robin Squire: The Budget announcement meant good news for schools capital, with an additional £21 million above the published baseline for 1995–96. We have made clear our willingness to consider changes to the criteria for distributing capital, which were agreed with the local authority associations some 10 years ago.
    Sir Teddy Taylor: Southend's Lancaster school for disabled children, many of whom are in wheelchairs, has been unable to undertake essential work demanded by the Health and Safety Executive two years ago. Does the Minister see any merit in the all-party representations that he received on 14 November from Essex county council that its spending was inadequate and discriminatory? Has any concession since been made to Essex county council?
    Mr. Squire: As my hon. Friend may be aware, the announcement on 1995–96 capital guidelines will be made shortly and I cannot, for obvious reasons, preview that announcement. I can say to him, and underline, that responsibility for building and conditions for LEA schools remains with the local authority. As I have already made clear, the guidelines were drawn up in discussion with local authorities many years ago and I am open to suggestions from a significant number of authorities that there is room for those guidelines to be changed.
    Mr. Spearing: Does the Minister agree that, where a Government have given authority or promoted large-scale urban or suburban development in any region, there is an obligation to provide matching provision for primary schools and secondary schools in those neighbourhoods? Is this a matter not just for one Department of State but for all Departments? Will he assure us that that principle will be followed in the announcement to which he referred?
    Mr. Squire: I can certainly confirm that the most important aspect of the capital criteria is provision for basic needs. Although there are sometimes arguments about the exact cost of specific projects, there is no argument between the Government and local education authorities about the importance of ensuring that every child has a school place when he starts or changes school.

    General National Vocational Qualifications
    Mr. Brandreth: To ask the Secretary of State for Education what progress has been made with the development of an advanced diploma for the GNVQ; and if she will make a statement.
    Mr. Boswell: I understand that my hon. Friend is referring to advanced general national vocational qualifications—the new "vocational A-levels". They are a success. They are motivating students of all abilities to work hard and achieve high standards. Ofsted and the
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    Further Education Funding Council inspectorate have confirmed that standards in advanced GNVQs are comparable to two GCE A-levels.
    Mr. Brandreth: I am grateful to my hon. Friend for that reply. Will he confirm that he will continue to do everything he can to enhance the standing of advanced GNVQs so that they are increasingly recognised not only by employers but, in time, by universities?
    Mr. Boswell: Universities are already accepting advanced level GNVQs in significant numbers. Approximately 85 per cent. of people who applied received offers from universities and there is a gate project designed to inform universities and admissions tutors of their exact merits. The Government have done a great deal, but the task now is to ensure rigour and effectiveness in GNVQs and their acceptability by higher education institutions.

    Lancashire Schools
    Mr. Gordon Prentice: To ask the Secretary of State for Education what assessment she is making of the work of the Institute of Education in determining the added value contribution of schools in Lancashire to the education of their students.
    Mrs. Gillian Shephard: The Department has established close links with the Institute of Education about its work on value added in Lancashire schools and on other aspects of school improvement and effectiveness.
    Mr. Prentice: Are not the conclusions of the Lancashire study inescapable, showing that the publication of raw data is in itself highly misleading and can be very damaging? Does the Secretary of State agree that it is no more appropriate to publish raw data in that form than to judge the effectiveness of the economy by using a single measure such as inflation?
    Mrs. Shephard: I understand that the Lancashire study is producing results consistent with other work—namely, that the prior attainment measures at age 11 are the best predictors of performance at age 16. In the light of that, I have no doubt that the hon. Gentleman will be doing all he can to persuade the National Union of Teachers to co-operate in the administration of tests for 11-year-olds.
    Mr. Hawkins: Does my right hon. Friend agree that the enormous support given to school performance tables by the parents of children in Lancashire is reflected elsewhere in the country? Does she further agree that we are witnessing a desperate attempt by the Opposition to shift their ground? Are they not moving from ignorance, prejudice and outright opposition to performance tables in an attempt to fudge the issue and claim that they supported them all along?
    Mrs. Shephard: I agree with my hon. Friend that performance tables are popular and easily understood and that they provide the facts. Schools recognise that they are a major factor in encouraging improvements in

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    performance. They are important to parents, pupils, governors and the communities served by the schools involved.
    Mr. Blunkett: Will the Secretary of State join me in congratulating Lancashire county council and a range of other Labour authorities which have been working on added value, not to denigrate the schools involved but to increase standards and opportunities and to ensure that all children have a chance to achieve? Does she accept that she has done a complete about-face in accepting that added value and not crude league tables is the way forward?
    Mrs. Shephard: I remind the hon. Gentleman that, far from performing a U-turn, Ministers launched a consultation exercise on assessment in 1992 and at the same time asked for respondents' initial views on publishing value added measures. No doubt that escaped the attention of the Opposition, who at the time were busy opposing the publication of performance tables.

    Primary Schools
    Mr. Bennett: To ask the Secretary of State for Education what steps she is taking to improve resources in primary schools.
    Mrs. Gillian Shephard: It is for local education authorities to decide the level of resources to be available to primary schools and to the other education services for which they are responsible.
    Mr. Bennett: What advice can the Secretary of State give to head teachers in Tameside and Stockport who find that they are receiving between £300 and £200 per pupil less than neighbouring schools just across the border in Manchester? Given that they have checked up on the way in which local authorities spend their money, and given the capping that those authorities are under, it seems extremely difficult for those head teachers to find out why they should be receiving so much less than schools in Manchester. The only explanation that they can come up with is that the Government are treating schools in Thameside and Stockport unfairly. Does the Secretary of State agree that if league tables are to be used, at least some measure ought to be taken of the amount of money that schools have to spend in the first place?
    Mrs. Shephard: I remind the hon. Gentleman that even with the capping rules all LEAs will be able to increase their education budgets next year if they so chose. They will be greatly helped by the low level of inflation, which is two percentage points lower than was forecast when the 1994—95 settlement was agreed. Local authorities therefore receive a windfall benefit this year. That will benefit the hon. Gentleman's local authority as well as all others.
    Sir Peter Fry: Does my right hon. Friend agree that one way in which we could help to improve the resources in primary schools is to recognise those LEAs and those schools which are already educating the rising-fives? In the current financial settlement, that is proving difficult without any Government grant. Will my right hon. Friend
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    give an early response so that those who are making that pioneering progress are getting some kind of assistance from the central taxpayer?
    Mrs. Shephard: That and other matters are under consideration in our review of work on education for children in the pre-school years.
    Mr. Kilfoyle: Does the Secretary of State accept the evidence that there are lasting benefits from educating pupils in smaller classes in their early years? If so, when will she seek a significant national shift of funding towards primary schools?
    Mrs. Shephard: Funding priorities are a matter for local education authorities. I must repeat that to the hon. Gentleman. The size of classes therefore depends on the decisions made by LEAs. In any case, there is no evidence that marginal increases in class sizes threaten standards.

    School League Tables
    Mr. Harry Greenway: To ask the Secretary of State for Education what plans she has to introduce further school league tables; and if she will make a statement.
    Mr. Forth: My right hon. Friend intends to publish the national curriculum assessment results for 11-year-olds in national school performance tables once the assessment arrangements for this age group are satisfactorily established. Full consultation will be undertaken in due course on the presentation of the data.
    Mr. Greenway: Does my hon. Friend agree that it would be best not to try to dress up school league tables with subjective and therefore dangerous value added judgments? Will not a Rolls-Royce always be a Rolls-Royce and a Mini always a Mini? How can objectivity, which is vital, be achieved in that important area?
    Mr. Forth: My hon. Friend is correct in saying that it would be quite wrong to seek to massage or tweak the published performance data on schools to try to conceal bad performance. However, I think that there is broad agreement that an appropriate and factual measure of value added by schools is something towards which we are working and which we would probably envisage implementing in stages over the next few years. Nevertheless, I must not underestimate the difficulties. The recent report to my right hon. Friend the Secretary of State by the Schools, Curriculum and Assessment Authority brought out rather well the difficulties and the potential in that area and we are working towards that end.
    Mr. Miller: The Minister seems to recognise that it is necessary to ensure that one is comparing apples with apples. Does he agree that schools such as Cambridge Road school in my constituency, which has inadequate playing facilities, and John Street school, which is in a battle with the community action programme about the availability of classrooms, are disadvantaged? Should not his priority be to correct that disadvantage before seeking to make comparisons?
    Mr. Forth: I certainly hope that the local education authority would make a priority of such schools. That is something on which everyone could agree. However, I hope that the hon. Gentleman is not suggesting that we

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    should somehow excuse or explain away inadequate school performance simply because of difficulties in respect of premises or location. The truth, and the real giveaway here, is that many schools in difficult and deprived areas operating in difficult circumstances are producing magnificent results year after year. We want to find out how they do that and then make sure that everyone else does the same.
    Mr. Jenkin: Is not the vital point about league tables not so much the quality of the analysis as the fact that they make schools concentrate on outcomes rather than inputs? If we had concentrated more on outcomes over the past 20 years, would we not have a better education system?
    Mr. Forth: Yes. My hon. Friend makes a very important point. We are now reaching the stage at which most people in education are at long last looking at outcomes, results and achievements and are no longer obsessed with how much money is required to produce those results. Money is and always will be important, but the main requirements and factors affecting educational performance have nothing whatever to do with money.

    School Meals
    Mrs. Jane Kennedy: To ask the Secretary of State for Education what advice she receives from the Department of Health about the nutritional value of school meals.
    Mr. Robin Squire: The Department is represented alongside the Department of Health on a project team drawing up voluntary nutritional guidance for school meals providers. This forms part of the nutrition task force's programme of action to achieve the targets set in the Government's "The Health of the Nation" strategy.
    Mrs. Kennedy: I am grateful to the Minister for that interesting reply. Would he be interested in new evidence which shows that one in nine of our schoolchildren starts the day without breakfast, and that more than half have snacks, biscuits and crisps later in the day instead of a hot school meal? As part of its studies, will the project team consider the link between poor nutrition and the performance of our schoolchildren, and will the Minister publish the results?
    Mr. Squire: I should like to ponder the hon. Lady's last two points, but she was correct to highlight the problems that too many school children face by not having even one decent meal a day. One reason why school meals are so vital is that, assuming that parents take them up, they ensure that every child has at least one square meal a day. When the proposals are published next summer, I hope that they will persuade more schools and local education authorities to put more effort into that very important area.
    Mr. Dykes: Ignoring Labour party propaganda on the subject, and in view of the recent worrying publicity in the borough of Harrow about the fact that a small number of children from low-income households are not receiving
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    proper nutrition at lunchtime, may I ask my hon. Friend to have special discussions with Harrow local education authority to ensure that that problem is resolved?
    Mr. Squire: I invite my hon. Friend to forward to me any evidence of problems which may exist in Harrow. On the wider issue, he will be aware that it is precisely to ensure that children from low-income families are properly provided for that an LEA is required to provide free school meals for the children of parents on income support.

    Derbyshire Education Committee
    Mr. Skinner: To ask the Secretary of State for Education if she will increase the amount of Government grant paid to Derbyshire education committee.
    Mr. Squire: In 1995–96, Derbyshire's education standard spending assessment will increase by 0.7 per cent. I will shortly be announcing annual capital guidelines for education capital work in 1995–96.
    Mr. Skinner: That grant is not good enough. Is the Minister aware that more than six years ago, when the reorganisation plan for north Derbyshire was in process, the Government promised that Bolsover school would be placed on one site with the necessary money to implement that? More than six years have elapsed, but the Government have failed to carry out their promise. Instead, they have been cutting the grant for Derbyshire schoolkids ever since. It is time that they put a stop to that.
    Mr. Squire: I am sure that the hon. Gentleman enjoys his daily rant, even if the House is coming to expect it. I repeat to the hon. Gentleman that, as the House is aware, it is the responsibility of LEAs to bid for capital work separately. As I reminded the House in an earlier answer, the order for those capital bids was determined some time ago in conjunction with LEAs. Those priorities must be the basis on which the Government fund capital funding.
    Mr. McLoughlin: Is my hon. Friend aware that Derbyshire county council holds back from schools as much of its budget as it possibly can? Will my hon. Friend confirm that schools in Derbyshire would receive more money if they followed the lead taken by 30 per cent. of secondary schools and became grant-maintained?
    Mr. Squire: My hon. Friend is certainly right to say that, for all sorts of reasons, strangely enough not alluded to today by Opposition Members, grant-maintained schooling makes a lot of sense. As to the way in which Derbyshire local education authority handles its funding, that is its responsibility, including the way in which it funds individual schools within the total sum that it chooses to set aside.

    Pupil Numbers
    Ms Hoey: To ask the Secretary of State for Education what proposals she has to reduce the numbers of pupils per class in primary and secondary schools.
    Mr. Forth: Determining the size of a class is a matter for the school concerned. Last year, teacher numbers increased by 1,300 and education support staff increased by more than 6,000.
    Ms Hoey: The Minister said recently that the number of children in classes made no difference to the performance of those children. Would he prefer his child to be taught in a class of 30, 25 or 20?
    Mr. Forth: That would depend entirely on the quality of the teaching, the quality of the school, the dedication of the staff and so on. The hon. Lady is quite correct; I have said, and I repeat today, that there is no proven causal connection between class size and educational output. If the hon. Lady thinks otherwise, I should be glad to see any evidence that she can produce.

  PRIME MINISTER

    Engagements
    Mrs. Ewing: To ask the Prime Minister if he will list his official engagements for Tuesday 13 December.
    The Prime Minister (Mr. John Major): This morning, I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall be having further meetings later today.
    Mrs. Ewing: Does the Prime Minister believe in the principle of referendums?
    The Prime Minister: I have indicated in the House on several occasions that there may be circumstances in which I would support one. Clearly, in the case of Northern Ireland that is so, for I have already announced one.
    Mr. Patrick Thompson: To ask the Prime Minister if he will list his official engagements for Tuesday 13 December.
    The Prime Minister: I refer my hon. Friend to the reply I gave some moments ago.
    Mr. Thompson: Bearing in mind reports today of an official survey showing that 11-year-old pupils do not have sufficient command of English to answer questions in science and mathematics, and bearing in mind the mounting evidence of the damage being done by the National Union of Teachers' boycott of tests, will my right hon. Friend urge Opposition Members with influence on that union to urge it to drop the boycott today?
    The Prime Minister: What my hon. Friend says illustrates the importance of regular testing of pupils and equally regular reporting of the results. I welcome
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    very much the fact that most teachers' unions have now called off their boycott. It is high time that the NUT did the same, and I hope that it will do so.
    Mr. Blair: On railway privatisation, is it right, as the report to the Transport Select Committee states, that the costs of legal consultancy fees and relocation costs for British Rail alone are now £100 million, and that when underwriting and City fees are added in the total cost may be as much as £700 million? Are those figures right or wrong?
    The Prime Minister: They are certainly not figures that I recognise, but if the right hon. Gentleman wishes to pursue the matter I will give him a more detailed answer.
    Mr. Blair: I believe that the £100 million figure was given in a parliamentary answer. Perhaps the Prime Minister will check that. Is it also right, as the report indicates, that if the privatisation targets are to be met, the rail network will virtually have to be halved or there will be savage reductions in the timetable across the service? Can the Prime Minister guarantee that if there is found to be the remotest possibility of those things happening he will cancel the privatisation?
    The Prime Minister: The right hon. Gentleman is using yet another of the scare stories which have surrounded the privatisation process for some time. Since the start of the rail privatisation process, there has been no shortage of scare stories; that is just the latest one. As recently as 24 November, my right hon. Friend the Secretary of State for Transport stated and restated unequivocally that franchise services would be broadly based on the existing timetable. That remains the position.
    Mr. Blair: The Prime Minister has not given that guarantee. If he proceeds with a privatisation which has no popular support, which will put the future of the railways at risk— [Interruption.]
    Madam Speaker: Order. The hon. Member for Lancaster (Dame E. Kellett-Bowman) should not be barracking from a sedentary position.
    Mr. Blair: If the Prime Minister proceeds with a privatisation that has no popular support, which will put the future of the railways at risk and, in the process, spend hundreds of millions of pounds which should be spent on providing a better public transport service, will that not show how completely out of touch the Government are with the British people?
    The Prime Minister: The right hon. Gentleman is quite wrong. His comments about rail privatisation are precisely the same as the comments that his predecessors made about almost every privatisation that has occurred. Each privatisation has proved a success. The initial costs of past privatisations have been more than outweighed by efficiency and benefits, and that will be the case for rail users as well. The right hon. Gentleman relies on precisely the same scare stories which existed for each privatisation that has occurred. If he seeks further assurance, it will come tomorrow when the franchise director launches the pre-qualification documents. The right hon. Gentleman will then see how wrong he is.

    Gibraltar
    Sir Teddy Taylor: To ask the Prime Minister if he will raise at the next meeting of the European Council the position of Gibraltar within the European Union.
    The Prime Minister: I have no plans to do so.
    Sir Teddy Taylor: As the present appalling restrictions at the Spanish border, with four-hour delays for people and eight-hour delays for vehicles, seem designed to cripple the economy of Gibraltar, and as the European Union seems unable to prevent these illegal blackmail activities, will the Prime Minister give guidance to Ministers to the effect that there should be no further concessions to Spain in the EU until the problem is resolved? Is the Prime Minister aware that it would hearten the loyal people of the rock if he would visit Gibraltar and assure them of the full support not only of the Government but, I hope, of every party in the House of Commons which believes in freedom?
    The Prime Minister: On my hon. Friend's second point, I can guarantee that we have no intention of deviating from the commitment that we made to the people of Gibraltar in the 1969 constitution. That commitment is there and it will remain. With regard to his first point, we have already made strong protests to the Spanish Government about the secondary checks imposed by the Guardia Civil at the frontier between Gibraltar and Spain. It is very important that the controls should cease and we have made it absolutely clear that the Spanish Government must bring them to an end. They are aware of our views, and we are in contact with them about it.

    Engagements
    Mrs. Ray Michie: To ask the Prime Minister if he will list his official engagements for Tuesday 13 December.
    The Prime Minister: I refer the hon. Lady to the reply I gave a few moments ago.
    Mrs. Michie: Can the Prime Minister explain how an assembly for Northern Ireland will strengthen the United Kingdom while a Scottish parliament will apparently weaken it? The situations may be different, but surely the principle is the same.
    The Prime Minister: As the hon. Lady graciously admits, the situation is not just different—it is wholly different. A tax-raising assembly is proposed for Scotland, whereas in Northern Ireland an assembly is proposed which will give Northern Ireland proper control over local government matters. That power already exists in Scotland.
    Mr. Haselhurst: To ask the Prime Minister if he will list his official engagements for Tuesday 13 December.
    The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.
    Mr. Haselhurst: Amid all the discussions about the European Union in the long term, does my right hon. Friend agree that there is a practical and urgent agenda to try to ensure that the single market is working fairly
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    and openly, so that British companies have a genuine opportunity to compete successfully in civil aviation, energy and other spheres in which there are currently impediments to competition?
    The Prime Minister: My hon. Friend is entirely right about that and about its importance. At Essen during the weekend it was self-evident that that is an agenda on which Britain is increasingly winning the arguments. There is wide recognition of the fact that the liberalisation of aviation, energy, telecommunications and a range of other areas is vital to Europe's future competitiveness. A great deal of work needs to be done to ensure that. It must figure very prominently in the Community's agenda in future, and we will ensure that it does.
    Mrs. Adams: Is the Prime Minister aware of the havoc wrought in the west of Scotland at the weekend by severe flooding in which lives were lost? Is he further aware that the Scottish Office Minister who visited the Paisley area yesterday gave us little comfort? Will the Prime Minister visit the stricken areas and make a statement that adequate funding will be available to reimburse families and local authorities?
    The Prime Minister: I know that the whole House will wish to join me in expressing regret at the loss of life and the very significant damage following the severe flooding in Strathclyde. As the hon. Lady may or may not know, my hon. Friend the Under-Secretary of State for Scotland with responsibility for industry and local government was able to make a statement about the flooding to the Scottish Grand Committee this morning. He said that grant aid from central Government might be available under the Bellwin scheme.
    Mr. Gallie: To ask the Prime Minister if he will list his official engagements for Tuesday 13 December.
    The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.
    Mr. Gallie: Has my right hon. Friend seen the "Scottish Engineering Quarterly Review" issued this week, which shows that orders are up, investment is up, recruitment is up and optimism is strong? Is he further aware that today Jetstream Aircraft at Prestwick announced yet another order? Is that not good news in the run-up to Christmas?
    The Prime Minister: I must confess that I have not seen the journal to which my hon. Friend refers, but I will ensure that it is delivered to me regularly in future. I am pleased to hear my hon. Friend's good news and delighted to hear about Jetstream. A further order will be another welcome endorsement of the success of Scottish manufacturing.
    Mr. McCartney: To ask the Prime Minister if he will list his official engagements for Tuesday 13 December.
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mr. McCartney: The Prime Minister will know that the blood transfusion service is a unique service in the United Kingdom national health service. Last year, the

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    British people gave 2.5 million units of blood freely and saved thousands of lives. Does he appreciate the dismay and disgust at the Bain proposals to privatise the service and close down five regional centres, from Plymouth to Lancaster, with 1,000 job losses? When will the Prime Minister put the national health service before private greed and abandon that proposal?
    The Prime Minister: The hon. Gentleman knows that the NHS is getting more resources and more funding year after year. He also knows that there are areas which can be dealt with in the private sector without harm to patient care and that where that releases resources for patient care it is economically and medically sensible.
    Mr. Yeo: Does my right hon. Friend agree that the results of the past four general elections show that the good sense of the British people can normally be relied on? Against that background, does he further agree that, if the 1996 intergovernmental conference produced substantial changes in the European Union the use of a referendum might be justified, but that in the intervening period speculation about the type of question to be asked is entirely bogus?
    The Prime Minister: In advance of the IGC, it is extremely difficult to know precisely what the question in a referendum might be. I have said that I am not
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    prepared to close the door on the possibility of one, but, equally, that there are important constitutional matters to be considered and it would be very unwise to make snap judgments as to how to deal with that matter. As I understand it, two days after I stated that last week, it suddenly became the Opposition's position as well.
    Mrs. Helen Jackson: To ask the Prime Minister if he will list his official engagements for Tuesday 13 December.
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mrs. Jackson: According to official figures given to me by the Child Support Agency last week, that body has processed just four claims for compensation in the past 12 months. Will the Prime Minister ensure urgently that the thousands of families who have suffered from the incredible incompetence of that body are fully compensated for their financial and emotional losses?
    The Prime Minister: As the hon. Lady knows, my right hon. Friend the Secretary of State for Social Security is looking at the child support arrangements. He will be responding to the Select Committee's report and will make an announcement as soon as the Government have finished their deliberations. Proposals for any changes will be brought forward at that time.

Pergau Dam
3.30 pm
The Secretary of State for Foreign and Commonwealth Affairs (Mr. Douglas Hurd): With your permission, Madam Speaker, I would like to make a statement on the Pergau dam in Malaysia.
I have now considered the written judgment of the divisional court. As I told the House on 17 November, I needed to establish whether, in the light of this judgment, the Overseas Development Administration can continue to run an aid programme of benefit to this country as well as to the recipients of aid.
I have considered whether there are particular forms of aid which in the light of this judgment should not be financed under the authority of the Overseas Development and Co-operation Act 1980. 1 have concluded that the activities financed by the Overseas Development Administration are not in general vulnerable to the kind of legal challenge brought in the case of Pergau. In the light of this, and having now considered the written judgment and taken legal advice, I have decided not to appeal. I have asked the ODA to ensure that all new spending decisions are weighed carefully, in order to respect fully the implications of the court's judgment.
In co-operation with the National Audit Office, my officials have carefully reviewed all projects receiving finance under the aid and trade provision, to see whether any of these projects approved under our previous understanding of the Overseas Development and Co-operation Act 1980 might fall outside the interpretation of that legislation now given by the divisional court. It appears that in the light of this review three projects might be held to raise legal difficulties following that judgment. These are £22 million of ATP support for a British sub-contract for the metro in Ankara, which was approved in 1990 and is in progress; a £9.3 million contribution to the costs of a television studio in Indonesia, approved in 1985 and completed several years ago, for which soft loan payments are continuing; the Botswana flight information region project, costing £2.9 million of ATP, approved in 1988 and physically complete.
In each of those projects, issues were raised about the strength of the economic or wider development case, though in none of them did the ODA accounting officer ask for a ministerial direction.
My hon. Friend the Parliamentary Under-Secretary for Foreign and Commonwealth Affairs announced to the House on 17 June 1993 new procedures for ATP projects as a result of our review of the programme. All ATP projects approved since these new procedures were introduced fully meet the criteria laid down in the Act as now interpreted by the divisional court.
In the light of the judgment, arrangements will be made for the outstanding commitments to Pergau to be met from funds voted by Parliament outside the scope of the Overseas Development and Co-operation Act. In order to avoid any possible doubt, similar arrangements will be made for the other three ATP projects I have mentioned. In the case of Pergau and the Indonesian project, which are financed by soft loans, the Export Credits Guarantee Department will continue to make the necessary payments under the relevant statutory
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provisions of that Department. A supplementary estimate will be sought to replace the relevant appropriations in aid from the ODA. In the case of the other two projects, which are financed by mixed credit, funds will be sought under the authority of the Appropriation Act. The necessary supplementary estimates will be laid before Parliament in due course.
A number of hon. Members have called for the money which ODA has spent in the past, and would have spent in the future on Pergau, to be available for other aid purposes. But the aid and trade provision of the aid programme for previous and future years was set on the assumption that the cost of Pergau and the other three projects would be met from within it. For the future, a financial obligation has been lifted from the aid programme and will have to be met outside the scope of the Overseas Development and Co-operation Act. It is not self-evident to me or to the Government that the Government should in consequence ask the taxpayer for additional money to allow the ODA to expand its aid activities.
The Government have concluded that, in respect of expenditure on the four projects in previous years, no adjustments will be made to ODA's future budget. Under our system of annual budgets, the books for those years are effectively closed, and we believe that they should remain so.
For the future, the planned aid programme again contains provision for all four projects. Expenditure on the four projects is expected to be £34.5 million this financial year and £31 million next financial year. It might be thought harsh if the aid programme were reduced by those amounts. The Government have therefore decided that funding from the Reserve will be provided to meet the costs of the four projects, thus releasing an extra £34.5 million this year and £31 million next year for overseas development.
For later years, my right hon. and learned Friend the Chancellor of the Exchequer announced to the House on 29 November increases of £56 million and £115 million in the aid programme in 1996–97 and 1997–98 respectively. Final figures for the aid programme in those and later years will as usual be determined during the annual public expenditure survey in the light of all relevant factors.
Mr. Harry Cohen: On a point of order, Madam Speaker.
Madam Speaker: Points of order are taken after the statement.
Mr. Cohen: Will you check whether the loudspeakers are working, Madam Speaker? I did not hear the Foreign Secretary say that he was sorry.
Madam Speaker: Increase the loudspeakers, please.
Miss Joan Lestor: First, may I thank the Foreign Secretary for sending me a copy of the statement a short time ago?
I welcome the fact that the aid programme will no longer have to bear the cost of the four projects, estimated at £34.5 million to date. Will the money that has already been spent on those projects—that spent on Pergau alone comes to £35 million—be repaid, since those funds have clearly been misappropriated? In the case of Pergau, the funds were unlawfully

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misappropriated. Will the right hon. Gentleman confirm how much has already been lost on the four unlawful projects? That lost money could otherwise have been used to alleviate poverty and to feed the hungry of the third world, where most people imagine that much of the aid budget is used.
Does the right hon. Gentleman recall that, when I first raised this matter in the House, in 1989, I was advised by the Minister that I was imagining a link between defence sales and aid. The Secretary of State has since admitted to what he coyly described as a brief entanglement—which occurred in 1988—between our aid programme in Malaysia and our support for defence exports. That admission is not a full confession, but it is certainly a start.
Does the right hon. Gentleman believe that promises given by a former Prime Minister are always defensible? Is it common practice for aid projects to get a provisional go-ahead, but to undergo rigorous reassessment? It should not be the guiding force of Ministers to prop up the tarnished reputation of former Prime Ministers. Furthermore, if we are to accept the Secretary of State's claim that at no time did he seek legal advice on the project, we can only conclude that he was either incompetent or so dismissive of the monitoring process that he felt that there was no need for him to cover his tracks.
Can the right hon. Gentleman also tell the House which of the three new projects that he mentioned—the metro in Ankara, the television studios in Indonesia and the flight information centre in Botswana—the former Prime Minister had a hand in? Were any of them queried by the former permanent secretary, as in the case of Pergau? Either way, the Secretary of State's case does not really stand up. As a recent editorial in The Times put it:
"If the loan was illegal, his position will be untenable."
It was and it is.
Mr. Hurd: I sent the hon. Lady a copy of my statement in advance, I hope in sufficient time. She does not seem to have read it with any great care because I have already answered several of the questions that she asked. The amount already spent on Pergau is £24 million over the past two years. The hon. Lady's first question, which I think goes to the heart of the matter, shows a misunderstanding as to how the aid budget is arrived at. It is not plucked out of the air. We do not say, "Let us spend £2 billion on aid," and then decide how to spend it. It is built up out of our estimate of needs and commitments. Part of those commitments for the past two years was certainly the aid and trade provision, and part of that was Pergau. Everybody knew that, questions had been asked about it, and it was known in Parliament and through Government.
It is not a question of money having been filched from the aid programme. When that programme was approved by the Government and voted by Parliament it was known to everybody who took an interest in it. It included the ATP and a commitment to the Pergau project, which had been discussed.
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The arrangement that I have announced says that we will not open the books on the £24 million that has already been spent. However, for this year, when £34.5 million will be spent on the four projects, and for next year, when £31 million will be spent, the aid figures announced by the Chancellor will remain and will not be reduced because of Pergau. They will thus be available for such extras as extra relief for Bosnia, which will certainly be needed.
Much of the ground covered by the hon. Lady has already been covered in debate, for example on 17 November. The 1988 entanglement was examined in depth by the Select Committee, and its report is available to the hon. Lady. I repeat what I said on 17 November: that at no time while I have held this position have I approved or been aware of any link between the provision of overseas aid and defence sales. I ask the hon. Lady, as I asked the hon. Member for Cynon Valley (Mrs. Clwyd), to accept that.
I have already dealt with the question about the ODA accounting officer. As I said in my statement, in terms of the three additional projects of which I have told the House, there was no question of the accounting officer asking for a direction. I will need to check this and let the hon. Lady know if I am wrong, but I do not believe that there was any involvement by the former Prime Minister, my noble Friend Baroness Thatcher, in any of these projects.
The arrangement that I have announced, the decisions not to appeal and on how to honour our commitment to Pergau, which with the other projects brings substantial benefit to British industry and to our trade, coupled with our arrangements for financing and the decision not to reopen the books on the £24 million that has already been spent on Pergau and, equally, not to cut the aid budget for the present year and the coming year, are equitable ways to settle the matter.
Mr. Tom King: Will my right hon. Friend confirm that by far the greatest part of our aid budget goes to the poorest countries, that ATP represents only about 5 per cent. of our aid budget and that it has been of considerable benefit to British industries in overseas markets? Does he agree that, after all, those industries help to fund the aid budget in any case?
Mr. Hurd: I am grateful to my right hon. Friend. He is perfectly right. Eighty per cent. of the aid budget goes to the poorest countries, and 92 per cent. goes to the lowest and middle income countries. I think that ATP is between 5 and 6 per cent. of the total and, of course, the Pergau commitment is a small part of that. I believe that the ATP which was put into action was invented by the Labour party. It has proved itself in a modest way to be a help to British industry.
Sir David Steel: Like the hon. Lady, I would like to thank the Foreign Secretary for sending me the statement in advance. I have read it carefully and I genuinely admire the gall with which he wrote the sentence:
"I have asked the Overseas Development Administration to continue to ensure that all new spending decisions are weighed carefully".
The whole House knows that that spending decision was weighed carefully by the ODA. It recommended against it, it was steamrollered by the Foreign Secretary

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and the previous Prime Minister, and it was subsequently found to have acted illegally by the courts. It is not a minor technical matter to be treated like a page of the telephone directory.
As for what is self-evident to the taxpayer, which the Foreign Secretary included in his statement, it is clear that the money was misused and the taxpayer believes that the limited budget for overseas aid should be used for its proper purpose and that the Foreign Secretary should reinstate those funds.
Mr. Hurd: I do not wish to repeat myself on reinstatement of funds. I believe that the decision I have announced is equitable; it will enable the aid programme this year and next year to undertake activities for which there will be a crying and continuing need in Bosnia and which otherwise they would not have been able to do.
On the right hon. Gentleman's main point, an undertaking was made in circumstances on which the Select Committee has reported in detail. It was twice made by the Prime Minister of Britain to Malaysia that we would help the projects, which they and we believed was developmental. When the time came in 1991 for me to decide whether the promise should be kept, it was clearly more expensive than it was supposed to have been three years earlier, but the right hon. Gentleman will acknowledge that the fact that keeping a promise is more expensive than was supposed when it was made is not always a reason for breaking it.
Mr. Michael Colvin: Will my right hon. Friend confirm that our defence sales and aid proceed quite separately and that the September 1988 memorandum of understanding on defence matters with Malaysia does not mention overseas aid?
Mr. Hurd: My hon. Friend is quite right. The Select Committee examined the matter exhaustively under the chairmanship of the right hon. Member for Bethnal Green and Stepney (Mr. Shore) and I have nothing to add to its report, which seems to me a balanced account. I simply repeat what I said before: that since I have held this position I have never approved or been aware of any linkage between aid and defence sales and I am confident that no such linkage exists.
Mr. Peter Shore (Bethnal Green and Stepney): This is a long and appalling story which, as the Foreign Secretary well knows, began with an aid for arms protocol signed by the former Secretary of State for Defence and has now ended with himself being judged to have been a law breaker in terms of the Overseas Development and Co-operation Act 1980, which it is his duty to administer. Surely some sign of regret or remorse, let alone an apology to the House of Commons, would be much more fitting than the rather strident tone in which he has addressed the House. Although he has made restitution for the next two years, he must be aware that unless further restitution is made, £181 million, which has still to be paid by the British Government to complete the Pergau project, will be deducted from what would otherwise be the legitimate overseas aid budget?
Mr. Hurd: As regards the future, when the Treasury and spending Ministers discuss spending in the public expenditure survey, they take everything into account
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and these events will be taken into account. I cannot say what decision will be reached on that in the public expenditure survey next year. The right hon. Gentleman is not contesting what I have said about the equity of the arrangements that I have announced for this year and next year; they are equitable and will give the Overseas Development Administration funds that it did not expect in order to carry out its duties.
As regards regret, the right hon. Gentleman knows the arguments. He does not agree with me, but I believe that the penalties which the national interest would have incurred had we broken in 1991 the undertaking given in 1989, would have been formidable. The court has not said the Pergau dam should not be financed or that Lady Thatcher's promise should have been broken; the court did not deal with any of those matters or with the question of arms. It simply dealt with the specific point of whether or not funding of the Pergau dam should be taken under the 1980 Act.
Mr. Jim Lester: Will my right hon. Friend confirm that much of the pseudo-indignation from Opposition Members is manufactured, in the sense that this money, which is allocated to the aid and trade budget, could have been used for other aid projects? We have already heard from my right hon. Friend that more than 91 per cent. of our aid budget goes to specific purposes. Will he also confirm that the Pergau dam has never been subject to corruption, that it is a triumph of British engineering, that it will generate electricity, which will be of value to Malaysian development, and particularly for development in the northern region of Malaysia, which is a very under-privileged area?
Mr. Hurd: I agree with all my hon. Friend's points. He speaks with close and sympathetic knowledge of the matter and I repeat my estimate of where the national interest lay. Of course, since then, the ATP policy and the aid policy have changed. An application from Malaysia—because its standard of living, its development, has been so successful in the past few years—for ATP on this kind of project would not now be granted. The House knows of the change of policy. We are not talking, therefore, about what would be approved in future. As I said in my statement, it is quite clear that the guidelines have been tightened and projects for a Pergau dam in Malaysia would not be approved today. That was not the question in 1991. The question then was whether the word given by the Prime Minister of this country should be kept.
Mr. Tony Banks (Newham, North-West): Will not the Secretary of State accept that the link between arms and aid was judged by the courts to be unlawful? How, then, can a promise that is unlawful be expected to be kept? Is not it a fact that if a council had been found guilty in the courts of misappropriating such a level of funds it would have been surcharged and, perhaps, independently taken to gaol? Why should there be different standards between central and local government?
Mr. Hurd: The hon. Gentleman cannot have read the judgment. He can have read only the initial advertisements of the World Development Movement. The court was not asked to deal with any question of a link with arms sales, and therefore did not do so.
Sir Anthony Grant: Can my right hon. Friend confirm that the ATP was originally an initiative of the previous Labour Government? As the Opposition are always talking about help for British industry, is there not a very substantial element of humbug in their attitude to this matter?
Mr. Hurd: I agree with my hon. Friend. ATP, I believe, has justified itself. It has not taken over the aid budget; it is between 5 and 6 per cent. of the aid budget. It has justified itself in helping the development of countries that we want to help, and at the same time giving help to British companies. I see no harm in that, provided it is done within international rules, which it has been.
Mr. Dennis Canavan: Why should the taxpayer have to foot the bill for illegal misconduct by the Secretary of State, bearing in mind the fact that, if the Secretary of State were a local government councillor who flouted the advice of his officials, thereby incurring illegal expenditure, he would be surcharged, probably bankrupted and certainly barred from holding public office? Will he now do the decent thing and resign?
Mr. Hurd: The hon. Gentleman is being synthetic, I think. The criticism that reached me from the ODA on the Pergau project did not relate in any way to its legality. The question was whether it was economically sound, and Sir Tim Lankester said that, in his view, it was not. There was no question, no query raised, at that time as to whether it was a development project in accordance with the 1980 Act. I had to decide whether it was in the national interest that Sir Tim Lankester's doubts on the matter should prevail over the promise that had been given. Keeping the promise turned out to be more expensive than had been supposed when it was given. I did not think that it was in the national interest that it should be broken.
Sir Giles Shaw: If there is any regret to be expressed, it would, on my part, be that this issue may have damaged the huge importance of ATP. Will my right hon. Friend confirm that, as a proportion of total aid, the ATP should be increased from its current level of 5 or 6 per cent., that it provides, and has provided since it started, some £4 billion of income to British industry, many of them small companies, and that its administration is crucial if we really mean to gain export access to difficult markets, which only the Government can help us to achieve?
Mr. Hurd: I do not want to prejudge the decisions that we shall make about how the ODA will use the amounts announced in the Budget speech and the extra amounts that I have announced today; but I note what my hon. Friend has said about the importance of ATP, and I am both certain and keen that it should be preserved.
Mr. Dennis Skinner (Bolsover): There is a gang of serial crooks in the Government. We should consider all the ones who have been in court. When will one of them, instead of acting arrogantly, have the decency to
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admit that he or she was wrong and resign? That is one of the problems with this Government. May I tell the Foreign Secretary that I might have expected him to be the fellow to do it. There is a vacancy in a flower stall outside Waterloo station; the Foreign Secretary should go and fill it.
Mr. Hurd: The court decided that it was illegal to finance the Pergau dam under the 1980 Act. It interpreted the Act in a way in which it had not previously been interpreted, causing me to say that we must look through all the ODA projects to make absolutely sure that the law was being complied with. That we have done, with the results that I have mentioned.
That was the nature of the court's judgment. I have no desire to cross swords with the court, and have not done so in any way. As I have decided not to appeal, we must obey the court's verdict strictly. I believe that we can do that while still preserving an aid programme that is able, within the limits of the ATP, to help British industry.
Mr. Richard Page: In accepting my right hon. Friend's statement, the whole House will know that he was not Foreign Secretary at the time and that no personal responsibility attaches to him.
The Pergau dam project has attracted a great deal of criticism, but is it just coincidence that, since the signing of the contract, our trade with that country and that part of the world has increased considerably, providing many jobs for people in the United Kingdom?
Mr. Hurd: I feel strongly about the merits of the matter. I must obey the court's decision, as I have decided not to appeal against it, but I do not feel penitent about taking a robust view on where this country's interests lie.
Since the decisions of 1988–91—as my hon. Friend pointed out, I was responsible only for the final decision, but I entirely understand the reasoning behind the others—our trade with Malaysia and its neighbours has increased enormously. Those are the most expanding markets of the world, markets in which Britain has been strikingly successful. Does the House really believe that we would have enjoyed that success if in 1991—strikingly and stridently—we had decided to tear up an undertaking that we had given?
Mr. Ted Rowlands (Merthyr Tydfil and Rhymney): Did not Lord Justice Rose clearly state that the Foreign Secretary should agree
"to take appropriate steps to make good the deficiency in the overseas aid budget"?
As £24 million of that budget was spent unlawfully on the Pergau dam, could not the Foreign Secretary at least modestly restore that £24 million?
Mr. Hurd: I have been into that. The court said that what it described as the "unravelling" was not a matter for it, and that is obviously true. I believe that what I have done—I have not reopened the past books relating to the £24 million, but have dealt with the rather larger

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sums involved in this year's and next year's budgets—is an equitable way of dealing with the difficult situation that was created.
Mrs. Jacqui Lait: What progress has been made in the restoration of British business links with Malaysia?
Mr. Hurd: They were never wholly interrupted. There was a pause and a breakdown in public sector contracts as a result of the Malaysian Prime Minister's indignation over what he read in the British press, but that has passed and we are on track for a further steady expansion of our trade with Malaysia.
Mr. Llew Smith: The Foreign Secretary informed me that there was no link between defence sales and aid. Thanks to the stirring work of the World Development Movement, it has been shown that he misled the House. Many of my hon. Friends have requested either his resignation or perhaps words of regret. Is he willing to give either?
Mr. Hurd: I am not sure what the hon. Gentleman is referring to. The events of 1988, for which 1 have no responsibility, have been fully examined. If he is saying that, since 1989, a connection has been made between defence sales and overseas aid provision, he should say so. If that is what he is implying, he should say so. I believe it to be wholly untrue. I do not think that that sort of insinuation does good.
Mr. John Townend: Does my right hon. Friend agree that the majority of this country's population see nothing wrong in using aid to create British jobs? If it has been found to be against the law, is it not time that the law was changed? May 1 take issue with him on the £65 million from the reserve? That money is still coming from the taxpayer. It is still increasing overseas aid and it will not be welcomed in my constituency, particularly on a day when hon. Members have been asked to increase the burden of taxation by £800 million. More and more people in this country are beginning to say, "When does charity begin at home?"
Mr. Hurd: My hon. Friend's views on this matter are well known. Charity does begin at home, but it does not necessarily end at home. I hope that today's announcement illustrates that.
Mr. Robert N. Wareing: The Foreign Secretary cited the evidence of the Select Committee on Foreign Affairs almost in his own, or in the Government's, defence. Is he aware that one person refused to give evidence to that Committee—that dreadful woman, Baroness Thatcher? Until we know why there was a link in a letter of 8 August 1989 to the Malaysian Prime Minister, how can any of us be really convinced that there was no link in her mind between arms sales and the Pergau dam project?
Mr. Hurd: That is not a matter for me. The hon. Gentleman and his colleagues went into the matter carefully. I am not saying that their report justified everything that happened because it did not. It showed a good deal of understanding of my position in 1991 and it came to the conclusion that I did not have much
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choice at that time. Despite the fact that my noble Friend did not give evidence, the hon. Gentleman would agree that the Committee did a thorough job.
Mr. Peter Luff: Does my right hon. Friend agree that the World Development Movement's decision to pursue the court case and the manner in which it was exploited by the Opposition parties and by some sections of the British media were damaging to British interests, British jobs and our relations with Malaysia? One good thing, however, has come out of this. Will my right hon. Friend give the House an indication of how the additional sums in the overseas aid budget will be used this year and next?
Mr. Hurd: The World Development Movement was entirely entitled to act as it did and it showed considerable perseverance and skill in doing so. I am not so sure whether, against the background of the opinions expressed by my hon. Friend the Member for Bridlington (Mr. Townend), it did good to the cause of support for British aid and the people that it has helped. That is a matter for the World Development Movement to judge. The opposite opinion to the sort of views that it has expressed may have become quite strong.
On the last question of my hon. Friend the Member for Worcester (Mr. Luff), I do not know yet, because the decisions that I have announced today have only just been taken and we have only just had the Budget figures of my right hon. and learned Friend the Chancellor of the Exchequer. We need to put those two together and to decide how the Overseas Development Administration is to distribute the money. The human emergencies in the world, whether caused by civil war or famine and whether they occur in Africa or Bosnia, are not likely to diminish. The Chancellor's Budget announcement and the arrangements that I have announced today will enable the ODA to continue a tradition, which it has successfully established, of giving quick, prompt, adequate aid to deal with those emergencies. I imagine that some of the money will go for that purpose.
Mr. D. N. Campbell-Savours (Workington): Are the appraisal reports into ATP projects, which are conducted by independent consultants, still being revised at the request of departmental officials if it is considered that they might be embarrassing for the Government?
Mr. Hurd: Perhaps the hon. Gentleman would examine the announcement made in 1993 by my hon. Friend the Under-Secretary of State about the change in procedures following our review. Were he to do so, I think that he would be satisfied about the procedures. If not, perhaps he will let me know and I shall try to satisfy him.
Mr. Spencer Batiste: Does my right hon. Friend agree that in the eyes of most people in this country there is absolutely nothing wrong with linking an appropriate portion of aid with trade? This case has revealed that the present rules are too inflexibly drawn. Will he introduce proposals to widen the bands under which such decisions can be made, so that in future

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the Government can make sensible judgments without the danger of their being second-guessed by every lobby group on any subject?
Mr. Hurd: I am glad that my hon. Friends are strongly endorsing ATP and that the Opposition are not condemning it as such. That is useful. Of course, ATP has to take place under international rules which have been tightened since the period that we are discussing. It is not a good idea to have a race to subsidise exports, but it is right that, within international rules and the law, we should persevere with ATP, concentrated on those markets that make most sense, such as the poorer countries in which there are good trade prospects for this country. I am encouraged by today's exchanges to be robust in persevering with ATP.
Mr. Tony Worthington: The Secretary of State said that he believes that what he has announced today fulfils his obligation to the court after its judgment against him. What legal advice has he received, and is it unambiguous that his response is right? If the advice proves to be incorrect, will he resign?
Mr. Hurd: I have, of course, taken legal advice on the question of past payments. I am advised that it is not for the court to direct what should happen in that respect. I stand by what I said about the present and the future, and that is not open to legal question.
Mr. Gary Streeter: May I urge my right hon. Friend not to be blown off course by the Opposition's synthetic anger? When shaping future aid policy, will he be sure to take into account the employment prospects for British workers, just as the French, Germans and Americans do? Is not that what aid for trade is all about?
Hon. Members: Bribery.
Mr. Hurd: I am sorry that this has become a party matter because there is an underlying problem which is not being dealt with by the Opposition in their desire to make trouble. If they examined recent events they would see what that underlying problem is. I am grateful to my hon. Friend.
Mr. Harry Cohen: Does the Secretary of State recall the pictures that the nation saw of emaciated and dying children in Ethiopia and Somalia a few years ago? What does he think of a Government who preferred to use the aid budget to sell arms to what he has admitted are rich countries? Does not that fill him with shame?
Mr. Hurd: The record of this country and of the ODA in particular, often operating through non-governmental agencies, in taking prompt and effective help to the type of disasters to which the hon. Gentleman refers is second to none. Instead of making such remarks in order to cause the Government trouble, the hon. Gentleman should take a little pride in what we are doing overseas, whether in Rwanda most recently, or before that in Somalia, which he mentioned, or every day in Bosnia where we are supplying 20 per
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cent. of the international aid. Our record in dealing with exactly the type of problems that he mentions is unmatched.
Mr. Nigel Waterson: Can my right hon. Friend give us an idea of how many Labour Members persistently press for companies in their constituencies to be involved in projects linked to ATP? Does not that reveal the gross hypocrisy of much of what we have heard from them this afternoon?
Mr. Hurd: There is strong pressure—I cannot give the figures—from constituency members, of course, that ATP? help should go to projects in which they are interested. There is also very strong pressure from individual Labour Members that their constituents should benefit from the sale of arms to the third world.
Mr. Mike Hall: Earlier in his statement, the Foreign Secretary referred to evidence given to him by Sir Tim Lankester, the former permanent secretary at the Overseas Development Administration, and he described Sir Tim's reservations as being on economic grounds. When Sir Tim Lankester came before the Public Accounts Committee, he described the Pergau dam as an abuse of the aid project. The courts decided that it was illegal. I think that it is wrong for the Foreign Secretary to say that it is a party political issue. The only two things missing from his statement this afternoon were an apology and a resignation.
Mr. Hurd: I do not wish unnecessarily to repeat myself. I have described what the court decided. The court did not say that it was wrong to finance the Pergau dam. The court did not say that it was wrong to take into account political and commercial considerations. The court did not enter at all into the question of arms sales, which bulks so large in the controversy. The court simply said that it was not right. It produced a new interpretation of the 1980 Act and said that the financing of the Pergau dam did not fall within that interpretation of the Act. I am complying fully with that judgment.
Mr. Jacques Arnold: Will my right hon. Friend stress time and again the lavish use made of ATP procedures by our export competitors? Is it not a fact that the Government have given skilled support to British exporters, which has been good for jobs, not least jobs in the constituencies of Labour Members?
Mr. Hurd: That is certainly true. As a result of all that has happened, the importance of ATP is, if anything, more clearly established. I repeat the point that I made before. I am against having an international race to subsidise exports. I believe that there should be international rules on that—indeed, there are—and that they should be strictly enforced. Within those rules, I see no case whatever for sitting back and giving an advantage to our competitors.
Mr. Hugh Bayley: On a number of occasions this afternoon, the Foreign Secretary has stressed the importance of abiding by the verdict of the court in this matter. However, is it not equally important for him to abide by the policies of his own Department as set out in the annual report, which say that aid should be targeted on poor people in poor countries? Why,

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since he has been told by the court that he may not use that sum of money for aiding the Pergau dam, is he standing in the way of using it for purposes for which Parliament has voted?
Mr. Hurd: We are complying with our own policy. Of the aid budget, 80 per cent. goes to the poorest countries. The quality of British aid is often praised, as it was, for example, in the latest OECD report. From the aid budget, 92 per cent. of the aid goes to low and middle-income countries. We have nothing to be ashamed of in that respect. As regards the past, I have answered the question about reopening the books. As regards the present and the immediate future, the arrangements that I have announced today will enable us, for example, to give more effective and more immediate help to the kind of cases to which the hon. Member for Leyton (Mr. Cohen) referred a few minutes ago.
Mr. George Foulkes: There are one or two questions which the Foreign Secretary has not yet answered. I remain puzzled as to how the Foreign Secretary had no knowledge of what he described as an entanglement between arms sales and aid, which was known to the Prime Minister and to Lord Younger. Was he merely naive, or was he kept in the dark?
Mr. Hurd: I was Home Secretary.
Mr. Foulkes: He was a member of the Cabinet. There must be some collective responsibility for decisions taken by the Cabinet.
The right hon. Gentleman accuses us of making this a political issue. May I assure him that we support ATP, but we do not support ATP stealing money from humanitarian aid and help to the poorest of the poor? We do not support money going into unsound economic projects, which the Pergau dam was clearly seen to be. He made some amazing revelations in his statement today. How do a television studio in Indonesia and a
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metro in Ankara fit in with our aid policy of helping the poorest of the poor? How can they possibly be the kind of projects that we should be supporting?
As many of my hon. Friends have rightly said, in the good old days, any Secretary of State caught red-handed, in the way in which this Secretary of State has been, would have done the honourable thing and would have gone back to writing novels, which the Foreign Secretary does so well. However, if the Foreign Secretary is not willing to do that, I assure him, on behalf of all Opposition Members, that his standing would rise immeasurably in the House if he would simply apologise for his mistake.
Mr. Hurd: On the hon. Gentleman's specific points, he has his chronology a bit wrong, but I do not complain about that. The reference to ATP stealing money simply does not wear, because the figures for the aid programme included ATP and the commitment to the Pergau dam. There was no secret about any of that. There was no question of filching money.
The total of the aid programme took into account the commitments that had been made. That is how the aid programme is constructed. This talk of filching or stealing money surreptitiously from the aid programme is completely wrong. As it is completely wrong, what the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) followed up with is also completely wrong. [HoN. MEMBERS: "What about Indonesia?"] I will go into that. That is a programme of £9.3 million of support from the ATP. It was approved in 1986 by the then Minister of State.
In Bandung, it is designed to bring together a widely scattered community of poor people and make it possible for that community to function more effectively. If the hon. Member for Carrick, Cumnock and Doon Valley thinks that that is a wrong use of money, I would not agree with him. I believe that it is a good use for the money and my right hon. Friend was right to approve it. We believe that it may fall outside the Overseas Development and Co-operation Act 1980. In order to be absolutely sure, it is being financed as I have said.

Offices (Intrusion)
4.16 pm
Madam Speaker: The House will be aware of press reports about an intrusion last Friday into the suite of offices of the Leader of the Opposition. I have made inquiries into this matter and I understand that the intruders concerned were two research assistants and a guest. I am satisfied that there was no malice whatsoever in their action, which resulted from an excess of seasonal spirit and a mischievous walkabout.
Nevertheless, it must be understood that it is a privilege to work in, and have access to, the Palace of Westminster and I do not expect that privilege to be abused. In this instance, it has been abused. I have therefore given instructions that the researchers concerned should have their passes withdrawn with immediate effect and until 1 February.
Mr. Max Madden: On a point of order, Madam Speaker. This relates directly to your statement. I understand that the Administration Committee is currently reviewing the arrangements for the issuing of passes to the House of Commons. It appears that, at the moment, anyone who is nominated by a Member of the House for a pass is automatically issued with one unless anything is known on security grounds. In addition, there appears to be a very long list of organisations whose employees are issued with passes. Indeed, the list is so long that the Administration Committee has been unable to supply me with it.
My point of order is this: as it appears that virtually any Tom, Dick or Harry can be issued with a pass to this place, and undoubtedly a very large number of people have passes which give them access to the House, I wonder whether arrangements can be made to invite hon. Members to submit evidence to the Administration Committee so that more sensible criteria can be devised before passes are issued.
Madam Speaker: That is a matter for the Administration Committee and for the Serjeant at Arms. I will ensure that the point raised by the hon. Gentleman is referred to that quarter.
Mr. Tony Banks: On a point of order, Madam Speaker. May I refer you to page 380 of "Erskine May", which states:
"Opprobrious reflections must not be cast in debate on heads of state or governments of independent Commonwealth territories or countries in amity with Her Majesty, or their representatives in this country"?
You will recall, Madam Speaker, that yesterday, in answer to questions on the recent European Union summit, the Prime Minister said:
"Indeed, I must say that some of my fellow Heads of Government could scarcely find their way to their Parliaments with a guide dog."—[Official Report, 12 December 1994; Vol. 251, c. 625.]
That is an opprobrious reflection on the Heads of Government of countries which are in amity with Her Majesty.
Is it little wonder, with the hon. Member for Teignbridge (Mr. Nicholls) referring to our partners as collaborators, warmongers and beggars, and with the Prime Minister now suggesting that some of his fellow Heads of Government are visually challenged, that the British Government are seen on the continent and in the
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European Union as a bunch of exceedingly rude whingers? Would it not be appropriate for the Prime Minister to apologise and, perhaps, to offer a suitable donation to the appropriate guide dog charity?
Madam Speaker: The Prime Minister is responsible for his own remarks, as are all other members of the Government and Members of Parliament. I remind the House of the words of "Erskine May", and I add to them that not only good temper and moderation but tolerance of other people, whether in this country or abroad, are equal characteristics of parliamentary language.
Mr. D. N. Campbell-Savours: On a point of order, Madam Speaker. Will you authorise the House authorities to release the names of the three men who intruded into the office of the Leader of the Opposition? Can you establish why they were not searched when they left the office?
Many hon. Members find it difficult to understand—indeed, we do not believe that it is credible—that three men should walk the length of the Palace of Westminster and just happen to enter the Leader of the Opposition's office. It is not a credible story. We believe that their motive was deliberate—that is, to enter that office, knowing that they had no right to enter, and to do whatever they set out to do. We understand that no checks have been made.
Mr. David Winnick: Further to that point of order, Madam Speaker. Our suspicions would not have been so great had it not been for the recent memorandum from the vice-chairman of the Conservative party, Mr. Maples. Bearing in mind the distance to the office of my right hon. Friend the Leader of the Opposition, it seems almost incredible that those three people claim that it was simply a mistake on their part. What would have been the position if the person in charge of the office at the time did not take the necessary steps to identify the three concerned and to call in the authorities?
There is a feeling among Labour Members at least that this is a minor Westminstergate—a deliberate attempt unofficially to find out information from the office of my right hon. Friend the Leader of the Opposition. Therefore, I urge you, Madam Speaker, to consider it appropriate that further steps should be taken to look into the matter.
Madam Speaker: I have made extensive inquiries into the matter. I even went to the offices of the Leader of the Opposition very early this morning to refamiliarise myself with their geography. I am totally satisfied that, as I have said in my statement, no malice was intended. I gave my reasons why I thought that those three people—they were not all males; there were two males and one female—were there. A thorough police inquiry has been carried out, too. The police tell me that they are satisfied that nothing was taken and that nothing was disturbed. In all seriousness—we must be serious about such matters—I am sure that that would be the view of the Leader of the Opposition himself.
Several hon. Members rose—
Madam Speaker: We must leave the matter as it is. There will be no further points of order on it.
Mr. Dennis Skinner: On a point of order, Madam Speaker.
Madam Speaker: Is it on this matter?
Mr. Skinner: It is on security. During the past five years, and increasingly lately, there have been questions about the reduction in the number of police and security people positioned around this building. Most of the time the matter has been ignored, and we have been assured by Ministers that everything is all right. It is apparent to many people who are in this building on Fridays in particular and to the security people that there is not sufficient manning to cover all areas. I suggest that it is time that we looked at the number of people who have been removed from security and police positions, so that in future police and security officers are able to do their job effectively. I think you will find, Madam Speaker, that there has been a severe reduction in their number.
Madam Speaker: I am in touch with police and security figures not monthly but on a weekly basis. I do not discuss security matters across the Floor of the House, but if the hon. Gentleman would like some details about those matters I know that the Serjeant-at-Arms will be happy to place them in front of him.

Cleveland County Council
Mr. Frank Cook: On a point of order, Madam Speaker. Yesterday you heard my point of order about the promised deposition of the details of submissions made to the Local Government Commission in relation to the dismantling of Cleveland county council. I thank you, Madam Speaker, because your admonishment of the Treasury Bench yesterday resulted in the details being placed in the Library as your procession was passing it at 2.30 this afternoon.
My point of order is that the summary, which has taken nine months and four days to deliver, is a single sheet of paper. It does not say how many submissions were made in favour of the recommendations and there is no detail of the submissions which opposed the recommendations—in fact, there is no total of submissions received. The summary is little more than a repeat of the recommendations of the Banham commission. My two-year-old grandson could have done better than that in half a morning.
Frankly, the Government are treating the House with contempt and preventing any hon. Member who wishes to oppose the order from receiving necessary information. We are told that the order has been laid down and that the matter may be discussed next Monday. The Government are treating the House with contempt, and that is unacceptable. I appeal to you, Madam Speaker, to use your powers to urge the Government to act decently for a change.
Madam Speaker: I am very pleased that I was able to help the hon. Gentleman yesterday, but I certainly cannot help him on this matter. I am not responsible for the quality of material that is provided by the Government—I have many responsibilities in other respects, but that is not one of them.
I can only suggest that the hon. Gentleman see the Minister concerned—I realise that it may be a little late if the matter is to be debated next week—and perhaps make some representations to obtain the information that he requires.

Ways and Means
Madam Speaker: Before I call the Chancellor of the Exchequer, I inform the House that I have selected amendments (a) and (b), standing in the name of the Leader of the Opposition.
4.27 pm
The Chancellor of the Exchequer (Mr. Kenneth Clarke): I beg to move,
Mr. Robert Sheldon: Will the Chancellor explain one matter that he did not explain last Thursday? In the past 10 years, the average error in the public sector borrowing requirement has been £10.5 billion. He wants to raise £800 million. Why is he in such a hurry? Is he now a convert to fine tuning? Will the Pergau financing mean further increases in taxation? Why cannot he wait until February, during consideration of the Finance Bill, and make a decision in the light of further information?
Mr. Clarke: Confidence in policy requires clear consistency of purpose and determination to put that purpose into effect. I had a similar exchange with the right hon. Gentleman last week and explained that, of course, these are not exact forecasts or spot figures, but the best forecasts that we can make and that there is a variation around a median line.
The right hon. Member for Ashton-under-Lyne (Mr. Sheldon) was in the Treasury at a fairly terrible time—I think that he was there when the International Monetary Fund took over for a time because of the inability of the Government of the day to deliver healthy public finances. Even when he was in office, he did not take the view that £10 billion on the PSBR here or there was something that the Government would ignore. He and his colleagues published forecasts and missed them rather badly. The downward track on which we are setting the PSBR is essential to the restoration of confidence, as is our commitment to take no risks with inflation.
I think that we would all agree that the past week has been one of slightly greater than usual political turmoil. Fortunately, that has not shaken confidence here or abroad in Britain's ability to keep on course with its recovery. Many countries are going through substantial political crises. Usually, that has a knock-on effect on confidence in the Government's abilities to deliver their economic aims. That has not happened here, in part because of the prompt action that we took.
Mr. Tony Marlow: Is it possible that confidence was not dented because people think that the present solution is rather better than the one we had before? As we are talking about changes in solutions, and given the state of the housing market and the fact that mortgage interest relief at source is going down, why does my right hon. and learned Friend still think it wise to knock that market on the head again by making people insure their mortgages?
Mr. Clarke: That was as helpful as ever. Confidence was retained overnight not least because I had a monetary meeting and raised interest rates first thing the next morning. It was extremely important to do so to reconfirm the fact that political turmoil would not threaten our commitment to low inflation and to demonstrate that our policy of considering the economic evidence, looking forward and ensuring that, if inflation pressures are incipient, we act in good time and keep control of events remained unshaken. Confidence was retained before I proposed my package of measures on Thursday.
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As I told the right hon. Member for Ashton-under-Lyne, a prompt reaction to events to put in place the Budget judgment was essential to keep us on course. In the short term, the interest rate change was never likely to be welcomed by people concerned about the housing market. The present difficulty is that our manufacturing economy is roaring ahead, with very strong growth, while the housing market remains distinctly flat. In the medium-term interests of anyone involved in the United Kingdom economy, it is essential that a low inflation climate is retained and that it lasts. People involved in the housing market probably realise more than anyone else in business the dangers of returning to boom and bust, and of the apparent prosperity that inflation brings and its effects thereafter.
Mr. David Winnick: Most people clearly have no confidence in the economic competence of the Government, and the Chancellor knows that. The Government's humiliating defeat on VAT undoubtedly dented them, but does the Chancellor accept that it has in fact reinforced the standing of the House of Commons? Letters to national newspapers and hon. Members have shown that the vote has almost reaffirmed people's faith in parliamentary democracy and the workings of the House of Commons. As a parliamentarian, I think that is excellent. Does the right hon. and learned Gentleman agree?
Mr. Clarke: I regard myself as a parliamentarian, and I am extremely glad about anything that raises confidence in this House, which needs raising by a quite considerable extent. I accepted the judgment of the House, which, although I will not labour the point this afternoon, was reached in an extraordinary way. The House, having confirmed the tax in four separate votes, changed its mind in circumstances where—the hon. Gentleman will concede—background events had a lot to do with the decision.
I have accepted the decision, and that is where we now are. I am explaining that it is necessary to proceed with the resolutions so that the key economic policy of low inflation and healthy public finances is dealt with properly by the Government with the support of the House.
Virtually every major economy in the western world faces serious problems with its public finances as it emerges from recession. The general level of deficits throughout the European Union and across the Atlantic is far too high for comfortable and sustained growth, and every Government is having, or trying, to take action to deal with that problem. I believe that the British Government are tackling the problem more effectively and more promptly than almost any of our competitors in the developed world. That is one reason why confidence in Britain is so high—not only in the financial community, but among the business men and industrialists upon whose confidence we depend to get investment going to sustain our current good performance.
We are doing better than anybody else at the moment. That is why the House must accept—if we accept the House's verdict, as we do—that, having lost potentially £1 billion of tax revenue in the next financial year and

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£1.5 billion worth in years two and three of the survey period, it is essential that it confirms the action necessary to fill that gap in the public finances.
Mr. Dennis Skinner: I go back to the question of the interest rate increase. The Chancellor gave the impression that the increase was not as a result of the defeat in the House of Commons, but that it arose simply because he felt that the judgment had to be made at that time. Why, then, only a fortnight ago, when I asked him directly in the House whether there would be an increase in interest rates before Christmas, did he tell me that he had no plans for such an increase?
Mr. Clarke: With the greatest respect to the hon. Gentleman, I am quite certain that I never answer questions—either in the House of Commons or from journalists outside—about my intentions regarding interest rates. It would be totally irresponsible for any Chancellor to do that, as it would cause turmoil in the markets.
I have always explained my policy on interest rates, which is to ensure that we act in good time to keep control of events and to stop inflationary pressures building. The decision on interest rates to which the hon. Gentleman referred was taken the following morning, and not before, and it was taken on the basis of a judgment of the inflationary pressures. But, at the request of the Governor, we had brought forward the timing of the meeting so that, if we decided to raise interest rates, we would do so in good time before any turbulence in the markets after the decision of this House. I make my decisions on the evidence of the meetings that I hold, but the House must bear in mind the fact that those decisions, and their timing, have to include, among other things, the surrounding political events and the possible consequences of a defeat in the House of Commons the night before and the loss of a billion pounds worth of taxation.
Mr. Tony Banks: The Chancellor said that the manufacturing economy was "roaring ahead" Will he tell us when we last had a balance of payments surplus on our trade in manufactured goods, and when he expects us to move into surplus again?
Mr. Clarke: It is a long time since we have had such a strong balance of payments recovery at a time of economic recovery. The hon. Gentleman knows that that is because the recovery is export-led: in volume terms, our exports are up 10 per cent. on a year ago and investment is beginning to press ahead. The course for our balance of payments is improving precisely because this is a competitive country. It is attracting inward investment because it the best place in western Europe in which to invest if one wants to manufacture modern products.
As I said in my statement last week, when it came to filling the gap in the Budget judgment, I turned first of all, instinctively, to public spending. It was obviously right to look at that side of the account. I know from last week's intervention from my hon. Friend the Member for Bridlington (Mr. Townend), as well as from his representations to me for about as long as I can remember in his capacity as chairman of the Conservative finance committee, that he wanted me to do just that.
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As I explained, to make further changes in the public spending total for next year and the year beyond at this stage, after the end of the public spending round, was simply not practicable. I could not do that because of our enormous success in the two successive public spending rounds, which reduced general Government expenditure by at least £43 billion over the four years covered by those two public expenditure surveys. That sum was taken out of general Government expenditure without disturbing the Government's policy priorities and, so long as efficiency is maintained, without threatening the delivery of good, high-quality services.
I accept that a further adjustment to recover money out of those public spending totals may well have been attractive to a number of hon. Friends, as it was to me, but it would not have represented good competent government. It was too late in the year to make such a change. We had just settled the survey and health authorities, local authorities and Government Departments had made their plans on the basis of the figures that we had provided. If we had gone ahead, within 36 hours, to find areas of public spending from which we could have quickly recovered the money further required, it would have been damaging.
I know that my hon. Friend for Bridlington is not alone in making representations to me about public spending—my hon. Friend the Member for Chingford (Mr. Duncan Smith) and others have also done so. Because I was unable to go further on this year's public spending round, however, does not mean that we are lessening our determination to keep public spending under control. In years two and three we have already committed ourselves to filling the expenditure gap by £300 million. The tight public spending control of the kind that we are delivering is not a short-term, temporary Government policy; it is one of the hallmarks of Conservative government that we keep tight control of expenditure.
The resolutions deal with the need to raise taxation. We know that the ability to raise or to reduce taxation is directly linked to control of public spending. If one cannot control that spending, one has lost control of one's taxation policy. In future years we will stick to that principle, but this year, for purely practical reasons, we did not attempt to alter the public spending totals.
Mr. Malcolm Bruce: Does the right hon. and learned Gentleman accept, however, that choosing to recover money in taxes has had an inflationary effect of 0.4 per cent., which has meant indexing benefits to the tune of nearly £600 million? Surely he would have faced a much easier task if he had found the money elsewhere. When does he think that the borrowing level will be at a pitch where he will be able to justify reducing taxes? Can he tell us what the criteria would be?
Mr. Clarke: We looked at alternative packages, but one of the attractions of the package that I am commending to the House in the resolutions is that the impact on inflation is rather less than that of the taxes that it replaced. I accept that there are disadvantages in the new package, and, if I am pressed, I will explain why what I am now presenting is, as everyone realises, my second choice, starting from where we were before I prepared this year's Budget. Nevertheless, the substitute package has one advantage, because it slightly reduces the impact on inflation.

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On the borrowing requirement, we published in the Red Book the public sector borrowing requirement that we now expect to be sustained. We published our expectation that general Government expenditure will fall as a proportion of gross domestic product. Judgments about taxation in future years must be made on the same basis as the judgments about taxation that I made this year and last. The lower one gets the PSBR, the more one gets public spending under control and the more one is able, when conditions begin to improve, to consider how far one can reduce taxes rather than increase them.
According to the Government, judgments about taxation must be made, and will always be made, on the basis of the health of the real economy. We are committed to industry, to jobs and to prosperity. Our past policy of declining to decide on low rates of marginal taxation was based on our belief that that stimulates a healthy economy. We will make changes in taxation only as and when we believe that it is in the interests of a healthy economy to do so.
Mr. Nigel Griffiths: The Chancellor may talk about judgments on taxation, but how can we trust his judgment to match what he has said about taxation? Before the election, he told us that there was no need to extend the scope of VAT and he made specific promises not to increase the rate of VAT. When he came back to the House, however, he offered proposals that went against everything that he had promised. What will happen on a wet night in Dudley tomorrow?
Mr. Clarke: Before the election, the hon. Gentleman and his hon. Friends campaigned on a policy of increasing taxation in order to increase public expenditure. They also ran a campaign suggesting that they had somehow done their calculations and discovered that the Conservative party would be obliged to raise the rate of VAT. We did not.
The hon. Gentleman has no quotations from me about VAT. He may, however, be referring to some remarks that I made during the election campaign, which were made at a time when his party and my party believed that the recession was over and that public finances would not fall into a worse state. The difference is that when, thank heavens, I am glad to say we found ourselves charged with the responsibility for turning the recession into the recovery, we took the necessary steps to deal with the deficit to get us back on course.
The hon. Gentleman's party opposed every increase in taxation and every spending reduction. Had the Labour party taken office, it would have put into effect the budget of the late John Smith, which would have meant increased taxation and increased public spending. The Opposition would obviously have turned a dangerous borrowing position into a catastrophic one. I recall that that is exactly what the Labour party did when it last took office in similar circumstances.
Mr. Gordon Brown: Did or did not the Prime Minister say that the Conservative party would not extend VAT? The truth is that he said just that. Will the Chancellor, just like the Prime Minister told us before the general election, now tell us that he will never extend VAT to food, travel, children's clothes, books and newspapers? Will he repeat the Prime Minister's promise?
Mr. Clarke: Did or did not the hon. Gentleman and his hon. Friends tell us that, if elected, the Labour party would put up child benefit and all retirement pensions? The Opposition would not have done that if they had been
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remotely responsible upon taking office and discovering that the PSBR was in crisis. The hon. Gentleman looks shocked at my response. He appears to be saying that if the electorate had made a mistake at the election, the Labour Government's reaction to discovering that public finances were in crisis would have been to raise public expenditure on those items by enormous amounts.
The hon. Gentleman has wrung that lemon of the old election quotations dry. As he asked me to give undertakings about the future, let me tell him that we have put in place a policy to match the occasion, which has dealt with the crisis and turned the recession into recovery. The hon. Gentleman cannot even come up with any proposals. Any question to him is waved away and he refuses to give any undertakings about any future Budget, which I hope he will never deliver.
Mr. Patrick McLoughlin: I do not believe that we should take too many lessons from the Labour party. Is my right hon. and learned Friend aware that some time ago the hon. Member for Brent, East (Mr. Livingstone) said that those who pay tax on more than £50,000 should be taxed even more? According to press reports at the weekend, however, the hon. Gentleman's accountant has managed to do some clever tax fiddling for him.
Mr. Clarke: I will not comment on my hon. Friend's second point. We are beginning to quote the hon. Member for Brent, East (Mr. Livingstone) with approval; I have done it myself. There is no point in Opposition Members shrieking derision at their hon. Friend. He is almost the only Labour Member who attempts to make positive proposals. His hon. Friends do not say that they disagree with him: the inclination to go for higher taxation is not disowned. They are silent when we press them, and we shall press them again in the debate.
I shall now deal with the substitute indirect taxes to replace those that the House has rejected and with the increases in duty. The debate is sensible, certainly in the context of Conservative Members. We will support the resolutions but we will do so with some regret. When I was preparing my Budget I rejected those indirect taxes, because, although they raise the necessary revenue, they all present disadvantages which, until we had the vote, I had hoped to avoid.
The first issue is duty on alcohol, which I am obliged to raise to make a contribution to revenue. I received[ a large number of representations about the excise duty on alcohol before I prepared my Budget. I do not meet many of those who wish to speak to Ministers, but all Treasury Ministers meet deputations. I met representatives of the brewers and of the Scotch Whisky Association because, as hon. Members will recall, last year I reflected my concern for the situation that they faced following the opening of the single market and the ending of frontier controls.
One of the delegations was a powerful one and consisted of some of my hon. Friends. It was led by my hon. Friend the Member for Birmingham, Edgbaston (Dame J. Knight) who urged on me the importance to the British economy of the Scotch whisky industry and the need to ease its burden of duty. I accepted that case when I presented my Budget. I had hoped this year to repeat what I did last year—to freeze alcohol duties for the benefit of the British brewing industry and the Scotch whisky industry.

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Unless one wants to load even more on the other chosen sources of revenue, it was impossible to stick to what would have been my preferred policy of repeating that freeze. I assure my hon. Friends who are interested in this matter, and certainly those who came to see me about it, that force majeure compels me to do this: it is not a change of policy. I continue to believe that in next year's talks we must explore the objective of approximation of duties across the European Union. That has been made even more urgent.
I assure the House that we shall sustain and strengthen our actions against the illegal importation of alcohol and tobacco. I am satisfied by recent evidence showing that we are becoming more effective in our operations against criminal gangs of smugglers. Since the ending of frontier controls, we have steadily strengthened the intelligence gathering part of our effort and are becoming steadily more successful.
Mr. William O'Brien: What items other than excise duties could the Chancellor have examined in his second look at the Budget? Is he aware of the jobs that will be lost in brewing and distilling and the effect that that will have on regional economies? Will there be less smuggling because of the increase in duty?
Mr. Clarke: I told the House a few days ago about the alternatives and I do not propose to go over them again. Those who argue for alternatives should face the fact that they are either increases in direct taxation by raising the rates or squeezing the allowances, increasing taxation on business in various ways or indirect taxation. That involves the possibility of raising the rate of VAT on its narrow base or indirect taxation in the form of increased duties. I shall not rehearse again the process by which I arrived at the decision. It had to be indirect taxation.
Mr. John Townend: I am grateful to my right hon. and learned Friend for his efforts to stop smuggling. Of course, we could have put VAT on newspapers and I would have welcomed that. Does he accept that, inevitably, if we are to have any success on the approximation of duties with other countries, at some stage the Government will have to reduce our duties to the level of those in other countries? We cannot expect the problem to be solved by other countries putting their duties up to our level.
Mr. Clarke: That may be so, but I do not want to anticipate our negotiating position. I am grateful to my hon. Friend because, without going wider than the terms of the debate, he sometimes shows a slightly fuller understanding than other hon. Members of how European negotiations proceed. I am all too familiar with coming back from European negotiations and, unless I have received agreement to every last dot and comma of the negotiating position with which I set out, being accused of taking part in another humiliation for Britain. One must go to Europe with a negotiating position. Our position is strong, and we have chosen a perfectly legitimate area in which to raise revenue. We need approximation to make sure that revenue is not lost in one country and gained in another, and that trade is not distorted by goods going across borders.
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We would be reluctant to lose that source of revenue altogether. It is perfectly legitimate to raise duties on alcohol, which some people welcome because they blame alcohol for crime and other problems. The difficulty is unlawful smuggling and the legal trade that is encouraged when people go shopping and take advantage of lower duty.
We must get the loss of duty in proportion. I sympathise with the argument that jobs and so on will be lost, and that sympathy has twice been demonstrated in my Budgets. Nevertheless, with the greatest respect to them, the brewers and the Scotch Whisky Association negotiate in the way that perhaps one negotiates in Europe—by slightly exaggerating the consequences. Changes in brewing have much to do with changes in custom, trade and consumer taste and changes in the industry.
The brewers are making healthy profits, as are manufacturers. I am extremely glad that, because of the recovery, sectors of our industry are showing a healthy recovery in profits. To put the matter in proportion, the best estimate by Customs and Excise of the current loss of duty from goods smuggled from across the channel is about £65 million a year. We must put in proportion the idea that we can simply afford to wave away all that revenue without recovering it elsewhere.
Mrs. Margaret Ewing rose—
Mr. Clarke: I give way to the hon. Lady, who is interested in the Scotch whisky industry.
Mrs. Ewing: The Chancellor will appreciate the importance of the industry to my constituency, which has more than 40 distilleries, in terms of direct and indirect employment. Essentially, I am concerned about how the Chancellor reconciles his decision to put 26p on a bottle of whisky with the reduction of 20p on a bottle of champagne. What kind of message will that send to the other members of the European Union, where 40 per cent. of our export market is based, when he argues for the reduction of discrimination against Scotch whisky?
Mr. Clarke: My statement last week put another 8p back on to sparkling wine, and that was in line with the way that we had based duty before. If one is scraping the barrel for arguments, the champagne thing is fun, but it is fairly irrelevant. The sparkling wines in question include champagne, but they also include many other sparkling wines that are manufactured in this country. The change about which so much fuss was made was a perfectly ordinary, common sense move to bring the duty on sparkling wines into line with that on fortified wines. There was no logical reason for different amounts. My corrigenda statement at the end of last week was to put another 8p on wines, which included Champagne.
The serious point about whisky is that I would have preferred to freeze duty. Scotch whisky is a major employer in the hon. Lady's constituency and in that part of Scotland; it is also one of our most successful industries. The Scotch whisky industry has been even more successful than the brewers in responding to pressures on the trade. It is a successful exporter and is building up its position in many important markets.
The best argument was made by the hon. Lady. In due course, when arguing about the approximation of duty, we shall encourage other countries not to discriminate against

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spirits in their pattern of duties, and perhaps to increase the duty on wine to reduce the distortion. This year, forced as I was to find the revenue, I have not been able to maintain the freeze, but I shall certainly address that key question in talks with our European partners against the background of the policy that I have described.
Mr. Quentin Davies: Does my right hon. and learned Friend agree that, whatever impact personal imports under the single market may have on excise duty or on the trade of off-licences and supermarkets, there is no reason why the brewing industry or the distillers should suffer? It is no more difficult to ship British beer from Burton on Trent or from London to a hypermarket in Calais than it is to ship beer from Strasbourg, Amsterdam or Copenhagen. There is therefore no reason why there should be a negative impact on the volume of production by British distillers and brewers.
Mr. Clarke: I might, with caution, try out that argument on a brewer, but my hon. Friend should bear in mind the position of off-licence retailers and others who have no such protection against the trade.
I turn to the duties on petrol and diesel, which also will not be welcomed by many right hon. and hon. Members. Again, it was quite impossible to raise the necessary revenue without making a further addition to duty on petrol and diesel over and above that which I had previously resolved to impose. Nevertheless, even with the moves we have made, which have good environmental consequences and are welcomed by the environmental lobbies, petrol remains cheaper in real terms than it was 10 years ago. After both increases in duty, unleaded petrol will still be cheaper in Britain than in most of the major economies of western Europe, including Germany, France and Italy.
Tobacco is subject to many of the arguments that I deployed earlier. We are caught in a dilemma.
Mr. Harry Greenway rose—
Mr. Clarke: I shall give way shortly to my hon. Friend, who has a constituency interest in the matter.
The Government are following a policy of raising taxation on tobacco to reduce consumption. That policy has been supported by hon. Members on both sides of the House for some time, so it is not possible to argue against the duty simply on the basis that it is damaging the tobacco industry. It is a positive act of policy to reduce sales and there is no point in shrinking away from it. However, it is never Government policy to damage British sales in favour of continental sales; therefore, the same point that I made about differing levels of duty on alcohol applies. Personally, I am in no doubt—and nor is my right hon. Friend the Secretary of State for Health—that European countries should follow our commendable health policy and raise their duties on tobacco to approximate with ours.
Mr. Harry Greenway rose—
Mr. Clarke: My hon. Friend has many constituents who work in the tobacco industry, so no doubt he has a point of view.
Mr. Greenway: I know that the Labour party spokesman wants to go much further than my right hon. and learned Friend, but does he not realise that cigarettes are not only being imported from France and Germany,
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where duty is much lower, but smuggled too? Does he accept that that means jobs are being exported from Britain? In Gallahers in Northholt, 204 jobs have been lost within the week. My constituents' jobs are being exported to other countries. They cannot accept that, and why should they?
Mr. Clarke: I am sorry to hear about the loss of jobs at Gallahers. As the economy is recovering so strongly, and new jobs are being created, I hope that his constituents do not have to wait too long before resuming work in other jobs. My hon. Friend would find it difficult to maintain that the loss of jobs is directly related to my statement last Thursday. I doubt whether that was the critical decision-making factor. It is also by no means easy to demonstrate that it was a result of smuggling; it is a result of changing habits. The point of taxation policy is in part to discourage smoking. My remarks on smuggling remain. We must tackle smuggling ever more effectively and keep up pressure on other Europeans to raise their duties.
Mr. D. N. Campbell-Savours: Will the Chancellor give way on that point?
Mr. Clarke: I must get on.
Mr. Campbell-Savours: I have waited patiently.
Mr. Clarke: Sooner or later, I shall have to refuse someone. I have not picked out the hon. Gentleman, but I shall certainly make him wait.
I have covered all the resolutions before the House bar one—the first resolution that the Opposition have sought to amend. I can tell from the amendments that they believe that they have read into the first resolution an intention to extend VAT to zero-rated goods. I hope that I am not cutting out a large part of the speech of the hon. Member for Dunfermline, East (Mr. Brown), but before he launches on that I should like to give him a reassurance and undertaking, as it looks like that when one first reads it.
The first resolution is a wholly technical resolution of a kind that has been tabled ever since VAT was introduced in Britain in 1972. It means merely that if, in the course of operating the duties on fuel at an intermediate level and the new ones I have announced—particularly those on fuel—it turns out that anomalies are creeping in and that the drafting is incorrect, that can be changed by order and would not require fresh primary legislation. I am advised that it is quite essential to the proper operation of a complicated tax such as VAT.
The argument has been made before; it is not original. If the hon. Gentleman pretends to read into it a tremendous intention to extend VAT to other zero-rated goods, I shall repeat the undertaking that has been given by all my predecessors since Tony Barber, because the drafting on the Order Paper is the same as that used by Labour Chancellors and not just by Conservative Chancellors. The Government have no intention and would never extend VAT to zero-rated goods without primary legislation. At the moment I have not thought about any future Budget and would not do so. To press the amendments, although they appear to be aimed at a serious political point, would impede the sensible operation of the tax and I hope that the Opposition will not do so.

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I hope that the Labour party will turn instead to taking the third opportunity to try to produce a macro-economic policy of its own. If it plans to vote against any of the resolutions, it must have some germ of an alternative idea in mind about how it would tackle the problems.
I do not wish to ask difficult questions for which the Opposition are not yet ready; I have only straightforward fundamental questions. Is the level of public borrowing too high or too low? Is the general level of taxation we are proposing too high or too low? If the Opposition are unable to answer those questions, they are unable to make a serious contribution to an economic debate.
I hope that we do not hear any more about loopholes. There were £10 billion worth last year and there are none this year. The windfall tax is based on the assumption that when and if a sale of the national grid goes ahead, one taxpayer might be exposed to a particular sum of money replacing a stream of revenue. I shall not go into that again, but at the moment the Shadow Chancellor is putting forward policies that are so shadowy as to be invisible.
This evening the House will vote in a responsible way for resolutions that will deal with the gap in the public finances and, far more important, with the key issue: to back the Government's economic policy which has put Britain on course for recovery.
These resolutions keep intact the economic policy of the Government. That policy is a successful economic policy and is sustaining growth and bringing down unemployment. It must be kept on the road. It is the only sensible economic policy on offer in the House and is strongly supported by the business and financial community. These resolutions are consistent with strong and decisive action, which will give us a powerful manufacturing industrial economy again. I commend the resolutions to the House.
5.9 pm
Mr. Gordon Brown: I beg to move amendment (a), in line 7, leave out "for the time being".
This second debate on the Budget, like the mini-Budget last Thursday, arises because the Chancellor got it wrong over VAT on fuel. He got it wrong by going ahead with it in the first place. He then got it wrong by refusing to listen to the representations that were made before the Budget. He got it wrong a third time by refusing to rethink even when the strength of opposition became clear.
Events have already shown how right we were to defeat the Government last Tuesday. If the Chancellor gets it wrong on an issue as crucial as VAT, why should anybody believe that he can get anything else right? He has already made his views clear about VAT. He wanted VAT on fuel at 17.5 per cent.—not next April but this April. He has voted for VAT on children's clothes. He favours a principle, as he told a constituent, of going even further, and wants to extend VAT to other goods as well. He said at a by-election that not to extend VAT to items, including food, transport, books, newspapers and children's clothes, was "an anomaly". Therefore, we will need more from the Chancellor than the assurances that he gave at the end of the debate, about existing legislation and statutory orders, before we believe that it is not his long-term plan to extend VAT to other items.
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I noticed when I raised the issue with the Chancellor this afternoon that, once again, he refused to give the promise that even the Prime Minister was prepared to give before the last election—that they would not extend VAT to those items.
Mrs. Jacqui Lait: I wonder whether the hon. Gentleman will confirm whether it is Labour party policy never to extend VAT to any of the zero-rated goods?
Mr. Brown: I have said on many occasions that it is not our proposal to do that. The question is whether the Chancellor will tell us his policy on these matters. The hon. Lady should think twice before she intervenes to ask about promises, because when she spoke to her constituents during the previous election, she said, "We need low taxes." She has been unable to deliver that, so perhaps an apology from her to her constituents would be in order before she proceeds to interrogate anybody else.
Mr. Kenneth Clarke rose
Mr. Brown: I shall give way to the Chancellor if he will answer the question that I put to him earlier. Will he repeat the promise that was made by the Prime Minister, that the Government would not extend VAT to food, children's clothes, books and newspapers, and transport? Will he repeat that promise, yes or no?
Mr. Clarke: That is a bit rich considering that the hon. Gentleman just ducked, with no great elegance, the question that was asked by my hon. Friend the Member for Hastings and Rye (Mrs. Lait). He said that his party has no proposals to extend VAT to those items. We have no proposals to do so. He makes extended and distorted use of quotations that I have never considered.
I have said for years that, if we went back and started again, there is a case to be made for having a lower rate of VAT and fewer exemptions. But I have had a policy. I have not extended things. I have had two Budgets. Will the hon. Gentleman give—as he is making so much of this—the guarantee for which my hon. Friend asked? Will he get up and say—he should not if he ever wants to be Chancellor—that he will never extend VAT to any of those goods?
Mr. Brown: I notice—[HON. MEMBERS: "Yes or no?"]—very clearly that the Chancellor has given something away this afternoon that he will live to regret. He has said that he will not give the guarantee that he will not extend VAT to food, children's clothes, books and newspapers, and transport. The Chancellor is now on record in the House of Commons as saying that he refuses to give that guarantee. This is a very revealing afternoon for the House, and I believe that, if the Prime Minister were sitting next to him, he would be very angry indeed that his statement had been contradicted by the Chancellor.
Mr. Richard Ottaway: Will the hon. Gentleman give way?
Mr. Brown: I shall give way once more, but then I must move on.
Mr. Ottaway: I thank the hon. Gentleman for giving way. He is particularly keen on telling people what they have pledged and what they have not in elections. Is he aware that his own election address in 1992 for Dunfermline, East contained the pledge that Labour

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would be tough and protect the environment? It also said that the polluter must pay. What is that if it is not a carbon tax? Is it not just the same as VAT on fuel?
Mr. Brown: Those are precisely the sort of proposals that we have been making—for example, the proposal for a landfill levy, which I notice that the Chancellor is now prepared to support. But before we leave the question of VAT, perhaps the Chancellor will answer one question. He gave a guarantee to the House only a few minutes ago that he would not extend the coverage of VAT other than by primary legislation. Will he therefore withdraw the VAT transport order?
Mr. Clarke: I have been answering questions all afternoon. The hon. Gentleman is answering none, but I am happy to answer questions in his speech as well, if he likes.
The extension of the VAT transport order was done partly under these resolutions and partly under the Finance Bill as well. The VAT zero rating on transport is designed to protect passenger transport. It has now been extended to air balloon rides, funfair rides, to things inside theme parks. This legislation covers anomalies of that kind, but in this case a combination of an order and, I think, measures in the Finance Bill has been used as well.
The hon. Gentleman knows perfectly well what we are talking about. He comes out with a litany about children's clothes, food, and so on, but he has refused to give a guarantee this afternoon that he will not extend VAT to those as well.
Mr. Brown: The Chancellor made a promise that lasted for about three and a half minutes—that he would never proceed with extending VAT other than by primary legislation. The VAT transport order was laid by the Chancellor. Will he withdraw it and put the measure in the Finance Bill so that we may have a proper debate on the matter, or will he dishonour yet another promise? I think that the House knows exactly where the Government stand on issues such as VAT.
We must look at the Budget as a whole and look at its effect on the living standards of people throughout this country.
Mr. Quentin Davies: Will the hon. Gentleman give way?
Mr. Brown: I shall give way if the hon. Gentleman wants to ask me something that I have been talking about in the past few minutes.
Mr. Davies: Indeed. Before the hon. Gentleman moves on to other subjects and tries to bury this issue, will he or will he not give a guarantee to the House this afternoon that he would not extend VAT if ever he were Chancellor?
Mr. Brown: We judge the Conservatives by their actions. The hon. Gentleman has the gall to come to the House this afternoon and talk about promises on taxation. What did he say to his electorate in Stamford and Spalding? He said:
"We are absolutely committed to continuing to bring down taxes."
Yet another promise has been broken by Conservative Members. [Interruption.]Conservative Members are clearly living up to the Maples memorandum this afternoon. They are behaving as though they want to
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disrupt the debate entirely, they are so embarrassed by the broken promises of two years' standing over the whole issue of taxation.
Mr. Nigel Evans: Answer the question.
Mr. Brown: The hon. Gentleman asks me to answer a question that the Chancellor will not answer. The Chancellor made a promise five minutes ago and broke it five minutes later.
I want to look at the issues affecting the Budget in relation to living standards. Let us look at how it affects the home owner. Let us look at the Budget overall. Horne owners are faced with mortgage rises that have already come through since September and are facing likely mortgage rises from decisions on interest rates that were announced last week. The Chancellor must justify and explain to the House why the very same home owners are also being hit by the withdrawal of mortgage tax relief and the imposition of a home insurance tax. We have seen even in the social security statement—at a time of growing insecurity in the jobs market, which has been recognised by surveys and opinion polls only this week—the withdrawal of support for mortgages when people are unemployed.
Home owners have been hit by this Budget, as they were by previous Budgets. They have been hit with interest rate rises, the withdrawal of mortgage tax relief and home insurance tax. As they will tell Conservative Members—no doubt Thursday's by-election in Dudley will serve as a starting point—unemployed people are now hit by the withdrawal of mortgage tax relief.
How has the Budget hit motorists? We have often heard the Chancellor defend an increase in the cost of petrol; but let us examine the overall cost to the motorist. The price of petrol has now risen twice, a car insurance tax is being introduced and vehicle excise duty is being increased. It is no wonder that motoring organisations express worries about people's ability to hold on to their cars.
Let us consider the cumulative effect of Budgets on widows. The starting point at which a widow paid tax used to be £99; now, as a result of the changes made by the Chancellor, it is £93. The Chancellor tells us that we should not worry about his decision to cut duty on champagne, but I believe that people will observe the contrast between his ability to cut champagne duty and his ability to tax widows at the same time.
The Chancellor also defended his measures in relation to beer and spirits this afternoon, saying that last Thursday he raised the tax on champagne. What, however, is the final result? Beer is up by 1 p and whisky by 26p, while champagne is down by 19p.
Mr. John Townend: Does the hon. Gentleman really think it sensible to levy a higher tax on a bottle of claret costing £25 than on a bottle of cheap Australian sparkling wine costing £3? The previous position was an illogical anomaly that the Chancellor has put right. It is ridiculous to make out that we are trying to benefit the wealthy by cutting the price of champagne.
Mr. Brown: That shows the difference in the priorities of the parties. I regard it as an anomaly that widows who used to start paying tax at £99 are now starting to pay it at £93. I think the hon. Gentleman would agree that, in a

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Budget that raised everyone's taxes, it was not a priority for the Chancellor to cut duty on champagne for people who have enough money to afford it.
Two weeks ago, the Chancellor said that he had "listened to the concerns" of industry. He said:
"No Chancellor can remain unmoved in the face of this".— [Official Report, 29 November 1994; Vol. 250, c. 1096.]
Let me ask the Chancellor and the Chief Secretary how many jobs they expect to be lost as a result of the rise in beer and whisky duties. If the Chancellor could not remain unmoved in the face of those concerns two weeks ago, will he now tell us how many jobs he expects to be lost?
The Chancellor presented a second argument. He said that he could have introduced no alternative measures that would not penalise middle or lower-income Britain. He gave us the impression that he had been as fair as possible. But what did Mr. John Spiers, of BESt Investment, say in the Financial Times only last week?
"If we had written it ourselves we could not have come up with a better Budget for the tax shelter industry."
Those are not my views; they are the expert views of people close to the industry, who do not usually speak highly of this aspect of Budgets.
Mr. Spiers went on:
"I cannot see why ever anyone should pay capital gains tax again."
Commenting on the Budget, the Financial Times said:
"The scale of the incentives dangled by the Chancellor suggests sponsors and venture capitalists will be queueing round the block to launch venture capital trusts."
That leads me to a statement issued by the journal of BESt Investment, entitled "Tax Shelter Service". The Chancellor had better be aware of the implications of the measures that he is asking us to approve. The company states:
"The Budget may have been regarded as boring … but for the tax shelter business it contained arguably the most exciting combination of measures ever seen. The Government is now offering up to 60 per cent. tax rebates on investments … Investors will have no less than four opportunities for sheltering tax … As a result we cannot see why anyone should choose to pay capital gains tax in future."
Why is all that happening? Why is the Chancellor's Budget leading to the biggest ever boost for the tax avoidance industry? Far from ending tax abuses, as the Chancellor implied he was doing in his speech last week, he has opened up many more. Far from dealing with the criticisms of executive share options that have been put to him—not least by the vice-chairman of the Conservative party—he has cost himself much more money, and in the process has introduced more tax shelters for the capital tax avoidance industry.
Mr. Kenneth Clarke rose—
Mr. Brown: I am happy to give way to the Chancellor, but I think he should explain why the tax shelter industry describes the Budget as the best boost that it has had for years.
Mr. Clarke: The hon. Gentleman keeps slipping between the words "tax shelter" and "tax abuse". What he describes are people trying to explain the tax advantages of investing in small, emerging, growing companies through the vehicle of venture capital trusts. It is new
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investment in new businesses and new jobs. It is absurd to describe those tax reliefs as a tax abuse; they are good for small industry and good for employment.
Mr. Brown: If the Chancellor were telling us the whole truth, he would mention the fact that he has extended the tax reliefs to the property industry. He has reopened all the abuses that made the closing down of the business expansion scheme necessary. Far from simply helping new manufacturing industry to get off the ground, as the Chancellor implies, the Budget—in two instances—extended the capital gains exemptions to the property industry. It is for that reason—the return of 60 per cent. tax relief, not the creation of jobs—that the tax avoidance industry is telling people about the great new opportunities that are available to them.
Last year, the Chancellor said that we would receive £1.3 billion from capital gains tax revenues. Now, in the Budget, he has downgraded the amount to £800 million. Despite all that he says about the boom in the economy, he has frozen the amount that he expects to receive next year at £800 million as well.
The Chancellor tells us that there is not a single alternative that he could consider, other than penalising middle and lower-income Britain, and that it would be wrong to end the tax privileges surrounding executive share options. In fact, the Chancellor's Budget has opened up even more opportunities for tax avoidance—opportunities available both to those who hold executive share options and to those who are prepared to avoid their capital gains tax liability throughout the 1990s and probably beyond.
I remind the Chancellor that it was not me alone who raised the question of capital gains tax abuses. The vice-chairman of the Conservative party put it thus:
"Although in the 1980s Conservative seemed to promise a classless society … the reality is now that the rich are getting richer on the backs of the rest who are getting poorer. Excessive pay packages especially in the privatised utilities cause real offence. Could we in future tax share options as income not capital gains and introduce some level of options above which tax would be charged as they rise in value not just when they are exercised?"
The Chancellor says that, by refusing to do that, he loses only £60 million. Indeed, he said in the House last week—the Chief Secretary nods—that the sum was only £50 million to £60 million. That is not an insubstantial amount; it could be used to defray the rising cost of dental treatment or eye tests, for instance. It could have given a better deal to many people who face tax rises. I do not see how the Chancellor can justify the loss—if it were so—of £60 million through this scheme. Even the Financial Times has said:
"the real joy of executive share options is that there is no risk of losing money."
The Association of British Insurers and the National Association of Pension Funds have said that the schemes may not be in the interests of shareholders, the public or employees. All the research that has been carried out recently shows that two thirds of the schemes do not have performance targets. The all-party Select Committee that examines these matters—its members come from both sides of the Chamber, but it is dominated by Conservative Members—criticised the schemes and commented that they rewarded short-term performance and not the long-term needs of the economy. Yet the Government have refused, even though it has cost £370 million on their own figures, to deal with the problem.

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If the Chancellor of the Exchequer examines carefully the Treasury's assumptions about the revenue that it loses as a result of executive share options—I do not believe that he has—he will find that the assumptions are wanting, and that the loss is substantially larger. Perhaps the Chief Secretary to the Treasury will do us the courtesy of responding to my arguments one by one when he replies later this evening.
The Chancellor of the Exchequer should understand that the estimated £60 million is based on some strange assumptions. Those who hold executive share options include Lord Young, Sir John Nott and other well-known Conservatives. It is assumed that those men, who are sophisticated in terms of financial markets, will buy shares other than at the best time for share values. It is then assumed that they will sell just about every share on the day that they buy them. It is further assumed that most of the capital gains tax exemption has been used in other ways and is not available to be set against share options. The next assumption is that none of the advantage is transferred to wives or spouses.
Mr. Kenneth Clarke: Will the hon. Gentleman give way?
Mr. Brown: I shall give way if the right hon. and learned Gentleman can correct what I have just said.
Mr. Clarke: I am advised that the figure that I used includes the possibility of transfers to spouses.
Mr. Brown: Why is it not stated in the assumptions underlying the proposals, especially as the Chancellor of the Exchequer promised at the beginning of the year that all the assumptions—the promise was based on a freedom-of-information gesture—would be explained to the House? In fact, the necessary statement has not been made. That is why we have a figure as low as £60 million. The Chancellor has been wrongly advised.
Why is it also assumed that men or women with executive share options will fail to perceive the advantage of defraying up to £200,000 of their capital tax liability by using the various schemes that the Chancellor has over time introduced, or by continuing to use the reinvestment relief that is available? It seems that the assumption behind the Treasury calculations is that the business acumen, flair and entrepreneurial spirit for which share option holders have been praised by the Government desert them on the day that they get hold of an executive share option. The Treasury's £60 million is based on a guesstimate that share option holders will act irrationally and against their interests when it comes to dealing with their own finances.
The main tax planning tool is the annual capital gains exemption—the spreading of disposals to wives. At the same time, it is assumed that shares will be bought 'when it is not the best time to buy them and when they do not represent best value. The Government's assumption will lose the Treasury substantial moneys.
As I have said, Lord Young has executive share options. He could pick up £1.1 million in profit on share options. Let us assume that he is granted them and decides not to sell in one go. He can then spread his capital gains tax liability over 10 or more years. He can transfer some of the shares to his spouse. He could take up a venture capital trust now. He could secure reinvestment relief and invest in property. As I have said, he could use up all his
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capital gains tax liability by means of such schemes. There is no reason why he or anyone else around him should have to pay CGT. None of these factors is properly taken into account in the Treasury's calculations.
If a few men in the privatised utilities can set against their share option liabilities—they run into £3 million for three top directors of PowerGen and £1 million for the top man at National Power—the various schemes to which I have referred, the moneys that will be received as a result of executive share options will be far less than assumed. The Government have not calculated the cost to the nation properly; they have not been serious about tackling the abuses which have arisen; and they are unaware of the anger throughout the country at the fact that they are prepared to penalise middle and lower-income Britain while allowing those who are extremely rich to go ahead and cash in their executive share options without paying a proper amount of tax.
Mr. Nick Hawkins: Does the hon. Gentleman agree with his departing colleague, the right hon. Member for Islwyn (Mr. Kinnock), that those who fall into the so-called category of the undeserving rich are those earning less than £60,000 a year—I ask the question in the light of the hon. Gentleman's recent remarks—or does he feel that the figure should be pitched a little lower than that?
Mr. Brown: The hon. Gentleman has misread the remarks of my right hon. Friend the Member for Islwyn. I talked to my right hon. Friend about those remarks on the day he made them. He never mentioned "undeserving rich". He and I have made a distinction between those who create wealth, start businesses and provide jobs—they deserve rewards for doing so—and others who under the Government have been given, because of monopoly positions or other privileges accorded to them, unfair rewards that cannot be justified in any taxation arrangements that the Government may make for them. When a millionaire can avoid paying any income tax, there is something extremely wrong with the taxation system. The hon. Gentleman should put his question to the Chancellor of the Exchequer, not to me.
Mr. James Clappison: Will the hon. Gentleman give way?
Mr. Brown: I shall give way once more and then I wish to conclude my remarks.
Mr. Clappison: I am grateful to the hon. Gentleman, especially as he has said that he wants to bring his remarks to an end.
Perhaps the hon. Gentleman will consider his overall macro-economic strategy and say something about borrowing. Does he accept the Government's approach to borrowing, or would he be prepared to accept a higher level of borrowing? Which is it?
Mr. Brown: I have said on many occasions that the aim of policy that is directed towards the public sector borrowing requirement should be to enable us to fund consumption. Investment is justified in certain circumstances, as any company or family would invest. The golden rule to which I would adhere is that consumption should be funded over the cycle by revenues. In my view, investment justifies borrowing in certain circumstances. That is a far more prudent policy than the

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one that the Government pursued over the 1991–1993 period. Either they misled us about the real position of the economy or they have been entirely incompetent in implementing their policies.
The executive share option issue will not go away. We heard today that Mr. Maurice Saatchi of Saatchi and Saatchi is proposing at some stage to cash in share options that would be worth about £5 million. He obviously meant it when he said words to this effect, "Don't let Labour ruin it." I refer to the slogan for the 1987 election. The tax bombshell was for others; the tax bonanza was for him.
For people like Mr. Saatchi and those in the privatised utilities, there is a national lottery that does not involve scouring the country looking for the winner. Winners are known in advance. By naming those who occupy the boardrooms of privatised utilities, we can predict with precision those who are making the millions. It is a lottery in which the participants do not win once: they win every year under the Government. Indeed, many people have been winning for 15 years. They are the happy few. Many of them are part of a band of tax avoiders under a Cabinet whose members make promises to take good care of them.
We propose that the Government should consider levying a windfall tax on utilities. The Chancellor of the Exchequer said that he would not consider the proposal in detail because he rejected the concept of a windfall tax, despite the fact that one had been imposed on the banks by a Conservative Government in 1981.
Let us consider the facts; the House should be aware of them. Utilities have made profits of £45 billion during the recession, doubling their profits. The profits of electricity units increased by 250 per cent. Profits within the water industry have virtually doubled to £1.8 billion. National Power has trebled its profits during the same period. PowerGen has doubled its profits. In the past few days, it has been reported that Northern's dividends have increased in value by 30 per cent. while Eastern's and Southern's have increased by 25 per cent. and 24 per cent. respectively. The business is so lucrative that many electricity companies are buying back their own shares and making extra payments in dividends.
Is it not obvious—
Mr. Nick Hawkins: They should cut prices.
Mr. Brown: The price cuts will be coming from next year. We must deal with the situation that has arisen this year and last year as a result of the excess profits that have been made.
Mr. Peter Rost, a former Conservative Member, who now represents the Major Energy Users Council, said:
"The right course is for the taxpayer to benefit. It is right to claim back the money and use it to pay for policies that benefit the economy as a whole."
He speaks for a substantial body of opinion. Artificially created profits have resulted from the monopoly position that the Government have given to industries through privatisation and their profits have doubled during the recession when most ordinary industrial companies had no profits. That should be re-examined.
The Chancellor of the Exchequer should consider the position in relation to the national grid. Will he confirm that, for the purposes of sale, the national grid was valued
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at £1 billion or less when it was sold to the electricity companies and that it is now valued at nearly £4 billion—some people say £5 billion—that a windfall profit will be made as a result of its demerger, that the Government have a golden share in the national grid which they should use to extract the best benefit for the country, and that the electricity companies are even resisting a scheme that would give a substantial amount of the money to their customers? Is it not right that the public should share in the benefit from the windfall profit, which has accrued not because of the companies' good management but because the Government gifted them the resource?
If the Chancellor rejects the idea of a windfall tax, let him consider the comments of Sir Geoffrey Howe in 1981, who said that the business sector—this was his justification for the windfall tax—had largely been protected from the effects of recession. That has happened in relation to the utilities because of the monopoly position. When the Chief Secretary to the Treasury argues against that view this evening, he will be arguing against Lady Thatcher's position when a Conservative Government were in power. Sir Geoffrey Howe said that profits
"have increased sharply, both absolutely and by contrast with the experience of most other businesses."
That has happened in relation to the utilities. He said that he could not avoid the conclusion that he should require banks
"to make a special fiscal contribution."—[Official Report, 10 March 1981; Vol. 1000, c. 772–73.1]
If it was right for the banks with windfall profits to make a contribution, it is surely right for the utilities to do so, especially when we know about the profits to be made by the national grid.
The Chancellor says that he knows nothing about the taxation benefit that may accrue, but will he confirm that, the day after the Budget, a week before his mini-Budget, the President of the Board of Trade met the electricity companies to discuss the windfall that should come to the Treasury once the sale had taken place? The Chancellor looks as if he knows nothing about it. He should check what sources of revenue are available before he introduces new taxes on ordinary people.
The Chancellor prides himself on being tough on ambulance men, tough on prison officers, hard on the people that he has been up against, including teachers, and hard on doctors; but when it comes to the utilities and to people at the very top with substantial sums of money, he is a soft touch, and the Budget is increasingly viewed as unfair.
Let us apply the fairness test to the Budget. It is clear that income tax cuts were made between 1979 and 1992 for people at the very top—the top 1 per cent. received 30 per cent. of tax cuts and the top 5 per cent. received nearly 50 per cent. of tax cuts. However, the top 5 per cent. do not pay 50 per cent. of tax rises; at best estimates, they pay only about 10 per cent. That is not a fair approach, given the substantial benefits that they received throughout the 1980s, which even Mr. Maples has been forced to acknowledge.
What is the strategy behind the Budget statement and the follow-up statement that had to be made last Thursday? It is the only strategy that the Conservative party has left for the next election. It is not an economic strategy but simply an election strategy. There are no taxes that the Government will not be prepared to increase

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and no suffering that they will not be prepared to impose to create the scope for what they think is the election-winning card—a tax cut next year, running into an election next year or the year after. That is how the Prime Minister in particular views the position.
Let me tell the Chancellor the facts about taxation which will confront the electorate in 1996 or 1997. In 1992, £37 billion was paid in VAT. Next year, it will be £48 billion. Despite all the promises at the previous election, the amount taken in VAT has risen by £11 billion and much of that amount arises from increases announced by the Government.
The Chancellor went to the electorate with a pledge that he would lower income tax. Let us consider what has happened in relation to income tax and national insurance. In 1992, total income tax and national insurance paid amounted to £72 billion. Next year, it will amount to £90 billion. In 1992, £57 billion was paid in income lax. By next year, it will be £70 billion. Even if the Government were able to cut the basic rate of income tax by 5p in the pound, the overall tax bill would be higher in 1996 and 1997 than in 1992 when the election was fought.
As a result of all the tax rises that have taken place, next year the British people will pay £50 billion more in taxation than they paid in the 1990–1992 period. Even a cut of 5p in the basic rate of income tax will not undo the damage that is equivalent, as the Chancellor admits, to 7p in the pound. That is why Conservatives will be embarrassed in their explanations to the electorate in the next election campaign.
When we face the next election, we will have tax rises that have been real and lasting, that have happened all the time and that have hit the many most. That should be compared with tax cuts that people will realise are token, an attempt at a pre-electoral bribe and beneficial to the few most. An election year tax cut, contrived to obscure relentless increases in taxation, year after year, will not impress the British people, especially when it is clear from what we have said today that the biggest beneficiaries of the Budget and the mini-Budget statement will be people at the top who are able to shelter substantial capital gains through tax avoidance.
Where the Chancellor could have been fair, he has been unfair. Where he could have taxed excesses at the top, he has taxed the daily purchases of the vast majority. Where he could have closed tax shelters, he has opened them up. He has taxed beer but cut tax on champagne. He has even introduced new taxation on ordinary savers but given millionaires huge windfall help. A tiny minority of the people stand to benefit most as a result to his measures.
These are not the Budget measures of a caring or competent Government. These are the Budget measures of a Government who are out of touch with the British people. The House, by its actions and speaking on behalf of the public, stopped VAT on domestic fuel rising to 17.5 per cent. It is time for the House and the people of this country to stop the Government. What the people of Dudley, West will say on Thursday, the whole country will say at the earliest possible opportunity, and the Government will go.
5.47 pm
Mr. John Biffen: I apologise to the House and, more particularly, to the Front-Bench spokesmen, that I have an unbreakable commitment that
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will keep me from the bulk of the debate, including the winding-up speeches. I assure the Whip, however, that I shall be here for the vote and I shall, I hope, compensate for my bad behaviour by making a short speech.
I always enjoy these occasions, not least because my right hon. and learned Friend the Chancellor of the Exchequer clearly revels in these exchanges. He revels in that good-natured bruising, rather like Brian Clough in happier days, as he berates his opponents and even, in more hilarious moments, his friends. I thought that I should get in with an early bid for his favour by saying how much I welcome his decision to present the Budget resolutions. It would have been ill-advised to take the implied advice of the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) and to allow the elasticity of the public sector borrowing requirement to cope with the statistical problem.
Similarly, I welcome my right hon. and learned Friend's decision not to place any further pressure on public spending, partly because it is often an illusory gesture that only rephases public spending commitments, but also because the local government settlement this year is extremely stringent.
I should like to reflect on the unique nature of the corrigendum, as my right hon. and learned Friend called it, to the original Budget statement. It has come about because of a taxpayers' revolt. Taxpayers did not exactly take to the streets, but they nevertheless made it known to Members of Parliament in the most powerful and genuine way imaginable that VAT on domestic fuel was inequitable and challenged a great many of the inherent value judgments about our taxation priorities. That is not a wholly novel experience, because almost exactly the same thing happened with the community charge.
My mind strayed back to the happy days before the 1979 general election, when Tory policy on taxation and public spending was reinforced by the experience of proposition 13 in California, where Howard Jarvis and Paul Gann pioneered a revolt on the streets to enforce tax discipline and, subsequently, public spending discipline. The movement that we are experiencing is subtly different.
There is no doubt that the pressures being put on us are against any disturbance of our inherited tax pattern. The community charge was a new tax and the extension of VAT to domestic fuel was an innovation involving an existing tax, but it was deemed to go beyond the original social objectives of VAT, which is what I shall dwell on for a moment.
I understand that my right hon. and learned Friend the Chancellor did not have much time to manoeuvre, but he responded to last week's events by reinforcing all the old traditional taxes. We have in fact diverged fractionally from our European Union partners as a result of this exercise, but I dare say that there will not be many damp handkerchiefs on that account.
The House must recognise the disciplines on it that are implicit in the strong public reaction against further taxation, especially in certain respects. The hon. Member for Dumfermline, East (Mr. Brown) is perfectly right to take up the cudgels against the extension of VAT. My right hon. and learned Friend the Chancellor responded fraternally, but it was a bit of a custard-pie exercise. I did not think that it was altogether real politics. Is it seriously supposed that any party wants to extend VAT to food, transport or housing? The hon. Member for Dumfermline,

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East points across the Chamber, but I would love to know what he thinks in his heart is the difference between his conditional stance and that of my right hon. and learned Friend.
Those are bound to be conditional stances because we do not conduct our fiscal policy in a vacuum. It is conducted with the advice, guidance and nudging of our European Union partners—and with the negotiating skills of which my right hon. and learned Friend feels that he is possessed. That brings us into a genuine confrontation with our European partners, not necessarily a bitter confrontation, but one that the House must recognise. Their taxation policies proceed from quite different social and economic backgrounds from ours.
We have always had a cheap food policy. Historically, it was based on free trade, but there are now social considerations in deciding to have a zero rate on food and travel and, until recently, on fuel. We know what storms are released when one begins to disturb that social pattern. It is a matter of great anxiety for Chancellors and shadow Chancellors that their tax manoeuvres are constrained in that way, but our experience of the past few months is that they are so constrained.
There is a European context to this debate. That is not the paranoia of a Tory Euro-sceptic, but the calm reflection of someone who tries to be tolerably well informed about what is happening around and about. One cannot talk about convergence, cohesion or a single currency without accepting that they have implications for a fiscal pattern that will have broad comparability across the European Union.
I watched Opposition Members this afternoon with an almost missionary zeal and I have to ask what the parliamentary Labour party's position is on Europe, or that of Labour Back Benchers. Originally I would have said, and will still say, that they are today's Trappists and tomorrow's sceptics. There is not a significant element in the Labour party that would trade in our present taxation pattern and social objectives expressed in our low or zero rates of tax over wider areas of the Community. For them, there is no merit in that. There may not be much merit in it for many others, but it becomes politically impossible to put taxes such as VAT on food, travel and housing if it is seen as part of a deal inspired by external agreement and force.
Dr. John Reid: Surely the real comparison is not between the United Kingdom and other countries, but between the total taxation levied on the typical individual or family in Britain when the Government came to power and that levied 15 years later. As my hon. Friend the Member for Dumfermline, East (Mr. Brown) constantly points out, despite the fact that a central plank of the Government's programme was to reduce taxation, the average share of the typical family's gross income that goes in tax has gone up in 15 years from just over 32 per cent. to 36 per cent. That is the real comparison.
Mr. Biffen: I am happy to acknowledge the underlying shift in public spending that has occurred under the Conservative Government. I suspect that the hon. Gentleman will find that roughly the same has happened in other western European countries, because in many ways they have exactly the same social characteristics as
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us. They have the same population structures and the same demands from the elderly and the young, which all make for a powerful spending base for the Government.
My point is that we have come to finance that spending in accordance with our past social and economic judgments as to what were acceptable balances of taxation. We shall not find it easy to move away from that which will inevitably bring us into conflict with other economies that have different taxation patterns but which requires movement on our part in the light of common commitments within the European Union.
My thoughts on the matter were given a particular focus by The Times on Monday. At the Essen summit meeting, Mr. Kohl said that the Prime Minister's Euro-sceptic critics would be
"swept away by the wind of history, as they deserve".
It is nice to be told to hitch up one's Lederhosen and get marching into the future, but it is not like that. The social and economic judgments that have created our tax policy and structure came about because our constituents put pressure on their Members of Parliament who, in due course, determined the system that we now have. It is not one that can be easily mortgaged to outside interests, and nor should it be.
5.58 pm
Mr. Malcolm Bruce: I always enjoy following the right hon. Member for Shropshire, North (Mr. Biffen), whose contributions are nothing if not individual. However, it is important to put it on record that this particular tax change was an entirely self-inflicted wound for the Government and did not originate in Brussels.
It is extraordinary that the turntable has revolved to such an extent in two weeks. We were told initially that the extension of value added tax on fuel was absolutely crucial to the Government's Budget requirements and that the £1.5 billion revenue that it would raise was irreplaceable but, within a fortnight, the Government came up with alternative measures and settled for almost half of what they had said was absolutely essential. They have settled for £750 million to £800 million instead of £1.5 billion.
We were also told that if the House of Commons were so foolish as to vote down the extension of VAT, it would have a catastrophic effect on interest rates, which would rise by 2 to 3 per cent. The Chancellor may, of course, have been simply trying to protect himself from what he saw as the future effect of his current economic policy. But, so far, there is no sign that any such emergency increase is anywhere in the wind.
Indeed, the Governor of the Bank of England, giving evidence to the Treasury and Civil Service Select Committee, of which I am a member, made it clear that, as far as he was concerned, although the outcome of the vote may have affected the timing of the increase—at his request, the meeting was brought forward to 8.45 am as opposed to 9.30 am—the increase was related to the overall economic situation and his judgment of what was required at the time and had nothing whatever to do with the changed circumstances resulting from the vote.
Just for the record, it was interesting that the Chancellor indicated that he decided to increase interest rates. Of course, technically that is absolutely true, but the Governor of the Bank of England made it clear that the

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increase was at the Governor's request. So there may have been a slight difference in perception of exactly who was making the decision.
The right hon. Member for Shropshire, North made an interesting point about taxation and the distribution and balance of taxation, which had not been made before in the debate. The Government and the Conservative party ought to address it. When Conservative Members set out a policy of cutting income tax in 1979, many naive souls thought that they meant just that; nothing else. Some people thought that if they voted Conservative, they would pay less income tax. Hooray! Hallelujah! Reassuring speeches continued throughout the past 15 years saying that that would be achieved without any cuts in education or health. The Conservatives said that there would be painful spending cuts in general, but when it came to the specifics, Ministers were always ready at the Dispatch Box to say that social security spending was being protected, health spending was being protected and education spending was being protected.
That was, of course, a fantasy world. The standard rate of income tax was reduced, but that reduction was more than compensated for in other taxes elsewhere, which fell more unevenly and more unfairly. The intervention of the hon. Member for Motherwell, North (Dr. Reid) was more about the burden that has fallen on the average family when it calculates its total tax payment than about the deductions at source on its income.
Mr. Nigel Evans: Is the hon. Gentleman trying to say that the Government tried to deceive the electorate by saying that income tax would come down, but that any shortfall would not have to be made up from expenditure taxes? That is not true. The hon. Gentleman must remember that we fought those general elections in that period on a manifesto which said that we would switch taxes away from income tax to expenditure taxes. That is exactly what we have done.
Mr. Bruce: I seem to recall that Lord Howe, as he now is, said that he had no intention, when challenged, of doubling the rate of VAT. Of course, he was right, since it has risen from 8 per cent. to 17.5 per cent. That statement was specific. Indeed, when pressed at the last election, the Prime Minister said, in a formula that we all now recognise, that the Conservatives had no plans to increase taxes. That phrase means, of course, that they will do whatever they please as and when the time arises. However, the public have learn to understand that formula.
When the Chancellor made his second Budget speech, I made the point that he seemed absolutely determined to ensure that he got the revenue for which he settled from the most painful and irritating taxes on consumers, which they would really feel. I described that as "the politics of pique". I believe that it is just that. I find it extraordinary that the Chancellor could have found the money in other ways, causing less irritation and, indeed, less inflationary pressure, to which I shall return, yet chose not to. In fact, in his Budget, he gave away just over £1 billion in tax reductions, which he clearly decided were more urgent and more important than responding to the public demand not to extend VAT on fuel.
Certainly, quite a number of those tax changes were not urgent, or required or necessary to any strategy, public or private, which had been declared or communicated to the electorate. If the Chancellor had been in touch at all with
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public opinion, he would have recognised that he had room to manoeuvre, and could have made a virtue of not going ahead with the second tranche and saved the Government from the embarrassment of being defeated in the House.
I agree that the Government's defeat in the House of Commons has had a beneficial effect on the public's belief that the House, perhaps, for a change, has some real control over the Executive. However, the Chancellor has done nothing to improve the credibility of the Government, of which he is a member. Indeed, he could have retrieved a little of that credibility if he had been only a little more sensitive and a little more in touch.
The pique has gone into taxes on drink and petrol. The Chancellor tried to say that it was all the Opposition's fault. From the Liberal Democrats' point of view, all I can say is that we clearly identified alternatives which would have provided the money that he now says is necessary and which would not have caused the irritation and inflationary pressure.
When I questioned the Chancellor in his opening speech on that inflationary pressure, he said—perhaps it was an understandable answer—that the new tax changes were slightly less inflationary than the extension of VAT on fuel. My understanding is that VAT on fuel would have put 0.4 per cent. on the retail prices index, and the subsequent changes announced will put 0.3 per cent. on the RPI. However, when we are working with inflation levels of 2 per cent. or thereabouts, those increases have significant impact, which one would have thought that the Chancellor would wish to take on board.
Of course, 0.1 per cent. on the retail prices index, as, indeed, the Chief Secretary to the Treasury was telling the Treasury and Civil Service Select Committee yesterday, has an immediate effect on the uprating of social security benefits. From reading the Chancellor's statement, I understand that social security charges rise by £160 million for every 0.1 per cent. on the retail prices index. In those circumstances, I put it to the Chancellor that, if he had not sought to get that money from putting up taxes at all, he would saved himself more than £600 million in social security uprating requirements. It seems strange that he did not take that opportunity.
I want to address the particular point of the extra duty on drink. A serious industrial issue arises, which the Chancellor has acknowledged and accepted. Indeed, I welcomed his response to the hon. Member for Moray (Mrs. Ewing), which implied that he was prepared to look at the issue again to see whether there could be an adjustment in the distribution of drink taxes that would be beneficial to the whisky industry and, incidentally, I suppose, to gin makers as well. The Chancellor said on 29 November that his reason for not putting duty on drink was that he recognised the industrial issue and the concerns over smuggling. He said:
"No Chancellor can remain unmoved in the face of this".— [Official Report, 29 November 1994; Vol. 250, c. 1096.]
Having been moved then, a week later he had moved right back again. He has put pressure on the industry in ways that most of us who have a direct interest in the health of the Scotch whisky industry cannot understand. We have distilleries in our constituencies and therefore a real understanding of the industry's difficulty in the face of tax changes, which has been acknowledged in the past two Budgets.

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Wine is relatively less taxed than whisky. With the greatest respect to a few vineyards in the south of England, wine is not one of the United Kingdom's great beverages that we produce in substantial quantities and not one of our great industries. On the other hand, Scotch whisky has a global market in which we are pre-eminent. It is clearly acknowledged by the industry that its health in the home market is a major determinant of its continuing ability to sustain a healthy export market. If the Chancellor were determined to take his money from alcohol, he should have gone for the wine market rather than for the whisky industry.
I find it puzzling that the Chancellor seems to be more concerned about the sensitivities of the wine and champagne industries, which are not British—we do not make those products in significant quantities—and rather less concerned about a major home-grown industry. I hope that he will address that concern in a radical fashion, which will give the industry some confidence and optimism in its future regime.
I am not alone in that view. The Institute for Fiscal Studies, referring to that point, stated:
"If the relevant measure of 'sin' is the alcoholic content of the drink, then there may be an argument for narrowing the 'tax per litre of alcohol' gap between spirits, and wines and beers. This would have the added benefit of lessening the current discrimination against a largely domestically produced good."
I hope that the Chancellor will consider that recommendation seriously, because it would be extremely welcome. I take his response to the hon. Member for Moray as a sign that he might be prepared to do that.
The increase in tobacco duty seems to be widely recognised as an area in respect of which there is a clear and unarguable health problem and where tax is a reasonable way of dealing with that problem. However, in the Liberal Democrat alternative Budget, we would have used the money specifically for the national health service.
We are particularly cross about the petrol tax. The Government do not seem to have a strategy for transport. The lead story in The Guardian today refers to the completely shambolic state of railway privatisation and the lack of a transport strategy. People in rural areas know that we do not have the potential for significant public transport development. As a consequence, the Government have simply increased the cost of using a car, particularly in rural areas, without a corresponding reduction elsewhere.
The Liberal Democrats believe that the Government should have cut vehicle excise duty, at least on small fuel-efficient cars. That would have reduced the tax on car ownership. As a result of that, one could have justified increasing tax on petrol so that that was a tax on use rather than on ownership. Increasing petrol tax while increasing vehicle excise duty imposes a burden with no compensation for people living in rural areas.
The Chancellor could have found the money in other ways. Indeed, I sent him a letter in which I enclosed my suggestions for raising that money. At least £600 million worth of tax cuts in the Chancellor's original Budget were unnecessary. The savings in respect of social security uprating by not including it in taxes would have been about £600 million. There were other areas where waste
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could have been eliminated in Departments, and that would have provided more revenue than the Chancellor has raised.
Perhaps the Chief Secretary to the Treasury would care to answer a question to which I have not received a satisfactory answer. He suggested to me yesterday that there was no way of cutting public expenditure in the current year once the Budget is set. I do not accept that it is not possible on procurement strategies, about which the Chief Secretary knows something, to say that, as the inflation outturn is better than expected, one is looking for additional savings to come back. I do not believe that that could not or should not happen.
I also want to know why the Government have done nothing about the more than £500 million that they are spending on consultants when the civil service analysis suggests that they have produced only £10 million of material benefit. That is clearly an area in respect of which there is identifiable waste inside and outside the Government.
For the benefit of the House and the Chancellor, I say that Liberal Democrats accept the need for a disciplined approach to budgeting. The Chancellor wanted to know what level of borrowing is acceptable and whether it was too high or too low. We have been working on the convergence criteria as a reasonable base to work towards. Three per cent. of gross domestic product is about £22 billion.
When we approached our budgetary exercise this year, we were quite clear that as the public sector borrowing requirement was well above that level, we could not justify an increase in borrowing and our Budget was calculated within that framework. I hope that the Government will acknowledge that we have accepted that discipline and that we have included it in our calculations. As the finances improve, we shall be able to select different priorities and people will be able to debate the choices. However, in the present climate, the Government have left us with very little room for manoeuvre, although I believe that we have found some quite creative ways of manoeuvring.
In his response to me the other day, the Chancellor said that our suggestion for taxing benefits in kind that are paid to employers on employers' national insurance charges was administratively impossible. I have checked that and, frankly, the Chancellor was talking absolute nonsense. That is a perfectly routine matter.
The Chancellor knows perfectly well that, as the threshold has never been increased in living memory above £8,500 a year, and as form P11D is required for everyone who earns more than £8,500 a year, it is simply a matter of ensuring that benefits in kind are declared and that the tax is calculated. It is nonsense to suggest that that cannot be done.
The Government have rushed into a situation where they simply did not need to create such pain. They have caused the maximum amount of pain for the minimum amount of gain. That is a rather churlish exercise, which I believe was motivated by pique. It ignores many of the arguments that the Government had previously put forward.

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That point has been noted outside this place. Roger Bootle of the Hong Kong and Shanghai Banking Corporation—which includes the Midland bank—has written:
"The Chancellor seems to have missed a trick. He surely could have raised the necessary money without increasing excise duties at all‖thereby saving a full 0.4 per cent. on the RPI. This would have helped the battle against inflation directly and would have minimised the danger of an increase in wage inflation. In addition, it would have helped to reduce public expenditure, not least on benefits which are tied to the RPI. It seems particularly odd to target alcoholic drinks which the Chancellor ostentatiously left alone in his Budget"—
except for the cut in champagne. The City, like me, believes that the Chancellor has created irritation for no purpose.
Many of us are left with the belief that the Government have acted deliberately to try to get the message across to people that they had to increase taxes and that the Opposition forced them to raise those unpopular taxes. The truth is that the Government imposed those taxes on themselves. They have created the situation for themselves. They had enough disciplined means operating within their own constraints for raising such taxes. The Government are trying to get their hands on revenue so that they can give it back to people later and hope that they will be persuaded that that is great generosity resulting from the success of a Conservative Government.
Given that the Chief Secretary has already made it clear that the tax increases of the past two years were necessary and justified because of the potential borrowing requirement of £50 billion, will he tell us what level borrowing would have to be reduced to, to justify tax cuts, or at least will he tell us what the criteria would be to determine whether tax cuts were justified?
The House and the country are entitled to expect that the Government's argument that required tax increases should be the same argument that justifies tax cuts. If the Government have not been able to create the economic performance to justify that, they should not introduce cuts imprudently for purely political reasons when the economy cannot stand such cuts. If the Government are prepared to lecture Opposition parties about discipline, I hope that they will accept the constraints that their own discipline imposes on them.
6.18 pm
Mr. Roger Sims: I preface my remarks by declaring an interest as parliamentary adviser to the Scotch Whisky Association. I shall elaborate on some of the points made by the hon. Member for Gordon (Mr. Bruce) in connection with the industry.
I have never been a great enthusiast for VAT on fuel, but given the need for additional revenue I understand why my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) felt justified in introducing it. There is a perfectly valid argument to be made for it, not least that VAT on fuel applies in most European Union countries. Of course, in the case of most goods and services which attract VAT, the consumer can choose whether to purchase them. Fuel is a necessity.
That is not an argument against imposing VAT on fuel, but it is self-evident that it would be necessary to protect from its impact those on low incomes, particularly pensioners and others on social security benefits. I was one of several hon. Members who voiced concern on that
822
score when the VAT proposals were announced in April 1993. I am bound to say that I was astonished that the need for a package of compensation was not recognised by Ministers and announced at the time of the April 1993 Budget, or at least soon after it. Instead, it was not until November last year that detailed proposals were announced. It was not surprising, therefore, that during those six or seven months a campaign against the tax built up a substantial head of steam. The campaign was never effectively countered, with the outcome that we saw a week ago—a case, I fear, of a defendable policy poorly presented.
Despite the fact that the first stage of VAT and the first stage of the compensation package were already operative, the House decided last week not to implement the second stage. That seemed to be an illogical, if not perverse, decision. However, the decision was clear, and my right hon. and learned Friend the Chancellor was right to accept it—indeed, he could not do otherwise. He was then forced to find alternative sources of revenue, and he spelled out the various possibilities that were open to him last Thursday and, to some extent, again today, and gave us his decisions.
The increase in respect of petrol is clearly unwelcome, but it is a well established source of revenue and should procure what the Chancellor wants. The House will not be surprised to know that I welcome the increase in tobacco duty. It is also a well established source of revenue and again should produce what my right hon. and learned Friend wants. I hope, too, that it will play a part in persuading smokers to reduce their consumption and in dissuading those who might be tempted to take up the habit from doing so. I am particularly concerned about the incidence of smoking among young girls.
If people choose to smoke, they should be free to do so, provided that they do not cause offence to others. However, given what we know of the effects of smoking, it is surely the duty of Her Majesty's Government to take every possible step to discourage the habit. It is clearly established that price is a factor, especially among the young.
Mr. Ottaway: My hon. Friend says that smoking should not be encouraged and refers to its detrimental effect. He says that the Government should intervene where relevant. I hope that my hon. Friend will not go as far as consultants at the Mayday university hospital in Croydon, who refuse to treat patients who habitually smoke. After all, they are civil servants whose duty is to serve the community and not to dictate the terms on which they are prepared to do so.
Mr. Sims: My hon. Friend the Member for Croydon, South (Mr. Ottaway) tempts me on that issue, not least because the Health Select Committee, of which I am a member, is currently considering priority setting and where funds should be most appropriately used. Much as I would like to launch into a dissertation on that interesting matter, you would rightly rule me out of order, Madam Deputy Speaker, but I certainly would not endorse the action that my hon. Friend has described.
Mrs. Lait: As my hon. Friend knows, I share many of his views about a policy of high taxation acting as an effective deterrent against smoking. Will my hon. Friend share his thoughts on the availability of cheap cigarettes,

823
particularly to the young market, through illegal importation? Does my hon. Friend agree that that undermines our policy of high taxation?
Mr. Sims: Naturally I do, and I am very concerned about that matter. It must be tackled. We cannot let it continue. There are various other ways in which Government policy could reduce the incidence of smoking. For instance, I would like a more robust approach to tobacco advertising. Again, however, if I launched into that subject, I might try your patience, Madam Deputy Speaker.
The increased duty on alcohol is far from welcome in any quarter. Indeed, the reasons for that were spelt out by my right hon. and learned Friend himself in his original Budget statement. There is no doubt that the increase will exacerbate the problem of cross-channel traffic in alcohol, especially beer, and it will have an adverse effect on brewers and on off-licences. For the reasons that I have given, I am especially concerned at the effect of the increase on the fragile home market for whisky. That was recognised by the Chancellor in the past, by freezing the duty at existing levels in the previous two Budgets, but his present proposal to increase the cash differential between spirits on the one hand and beers and wines on the other can only harm the whisky industry.
The proposal will also affect European markets at a time when minimum rates in the Union are being discussed. We want to persuade our European partners to reduce discrimination against spirits. As the hon. Member for Gordon said, Britain is a large producer of spirits, whereas our European partners are wine producers. Increasing rates on spirits must surely weaken our Government's negotiating position.
Similarly, in overseas markets the Scotch whisky industry is constantly trying to overcome the high barriers of domestic duties which are erected against imported spirits and urging that they be reduced. How much more difficult its case will be made when our own Government increase the domestic level of duty on spirits.
Will the measure produce the increased revenue for which my right hon. and learned Friend the Chancellor is looking? The reason for freezing the level a couple of years ago was that the duty had reached the point of diminishing returns. After the 1992 uprating, the total Treasury take on whisky declined by £80 million. Last year, the duty remained unaltered, and that produced an extra £45 million, although it is still below the 1991 level.
The Treasury must be aware that whisky is a particularly price-sensitive product. Will the increase in duty produce any revenue gain at all? Certainly, I doubt whether it will do so to the extent that my right hon. and learned Friend hopes. Perhaps in winding up the debate my right hon. Friend the Chief Secretary will tell us what the Treasury forecasts as its yield from the increased duty on whisky and whether those expectations are well founded. The last time the duty went up, receipts went down. Why should that not happen again?
At 10 o'clock tonight I shall support my right hon. and learned Friend in the Lobby by voting to increase the tax on petrol and tobacco for the reasons that I have given. However, I fear that he is wrong about alcohol. First, his
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proposals will damage the whisky industry; secondly, they will weaken our negotiating stance in Europe; thirdly, they are unlikely to produce the revenue that he requires.
I have been critical of several of my hon. Friends who were sent to Parliament—as I was—to support our party, our Prime Minister and our Government and who chose to withhold their support for one or two specific matters despite being well aware of the possible consequences of their actions, on which I need not elaborate. I have no intention of being so self-indulgent: I refuse to put my Government at risk simply because I have doubts about a specific issue.
I shall follow my right hon. and learned Friend into the Lobby when we come to vote on the increase in tax on alcohol, but I shall do so with a heavy heart as I believe that it is a step which will prove to be ill considered both in principle and in practice.
6.31 pm
Mr. D. N. Campbell-Savours: My remarks will be brief. I hoped to intervene during the Chancellor's speech, but he would not give way.
I think that Ministers of the Crown are completely out of touch in their handling of the increase in tax on tobacco and I think that they have made a major error of judgment. The right hon. Member for Thanet, South (Mr. Aitken) has some experience in his constituency of the matters to which I shall refer.
It is assumed that the increase in tobacco tax will reduce consumption. However, I argue that it will increase, for the reason given by the hon. Member for Hastings and Rye (Mrs. Lait). She is absolutely correct about what is happening in the marketplace. The reality is that one can buy black market cigarettes in any town in the United Kingdom. A huge secondary market has developed in cigarettes costing between £1.50 and £1.80 per packet or 15 per carton.
In Workington one can buy as many black market cigarettes as one wants. They are freely available, and the situation is the same all over the country because of the current tax regime. I do not smoke, so I shall not purchase black market cigarettes; indeed, even if I did smoke, I would not purchase them because I would be cheating the Revenue. Nevertheless, black market cigarettes are available anywhere in the United Kingdom because of the difference between the retail price of cigarettes and the price charged by black marketeers who sell them at substantially reduced prices.
It is wrong to assume that all cigarettes sold on the black market are imported cigarettes. Most of the cigarettes that are sold on the black market in the United Kingdom are made in Britain. All the major brands are available. One can purchase black market cigarettes from pubs, shops and social clubs in all parts of the country.
As a consequence of that thriving black market, the price of cigarettes will fall. The people who want to smoke—including young people—will purchase black market cigarettes. The Budget will not raise revenue in the way that the hon. Member for Chislehurst (Mr. Sims) imagines; it will reduce it. More cigarettes will be made available to young people at a lower price. Clearly, the Government have not taken that consequence into account.
Smokers—the people we are trying to target for health reasons—recognising that they will have to pay more for cigarettes each week, have a reason for finding and

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purchasing black market cigarettes. If the measure is carried, the Government can do nothing to prevent that development, except intervene in the area of smuggling. People are entitled to bring large numbers of cigarettes into the country, but many re-sell them within the United Kingdom.
The Government should start by looking at any United Kingdom port—such as Edinburgh, Newcastle and Hull—which trades with European ports. They are all routes by which large numbers of cigarettes are imported into the United Kingdom. People travel to Europe, fill their vans with cigarettes and return to the United Kingdom to sell them on the black market. Only last week in Wales some people were prosecuted for importing large numbers of cigarettes on a very organised basis—they were clearly running a business.
Many shopkeepers in the United Kingdom sell cigarettes, tax paid in full, across the counter. They, too, will suffer because their revenue will fall as a result of the Government's measure. We do not require extra technology to deal with the problem. The Government are mad if they are prepared to reduce the number of customs officers when hundreds of thousands of people are coming through British customs carrying cigarettes far in excess of their own requirements. In effect, the Government are inviting black marketeers to enter the market.
We should consider what has happened in other countries where high prices have created product shortages. In the Scandinavian countries, high prices for spirits led to the development of a black market in home-produced "hooch". In the end, those countries were required to liberalise the market and reduce duties and internal taxation so that the legitimate internal market in spirits and beer could take off. The Government's Budget measure will have unintended consequences, and that is very wrong.
The answer is harmonisation, but, due to the principle of subsidiarity, there are varying views as to whether it can be applied in these conditions. There has to be harmonisation of the tax regime for cigarettes throughout the European Community. That will mean a substantial increase in the rates of taxation in other European countries, but Ministers have a duty to press for that.
In the meantime, the Government must act to protect local retailers, who will lose business. They must also act to protect young people, who may be drawn into smoking as a result of the reduction in cigarette prices that I believe will occur throughout the United Kingdom.
6.39 pm
Mr. Richard Ottaway: I agree with much of what the hon. Member for Workington (Mr. Campbell-Savours) said about health, although not with his political arguments. I share his concerns about the dangers of young people being lured into smoking. That is a non-political view that hon. Members on both sides of the House share.
The pre-Budget submission that the Confederation of British Industry made to the Government was entitled, "kecovery in progress: do not disturb." That headline was appropriate before the Budget, was reflected by it and is still a good summary of the current state of affairs, despite the political upheavals of the past few weeks.
With unemployment of 11 per cent. in the south-east compared with 9 per cent. in the Rhondda valley—I thought that it would be a long time before a Conservative
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Member of Parliament for the south-east would be saying something like that, but there it is—in constituencies such as mine we are only too keenly aware of the need for a sustained recovery, which will lead to a rise in living standards.
While we want to encourage that sustained recovery and ensure that it is maintained, it is essential that we do not allow it to turn into a boom that is followed, as night follows day, by a bust. There is a danger of that happening.
The economy is showing the most superb set of performance figures. Underlying inflation is 2 per cent., which is its lowest level for a generation, especially over a sustained period. We all know that inflation is the enemy of investors—both commercial investors and the elderly person with savings trying to live off fixed interest. Inflation is the danger to them all. It is a credit to the Government that they have managed to get inflation down to their target. They set a range of between 1 and 4 per cent. and expressed a preference for getting it in the lower half of that bracket. The figure is wobbling on the edge of the bracket, but let us hope that the Government can keep it on target.
The OECD confirmed the second good set of performance figures—this year, the United Kingdom economy is predicted to be the fastest-growing major economy in the European Union. That should come as no surprise when one studies our export performance. One of the most exciting aspects of this recovery is that it is export-led. How many times have we had booms when all the surplus money generated simply went in house price increases and was wasted unproductively? This time, exports are leading the way and house prices are fundamentally stable. Our exports to the European Union are up 17 per cent. on a year ago, while the economies of the other member countries grew by only 5 per cent. It comes as no surprise, therefore, when commentators say that we are closing the trade gap.
It is also fair to say that inward investment is transforming our industrial practices, as ideas and concepts are imported from overseas to make ours a more efficient and productive economy.
Perhaps privatisation is a controversial subject, but it has been a fundamental success and is very much a part of our economic revival. As the Opposition are constantly saying, "That's not true," we must consider how we achieved it. Throughout the 1980s, productivity grew faster here than in any other European Union country. Since 1979, investment in plant and machinery has risen by 54 per cent. and business investment by 35 per cent.—
Dr. Reid: Growth was slower.
Mr. Ottaway: If the hon. Gentleman is patient, I will get to that issue in a moment.
Against that background, one is tempted to argue, "If it ain't broke, don't fix it." The Budget largely did that and it reflected the views of the CBI, with one notable exception. The measures contained in last year's Buclget show signs of fulfilment. The aim this year—rightly—is to continue the reductions in public expenditure that have partially been achieved by the tight control of inflation, while ensuring that public expenditure continues to decrease as a percentage of gross domestic product. This afternoon, the Chancellor put that succinctly when he talked of "filling the gap."

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The net effect is a welcome and continuing decline in the public sector borrowing requirement, which is projected to go into surplus by the end of the decade. Given the way in which forecasts have constantly been beaten, and the growth in the economy, I predict that in his November 1996 Budget the Chancellor will be able to forecast a nil PSBR for 1997–98. Then, the challenge will be to start to reduce the national debt.
After all, the relatively small size of that debt has given us a competitive advantage over our rival economies, both in Europe and the world. As we have to pay a relatively small amount of interest each year, we have been placed in an enviable position when compared with other economies. That, coupled with the strong emphasis on private pensions that was brought about by the reforms of the past decade, means that we will be paying out much less in pensions to an aging population than other countries. Those two factors give us a highly competitive edge and bode well for the future.
I do not need to remind the House why we are here. Obviously, most people would demur when asked whether they supported the introduction of new taxes. If we carried out a survey on whether to introduce income tax, I am sure that the country would be emphatically against it. No one likes new taxes, but, as Oscar Wilde reminded us, the only two things in life that are certain are death and taxes.
We debated value added tax on fuel in two Budgets and on other occasions. My only concern was whether the people least able to pay would be unable to do so. Once the package of compensation for the unemployed, the old and those on low incomes was established, however, I had no personal quarrel with the increase. As the people with the largest houses would be the hardest hit, the proposal struck me as one that might have come from the Labour, rather than the Conservative, party.
What puzzled me about last Tuesday was the fact that the introduction of the second tranche was ultimately brought down by Members who voted for it on other occasions and I regret the fact that those Conservative Members involved seem to have an alternative agenda that has little to do with protecting the elderly and more to do with disrupting the Government. As the Conservative party braces itself for what I suspect will be a massive by-election defeat in Dudley, I hope that those Members will realise what they are doing to one of the oldest political parties in the world.
Mr. Campbell-Savours: Why does not the hon. Gentleman look at his hon. Friend the Member for Northampton, North (Mr. Marlow)?
Madam Deputy Speaker (Dame Janet Fookes): Order. I remind hon. Members that the hon. Member for Croydon, South (Mr. Ottaway) was correctly looking at me, the person to whom he was addressing his remarks.
Mr. Ottaway: I am aware of the presence of other hon. Members in the Chamber, Madam Deputy Speaker.
I have no quarrel with the Chancellor's decision to make up the shortfall in funding by introducing excise duties, on which we will vote tonight. We have a growing problem with cross-border smuggling and I welcome his anti-smuggling proposals. He was right not to increase the duty on wines and spirits in his original
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Budget. His forced decision to raise that duty will do little to help the drinks trade, especially in the south-east of England.
During his short statement last week, my right hon. and learned Friend the Chancellor said that the introduction of excise duty on smokers would be a healthy deterrent. In my intervention on my hon. Friend the Member for Chislehurst (Mr. Sims), I asked whether it was appropriate for the medical profession to decide whom to treat. A serious problem at the Mayday university hospital in Croydon is a matter of some concern to me. If the duty is to be a deterrent, what do we say to drug addicts or alcoholics? We must remind ourselves that those who refuse to treat people who habitually smoke are there to serve the community, and not to dictate the terms on which they do it. I shall return to the motion before the House.
The decision of the Chancellor of the Exchequer to raise interest rates by 0.5 per cent. was particularly interesting. He was quite right to do so to maintain confidence in the global markets. Statements from the Chancellor and the Bank of England suggested that the rise was likely to happen anyway. It did, however, have a noticeable steadying effect on the markets, which have remained particularly stable in the aftermath of the decision of the House on Tuesday.
I found the Opposition's statement that the increase in interest rates was a major blow to the economy most concerning. One can only assume that if they had been in a similar position, they would not have introduced that interest rate increase. How they can reach that conclusion is beyond me.
Mr. Campbell-Savours: We would not have been in that position.
Mr. Ottaway: Is the hon. Gentleman saying that he would not have introduced an interest rate increase?
Madam Deputy Speaker: Order. There is a good reason why I deplore seated interventions.
Mr. Ottaway: I am happy to give way to the hon. Gentleman if he wants to say what he would have done. As I thought, he has nothing to say.
It is perfectly obvious to a moderately well-informed observer such as myself that inflation pressures are stoking themselves up in the economy. With output growing by 5.9 per cent., the dangers of those pressures reappearing are always close to the surface. It is possible that the Labour party believes that inflation is licked and that it does not have to bother about it. That would be to defy history where, in any economic cycle, inflation will rise and fall.
Confidence is growing, but employers are also complaining about skill shortages. The warning signs are clear for all to see. In my constituency, I recently received a report that the price of paper had risen by more than 20 per cent. in the past four months, and there was strong evidence that paper suppliers were acting in unison to force up the price.
Mr. Andrew Smithindicated assent.
Mr. Ottaway: The Opposition spokesman, who frequently speaks a lot of sense, nods in agreement. Why, therefore, did he say that the interest rate rise was a danger to the economy?
The Governor, who has by far the best access to data in the economy, firmly believes that there are inflationary pressures. Under the circumstances, it would be plain folly not to raise interest rates as a warning shot to the economy.
The most depressing thing has been the lack of concise proposals from the Opposition. The Chancellor asked the hon. Member for Dunfermline, East (Mr. Brown) a simple question this afternoon—did the hon. Gentleman think that the Chancellor's expenditure and taxation plans were too high or too low? My right hon. and learned Friend got no reply.
The President of the Board of Trade put a similar question to his opposite number, the right hon. Member for Copeland (Dr. Cunningham), during the Budget debate last week. The reply was that the right hon. Gentleman could not say what the position would be in three years' time, so how could he say what the Opposition's economic proposals were? That was a perfectly reasonable position to take. However, the question my right hon. and learned Friend asked this afternoon was whether the hon. Member for Dunfermline, East thought the Government's figures were too high or too low. It is a sign of the paucity of arguments from the Opposition that the hon. Gentleman was unable to respond to that question.
The nearest we have seen to sound policy from the Labour party has been the Commission on Social Justice, which was set up by the late John Smith as a blueprint for a new economic strategy, no doubt designed to entice the middle-class voters the Labour party needs to win an election. It is a curious document, strong on rhetoric and weak on remedies. Not unsurprisingly, it attacks the Government's policies of cost-cutting, deregulation and privatisation, although I fail to see how that squares with the party's intention to scrap clause 4. The Labour party will have to try harder to convince my constituents when they argue that the reforms of the 1980s have made the economy less efficient.
The document makes the plea—often repeated by the hon. Member for Dunfermline, East—that our alleged economic failure has been due to a lack of investment. The flaw in that argument is that investment has not been particularly weak. From 1960 to 1990, investment in machinery and equipment as a percentage of GDP was well ahead of that of America and Canada, and only marginally behind that of Germany and France. Britain's investment shortfall is due mainly to exceptionally low levels of housebuilding. It is the quality, and not just the quantity of investment that matters. One need only look at the rusty investments of the steel industry in the 1970s to have that point underlined.
Finally, there is the question of what the Opposition would do to stimulate investment if they were in power. There are several ways in which they could do this. I can
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imagine a Labour Government proposing direct Government intervention by renationalisation, or another similar proposal.
Mr. Campbell-Savours: No.
Mr. Ottaway: No? Fair enough. A Labour Government could offer tax incentives to industry.
Mr. Campbell-Savours: Yes.
Mr. Ottaway: They could cut corporation tax.
Mr. Campbell-Savours: Yes.
Mr. Ottaway: Finally, they could encourage savings and discourage consumption. It is interesting that the Borrie commission rejected the final three proposals, and the only one which it was prepared to look at was renationalisation.
Mr. Campbell-Savours: We are the Labour party.
Mr. Ottaway: I know—
Madam Deputy Speaker: Order. I do not expect to have to remind Members twice of the same fault.
Mr. Campbell-Savours: On a point of order, Madam Deputy Speaker. I am sorry to intervene, but there must be a little give and take during a debate. You are excellent in the Chair, but I would ask for a little flexibility, as I am not in any way being discourteous to you.
Madam Deputy Speaker: We simply cannot conduct a debate on the basis of cross-Floor arrangements, simply because it is very confusing. At the very least, Members ought to think about the Hansard reporters.
Mr. Ottaway: We are deeply indebted to the Hansard reporters, and I apologise for the rapport that the hon. Member for Workington and I have been generating.
The point that I was trying to make was that, of the four proposals extolled by the Borne commission, the one it was most prepared to look at was renationalisation. As the hon. Member for Workington said—improperly, from a sedentary position—"We are the Labour party." He was implying that the Borrie commission was not binding on him. The Opposition have said that on a number of occasions, and that is fair enough.
If the Opposition want to have any chance of winning votes in the south-east of England and in the midlands—the battlefield of British politics—I suggest that they leave the commission proposals as a consultative document and not look at them at all. Otherwise, they will make absolutely no progress.
Mr. Campbell-Savours: I thank the hon. Gentleman for his advice.
Mr. Ottaway: I am always pleased to hand out advice to the Opposition, and I hope to continue to do so. I remember an occasion in the 1980s, when the late John Smith was a shadow trade and industry spokesman and I was a fairly green Member, when I was going on about the shipbuilding industry, and he asked what I would do about it. I felt rather flattered that an Opposition spokesman should ask me for my opinion, and yet again I am pleased to give the Labour party advice.

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This debate has been brought about in difficult circumstances. Like my right hon. Friend the Member for Shropshire, North (Mr. Biffen), I do not mourn the loss of VAT on fuel. The circumstances in which that loss has been brought about are regrettable, but I do not believe that either the Budget or the Government has been blown off course by recent developments.
Mr. Marlow: On a point of order, Madam Deputy Speaker. As you know, there is to be an important debate tomorrow on fisheries. I understand that it is normal for Government motions to be put down by half past two, but, as of now, no motion has been put down. Many colleagues would like to table amendments which could strengthen the Government's position. I do not know whether this has anything to do with the authorities of the House, but it would be much appreciated if something could be done to get a motion put down quickly.
Madam Deputy Speaker: My understanding is that a motion can be put down at any time until the House rises. I have no doubt that the hon. Gentleman's point will be taken on board by those more able to deal with it than I.
6.58 pm
Mr. Mike O'Brien: Far be it from me to intrude on private grief, but while listening to
the hon. Member for Croydon, South (Mr. Ottaway) attack his unwhipped colleagues I was struck by the thought that perhaps the hon. Gentleman and many of those Conservative Back Benchers who voted for 17.5 per cent. VAT on fuel would, in due course, thank those unwhipped rebels for saving them from having to defend that policy during a general election campaign.
Afterwards, I thought the better of that, because people will remember those Back-Bench Conservatives who wanted the 17.5 per cent. VAT to be imposed on fuel and who voted for it. They will also remember those Conservative Back Benchers who, when they stood for election in 1992, advocated tax cuts, but delivered the biggest tax hike in history in last year's Budget. When they go to the electorate next time, they will have to answer the question, "Why should we believe you this time when you did not tell us the truth last time?"
The Chancellor's revised Budget is better than the original one, but that is not due to his decision, but because he could not convince enough of his own Back Benchers to stay with him, so they voted for the Labour amendment. The way in which the Chancellor sought to proceed with imposing 17.5 per cent. VAT on fuel demonstrated how out of touch he is with the reality of life for ordinary people. He never really understood the depth of anger that ordinary people felt at the imposition of VAT on fuel and the reasons for it.
That public anger was compounded not only by the reality of 8 per cent. VAT on fuel and the prospect of 17.5 per cent. VAT, but by the decision of companies like British Gas to charge people with bank accounts less than those who do not have them, because that latter group pay in a certain way. That decision angered an awful lot of pensioners, as did the 75 per cent. pay increase, equivalent to £740,000, paid to one British Gas boss. Although the Prime Minister said that he too felt that that increase was unjustified, he refused to condemn it. If workers had been
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asking for 2 per cent. pay rises instead of a 1.5 per cent. settlement, no doubt the Prime Minister would have pronounced them a danger to the country. The 75 per cent. increase was an appalling example of bosses following the dictum, "Do as I say, not as I do."
The Chancellor does not seem to have appreciated or understood the anger in the country caused by that pay increase and the proposed VAT increase. He paid the price for that misjudgment. The Chancellor and his colleagues should now not only admit that it was wrong to propose to increase VAT on fuel to 17.5 per cent., but they should urgently implement the Prime Minister's own wish to make a law to allow shareholders to control directors' salary increases. Perhaps they should go further by allowing shareholders to reduce directors' salaries at each annual general meeting if those directors have cut jobs or failed to make the company prosper.
The Government should also intervene to put an end to the British Gas wheeze of offering cheaper bills to those who hold bank accounts. That policy penalises the poor and pensioners who may never have had a bank account and who do not want one now. Many people feel angry about that decision because of its implications for civil liberties. A middle-aged business man came to my surgery the other day and said that he did not want a bank account because he paid his bills within seven days. He wanted to know why he should he penalised in that way.
Dr. Reid: I agree with my hon. Friend that the depth of the resentment felt against the direct debit discount offered by British Gas is far more widespread than that company and hon. Members appreciate. Can my hon. Friend think of any good reason why that discount should not be offered to all those who pay their bills on time rather than just to those who pay by a particular method, which is exclusive to certain sections of the community?
Mr. O'Brien: It is obvious that British Gas aims to increase its profits at the expense of poor people and those who do not have bank accounts. That is unacceptable and the Government should take action to prevent it.
Mr. William Ross: Has the hon. Gentleman any evidence that British Gas pays all its bills within seven days of receiving them?
Mr. O'Brien: I have no evidence that it does and I suspect that it may not.
The compensation for the 8 per cent. VAT on fuel needs to be extended. As well as his package of tax rises, the Chancellor also cut the amount of help that he is giving to pensioners to compensate for that VAT. The right hon. and learned Gentleman's bribe on Tuesday night to the hon. Member for Brighton, Kemptown (Sir A. Bowden) seems to have been forgotten. He has also cut into the compensation package that he first announced in last year's Budget and which he confirmed last week. He attempted to take away any gains that pensioners might have received, because he could not raise VAT on fuel to 17.5 per cent.
From April 1995, single pensioners will receive just 20p instead of the 50p that they had been promised. The total compensation for a single pensioner will be 70p while pensioner couples will receive £1.05. The Chancellor's claim that that will be enough to compensate all pensioners completely ignores the fact that heating costs vary enormously both according to household type

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and by regions. The right hon. and learned Gentleman could and should have been more generous and kept his original promise to pensioners.
Many vulnerable people will receive no compensation for that 8 per cent. VAT on fuel, which remains unchanged. Low-paid workers, who get maximum help with housing benefit, will be offered no help with their gas and electricity bills. That will leave the poorest 20 per cent. of households 85p a week, and £44 a year, worse off as a result of VAT at 8 per cent. The compensation scheme also excludes many on unemployment benefit. Households headed by someone who is unemployed will be £1 a week—£52 a year—worse off. It also fails to address properly the needs of the disabled, because those on disability living allowance will not receive any compensation.
We must ask whether the increase in taxes on cigarettes, beer and car fuel was really necessary. Surely, as hon. Members have already said, £1 billion was within the margin of error in the Budget. Not only that, but as the Chairman of the Public Accounts Committee has already said, the margin of error in previous Budgets in the past decade averaged around £10 billion. The Chancellor had his own rather large margin of error in last year's Budget. He told us then that the PSBR deficit was £50 billion and that he needed to impose VAT at 8 per cent. on fuel to reduce the PSBR over the year to £38 billion. In fact, he had his figures wrong, because the PSBR was £46 billion—£4 billion less than forecast. The estimate for the outturn this year is not £38 billion but £34.5 billion. The loss of £1 billion was therefore well within the margin of error in this year's Budget.
The current Budget forecasts also gave the right hon. and learned Gentleman plenty of room for manoeuvre. For months the Chancellor has been trumpeting an on-going trend of lower unemployment. The Red Book cites an unemployment figure of 2.4 million people, spread over a number of years. That is the normal way in which the unemployment figures are recorded and I do not quarrel with that. The Budget Red Books do not try to estimate or predict our future levels of unemployment.
The departmental budgets have been set according to that Red Book figure. For most of the Departments that will cause few problems, but for unemployment-sensitive Departments, such as the Department of Social Security, it means that, according to table 6.5 on page 119 of the Red Book, the DSS budget will increase from £67 billion to £70 billion and up to £79 billion in 1997–98.
If the unemployment rate was to fall to 2 million during next year there would be plenty of room for the DSS budget to change. It is clear that that would have an impact on the overall PSBR. The £1 billion that the Chancellor was looking for would therefore be found easily.
I accept that other things might happen, for example, that inflation or interest rates may rise. We know from evidence to the Treasury and Civil Service Select Committee that there is leeway in the Red Book for interest rate rises in the future. There may also be inflationary pressures caused, for example, by the increasing cost of raw materials. There remains enough flexibility within the PSBR, however, to meet the targets within the margin of error without raising the extra £1 billion from new taxation.
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The real gap is not in the PSBR, but in the Chancellor's credibility, to which he alluded in answer to a question from the Chairman of the PAC earlier today. The tax rises have been introduced to protect the rather ragged reputation for financial prudence that the Chancellor liked to have. Last week's defeat was a humiliation for the right hon. and learned Gentleman, but it is all the greater when we remember the spectacle in the closing stages of the debate.
Then, the right hon. and learned Gentleman tried desperately to buy off his the hon. Member for Kemptown with £120 million. He did that not because he believed that it should be done—or he would have done it himself earlier—but because he had been forced into it. He lost anyway. VAT on fuel was bad politics and bad economics, and pursuing it in the Budget showed the bad judgment of the Chancellor and the Prime Minister.
The City knows that the Chancellor and his Conservative predecessors cannot be trusted on the economy. That is not just because of the Lawson boom, the two harrowing recessions or withdrawal from the ERM but because of the pre-election tax cuts which went wrong after 1987 and 1992. That is why there were feverish midnight telephone calls to the Governor of the Bank of England after the Chancellor lost the vote.
Those calls were an attempt to bring forward by 45 minutes the meeting scheduled for the following morning, so as to get an interest rate rise announced as quickly as possible. The City had to be steadied by Steady Eddie in case it started to panic because it did not trust the Chancellor. Only that meeting with Steady Eddie George, the Governor of the Bank of England, and the raising of interest rates prevented severe problems.
Ordinary mortgage payers and businesses are paying higher interest and higher taxes because the Chancellor lost last week's vote through bad judgment and his ragged reputation had to be saved. Perhaps it would have been better if the person responsible for the bad judgment had gone and interest rates had not had to rise. The other reason for the Chancellor's decision to recover the £1 billion is that he secretly harbours fears for the economy. I share those fears, and the Governor of the Bank of England sees them as great difficulties.
The economy lacks capacity. It is coming out of recession quicker than expected and that brings its own problems. The damage that has been inflicted by two Tory recessions and the neglect of manufacturing over 15 years mean that its capacity for recovery is constrained. Unless investment rises sharply the capacity buffers will be hit some time next year or shortly thereafter, and inflation will take off. The hon. Member for Croydon, South (Mr. Ottaway) was right to say that inflation has not been licked and is always there. The Chancellor knows that, and that is the reason for his decisions.
Mr. Ottaway: Why did the hon. Gentleman's Front-Bench spokesman say that the increase in interest rates was a mistake?
Mr. O'Brien: It was increased at that time because of the Chancellor's error of judgment in trying to pursue the policy of increasing VAT to 17.5 per cent. He could not even convince his own Back Benchers. The rise need not have occurred at that time.
I understand that the minutes of the meeting before the one last week between the Chancellor and the Governor will be published in two weeks. At that time, the Governor

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foresaw difficulty in the economy and its capacity, and pointed out that it might be necessary to raise interest rates at some stage. However, the rush and the feverish phone calls before the vote and almost immediately after it to bring the meeting forward were caused exclusively by the Chancellor's misjudgment. That is why people are paying higher interest rates.
The recoveries in Canada, Australia and the USA started before our recovery. The USA is already hitting inflation problems despite interest rate rises and despite the fact that the recession there was not as bad as ours. The economy is ill prepared for recovery and the Bank of England has accepted that. The Governor said as much in giving evidence to the Select Committee on the Treasury and Civil Service.
The Governor voiced concern about a lack of capacity in the economy and pointed to survey evidence of business men who feel that they must be operating above normal capacity. That must be taken into account. He said that delivery times were direct evidence that capacity problems might be on the horizon; that the situation had to be closely monitored; and that it was a matter of feeling our way towards our capacity limits. The Governor was clearly concerned and warned that, if there were pre-election tax cuts next year, he would have to consider or perhaps demand interest rate rises. Conservative Members should be careful about thinking ahead and saying to themselves, "Perhaps the Chancellor has tax cuts up his sleeve to be announced just before the election," because the Governor gave fair warning that he would ask for interest rises to compensate for such cuts.
The Chancellor decided to damp down the recovery, and it seems that his objective was to prevent us from hitting the capacity buffers too soon. That was another reason for him pressing ahead with his tax rises. He realises that the economic news is not as good as it appears, that there are tangible dangers on the horizon, and that he may not be able to deliver tax cuts to his Back Benchers in the next Budget. He tried to damp down the recovery in this and the previous Budget, and the new tax increases on cigarettes, car fuel and alcohol have two main purposes. The first is to protect the Chancellor's battered reputation and the second is to slow down the economy to respond to weaknesses that have been caused by the failure of Government policy over the past 15 years.
The tax cuts are unjustified, and the way in which the Chancellor decided to raise money is open to question. Perhaps he can justify tax increases on cigarettes and petrol and perhaps even on wine, but the increase on beer and whisky is worrying. The Treasury and Civil Service Select Committee recently published a report about problems in the brewing industry. Although it did not advocate a reduction in duty, it warned of the serious problems caused by imports from abroad. The Chancellor's tax gift to smugglers could have been avoided. Even if he felt that there was no margin for error in the Budget, he could at least have recognised that the increase in the tax on beer and whisky would cost jobs and increase smuggling crimes.
There was some leeway, and the damage that the Chancellor has caused to an important sector of the economy and the effect of his measures on law and order could be considerable. To say that we will be more
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effective against smugglers while cutting Customs and Excise staff beggars belief. If those people were not made redundant but were employed in intelligence gathering, the Government's policy would be much more credible. The one Tory who got it right was the vice-chairman of the party, John Maples, who said:
"The Conservatives have let voters down, they have been in government too long, are complacent and have lost a sense of direction. They fail to fulfil promises, are clumsy at implementing policy and 'shoot themselves in the foot'."
Shooting himself in the foot was precisely what the Chancellor did in his Budget. The Budget and the mini-Budget are not about Britain's future, but about attempting to salvage the Chancellor's reputation and the election prospects of the Conservative party. The price of that salvage operation will be paid by families who will have to meet the extra taxes that the Government will impose in the next year and by home owners who, because of restrictions in benefit, not only feel insecure about losing their jobs but fear that they will lose their homes as well. A price will also be paid by industry, which has been ignored for much too long by the Government.
Although they do not yet realise it, the real victims of the Budget, the mini-Budget and the Budget that preceded them are Conservative Members who will for ever be tagged with promising no tax rises and then voting for them, who promised prosperity but were prepared cynically to undermine it, and who hope to win the next election, but will lose it.
7.19 pm
Mr. Nigel Evans: I am extremely grateful for the opportunity to take part in this evening's important debate. We all know the reasons for the second Budget. Sequels never measure up to original movies and the same applies to the second Budget, but one has to appreciate the fact that we never wanted a second Budget.
I found it peculiar to listen to Opposition Members saying how dreadful it was that the Government were raising taxes on fuel to 17.5 per cent. They condemned us for doing so and said that the compensation package was simply not enough. I looked through some old newspapers going back to May 1974, which reported shocking rises in electricity prices. On one occasion there was a 30 per cent. rise and an article in the business section of The Observer of 5 May 1974 stated that a 30 per cent. increase announced in the Budget speech by Mr. Denis Healey took account only of fuel price increases of 300 per cent. on oil and 45 per cent. on coal and ignored the uncomfortable fact that the industry was already heavily in the red even before the oil crisis and the miners' strike.
During the period 1974–79, electricity prices rose on average by 2 per cent. every six weeks. Electricity prices rose by 30 per cent. above the rate of inflation, which averaged 15.5 per cent. I tried to recollect what compensation package was in place for pensioners and those on fixed incomes during those bleak days. Of course there was none. Exactly the same applied to gas bills and other prices that pensioners and people on fixed incomes had to meet because of runaway inflation.
The position is very different today. I received a letter from NORWEB dated 9 December that mentions standing charges being reduced by £1.50 each quarter—or £6 a year—from 1 January 1995. It says that that decrease, on top of the decrease already announced earlier this year,

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was more than enough to offset the rise in VAT. People—certainly those in the north-west—have been more than compensated for VAT increases and there is additional compensation for many people on fixed and low incomes.
The hon. Member for Warwickshire, North (Mr. O'Brien) spoke about discounts for British Gas consumers who have standing orders, but not for those who pay their bills diligently. I agree with him, and I hope that British Gas moves quickly to ensure that many consumers who pay their bills on time are not penalised simply because they do not pay by direct debit. I hope that British Gas will soon announce that it will heed the voices of many hon. Members on both sides of the House on this issue.
Mr. Mike O'Brien: I am grateful to the hon. Gentleman for endorsing my view, which is shared by many hon. Members. Has he made representations to Ministers to ensure that they put as much pressure as possible on British Gas to make those changes? Will Ministers make public statements condemning these practices? It would weigh heavily with the shareholders and directors of British Gas if the Minister said exactly what the hon. Gentleman has just said.
Mr. Evans: I have already made representations to British Gas. It is not a party political matter; I am sure that all hon. Members have made representations on behalf of their constituents. I have received many letters, particularly from pensioners who are extremely keen to pay their bills as soon as they get them. They are not used to having reminders sent, as they pay their bills on time. I hope that will be recognised quickly by British Gas.
The Chancellor talked about the various alternatives for making up the shortfall because the second tranche of VAT on fuel would not be applied. He dismissed them one by one for various reasons. He then considered the three areas where the Chancellor decided the extra revenue was to be raised: tobacco, petrol and alcohol, which are targeted in every Budget.
I must declare an interest, as I have a retail business in Swansea that sells tobacco products. I am also an executive member of the all-party beer group. I have no interest to declare on petrol.
I understand that there is a hand-rolling tobacco product called Drum, which is the third best selling hand-rolling tobacco in the country. It is not sold legally anywhere in Britain for copyright reasons, as it would conflict with another brand called Duma, but it is coming into the country in large quantities. The Chancellor was quite right to recognise that specific problem, and no extra funds were sought from hand-rolling tobacco.
I also accept that the Chancellor has decided to raise extra revenue from tobacco products because of the health reasons, which have been listed time and again in the House. That is one reason why in the past I have raised the problem of the European Community subsidising tobacco production and I hope that sooner rather than later we can eradicate the subsidy to growing tobacco in the European Community. It seems quite absurd to pay people to grow tobacco products in other parts of the European Community and at the same time to impose taxes on British consumers to deter them from smoking it. I hope that we can do something about tobacco subsidies.
Mr. Bernard Jenkin: The story that my hon. Friend tells about tobacco growing in the European Community at the European taxpayers' expense
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is worse than he describes, because the tobacco we subsidise is of such low quality that nobody in the European Community smokes it; it is exported to third-world countries, where it poisons the lungs of much poorer people. We buy in much higher quality tobacco from elsewhere, which adds to the lunacy of the situation.
Mr. Evans: I can only agree with my hon. Friend. I do not believe that European taxpayers' funds should support social services in Greece and other countries that are in receipt of such funds to grow tobacco. Surely we should be looking to trying to get them away from growing tobacco if it is such a low grade as my hon. Friend says and get them doing something else.
The 21/2p rise in petrol imposed in the first Budget was quite substantial and will hit many motorists, particularly in rural areas such as my constituency. I do not particularly welcome the extra penny imposed by the second Budget. I have already received my first letter from a constituent who has a transportation company, who writes that the Budget measures are causing increases
"of over 221p for every mile a truck moves".
It is not good news, not only for businesses but for people who live in rural areas who will have to find that extra money.
I shall make the bulk of my comments about alcohol. In an Adjournment debate on 11 May 1994, I raised the problem of alcohol being smuggled into Britain from the rest of the European Community. It was a problem then and it is a greater problem now, but the duties imposed on alcohol in the second Budget are neither here nor there. A penny on a pint of beer will not greatly exacerbate a problem that already exists.
The Chancellor commented on the existing problems of which he is aware. Obviously, the penny increase is not a move in the right direction. I believe that we must direct our attention to how we can eradicate smuggling, which costs the Exchequer money and, I believe, costs jobs in the brewing industry and in the retailing of alcohol in pubs.
The indicative level that is now set on various items of alcohol and tobacco and the single European market have presented Customs and Excise with a bit of a problem. Many people return to the country with very large amounts of alcohol—not so much tobacco, but certainly alcohol—and say that they are having parties, that Christmas is coming or that there is yet another wedding in the family. Customs and Excise is hard-pushed in many instances to say that those excuses are not real, so the problem will increase if we do not address it.
The industry proposed its own solution—a massive cut in the duty on beer. The Brewers and Licensed Retailers Association produced a document called "A Real Alternative", which I found quite compelling reading. It suggests that extra revenue would come from increases in food sales and from people using amusement machines in pubs and that extra employment in pubs would lead to people being taken off the dole, as a result of which the Exchequer would not be paying out money in social services and would, over three years, raise extra funds rather than lose revenue. I hope that the Exchequer will look at those proposals again.
I heard what my right hon. and learned Friend had to say about the harmonisation of duties, but I believe in subsidiarity and wish him well in trying to encourage the French to raise their duties on beer. If they do not wish

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to go down that route, it will be extremely difficult to push them. The differential on duty is so large—it is seven times higher here than in France—that it will take the French a long time to reach our level. If we do not address the problem of smuggling in the short term, we may find that, because so many jobs have been lost in the brewing industry, by the time we get to harmonisation it will be extremely difficult to make up those jobs again.
David Kay, a director of one of my own brewers, Thwaites, wrote to me the other day to express his fears about job losses in the north-west. I know that everybody thinks that the problem of smuggling means that beer just comes in and stays in the Kent area. That is not so. He suggested to me that as much as 18 per cent. of the beer that is coming in finds its way to the north-west. It is not just a problem for Kent.
Mr. Mike O'Brien: I agree with the hon. Gentleman that we need to deal with the problem of smuggling, but not by adopting the brewers' proposal of a 50 per cent. cut in excise duty on alcohol. The brewers suggested that there might be a greater return to the Exchequer if that were allowed, but that would come from an increased consumption of alcohol. That would put a greater burden, perhaps, on the health service—from people with health problems as a result of the increased consumption—and on the forces of law and order. Although I am not averse to some reduction, York university suggested that one of the main causes of beer price rises has been problems within the industry itself rather than simply excise duties. A lot can still be done within the industry and a lot can be done by the Government to deal with smuggling.
Mr. Evans: I understand fully what the hon. Gentleman is saying, but the industry is not simply trying to increase beer consumption in this country, which is already high. It is saying that 1 million pints of beer a day is being imported from France and that if we could only reclaim that share for the British market it would be a substantial boost to our brewing industry. If it means that people have to make more visits to the pub instead of drinking at home the beer that they brought back from Calais, and if they drank the same amount of alcohol, they would still be spending more money. Extra people would still be employed in the pubs and, instead of being closed, pubs would remain open. I hope that my right hon. and learned Friend will look at the proposals again.
Many other measures could help pubs. I was involved in the Committee that considered the Deregulation and Contracting Out Bill, as were many other hon. Members present. We tried to save the head on a pint of beer, and to prevent extra costs from being imposed on pubs. I am delighted that the Bill was enacted, but I hope that we shall look at licensing hours generally. That is one area on which I hope that we can harmonise further with the European Community, as it is quite absurd in this day and age that some pubs, particularly where they do not affect people around them, have to close at 11 o'clock, forcing people to go out to clubs where they have to pay an entry fee. It is absurd that we have such archaic and antique licensing laws. I hope that we can look at those matters to support some of our hard-pressed pubs.
Earlier this year I went on a trip to Calais to have a look at the problem that currently exists there. I visited some of the cash-and-carries to see for myself the scale
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of business for people who buy alcohol and bring it back. I went to a few of the well-known ones—EastEnders, Beers R Us—which display signs all over the place showing where they are. Even Sainsbury's has opened within one of the hypermarkets in Calais, trying to encourage the British shopper to buy beer and alcohol from it.
What disturbed me most was not the consumers going around with their trolleys buying beer and alcohol, but the heavy goods vehicles inside some of those cash-and-carries, which were being loaded up with beer by the pallet load. They had offloaded their various goods in France, Spain or wherever, and were loading pallets of beer before coming back to Dover. That beer was destined not only for Kent but, as the tarpaulin suggested, Scotland, north Wales, Yorkshire and the north-west. It is finding its way all over the country. I was quite shocked to see that such a business is going on.
Yesterday's papers reported what they called "Victory for the Bootlegger". They mentioned a big surge this weekend in illicit trading, with more than 100,000 Britons flooding across the channel to Calais to buy supplies from supermarkets and cash-and-carries. They say:
"Since European trade barriers came down two years ago, anyone can buy limitless amounts of cheap alcohol".
Ian Brading, a senior purser on P and O's Pride of Burgundy, estimates that 80 per cent. of the 4,000 people he ferried to Calais on Saturday were travelling there only for the beer. He said:
"On some return trips we have 50 vans, all heavily loaded."
That shows the extent of the problem, which will get worse. Many of those ferry companies are putting on cheap trips to Calais to try to encourage people to use them. As part of the enticement they spell out to people the gains that can be had from taking a visit across to Calais, buying some beer and bringing it back.
A few weeks ago I went to Dover and chatted with some Customs and Excise officers. I was able to see one of their warehouses. It was packed full of drugs that they had seized and tobacco and alcohol. I talked about the problem of HGVs and of Transit vans. I understand that it is difficult to hire a Transit for the weekend in Kent because they have already been taken for that business. If people are stopped and the vehicle is seized, they think that it is far better to have a hire vehicle seized rather than one's own vehicle. Smugglers are already learning that trick. Others are bringing their Transits across, driving some way out of Dover, loading the alcohol on to a larger van and then getting straight back on to the next ferry, thus ensuring that the larger vehicle is full before driving off to another part of the United Kingdom.
Only last week we witnessed the success of a Customs and Excise operation: 28 former Yorkshire miners were arrested for smuggling alcohol and then selling it on. I believe that that is just the tip of the iceberg. In the newspaper article from which I quoted, officers suggest that for every £1 worth of alcohol that they stop at ports of entry another £9 worth is getting through. As last week's case showed, organised groups are involved, but many individuals are giving it a go, having read in the newspapers about the amount of alcohol that can be brought back to this country.

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Sometimes Customs and Excise officers come across the vehicles involved after police have stopped them just outside Dover because they are overloaded. People are so greedy that they fill the vans that they have hired, or their own Transits, with as much alcohol as possible.
I saw one boat arrive at Dover and watched the passengers disembark. Customs officers stopped two Transits, both of which were packed with alcohol. One driver trotted out the old excuse that it was "for Christmas", but all the alcohol was taken out of the van. I thought that I was generous and that my family liked to drink, but either that man's family consisted of about 200 people or he was very generous indeed, and his family would remain inebriated throughout the Christmas period and probably into March.
I did not accept that excuse, and neither did the Customs officers, but they did not have anything to go on until they found a shopping list in the van. It would otherwise have been difficult for them to prove that that person had not imported the alcohol for his own consumption. I think that they are doing a superb job, and would be loth to think that their numbers will be reduced at ports of entry.
Harmonisation of alcohol duties is a possible solution to the problem: it might remove the incentive to load up in France. I also support the idea—mentioned by the Chancellor—of initiating more high-tech methods of detection, such as profiling. As the authorities know what sort of people are smuggling alcohol, it should be possible to build up a dossier and subsequently to stop them from doing so.
We should, however, ensure that customs officers remain at the ports of entry. The channel tunnel now provides an extra route for those who wish to bring in alcohol, and officers will be switched to the tunnel to deal with that problem. More people than ever will travel to France—especially now that Christmas is coming—and I hate to hazard a guess at what may happen. If 1 million pints a day are coming in now, the amount will be that much more in 12 months' time unless we ensure that enough Customs officers are provided to prevent the current widespread smuggling.
We should also support the officers who are working in the United Kingdom, visiting pubs, clubs and car boot sales where they believe that trading is taking place. Some people have an image of an Arthur Daley type who nips across to Calais, brings back a bit of booze and sells it to his neighbours. There is nothing wrong with that, they think. But the problem is much larger.
Our Customs and Excise officers should liaise more with their French counterparts, sharing information, so that they can exercise more intelligence in stopping heavy goods vehicles that they see loading with pallets of alcohol. Obviously they cannot stop every vehicle, as I saw when I watched the flood of vehicles coming off that ferry, but I think that more should be stopped. If people thought that they had more chance of being stopped, they would be deterred.
Much has been said this evening about the Budget, and the second Budget. Some hon. Members believe that we are storing up tax cuts for the next Budget and the one after that. I hope that that is true, because in 1992 I was elected as a member of a Conservative party that supported low tax rates. I hope that, as the economy grows and we have the capacity to cut taxes, we shall do so. I shall look carefully to see which Lobby Opposition
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Members enter tonight, for that is the clear blue water that exists between the Labour party—and the Liberal Democrats—and the Conservatives: the Conservatives believe in lower taxes.
I hope that the Chancellor will consider the specific problem of Customs and Excise. We must say no to the bootlegger's charter and the stripping of Christmas beer money from British tills—indeed, to the stripping of that money at all times of the year. We must say no to the loss of brewing jobs. We must tackle the problem head on: we cannot allow it to continue for another 12 months.
7.46 pm
Dr. John Reid: Following the speech of the hon. Member for Ribble Valley (Mr. Evans), I am tempted to say, "The case for the prosecution rests." I have never heard such a frank confession of what the Conservative party is up to. The hon. Gentleman made it absolutely plain that the Conservatives were taking money out of people's pockets in this year's Budget in order to give it back in next year's, in tax cuts. Let me say, with all respect to the hon. Gentleman, that as we approach Christmas I would not like to be a member of his family: I can imagine his children having their pocket money stopped in October or November, so that it could be given back to them on Christmas day in the guise of a generous gift.
I have come to treasure occasions such as this. Although the Chancellor shows the normal lack of substance and clarity, there are always one or two little jewels from Conservative Members for us to preserve in our memories for future reference. We heard two such gems today from the hon. Member for Croydon, South (Mr. Ottaway), who unfortunately is not present: I assume that he has gone to rest after his efforts to explain the Government's economic and fiscal strategy.
The hon. Gentleman said, "If it ain't broke, don't fix it." That was his comprehensive analytical explanation of the Government's failure to do anything in the Budget. I must say, again with all respect, that anyone who can look at the British economy—at the scattered ruins of our manufacturing industry, the piles of bodies on the unemployment register, the death of investment in all industry and the manufacturing deficit that has piled up for the first time in our industrial history—anyone who can look at those 15 years and say, "It ain't broke" will certainly not win first prize as observer of the year.
The second little gem from the hon. Gentleman took the form of advice. He quoted not the Chancellor, the Chief Secretary or the Prime Minister, but Oscar Wilde. He said, "As sure as eggs is eggs, only two things are certain under a Conservative Government." As predicted by Mr. Wilde, one was death and the other was taxation. Out of the mouths of the sucklings on the Conservative Benches comes the truth, dripped down to us in, perhaps, a moment of weakness or a sudden surge of honesty. Conservative Members are telling the British people that, as the next election approaches, if they want a prediction about taxation they should look not to a Prime Minister under pressure or the promises of a Chancellor, especially if it is raining and they are within 100 miles of Dudley, but to Oscar Wilde.
The Chancellor of the Exchequer has managed to combine fiscal ineptitude with political crisis. He has also led the Government into the worst political defeat over three decades of any Chancellor. In the face of that defeat,

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and against the background of the political mire through which he has dragged his already beleaguered leader, there was no hint of an apology this afternoon. There was no remorse. There was not even the cynical recognition that one would expect of a politician of the right hon. and learned Gentleman's depth of the political damage that he has done to himself and to his Prime Minister. Perhaps he does not regret the damage that he has done to the Prime Minister, but no doubt he regrets the political damage that he has done to himself.
The Chancellor seems not to understand how far he is distancing himself and the Conservative party from the majority of those outside the House. Even I am astonished at how the right hon. and learned Gentleman can turn a fiscal crisis into a political drama. Equally, I am astonished at how far he has separated himself from the British people, including his constituents.
I was surprised to receive a copy of last week's edition of the local newspaper in the Chancellor's constituency. With the indulgence of the House—the article is pertinent—I shall read the paragraph which is headed:
"No sign of boom for Rushcliffe's dressmakers."
It will become obvious why dressmakers are the small traders who have been selected. The article reads:
"The owner of a dressmaking shop which faces closure after 20 years has accused Chancellor and Rushcliffe MP Kenneth Clarke of being out of touch with his own constituency."
Even the dressmakers of Rushcliffe—not generally regarded as the most revolutionary vanguard of the proletariat—are apparently being forced towards protest in the local press by their own beloved Member, the Chancellor.
I am not sure of the relationship that the Chancellor has with dressmakers in Rushcliffe or why he has lost their confidence in particular, but it is a sign of how detached the right hon. and learned Gentleman is when his local newspaper is lambasting him on behalf of small business men and women and entrepreneurs, not industrial workers. I am talking of people who produce quality goods and artistic goods that the Chancellor deems to be a part of the centre of the dynamic new economy that he is creating.
I shall explain to the Chancellor why such a reaction comes from the dressmakers of Rushcliffe and from all thoughtful people throughout Britain to his political mistake over value added tax. Rejection was led by the Labour party, but it was fuelled, supported and sustained by people throughout the country of all political persuasions or of none because the Chancellor's proposals were unjust, because they did nothing to assist economic recovery and because they went entirely against the grain of the fair-mindedness of the British people.
The Budget and the appendix before us will do nothing to resolve the fundamental problems of the economy. That brings me again to the comment of the hon. Member for Croydon, South, that the economy "ain't broke".
What are the problems to which the Chancellor should have had regard in the Budget? They can be neatly summarised as the problem of the lack growth over the past 15 years—this year's growth will bring problems in its own wake—along with trade, tax, unemployment and investment problems over the same period.
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It must be remembered that the Conservative party formed a Government 15 years ago, but the Chancellor speaks as if he had only recently inherited power. He suggests that all the problems of taxation that he has inherited were written in the Book of Revelations and had nothing to do with him or his predecessors. The Government came to power promising that they would lighten the burden of taxation on the British people. They claimed that it has been levied on the backs of the people by interfering socialists and that they would sort it.
What is the result? This year, we are facing a tax burden on the typical family in Britain in 1995–96 of 36.1 per cent. of gross income. Last year it was 35 per cent. When the Government came to power it was 32.1 per cent. under the dreadful high-taxing Labour Government. The gross proportion of tax taken from the average family has increased by 4 per cent., and 4 per cent. of the original 32 per cent. is, in absolute terms, a 12.5 per cent. increase. That is the burden that has been placed on the average family. That is the result of the Government's efforts.
What was set out in the Budget to deal with the increasing burden of taxation? The Chancellor retained VAT on fuel. He was forced under pressure from the Labour party, from people throughout the country and even from his fifth column—perhaps we should call it the eighth column—to abandon the proposed increase. As I have said, he retained the rate of VAT on fuel which was imposed last year. He pressed ahead with the seven new taxes that were introduced in last year's Budget. In addition to the already record levels and proportions of income that are taken in taxation—last year it was 35 per cent.—seven individual taxes were introduced, to increase the burden on the average family by £360 a year or about £7 a week. The VAT proposals in last year's Budget will add another £80 a year to the average tax burden.
When Conservatives take the advice of the hon. Member for Ribble Valley and steal this year from Peter to give back next year to Peter, they had better take things back to where they were. They will have to return the equivalent of 7p in the pound in direct taxation. The British people would still ask, "Has it all been worth it?" A financial system cannot be worked by mirrors, but that is what the Chancellor is trying to do.
A reallocation of taxation is taking place. The Chancellor is hooked on VAT; he is a VAT addict. He stood at the Dispatch Box agonising about the decisions that he had to take to increase taxation on the purchase of goods. We were deeply moved. The right hon. and learned Gentleman would have brought a tear to a glass eye. He told us how agonised he was. If, however, he were given the choice of taking agonising decisions on VAT increases or increasing indirect taxation by 1p, he would certainly take the first course. The right hon. and learned Gentleman's strategy is to build up a war chest of direct tax cuts, the contents of which will be funded by the moneys that he has taken from the British people in indirect taxation.
The Chancellor derided some of the suggestions that have been made by Opposition Members, yet he constantly asks us for suggestions. He constantly demands that my hon. Friend the Member for Dunfermline, East (Mr. Brown) produces solutions, only to deride them. He derided the suggestion that the Government should impose a windfall tax only this afternoon. I recall that two Budgets ago he derided my hon. Friend for talking about loopholes. It emerged implicitly, and sometimes

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explicitly, during his Budget statement this year that the closing of loopholes has saved the Exchequer over £3,000 million. The loopholes that he claimed did not exist or could not be closed when they were talked about by Labour Members have now been closed, with a saving of £3,000 million. He claims that that is a measure of his financial prudence. The Chancellor has done nothing about taxation.
What about unemployment, the second problem? Unemployment is not only a social blight but an economic problem. By referring to unemployment's economic effects, I do not mean to undermine in any way its social consequences. Unemployment cannot be described by a graph on an economist's wall or by a chart in a bureaucrat's office. It is a living tragedy. Many of us have lived among it for a decade or more and Conservative Members are seeing the problem among their constituents and in their constituencies. In addition, however, unemployment is an economic waste.
When the Government took office, there were about 1 million unemployed people. There are now more than 2 million, despite more than 30 changes in the way in which unemployment is calculated. Even more important, when the Conservatives came to power in 1979, there were 340,000 long-term unemployed people; there are now more than 1 million.
The Government tell us that they have created more than 400,000 jobs but if we consider the number of people in employment—this shows how the statistics have been fiddled—we find that, since the bottom of the recession four years ago, employment has not increased by 400,000 but decreased by 440,000. The Chancellor of the Exchequer's genius has created a large hole somewhere in the Treasury with the disappearance of 800,000 jobs—the Government say that 400,000 jobs have been created but employment has decreased by about 400,000 according to the figures.
The Government's response to that in the Budget was a national insurance rebate of less than £10 a week. That will not begin to tackle the sort of problems faced by the long-term unemployed. We suggested a rebate of about £75 for employers who were willing to take on the long-term unemployed. The Government therefore offered nothing on employment growth, which has not increased.
What about housing and homelessness, which are not only social problems but the dynamo of the economy, especially in relation to the construction industry? No other sector of the economy would have a more catalytic effect on the rest of the economy than the construction industry.
The Chancellor's main concern during the Budget was not the fact that people were homeless and that we were not building houses but that housing benefit was out of control. Let us assume that his supposition is correct. Does not the fact that the Chancellor and his Treasury team should be surprised that housing benefit has increased because rents have gone up illustrate their naivety? Does not the fact that rents have gone up as a direct consequence of Government action explain how out of touch they are with the real world?
First, the Government withdrew subsidies on social housing, as a result of which social housing rents, especially council housing rents, went up by two, three and four times the rate of inflation. Secondly, the Government deregulated the private housing market. Thirdly, they created the economic conditions whereby
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the building industry was decimated. The Government prevented either private sector building or social building by refusing to release the receipts of council house sales.
Surely the Government, who are full of Adam Smith fans—the intellectuals who have studied the market and who festoon the Conservative Treasury team—should be able to work out that, if one reduces the number of houses, withdraws the social housing rent subsidy and deregulates private sector rents, the excess of demand over supply would probably lead to an increase in rents and, therefore, housing benefits. The Labour party recognised and predicted it. Its much maligned non-marketeers predicted exactly would happen.
The Government's solution in the Budget is not to build more houses, to reduce the imbalance between supply and demand or to create a catalyst in the economy by allowing local authorities to build more houses, but to penalise the victims of high rents who are suffering from deregulation of the private sector and the dearth of housing in the first place. Those people are the homeless, the about-to-be homeless and those who depend on Government benefit in the first place. It is a scandal of the first order.
Today, we had yet another budget opportunity and yet another opportunity was lost. Today, the Chancellor could and should have introduced a system of fair taxation. He should have ended tax abuse. The Government told us that there is no public interest in that or any flagrant abuse of the system on the same day as one member of Saatchi and Saatchi stands to benefit by £5 million from a share option system. The Government have a great deal of work to do to convince the British public. We should remember that Saatchi and Saatchi has presumably been paid £5 million for its tremendous foresight in declaring that, if any party other than the Conservative party were elected, we could expect tax rises. That failure of foresight while reaping the benefits of a £5 million share option only adds insult to injury.
The Government should have diminished tax privilege, abolished the tax on fuel, introduced measures to tackle unemployment and encouraged local authorities to build homes with capital receipts by phasing them in. The Government should have reformed the benefit system to encourage employers to take on long-term unemployed people and introduced a meaningful national insurance rebate. They should have changed the 21-hour rule for the long-term unemployed. They should have offered incentives for that.
The Government should have followed the policy of incentives for action and investment proposed by Labour. They should have discussed, proposed and thought about new, improved initiatives for public-private partnership. They should have tackled the real challenges and opportunities for the Post Office by developing commercial freedom in public ownership. I think that the hon. Member for Ribble Valley said that he received a letter from Norway.
Mr. Nigel Evans: NORWEB.
Dr. Reid: I beg the hon. Gentleman's pardon. At least we all have the satisfaction of knowing that we paid for the postage on the letter. Presumably he received it yesterday, but he said that it was dated 9 December. Even at the peak Christmas season, the Post Office—that efficient, publicly owned service—is delivering letters to Conservative Members within three days. If "it ain't broke", why did the Government want to fix it? Why

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could they not develop commercial freedoms and allow the Post Office to live in balanced public ownership but with private investment?
The Government should have introduced proposals to help small businesses, to promote innovation and to improve regional investment. There was none of that in the Chancellor's speech and he has had not one but two goes at it this year alone. There is nothing constructive in the proposals. I return to the quotation to which I referred earlier—that jewel from the hon. Member for Croydon, South, who said, "If it ain't broke, why fix it?" That little gem was an attempt to justify what effectively has been a do-nothing Budget or, certainly, a do-nothing-good Budget.
In my previous speech, I mentioned that this was, in a sense, a Government in waiting. I said that the Foreign Secretary was waiting for his blessed retirement, that the President of the Board of Trade was waiting for the call and that the Secretary of State for Employment was waiting for his opportunity. That is how they have appeared throughout the whole economic shambles, paralysed by inaction and inventing a new ideology based not on Oscar Wilde, who was mentioned earlier, but probably on Dickens—a Majorism-Micawberism based on the principle that something will turn up. However, nothing has turned up or is likely to turn up. If the Government continue to wait, they will become the only Government in history to have stayed a Government-in-waiting after they have been elected.
The Government may wait but they will not suffer the effects of their inability to act and their lack of strategy and economic foresight. Nor is it Conservative Members who will suffer because they are guaranteed an income for as long as the Government continue in power—but no longer. The people who really suffer are those outside, not only the unemployed, the homeless and the socially deprived but the business men and women who are prepared to play their part by risking and investing their labour and their time if the Government were prepared to do the same.
Those people are being let down by the Government more than the House has been let down. For as long as the Government continue on that path, those people will ultimately be the judges, and I very much doubt that their judgment will be other than the harshest when the time comes.
8.10 pm
Mrs. Jacqui Lait: I listened to much of the debate on the Budget last week and the week before and to most of the debate this evening. The dominant impression that I received is that our public finances are in apple-pie order, so we can spend every ha'penny that we can get our hands on, a notion exemplified by many of the Opposition's contributions tonight. The Liberal party's spokesman, the hon. Member for Gordon (Mr. Bruce), seemed to think that we had plenty of money and he was planning to spend it on a range of usually woolly Liberal ideas. In fact, we have heard a list of ways to spend money that we do not have.
Only when we can make it clear to the Opposition parties that the whole purpose of the austerity that we have had to inflict in the past couple of years was to ensure that our economy grows and becomes a good solid
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basis for expansion will we be able to achieve what we happily admit is our goal—to cut taxes so that people have more choice as to how they spend their income. That is what we are all working very hard to achieve.
It was interesting to learn that the hon. Member for Dunfermline, East (Mr. Brown) clearly cannot differentiate between the increased income that is derived from income tax and value added tax in an expanding economy and increased rates of tax. That would disturb me greatly if he had any pretensions to becoming Chancellor of the Exchequer.
The hon. Gentleman set out to describe the perfect entrepreneur to be rewarded through our economic system. He said that it should be a man of vision, someone who creates jobs, is successful and who exports. He described perfectly Maurice Saatchi who, with his brother, set up and for many years ran the most successful advertising agency in the world. It went through a bad patch but has now recovered and that man should be rewarded and be able to reap the benefits of his own skills. That the Opposition are still censorious about such achievements gives me great cause for concern and reminds me of the famous saying about the Bourbons to the effect that they have forgotten nothing and learnt nothing.
One of the great strengths of the Budget this year and last year was the determination to ensure that inflation should never again ruin our economy. It has paid off. We have very low inflation and, consequently, an expanding export market and a recovery that many of us could only have dreamed of. The conditions are now parallel to those which allowed the German economy to become one of the strongest in the world after the second world war and the deutschmark to take over the dominant role in world trade once occupied by the pound. We have managed to create those conditions in the United Kingdom.
It was interesting to learn that at Essen at the weekend one of the Commission's officials said that, should we ever wish to adopt a single currency, on current projections only two countries would make it—one was Germany and the other was the United Kingdom, and our finances are in better nick than the Germans'. We have created the right conditions and we must hang on to them.
We must encourage our manufacturing and export sector. Many of our services also make a great deal of money from exports and should not be deprived of the opportunity to do so. We must ensure that that sector drives our economy and continues to keep it on course.
In the past, any expansion in our economy has come through the housing market. We have driven up housing prices and the demand for consumer durables, which have had to be imported. We have thereby drained any strength from our economic recovery. Sad and difficult though it might be, the housing market remains depressed. There are many reasons for that, but one that is rarely dealt with is the fundamental change in demography, which will in the long term ensure that house prices remain steady.
We have an aging population and most of us own our own homes. There is no longer such a demand for housing to buy. When parents die, the family house is no longer occupied and owned by the children, but goes on the market for sale and resale, thereby meeting the existing demand. That demand matches supply, so there will not be a significant increase in house prices for a long time. That may be difficult, but it is as it should be. It is another factor in the effectiveness of the German economy.

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I am conscious of the fact that this is the second time that I shall have detained the House on the same topic, but smuggling concerns me greatly. I shall try not to repeat what I said in the Budget debate or what some colleagues and Opposition Members have said about it. I understand entirely why the Chancellor had to do what he has done but, as someone said on the radio, we have given smugglers a pay rise. I shall consider the issue under three headings.
First, I clearly have a constituency interest in smuggling. Any Member of Parliament with a constituency on the south coast who denies that there is a problem with smuggling is not in touch with his constituents. As hon. Members have said, smuggling extends beyond the south coast, but it is having an adverse effect on many small businesses there, some of which have been struggling to keep going.
The second reason why I am so concerned about smuggling is that it undermines the rule of law, and the third is related to health. Let me cite some examples, other than those that we have already heard, of the extent of smuggling.
The hon. Member for Workington (Mr. Campbell-Savours) gave a very elegant exposition of the problem as he sees it, and I cannot disagree with him. In one sense, I have some sympathy with the private enterprise shown by smugglers. There is a well-known character in my constituency who lives on social security benefits. Once a week he takes his backpack, gets on the ferry from Ramsgate to Belgium, goes to a tobacconist where his order is waiting for him, puts it in his rucksack, gets the same ferry home and makes a profit of £150 a week.
I do not blame him. We are handing people profits. In my heart, I find it very difficult to say that that man should not commit such an act. Indeed, there are many other cases where one has tremendous sympathy with the opportunity being presented. We wish to create a nation of entrepreneurs. We are doing it. Unfortunately, we are doing it through them having to break the law.
Mr. Thomas Graham: I do not wish to take up much of the hon.Lady's time, but is she aware that, in Scotland, we have a big coastline and, not long ago, smugglers trying to smuggle in cocaine and marijuana were found? Does she also realise that the Customs and Excise service is being cut, and we shall not have the same number of people trying to defend our coast from the smuggling of cocaine and other drugs?
Mrs. Lait: If the hon. Gentleman cares to listen to the rest of my speech, he will hear that I have reached the conclusion that, fundamentally, prevention of smuggling is not the answer.
When it comes to alcohol, many people have talked about the beer smuggling that goes on. In fact, Shepherd Neame, one of the Kent brewers, has told me that it is brewing an extra 1 million pints a year, which it sends to Calais—99 per cent. of which catches the next boat back. However sensible a commercial decision that is, there is something faintly ludicrous in Shepherd Neame doing that. The brewer, however, makes the sensible commercial point that, of course, its beer no longer stays in Kent. It is getting better known throughout the United Kingdom. So, commercially, Shepherd Neame is making
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a much bigger impact than it would if it remained a small regional brewer in Kent. However, is that the way in which we wish to go?
I am not aware that any hon. Member has mentioned that in the UK, especially in the south, there is an increasing number—there was an increasing number—of English vineyards making increasingly better wine, which is quite drinkable and very drinkable in many cases. Those vineyards were some of the very first businesses to be hit after the creation of the single market.
One of the areas in which they specialised was vineyard-gate sales. Those disappeared because people were going across to France. I accept that the making of English wine will never be a dominant industry as it is in France and Germany, but I applaud the English vineyards and I drink their wine. It is very hard for them to have to cope with the increased amount of wine that comes into the country and hits their market quite directly. In fact, I know that they, too, have tried to set up their own wine-selling operation in France to bring wine back.
We need to look at the practicality of what is happening in the smuggling world in a legal context. One of my fundamental worries, quite apart from my parochial concern, is about the undermining of the rule of law. We find that there is not a tobacconist, a newsagent, a pub owner, a restaurateur, or a café owner who has not had somebody knocking at the back door asking whether he or she wanted cheap tobacco and cheap alcohol. I admire those who have the guts to say no, because they are facing commercial death. However, I have great sympathy with those who say, "Yes, I'll take it." If one is offered alcohol and tobacco at prices that one cannot match anywhere else in a recession, it is a very great temptation. We all know that human nature is fallible.
The issue goes further than that. It is easy, very easy, for honest traders to fall into temptation as well. The more available cheap tobacco and alcohol is, the easier it is to fall. I know that some of the tobacco companies are trying to make their cigarette packs smuggle-proof.
Mr. Jimmy Wray: Will the hon. Lady tell the House just what the solution to that problem is? The Government have had 16 years to do something about it, and they created the problem.
Mrs. Lait: I am afraid that the hon. Gentleman clearly has not been following the advent of the single market. The problem has arisen only in the past two years. If the hon. Gentleman bears with me, I shall get to the solution.
I do not think that hon. Members have yet appreciated the damage that smuggling is doing to the body politic and to the health of the nation. My hon. Friend the Member for Chislehurst (Mr. Sims) defended the high taxation of tobacco. I have every sympathy with that, as I pointed out to him at the time. I am a non-smoker. I loathe smoking and I find it exceedingly difficult when I address the problem.
I also find it very difficult when I deal with people in the health industry—I use that term in its wider sense—because I do not think that they have yet realised the nature of the problem. General practitioners have not yet seen the increase in the number of patients with respiratory diseases. It is too soon. They have not seen the increase in the number of patients with alcohol-related problems. Also, we are not yet finding schools picking up on youngsters who have access to cheap tobacco.

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Research needs to be conducted in those areas. We need also to change the mindset, to take into account availability and the damage that, in the long run, could be done by the excessive provision of cheap tobacco and alcohol.
So one of the things that the Department for Education and the Department of Health should do is institute research plans to check where the effects of that excessive provision are evident. I am sure that it will not be long before we start to pick up through GP surgeries signs of greater access to cheap tobacco and alcohol. We need to work closely with the medical profession to ensure that its mind-set is changed to take into account the damage that is being done, because there is no point in having a policy of high taxation on tobacco if it is being undermined by easy access to much cheaper stuff.
Opposition Members have been encouraging me to come up with the answer. I have already told them that prevention does not work. I come from the historic smuggling area of the Romney marsh, and the figures from the 18th century that I have discovered so far showed that the cost of prevention far outweighed the cost of any of the goods captured. We are seeing precisely the same happening today, even with the recent successes in Eastbourne and with the South Yorkshire miners. Prevention is not the most cost-effective way in which to deal with the problem and, while every little helps, it does not answer the problem.
I also endorse the remarks about the European Union tobacco subsidies. I take issue—slightly—with my hon. Friend the Member for Colchester, North (Mr. Jenkin). We had a debate in the House about whether Community tobacco was even used. I have to tell him that 100,000 tonnes of tobacco produced in the Community is being smoked in the Community. As we are all agreed that it is pretty poor stuff, think of the lungs of the people who are smoking it. We cannot glibly say that we do not use that tobacco. We do use it and we are spending about £1 billion a year on subsidising its production. I was glad that, in Essen, it was agreed that the entire common agricultural policy should be looked at. I hope that the first thing that is done is to get rid of that tobacco subsidy.
We also must take into account the point made so effectively by my right hon. Friend the Member for Shropshire, North (Mr. Biffen) about the clash of cultures between ourselves and the other members of the European Union. We have always had a policy of high taxation on tobacco and alcohol and low taxation on food. The opposite has been the case on the continent. It is too easy to say that we must harmonise. Those of us who believe in subsidiarity would never suggest that harmonisation is the answer. My right hon. and learned Friend the Chancellor used the term "approximation". I would say, "Take the profit out of smuggling." That is the way forward.
I accept that that is a long-term business because we must persuade countries that cheap tobacco and alcohol are bad for their populations. The medical profession in this country must work much more closely with its colleagues on the continent to make them recognise the damage that is being caused to the lungs and livers of the populations of those countries. That is a long-term proposal because we all know how resistant the medical
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profession is to change. However, I believe that the medical profession has a real responsibility to work with its colleagues on the other side of the channel.
Will the Treasury please stop considering excise duty as the mulch cow from which it can solve any problem? For the reasons that I have cited, for my constituents and anyone on the south coast, for the rule of law and the continuing good health of our population, I urge the Treasury to take its responsibilities seriously and to stop using excise duty as a way of solving all its problems as that wrecks the health of more people than I, and many hon. Members, would wish to take responsibility for.
Mr. Graham rose—
Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): I call the hon. Member for Londonderry, East (Mr. Ross).
8.31 pm
Mr. William Ross: I apologise for speaking ahead of the hon. Member for Renfrew, West and Inverclyde (Mr. Graham), as I always like to listen to him. I promise to try to be around to hear what he has to say.
We are not constricted in this debate as we were in the last Budget debate when speeches were restricted to 10 minutes. For much of this afternoon, when I looked around the Chamber, I was reminded of the hymn which states:
"The tumult and the shouting dies;
The Captains and the Kings depart".
There is not the pressure to be present today to make our case. The bite has gone out of the debate. As a result, we have ventured into some very interesting highways and byways.
I listened to most folk this evening with a fair degree of interest. I was particularly interested in the Chancellor's comments. At one stage, he told us that the Government had taken the necessary steps to restore the nation's finances. When I think back to the absolute essential, which was September 1992, I recall that the Government were dragged kicking and screaming to the point where the necessary step was forced on them. Without that, we would still be in the dreadful situation that had pertained for a year or two before then.
I also listened with interest to the comments of Opposition Members. It appeared to me that, on occasion, there was a germ of convergence on the view that public debt had to be kept under control. When I think back to the debates to which I listened when I first became a Member, I believe that that convergence of view is very welcome.
This is a particularly interesting debate on the economy of the entire nation in view of what is happening in Belfast today and what is going to happen tomorrow with regard to the investment forum for Northern Ireland. I hope that that will have considerable effects down the years for my constituents.
I am grateful to the hon. Member for Redcar (Ms Mowlam), who kindly let me have a copy of the Labour party's views on what should be done in Northern Ireland. I assure her and her colleagues that we will read that document with great care. Whether or not we agree with it is a different matter, but we will read it with great care. The mere fact that we can think about such things is a sign that, even in Northern Ireland, we are approaching

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what passes for normal politics in the rest of the United Kingdom. That is a welcome change from that which normally gives us cause for concern.
With regard to the Northern Ireland economy, we are promised money from many sources in the coming months. My view is simple: those who call for that money to be spent on good works, community relations, training and all the rest of it should be told very quietly, "No, this is one off." When the money is spent, we want to see something on the ground. Whether that is a bridge, a new school or a new road is immaterial to me; we want something permanent in the infrastructure, or possibly in education in Northern Ireland, even at the level of primary or secondary schools, where much rebuilding is needed.
That money will not last. It is not normal government expenditure which will roll on for many years into the future. It is a short-term, one, two or three-year process and the money will then be gone. We want something permanent when the money is spent. We do not want it to be frittered away on projects which, no matter how worthy in themselves, should be met from normal government expenditure over a longer period. My party will give the Government its views on how those extra sums should be spent on very worthy things which should be done and which we believe should be carried into effect as speedily as possible.
In the first Budget debate, I referred to the consequences for rural dwellers of the rising cost of motoring. I suppose that I could do worse than repeat what I said then. However, I must add to what I said by saying that, as so many people have no real alternative and are absolutely stuck in their homes from morning to night if they do not have a vehicle and as the social and economic life of the countryside depends totally on the ownership of a car, and the more remote one is from a large conurbation the more essential that vehicle becomes, the further increase in the cost of transport fuel in this mini-Budget is most unwelcome.
Under the Rio convention, the Government have already committed themselves to steadily raising the cost of fuel for transport. That cannot be allowed to pass unchallenged and it cannot go on. If we allow it to continue, we will so damage the social fabric of our rural areas that social life as we know it will simply cease to exist. There is no alternative, whether we like it or not, to personal transport for much of the United Kingdom and for many millions of people who live here.
Where alternatives exist, such as the transport systems in large cities and suburban areas, let us by all means promote them and use them. Let us make them attractive to the people who use them and try to cut the number of personal vehicles that enter towns and cities every day. However, we must not forget the very real problems and concerns of rural dwellers in that respect.
The hon. Member for Hastings and Rye (Mrs. Lait) and others referred to some of the problems that have arisen as a result of the increase in duty on alcohol and tobacco. Our experience in Northern Ireland, especially with regard to the tobacco and cigarette manufacturing industry there, is that increases in taxation on tobacco have the unwelcome effect of sucking in legal imports, never mind the illegal imports which are exercising the minds of hon. Members who represent the south-east of England and further afield.
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A balance must be struck in the new borderless Europe. The right hon. Member for Shropshire, North (Mr. Biffen) drew attention to the underlying reasons for some of the problems. However, we simply cannot go on allowing important sectors of the economy to be undermined or destroyed because we are so out of step with other countries. We need to exercise control over those matters to protect government revenue and the income and jobs of our constituents throughout the kingdom.
Much has been said about the smuggling of alcohol. I am one of those who believe that far too much alcohol is consumed in the western world, anyway, not least in the United Kingdom. Those of us who have encountered the effects of the excess consumption of alcohol and the utter misery that it has caused for many people would normally welcome the fact that it had become so pricey that most people could not afford it. I used to have a very simple view of pubs. I thought that they should be nationalised and then they would be bound to go broke and fail. Unfortunately, no Government have had the guts to go down that road, so a lot of people drink a lot of alcohol.
Mr. Graham: Hear, hear.
Mr. Ross: Scotland is infamous in that respect, but it is not the only place in the United Kingdom where alcohol is used to excess.
The subject of alcohol and tobacco smuggling draws my mind back a few years. I am sure that the Chief Secretary to the Treasury will recall the immense problem from which people in the car retail business in Northern Ireland have suffered for many years. I refer to the enormous problem of huge numbers of vehicles being imported from the Irish Republic on such a scale and for such a period as to wreck many legitimate businesses in Northern Ireland. The problem arose because of the manufacturers' pricing policy. They changed their prices to sell cars in each nation state. Different prices were paid for the same car in each nation state. Once one was able to import a car, one was able to reap the benefits. Manufacturers' pricing arrangements arose largely because of the different taxation arrangements.
The Government should explore whether they can persuade the manufacturers of beer and other alcoholic drinks to alter their prices in order to bring the matter under control. However, I suspect that, like the efforts to control the importation of cars and the resultant damage in Northern Ireland—they were quite ineffectual, and whatever the Government did was soon circumvented—anything that the Government do in respect of the importation and smuggling of alcohol and tobacco will be a waste of time.
The money is available, but, unless the Government are prepared to close the borders and to control them, they simply cannot control or destroy the trade which has been built up. The hon. Member for Hastings and Rye has told us the reason for that trade—there is money in it. Therefore, a lot of people will do it if there is a lot of money in it. Some of them must think that they have drawn six lottery numbers every Saturday, judging by the way that they are behaving.
The other matter to which I draw the attention of the Treasury team yet again is the tax on heavy fuel which is used for electricity generation. The Chief Secretary to the Treasury will recall that I mentioned previously that, until the Budget, Northern Ireland was paying 30 per cent. of the total tax on heavy fuel for electricity generation in the

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United Kingdom—£11.67 million last year. The increase in the Budget brought about an increase of £4.82 million, so we are now up to £17 million.
That is an extremely heavy burden on the small generation capacity in Northern Ireland. It must be dealt with, if not in the short term, certainly in the long term. I understand that that burden alone amounts to roughly 1p a unit on electricity in Northern Ireland. That is only one of two or three such measures in the pipeline.
Bearing in mind that there is a forum and various efforts to increase investment in Northern Ireland, when we tell people that electricity there is the dearest in the United Kingdom, it is a bit off-putting. The best interests of the United Kingdom are not served by such a burden on generation costs. Although I welcome the two interconnectors—one has been constructed and another is being constructed—they are only a help. In the long run, we must bring down our generation costs, and there is no short-term way of doing that other than by doing something about the tax on heavy oil.
The main matter is the amount of money that is raised by indirect taxation in the United Kingdom. The right hon. Member for Shropshire, North drew attention to the difference between our view and that of the rest of Europe. He said that there was a limit beyond which people simply would not go. I must tell the Treasury team that we have reached the limit of the money that we can extract from the population by means of indirect taxation. Indirect taxation is much beloved by the Conservatives, and one can understand why.
It is like a banker's order; once it is in place, it is very hard to remove, and one never thinks about it while paying it every day of one's life. But it is an onerous tax, because it applies to everyone. Of course, people on low incomes pay a larger proportion of their income in indirect taxation than do those on higher incomes. The Government have had to resort to increased benefits for those people, thereby increasing the social security bill.
I should have thought that it was self-evident that, whenever taxation reached the point at which the Government had to compensate from tax, something was going far wrong and it was time to go back to basics and take a long, hard look at how they were trying to raise tax. Therefore, we need to reconsider the relationship of high taxation to the social security benefit entitlement system; we might then discover that lowering such taxes will lead to a lower bill for social security benefits. That would always be a help.
In the previous debate on such matters, I drew attention to my party's view that, although we should be absolutely adamant that we will not tax essentials that people need every day—fuel is clearly regarded by the population as one of them—that is not the whole story. We have a high public sector borrowing requirement. It is coming down again. Much of the drop in the requirement this year is as a result of more people being back at work, the fall in inflation and the fall in interest rates. That is very welcome, because it lays a long-term, sound foundation. However, if there is a sudden large rise in the public deficit for a year or two, surely the only honest way to deal with that is to put up income tax. It is the most flexible tax of all.
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If, instead of trying to put 17.5 per cent. VAT on fuel, the Government had stuck 3p on income tax, that would have been mighty unpopular, but it would have been honest. The Government would have received the revenue immediately, and that would have been welcome. The pain would have been felt immediately, and people would have said, "You are the lot who did it, and you promised not to do it." Perhaps that is a good reason for not doing it, but the alternative has turned out to be even worse. Furthermore, there would have been no recycling of the complaint; the matter would have been over and done with.
Surely one of the great lessons of VAT on domestic fuel is that, if the Government are going to tax, they should get it over and done with, instead of having six or seven bites at the bitter lemon. It does not get any nicer; it just allows people more time to think about how they will beat the Government, as they will eventually do. An increase in income tax is over and done with in one fell swoop and can be easily reversed when conditions allow.
I wonder whether the Government have pondered in the last week or two what the situation would have been if, instead of putting 3p on income tax to raise the £5 billion they need, they had put on 4p or 5p. They would have been in a wonderful position come next December. They could have taken 4p from income tax without being any worse off and they would have received the plaudits of the entire country for fulfilling their election promises by reversing unfortunate taxation measures.
The Government could have been in a much happier position in the run-up to the next general election. As a result of the decision taken in the House on VAT on fuel, the Chancellor was freed from that massive millstone. I suspect that, when he looks back in three months or six months, he will realise how fortunate the Government were to have been defeated. The matter will not return to haunt them.
Tax that is imposed to meet an immediate need should be able to be reversed easily and quickly. That leads me to question why the Government tried to increase VAT on fuel. It can only mean that they believe that they will need considerable revenue for a long time. They opted for a tax with long-term consequences which is difficult to reverse. For that reason, I fear that the Government do not expect to be out of the woods for some time; therefore, they are laying the foundations for sound public finances at the time of the next election. When that time comes, I hope that we will have seen a huge reduction in the PSBR, and that we will be close to repaying public sector debt.
8.51 pm
Mr. David Lidington: The test for this Budget is the extent to which it equips the British economy to cope with the dramatic and turbulent changes being experienced not just by the United Kingdom but by the entire industrialised world. The pressures on our economic policy making derive from two immensely powerful forces: technological change and international competition.
The hon. Member for Londonderry, East (Mr. Ross) began his speech by quoting from Kipling's "Recessional". If my memory serves me correctly, a later verse reads:
"Lo, all our pomp of yesterday
Is one with Nineveh and Tyre."

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Western nations have become used to material prosperity, high personal living standards and a standard of public services of which our grandparents would scarcely have dared to dream. In the face of competition from the far east and Latin America, if we are not careful we shall find the expectations with which we have grown up undercut by a very harsh economic reality.
The second great force for change is technology, which affects not only the manufacturing sector but also service provision. There are constant reports of redundancies in banks and building societies. Big employers in my constituency, such as Equitable Life, grapple daily with the fact that machines can do jobs more efficiently and with fewer mistakes than people can.
Those pressures will not go away. The test of our economic policy must be whether, in the face of that turbulence, the policies announced by the Chancellor of the Exchequer will help British companies to sell their goods and services to customers in this nation and throughout the world. In the end, that is the only way to ensure sustained growth and secure jobs. It is the only way to provide high personal living standards and the wealth to spend on the schools, hospitals and railways that hon. Members on both sides of the House and thousands of our constituents want.
The Government must look wider than the Budget in addressing those problems. We do not have to accept entirely the analysis of an historian like Correlli Barnett to appreciate that the British economy has deep-rooted problems which must be tackled through a range of policies, and not solely by the economic levers available to a Chancellor of the Exchequer. I am convinced that our hopes of creating wealth and increasing living standards critically depend upon policies of sound money, low inflation and controls on Government borrowing and spending. Those economic measures alone will not be sufficient to achieve our aims, but they are necessary elements of our continued future prosperity.
That is why, whatever quibble I may have with the particulars of the Chancellor's package, he has my wholehearted backing for his top priority of getting public finances in order and keeping them in order—even if my colleagues and I must accept the necessity of following policies which in more propitious circumstances we would have preferred not to see enacted.
What I find depressing about Labour Members' speeches is that they fail to grasp the scale of the present problems confronting our country and to advocate persuasive, economically literate solutions to those problems. Unemployment in my constituency is still far too high, but it is falling. Manufacturing industry, particularly exporting businesses, has done well. In a depressed domestic market, the Hoselock company has thrived in overseas markets, winning new customers and bringing profits to this country.
Retailers, particularly small independent retailers, and construction businesses are also finding life very tough. The alternative strategies advocated by our critics produce specious, attractive-sounding measures which in practice would damage those sectors of the economy that they say they wish to assist. That can be seen most of all in their demands for spending. Usually, those demands are hidden because of the Labour Front-Bench team's efforts to keep them under some sort of control at least for a couple of years.
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The pressures for additional spending and borrowing are there all the time, as we heard from the hon. Member for Motherwell, North (Dr. Reid), who mentioned the need to allow local authorities to spend more than their capital receipts. During the last general election campaign, even Labour party Treasury spokesmen admitted that such a policy change would inevitably bring about an increase in public borrowing. In today's circumstances, that would increase the present upward pressure on interest rates. Such pressure is potentially damaging for the retail and construction sectors, which are already the slowest to benefit from the economic recovery.
Despite the advocacy of the hon. Member for Londonderry, East (Mr. Ross), I am not persuaded of the need for further—
Mr. Wray: Does the hon. Gentleman agree that, under the Public Health Act 1897, local authorities have a responsibility to bring their houses up to a tolerable standard so that they can house people? How are we to clear the homeless queues if the Government will not allow those authorities to spend their capital receipts?
Mr. Lidington: The hon. Gentleman would benefit from studying the Conservative manifesto commitment on housing and the record. During the past two years, through our grants to housing associations, we have secured a greater increase in social rented housing provision than we thought possible at the last general election. That is the practical policy for securing better housing standards that the Conservative Government are pursuing.
The hon. Member for Londonderry, East said that an increase in income tax would be preferable to increases in direct taxation. I am not persuaded by his argument, for two reasons. First, the disincentives are obvious—especially for people with earnings around the tax thresholds—and we want to encourage people to take on work rather than rely on benefits. Secondly, in the longer term the labour market is moving towards more self-employment. More people will have a portfolio of occupations, rather than one job with one employer for 30 years. In those circumstances, it is even possible that income tax will become a less predictable and reliable source of revenue for the Treasury and Government spending. For those reasons, the Chancellor was right to avoid further increases in direct taxation last week.
On tobacco and petrol, I share the view of my hon. Friend the Member for Ribble Valley (Mr. Evans). It would be desirable for the European Union to phase out the indefensible subsidies for tobacco growing in southern Europe as quickly as possible.
I was less persuaded by the arguments of my hon. Friend the Member for Hastings and Rye (Mrs. Lait). As a non-smoker with 800 constituents who depend on the tobacco industry for their jobs, I take the view that smoking, to which I have never been attracted, is an activity that should be allowed to consenting adults in the privacy of their own homes. I therefore find myself unable to agree with my hon. Friend's ideas.
On road transport, I must mention to my hon. Friend the Chief Secretary the representations that I have received about excise duty and the changes in classification. I have received strong representations from farmers and the owners of small breakdown and road recovery businesses, saying that the way in which the changes have been framed bites hard on their businesses.

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I hope that Ministers will be prepared to consider that matter again when the Finance Bill comes before Parliament.
On the principle that the increase in petrol duty forms part of a sensible strategy to restrain car use, I have no quarrel with the Government. It causes difficulty to individuals, but if we are honest about the need to restrain private car use and if we are in adult politics, that is surely one of the measures that we must employ.
9.3 pm
Mr. Thomas Graham: I have listened to a number of speeches tonight, and it is sad that none of them has touched on a real aspect of local government which the people of Scotland need desperately. For the past three days, I have spent my time in the turmoil of flooded homes. Nothing has come from the Chancellor today, except further cuts in public expenditure—the public expenditure that the people of Scotland so desperately need.
I was in an elderly woman's home today. It was a beautiful home, but it had been absolutely wrecked and ruined by flood damage. The raging torrent of a river had burst through into her house and devastated her lifelong possessions. She was devastated, and she asked me what I could do to help her. I said that I would raise the matter in Parliament tonight and ask the Government to release money so that the Chancellor of the Exchequer could take the decision to allocate funds to that desperate emergency situation.
I have mentioned many occasions when certain things have hurt me, and have made me feel sorry for my constituents. There are hundreds upon hundreds of people in Scotland tonight—some 800 families—who do not know what Christmas will bring to them. They will not get Santa Claus coming through the door with a big bag of presents, because they saw their presents floating out of the door the other night. Yet the Government stand idly by and say that they can do nothing. They say that there are emergency powers, and that the Bellwin formula states that the Government pay 85 per cent. while the district council pays the other 15 per cent.
If the Government are to make further cuts in public expenditure, how will local government deal with an emergency such as the flooding? I plead with the Chancellor to release money tonight to deal with the flood disaster in Scotland and to assure my people—the people of Scotland—that they can live in comfort and face the new year with the same decency that Ministers will enjoy. Ministers know that they can go back to a warm home. They are well provided for, because Ministers have plenty of money. My constituents tonight do not know what will happen to them. They expect the Government to govern, and to look after the people, but the present Government abandon them.
I had a go at the Chancellor for reducing the price of champagne by 19p—that is literally mind-boggling—and increasing the price of whisky by 26p. A lot of the people affected by the flood work in the whisky industry, so they might be facing not just flood damage but further unemployment as a result of the measures that the Chancellor has taken. In France, of course, people will be over the moon, because they will be getting the jobs.
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I am quite sure that the Champagne Charlies in London will be well looked after. The Chancellor looks after his friends in the City and makes sure that they can bevvy champagne until it bubbles out of their earholes. But they keep punishing the workers and they create huge unemployment in Scotland and the rest of Britain.
I know Scotland well, but I also know England well. The rural communities in both countries are now to be punished by the increase in the price of petrol and diesel. The Government do not seem to think about that, despite the fact that they have destroyed rural bus services and are now destroying rural train services.
After nearly 16 years in power—the Chief Secretary should hang his head in shame—the Government have made the country nearly bankrupt, and they have destroyed businesses by the million.
Mr. Wray: The Government are bankrupt.
Mr. Graham: My hon. Friend is right. We are now approaching Christmas, but what a bleak Christmas it will be for millions of our people and for the pensioners facing the 8 per cent. VAT on fuel.
The other night—after pressure from Opposition Members and one or two abstentions—the Government had to drop the proposal to increase the VAT to 17.5 per cent. I was delighted that Members of the House combined to achieve that, but many hon. Members seem not to realise that the people we look after and represent—the elderly, the disabled, the unemployed and the low paid—demand that the 8 per cent. VAT on fuel should also be dropped. They want a sensible Budget which does not hurt the poor and which starts to take something off the immensely rich whom the Tory Government have created.
The Government have created a division so enormous that it is like the man in the moon. One individual has won £17.5 million in the lottery while hundreds of my constituents face a bleak and horrifying Christmas because the Prime Minister does not know whether to be Mr. Scrooge or Mr. Misery. He should take the opportunity to support the Opposition today and to become Santa Claus and give folk some hope for the future.
The best hope that we have is to burn 16 candles to mark the 16 years and ensure that there is a general election. I should be happy to burn all those candles and to see the end of the Government. I hope that 1995 will indeed see the end of this miserable—aye, very, very, miserable—Government.
9.10 pm
Mr. Andrew Smith: My hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham) could, unfortunately, speak but briefly, but he more than compensated for that with the passion with which he pleaded for the sake of his constituents. Those constituents must be extremely proud of him for the way in which he has spoken up for Scotland, which has been affected so awfully by floods. Let us hope that his pleas have been heard by the Government.
The debate started with an extraordinary admission—perhaps it should not be surprising—from the Chancellor, who refused to give any guarantee to my hon. Friend the Member for Dunfermline, East (Mr. Brown) that he would

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not extend VAT further. He was pressed on that several times, but he absolutely refused to give that guarantee. All hon. Members will have heard his refusal.
He then offered us the assurance that VAT would not be extended without primary legislation. That promise lasted all of four minutes, because we were then confronted with the resolution on VAT on transport, now before the House, in which the right hon. and learned Gentleman proposes to do just that. The Opposition were unconvinced by the Chancellor's assurance, and we will press our amendment to a vote. That amendment would greatly improve the House's control over the Government's addiction to extending VAT.
One simple question has not been answered by the Government. If the measures before us are right, why were they not included in the original Budget? The Chancellor and the Prime Minister could have spared us a lot of bother by getting it right the first time. We could put that question round the other way. Before the hon. Member for Croydon, South (Mr. Ottaway) predicted a massive Conservative defeat at the Dudley, West by-election—his prediction is certainly accurate—he said that he believed that his hon. Friends preferred the original version of the Budget. Judging from the way in which they voted on Tuesday, it is clear that that majority preferred the original version—something that we will have cause to remind their electorate of between now and the next general election.
We must ask why the Prime Minister did not force the original Budget through, as he could have done, by making it a vote of confidence. Three possible explanations can be offered, each of which is profoundly damaging for the Government. The first is the cock-up theory, according to which those on the Government Treasury Bench were so incompetent that they thought all along that they had the vote on VAT in the bag. They did not believe that they had to use the confidence threat even when defeat stared them in the face.
They saw the danger too late and put the Chancellor up to the tawdry and ultimately self-defeating farce of Tuesday's winding-up speech when he brandished £100 million worth of baubles at his Back Benchers 10 minutes before the vote like some second-rate department store Santa Claus. That is no way to carry on with the nation's finances or to run a Government. The House will not forget the pathetic spectacle of the Chancellor casting around for prearranged interventions. He tried to appear clever, but it made him look all the more foolish when his cobbled-together last minute deal came thoroughly unstuck.
The second theory is that the Prime Minister feared that to make VAT a vote of confidence would not be enough to secure victory. If that is correct, his confidence in the Conservative party's will and ability to govern is beginning to match that of the country. I suppose one could say that, unlike the Chancellor, the Prime Minister did not underestimate the vindictiveness of some of his Back Benchers.
The third plausible and interesting theory is that, when the Prime Minister said that the vote on VAT would not be a vote of confidence, he was signalling that he could live with defeat on that. Having been turned over on it in Cabinet, he would let the House turn over the Chancellor. In view of all the talk about the Chancellor being strong
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and taking the lead over Europe, perhaps the Prime Minister thought that it was high time he had his come-uppance.
Whatever the reason, that was a humiliating defeat for the Government in general and for the Chancellor in particular. He was unable to deliver his side on what he had described only a week before as essential to the strategy of achieving economic recovery. The Government got into the mess because they simply did not listen. They thought that they could break their promises with impunity and that what people outside said did not matter.
The hon. Member for Chislehurst (Mr. Sims) said that the Chancellor's policy was defensible but poorly presented. I half agree with him: it was an indefensible policy poorly presented. One of the lessons of the past couple of weeks is that we must listen to what constituents say. I trust that Conservative Members will have heard at Christmas bazaars and senior citizens' dos what we have heard, but only a handful of them take any notice.
In his opening speech the Chancellor said that we are having a few too many Budget debates. I wonder whether he has had a bit more exposure over the past couple of weeks than is good for him and the Government. I was given a charming child's eye view of the Budget by a Conservative councillor who shall remain nameless. His small daughter came into the kitchen and said, "Mummy, mummy, there is something wrong with the television. The same man is on all the channels and I can't get rid of him." I think that the answer was, "Don't worry dear, we are working on it."
People say that it is great news that the 17.5 per cent. VAT on fuel was defeated. However, it is typical of the Government that when they are forced to stop hitting the average punter with one tax increase they hit him with six others. I shall deal with some of those increases. The Chancellor speaks of an extra 1p on a pint of beer, but that is not what the customer will have to pay. By the time profit, VAT and higher transport costs resulting from the increase in diesel fuel are added, it is more likely to be 3p per pint of bitter. For higher strength beers and lagers, the increase may be as high as 5p.
Others have quoted what the Chancellor said in the first of his Budget speeches in the autumn, but it bears repetition. He said:
"one of the most widely publicised other effects of the single market has been the increase in legitimate cross-border shopping in alcohol and tobacco, and in smuggling. Both of these have inevitably meant some loss of duty to Exchequer, pressures on the British drinks industry and some damage to British business. No Chancellor can remain unmoved in the face of this".—[Official Report, 29 November 1994; Vol. 250, c. 1095–96.]
He listened to the concerns of the industries, but, true to form for the present Government, it did not last. His listening was truly a nine-day wonder. Now he is back to putting up tax on beer. Let us make no mistake about it—it will be a jobs killer.
While there is room for argument over the magnitude of the effects, no one disputes that the present and growing extent of cross-channel shopping—both legal and illegal—is having a serious impact on the British drinks industry and in particular on distribution, off-licences, supermarkets and pubs where, in total, thousands of jobs may be at risk.

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Let me repeat the challenge put earlier by my hon. Friend the Member for Dunfermline, East. Will the Chief Secretary in his reply say how many jobs will be lost as a consequence of the Chancellor putting up the duty on beer? Faced with that threat, Opposition Members believe—as the Chancellor said he did two weeks ago—that now is not the time to be putting up duty on beer and widening the differential with France, and we shall vote against that increase tonight.
Many of the same arguments that have been spelt out by my hon. Friends apply to spirits, particularly to whisky, which is so important to jobs in Scotland. We shall also vote against that increase. The hon. Member for Chislehurst (Mr. Sims) argued against the increases as being damaging to jobs and undermining Britain's negotiating position within the European Union. Although he is not in his place, perhaps he will consider voting in line with the arguments he put forward.
With the further increases in petrol duty, the Chancellor is hitting many individuals and families of modest means harder than they reasonably could have expected. Presumably, the whole point of indicating last year that road fuel duties would increase on average by 5 per cent. in real terms was to give people some warning, but on top of the 2½p per litre in his main Budget two weeks ago, the further 1p will increase petrol costs by 10 per cent., which will hit many people very hard—the Automobile Association estimates, by £51 a year.
The hon. Member for Londonderry, East (Mr. Ross) spoke with feeling about the effects of that on his rural constituents and about the particular effects of the increase in duty on heavy fuel, which is used for electricity generation in Northern Ireland.
I shall say something about tobacco. The Chancellor's proposed increase of 6p on a packet of cigarettes on top of the 10p he announced in the Budget is not a change we intend to vote against this evening, recognising the importance of tobacco taxation in helping to cut smoking and the consequent benefits to health, but there are limits to how far the Chancellor can go in hitting smokers.
As my hon. Friend the Member for Workington (Mr. Campbell-Savours) spelt out, smuggling is increasing at an alarming rate. The hon. Member for Ribble Valley (Mr. Evans), drawing on his own commercial experience, protested at the possible loss of front-line customs officers. With smuggling increasing at such a rate, what are the Government doing cutting 500 front-line customs officers? It is absolutely disgraceful.
The hon. Member for Ribble Valley must have been as pained as we were to hear the hon. Member for Hastings and Rye (Mrs. Lait) praising the entrepreneurial instincts of smugglers. Her approach to solving the problem seemed to be to condemn a little less, research as little as possible and do nothing at all. It was a very unpersuasive argument. We are debating a serious issue which the Chancellor recognised, to the extent that he did not increase the duty on hand rolling tobacco, which is particularly prone to smuggling.
I shall now touch on the important issue of equity in relation to tobacco taxation. Given the social distribution of smokers, banging tax on cigarettes is one of the most regressive forms of taxation. A study was carried out earlier this year—we would all do well to take note of
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it—for the Policy Studies Institute, by Alan Marsh and Stephen McKay, funded by the Health Education Authority. It showed just how severe the effects now are. Looking at low-income families with children, it found that nearly three quarters, for example, of council tenants receiving means-tested benefits smoke, spending, on average, more than 14 per cent. of their net disposable income, or £1 in every £7 on tobacco.
We must remember when we vote these increases in the House that giving up smoking, laudable, important and good for us though it is, is certainly not easy. We must remember, too, the particular difficulties for the people who are addicted to tobacco and who are under all the pressures that struggling along in poverty brings. The effect of the Budget will be to take an extra £2 a week out of the already meagre budget of the poorest families. There will come a point at which the poverty effect on children of such families will begin to exceed even the ill health effect of their parents' smoking.
Mr. Graham: My hon. Friend will realise that there are people in my constituency tonight who, because of poverty, because of their very low income, cannot afford to insure their houses, and their houses are now damaged. We will have to pay a fortune to try to put these folk on the right path. That is what poverty inflicts.
Mr. Smith: My hon. Friend speaks with deep knowledge of his constituency. As well as their insurance premiums, which are likely to go up, those people will also have to pay the insurance premium tax as well.
I hope that the Chief Secretary will agree that, with such a big tax increase and with such seriously regressive effects, the Government should act to ensure that help is given to people on low incomes to give up smoking and that the Government should act now to ban tobacco advertising.
Although some hon. Members argued that the mini-Budget measures might be less unfair than the original Budget measures, they are, as my hon. Friend the Member for Warwickshire, North (Mr. O'Brien) pointed out, still unfair.
As the Government's political credibility was on the line and, indeed, was so very fragile, we can understand why the £1 billion had to be found. But there were fairer and better alternative ways in which to raise the money, which the Labour party spelt out—for example, tightening up on executive share options, not going ahead with the venture capital trusts, ending the enterprise investment scheme, ending tax relief on private medical insurance and raising a levy on the windfall profits of the privatised utilities, as spelt out by my hon. Friend the Member for Dunfermline, East earlier. Those measures would have been much fairer and would have added next to nothing to the retail prices index, whereas the Chancellor's measures in both the mini-budget and the original Budget put it up.
As my hon. Friend the Member for Motherwell, North (Dr. Reid) said in his effective contribution, the Labour party would put in place employment measures now to get people back to work and to cut the cost of keeping people unemployed, whereas the national insurance rebate comes comes into effect for the long-term unemployed only in April 1996, when they will have been unemployed for so very much longer.

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What of the Chief Secretary? Opening the Budget debate, he dismissed our VAT amendment as an "opportunistic wheeze."
"True Conservatives,"
he said,
"will not, I believe, cast their votes in the House to support Labour's procedural dirty tricks"—[Official Report, 30 November 1994; Vol. 250, c. 1238.]
It is a fine irony, is it not, that our victory and the victory of the people of this country has forced hint to eat those words and come back to the House to lay in front of us measures to put in place the very proposals about which he was so dismissive just a week ago? We must ask him whether he agrees with the Chancellor's refusal to give any guarantee not to extend VAT in future to food, children's clothes, transport and books. Will he give a guarantee not to extend VAT?
The fact is that Labour spoke for Britain in defeating the VAT increase last week. What is more, together with everyone in the House and the country who supported us, we struck a blow for fairness in taxation. However much it can be argued that the measures we are now discussing improve on the Chancellor's original Budget, they still hit middle and lower-income Britain.
It should be remembered that people are still experiencing the biggest tax increase in British history. At a time when living standards are already falling and real personal disposable incomes are lower than they were, on average, at the last general election, taxes are rising by an average of £800 this year. Conservative Members' constituents will not forget that, however much the Chancellor attempts to bribe them next year.
Mortgage payments are rising; rents are rising; car tax and insurance are rising; holiday insurance, holiday flights, petrol, beer and spirits are all rising. Only the price of champagne is coming down. What an indictment of the Government: they are hitting people with taxes left, right and centre, but cutting the cost of champagne.
One way or another, ordinary families are being hit, while at the same time the Chancellor is unveiling new tax avoidance devices for the super-rich. It is all part of the price that people are being forced to pay for Conservative broken promises—for the Government's unerring instinct for unfairness, and their economic incompetence. With this Budget, people have further proof of why they can never trust the Government on tax again. Labour's message to the people is clear and unequivocal: "We are on your side." As with the whole VAT campaign, we do not just talk about it; we act to change things.
The Government are wrong to underestimate the British people's instinct for fairness and their longing for competence. The people know that they will get neither fairness or competence from this Government, with their "wet night in Dudley" broken promises. It is to the Labour party that the people look for good government; to the Labour party that they look for fairness; to the Labour party that they look for economic policies that work.
This week, the people of Dudley, West will have an opportunity to show the way forward for Britain with Labour. They will show the way forward for Britain with Labour, and they will show the way out for this failed and unfair Conservative Government.
9.32 pm
The Chief Secretary to the Treasury (Mr. Jonathan Aitken): Far from eating any words, as the shadow Chief Secretary hopes, I am proud to stand by what I said last week. It is clear that the Opposition are still in a mood of opportunism and wheezing. My right hon. and learned Friend the Chancellor and I both regret the necessity for today's debate and are sorry that the package of measures introduced to remedy the hole that was blown in the public finances—
Mr. Andrew Smith rose—
Mr. Aitken: No, I shall not give way. Opportunistic wheeze No. 1 will not succeed.
This is very much a package of second choices, but just as the Government have accepted the will of the House—
Mr. Smith rose—
Mr. Aitken: Very well, I shall give way.
Mr. Smith: Is the Chief Secretary confirming that his first choice is still to impose VAT on fuel at 17.5 per cent?
Mr. Aitken: No; the Government have accepted the will of the House. Opposition Members would be wise to understand, however, that there is no such thing as a free rebellion on a Budget measure. That is the fundamental reason why the package contains second-choice measures that the Government would have preferred not to introduce, and it is why we have considerable sympathy with hon. Members on both sides of the House who have advanced arguments about aspects of the package. Other Ministers also originally sympathised with some of those arguments.
Mr. David Shaw: Talking of sympathy, will my right hon. Friend confirm that he and I—as Members of Parliament representing port constituencies—are very concerned about the impact of the rises in alcohol and tobacco duties? Will he also confirm that he and his colleagues will instruct Customs and Excise to ensure that, at every opportunity, anyone who seeks to evade alcohol or tobacco duty is prosecuted and that prosecutions are pursued fully in the courts?
Mr. Aitken: I certainly confirm that vigorous measures are being taken by Her Majesty's Customs, about which I shall say something a little later.
As I have said, we have accepted the will of the House. I am, however, slightly in the mood of the Irishman who in the famous story was giving directions to a stranger. He ends by saying, "But if I were you, I would not have started from here." Perhaps it would have been best if we had not started from where we now find ourselves, but we have—[Interruption.]—and so I shall respond to the various remarks of hon. Members on both sides of the House.
It has been a curiously muted debate, but one would not think so with the sudden chorus of noise that has suddenly manifested itself. The Opposition Benches were until recently notable for the absence of Opposition Members, and consequently their silence. The hon. Member for Londonderry, East (Mr. Ross) got it right when he quoted Kipling's "Recessional", saying

867
that it had been a question of whether the "tumult and the shouting" had died away and the "Captains and the Kings" had departed.
Most Labour Back-Bench Members departed for most of the afternoon, and it was a pretty soporific debate. The first soporific note was made in an intervention—not even a speech—by the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), who seemed not to want the £1 billion or £1.5 billion replaced. He seemed to think that it was not necessary to do so.
The right hon. Gentleman's intervention reminded me of the story of an American senator who—
Mr. Sheldon: Will the Minister give way?
Mr. Aitken: Very well.
Mr. Sheldon: I was making the point that the Chancellor seems to be addicted to fine tuning. As soon as he sees £800 million, he wants to correct it. He could have done it in February. He could have done it in February after he had received further information during the passage of the Finance Bill. He could have done it at his leisure with a greater understanding of what was happening in the economy.
Mr. Aitken: I understood the point the first time round. The right hon. Gentleman's solution would have been to do nothing for a while, to be patient, to wait and to snooze. That would have meant that the uncertainty created by the hole that was blown in the Budget arithmetic would not have been replaced by the certainty of the markets and by the sound and sensible measures that my right hon. and learned Friend the Chancellor introduced.
A great deal of concentration during the debate was focused on the drinks industry. The topic was introduced first by the hon. Member for Gordon (Mr. Bruce), who made an eloquent plea for the Scotch whisky industry, and it was echoed by my hon. Friend the Member for Chislehurst (Mr. Sims). I was somewhat underwhelmed by the hon. Gentleman's plea. He had written to my right hon. and learned Friend the Chancellor on 7 December suggesting various ways in which he could put back the lost revenue following the defeat on the levying of additional VAT on fuel. He did not suggest letting off the Scotch whisky industry. In the eighth paragraph he suggested cuts in the drinking duty, or that they should be put back. He wrote one thing on 7 December and reversed it on the 15th. It is typical Liberal policy to say one thing on one pavement and another thing on another pavement.
Mr. Malcolm Bruce: The Chief Secretary is misreading and misrepresenting my letter. I was saying that he should have reversed the cut in champagne duty, which was introduced in the first Budget. That the Chancellor has chosen not to do.
Mr. Aitken: The hon. Gentleman is quoting from a letter that he has not written. I have his letter. There is no mention of champagne and no mention of Scotch whisky. It reads:
"The Chancellor should review the cuts"—
that is what the hon. Gentleman called them—
"in the drinking industry."
868
Several of my hon. Friends have referred in some detail to the problems that are faced by the drinks industry, not only as a result of added taxes but because of cross-border shopping and smuggling.
I represent a constituency that includes many people who work in and around the two large channel ports of Dover and Ramsgate. I am under no illusion—nor are my hon. Friends, including my hon. Friend the Member for Hastings and Rye (Mrs. Lait)—about the severity of the effects of legal cross-border shopping and illegal smuggling rackets. The effects bear severely on many shops, pubs, wine markets and other businesses where livelihoods depend on alcohol and tobacco sales.
It is no great consolation for a small business man to be told that the loss of revenue to the taxpayer is lower than expected, but that happens to be true. The latest available figures to December 1993 suggest that a full year revenue loss estimated to be £250 million was running at only £200 million. There was a split of £130 million in taxes on alcohol and £70 million on tobacco. A loss of £65 million is estimated to be due to smuggling.
I do not underestimate the severity of the problem. I subscribe to the anecdotal evidence, but I have to deal with the factual and numerate evidence. Let us view the national picture. Revenue receipts from tobacco and alcohol sales—£6.5 billion for tobacco and £5 billion for alcohol—are up significantly, despite the losses from smuggling and cross-border shopping. The paradox is that the local publican, wine merchant and tobacconist are being hurt by the smugglers and cross-border shoppers—as are the vineyards to which my hon. Friend the Member for Hastings and Rye referred—even though national revenues are not so adversely affected.
Mr. John Townend: Will my right hon. Friend give way?
Mr. Aitken: No. I am sorry, but I have to press on because of the time.
The Government sympathise very much with those traders and that is why my right hon. and learned Friend's original Budget contained no proposals to increase duties on alcohol and provided for only small increases in duties on tobacco. We were forced, however, with great reluctance to impose the measures. I regret it, and my right hon. and learned Friend the Chancellor regrets it. We hope that perhaps one or two Opposition Members will start to regret it, too. We hope that all their scaremongering speeches about hypothermia deaths are recognised as falsehoods that cost jobs and cause business closures in the drinks and tobacconist sectors.
I should pick up on the point about solutions to the problem which were mentioned at various stages of the debate.
Mr. Alex Salmond rose—
Mr. Aitken: On the whole, I do not give way to hon. Members who have not been present in the debate.
The hon. Member for Workington (Mr. Campbell-Savours) came up with a bright scheme for harmonisation of tax regimes. The trouble is that the cost in revenue of harmonisation with, say, French rates will amount to between £3 billion and £4 billion, which

869
needs to be set against estimated bootlegging costs of some £65 million. Revenue loss of that magnitude would have to be made up elsewhere, with massive increases in other taxation.
My hon. Friend the Member for Croydon, South (Mr. Ottaway) made some good points on the need to be responsible in increasing interest rates. He said that it was right to increase them by 0.5 per cent., because the warning signs of inflation were there. There have been rises in the cost of raw materials and in commodity prices. My hon. Friend's view was that of my right hon. and learned Friend the Chancellor and that of the Governor of the Bank of England.
I deplored the speech of the hon. Member for Warwickshire, North (Mr. O'Brien), who said that the Chancellor had taken a complete panic measure, and that it was all due to Steady Eddie. The decision to raise interest rates on 7 December was taken on the basis of an assessment of the inflation outlook which had been considered carefully for some time. It reflected economic and political considerations. The Government are determined to take no risks with inflation. It was wrong for the hon. Gentleman to say what he did.
Mr. Mike O'Brien: I am grateful to the Chief Secretary for giving way. Is he trying to tell the House that the panic telephone calls just after the vote, whereby the meeting was brought forward by 45 minutes, had nothing to do with that vote? That beggars credibility. It was, of course, a panic measure and people are paying higher interest rates because the Chancellor made a bad judgment about being able to persuade the House to accept the proposal.
Mr. Aitken: The hon. Gentleman is talking ignorant nonsense. First, he should consider that, throughout the night after the vote, the international markets, including the Tokyo market, remained calm and steady because they were assured by my right hon. and learned Friend's statement at the Dispatch Box that evening. Secondly, the meeting was brought forward by some three quarters of an hour, but it was to do with an auction of gilts that was to take place at 10 o'clock. We wanted to make the announcement at the earliest possible time.
My hon. Friend the Member for Ribble Valley (Mr. Evans) concentrated on cross-channel smuggling and emphasised the need for a stronger and greater intelligence effort. I assure him that we shall increase the intelligence effort because, nowadays, the detection of smuggling is a game not of numbers of uniformed officers at ports but of impressive intelligence effort. That effort is already showing some good results and has achieved some considerable coups in catching smugglers. A major announcement was made only the other day.
I shall also respond to some points made by my hon. Friend the Member for Hastings and Rye, who produced a great deal of anecdotal evidence on smuggling. I was especially impressed by the story of her constituent who makes a regular £150 a week in that way. She said that she wished that the Government would not use excise duties as the milch cow. I assure her that we would much rather not have gone to those particular cows or those particular dairies, but there is no such thing as a free rebellion on a Budget vote and that is what we have to cope with.
870
I deal briefly with the speech of the hon. Member for Londonderry, East. I am glad that a voice from Northern Ireland was heard and that the hon. Gentleman mentioned the investment seminar on Northern Ireland, which was opened by my right hon. Friend the Prime Minister. The peace process grows steadily and quietly and, as it does so, the prosperity of Northern Ireland will grow with it. The inward investment record in Northern Ireland has already been good for many years. In the past five years, total inward investment from the United States has been £536 million. Some 10 per cent. of all employment in Northern Ireland is provided by American-owned companies, which shows that there is a good chance that the momentum will grow.
My hon. Friend the Member for Aylesbury (Mr. Lidington) made an excellent speech, in which he was right to warn us that international competition in technology could cause a revolution of falling expectations. He is right to alert us to the magnitude of these challenges but also to point out that we have record-breaking exports and inward investment and that we are a world trading nation and a world financial centre. These successes depend on sound financial judgment, our excellent supply side reforms and the growing success of Britain's economy, all of which are underpinned by the excellent Budget.
I deal now, as I have been longing to all evening, with the extraordinary speeches of the Opposition's spokesmen. As usual, at least half the speech made by the hon. Member for Dunfermline, East (Mr. Brown) was taken up with completely phoney proposals for taxes to fill the gap which he thinks could have been filled in a better way. We have already demolished his windfalls and his loopholes and I now want to do a demolition job on his share options proposal. He went on about tax avoidance and he attacked Lord Young, Sir John Nott and some poor man from PowerGen who had bought some share options in his company. I shall deal with Labour's continuous attack on share options, and the party might learn a thing or two.
The hon. Member for Dunfermline, East worked himself into a lather of indignation during his denunciation of share options. His thesis is that they are a scandal and a wicked windfall for the undeserving rich. He intends to raise £200 million in new taxation by abolishing them. I have three serious criticisms of the hon. Gentleman for his stance on share options.
The first criticism is the familiar one that the hon. Gentleman has got his sums completely wrong. He claims that £200 million could be saved by abolishing share options, which is a typical exaggeration. As my right hon. and learned Friend the Chancellor told the House on Thursday and today, the actual cost of such an abolition—even if one includes the spouses whom the hon. Gentleman invented—would be around £50 million, so he got his sums wrong by a multiplier of four, which is about par for the course for him and his voodoo mathematics.
My second criticism is that the hon. Gentleman has completely misunderstood his target. In any sensibly run company, share options are offered to and usually taken

871
up by key employees at all levels, including clerical staff,secretaries and junior and middle executives as well as company directors.
Mr. Gordon Brown: I was talking about executive share options.
Mr. Aitken: The hon. Gentleman is going to learn a thing or two tonight. I am glad that he is encouraging me.
The fundamental point is that it is a good practice, because share options give employees the chance to have a stake in the business in which they work. If their company does well, perhaps a few years later they can make a profit on their options. They have to pay capital gains tax, and in some circumstances they might have to pay income tax on them, but it is a way for them to receive a reward for their contribution to making the company in which they work a success. The Conservatives fully support fair share options schemes of the type that I have described. It is typical of the politics of envy of the Labour party that so many of its Front-Bench spokesmen denounce them as a scandal.
That brings me to my third criticism of Labour's attack on share options, which is its barefaced hypocrisy and humbug. I am now going to reveal something to the House, something about some prominent Labour supporters, close friends and advisers to the Leader of the Opposition, who have done extremely nicely out of a certain share option scheme and who have used their profits from those options in an extremely nice political way for the benefit of the leader of the Labour party. I stress that I am talking here about extremely nice people. They appear in columns with headlines such as, "Who's who on the new Socialist social list?" More recently, they have been appearing under headlines such as, "Blair challenged to reveal source of his £79,000 leadership campaign," or as The Independent on Sunday headlined it, "How London Weekend Television men funded Tony."
Those reports, which I see are making Opposition Front-Bench spokesmen uneasy—
Mr. Gordon Brown indicated dissent.
Mr. Aitken:—are all about three London Weekend Television men and their share options. First, there is Mr. Barry Cox, who is described in the press as "running the Blair show" and the "mastermind of fundraising". Secondly, there is the well-known broadcaster, Mr. Melvyn Bragg, who was quoted as saying, "It is quite flattering at my age to be called a Labour luvvie." Then there was Mr. Greg Dyke, who was last month's guest speaker at the annual dinner of Labour's Fabian Society.
Those three friends and advisers of the right hon. Member for Sedgefield (Mr. Blair), the leader of the Labour party, forked out most of the cash or fund-raised it to finance his £79,000 leadership election campaign. There is nothing wrong in that, although I can probably see somewhere a sour face being pulled by the right hon. Member for Derby, South (Mrs. Beckett), who had to run her leadership campaign on a shoestring budget of merely £17,000. The deputy leader had to run his campaign on an even shorter shoestring of £13,000. The one thing that those three former London Weekend Television
872
executives have in common, besides, of course, being good, down-to-earth socialists and good Blair men, is that they made millions out of share option schemes.
Mr. Barry Cox, who, as I was saying, runs the Blair show, made a profit of £1.2 million on his share options. Mr. Melvyn Bragg, the "Labour luvvie", made a profit of £2.2 million on his share options. That Fabian socialist, Mr. Greg Dyke, made £5.3 million profit on his share options. No doubt the shadow Chancellor had such instant media millionaires in mind when he ranted at the Labour party conference in Blackpool and said:
"I am serving notice on executive share option scrounging, on the something-for-nothing elite … the undeserving rich, who in pursuit of short-term gain, largely for themselves, have starved the country".
He may have added the words, if he had been truthful, "and they have fattened up the coffers of the Labour party".
But we Conservatives are not the party of the politics of envy, so we say, well, good luck to those instant media millionaires, even if their share option schemes seem to bear more than a passing resemblance to the national lottery. It brought them bigger and faster bucks than almost any other share option scheme in Britain because of some rather strange devices called golden handcuffs. Perhaps those golden handcuffs were the sort of thing—
Mr. Graham: Will the Minister give way?
Mr. Aitken: No.
Perhaps they were the sort of thing that the Leader of the Opposition had in mind when he replied—
Mr. Graham: Will the Minister give way?
Mr. Aitken: I hope someone will put some handcuffs on the hon. Gentleman. That would be helpful. Anyway, I am looking forward to seeing Labour's—[Interruption.]
Mr. Deputy Speaker (Mr. Michael Morris): Order. The House must settle down a little. I know that it is—
Mr. Aitken rose—
Mr. Deputy Speaker: Order. The right hon. Gentleman must obey the orders of the House as much as anybody and pay attention to the Chair.
Mr. Aitken: I can quite understand why the—
Mr. Salmond: On a point of order, Mr. Deputy Speaker. I am having—[Interruption.] I am having extreme difficulty in hearing. I could not make out whether the Minister was referring to the undeserving rich or the undeserving Ritz.
Mr. Deputy Speaker: That is not a matter for the Chair at all.
Mr. Aitken: I can see what the Labour party cannot stand about the interesting story that I have been telling about everyday Labour folk. It is what I think the House and the country cannot stand, either—the bare-faced humbug of a shadow Chancellor who has been trying to

873
make a sanctimonious scandal out of share options. Fair and legal share option schemes that are acceptable to the friends of the Leader of the Opposition should also be acceptable to the working business people of Britain. So let us have no more double-talk and double standards on taxation gimmicks such as windfalls and loopholes and share option schemes. They will not work. Taxing them will not raise serious revenue.
Mr. Gordon Brown: Will the Chief Secretary simply confirm that it will not be Government policy at any time to tax executive share options as income?
Mr. Aitken: In certain circumstances, share options are already taxed under income tax. That just shows how little the hon. Gentleman knows about it.
Mr. Brown: Will the right hon. Gentleman give way?
Mr. Aitken: No, I shall not give way a second time.
Being thoughtful for a moment, these exchanges show that there are perhaps two fault lines running through British politics at the moment: the unity gap on the Conservative Benches and the credibility gap in the Labour party. Both gaps are bad for the country.
Mr. Graham: Will the right hon. Gentleman give way?
Mr. Aitken: In the long run, when the general election comes around in two years' time, it will be Labour's credibility gap that will prove to be the greater and more enduring liability. The greatest and most depressing feature of our six days of debates on the Budget resolutions has been the complete absence of answers, let alone serious alternatives and policies, from the Opposition Front Bench.
As The Sunday Times said in its editorial last Sunday, in words which must have chilled the Opposition:
"A 39.5 Labour opinion poll lead will not last long if it rests on a policy vacuum."
What an incredible vacuum it is, and how cruelly Labour has been exposed in these debates. So much so that the national society for the prevention of cruelty to shadow Chancellors almost had to rush in the stretcher bearers last Thursday when my right hon. and learned Friend the Chancellor attacked the hon. Member for Dunfermline, East.
As everyone knows, my right hon. and learned Friend the Chancellor made mincemeat of the hon. Member for Dunfermline, East. He chopped him up into little pieces and finally held aloft to public ridicule the one and only remaining portion of his anatomy, which he called the hon. Gentleman's brass neck.
However, my right hon. and learned Friend understated his case. What we have on the Opposition Front Bench is not one brass neck, but a brass band of brass necks. They cannot play a tune. They do not understand the instruments of economic policy. Even their negative
874
noises of discord fall into embarrassed silence whenever they are asked serious questions about the economy.
For example, we can ask the following questions: do the Opposition think that the present and planned levels of borrowing are too high or too low? Would they put taxes up or down? Do they think that public spending is too high or too low? Will they give a figure to define the full employment that they so glibly promise—
Mr. Graham: Will the right hon. Gentleman give way on that point?
Mr. Aitken: No, I shall not give way.
Mr. Graham: On a point of order, Mr. Deputy Speaker.
Mr. Deputy Speaker: Order. The hon. Member for Renfrew, West and Inverclyde (Mr. Graham) has been leaping up and down for the past 12 minutes. It is clear that the Chief Secretary to the Treasury does not intend to give way.
Mr. Aitken: I have a couple more embarrassing questions. At what figure will the Opposition set the minimum weekly wage which they have undertaken to introduce? Will it be more or less than the £60 price of the Leader of the Opposition's haircut? What is their estimate of the number of jobs that will be lost as a result of what the deputy Leader of the Opposition euphemistically calls the "shake-out" in employment that the minimum wage policy will create?
We hear no answer to those questions. When we ask the shadow Chancellor those questions—he is not just soundbite man, he is soundbiteosaurus rex of the air waves—he becomes Dumbstruck of Dunfermline. That is why today's credibility gap in Labour's economic policy will become tomorrow's vote-losing chasm.
By contrast, this Government and this party are united in support for the commitment to sound finances of my right hon. and learned Friend the Chancellor. We are united in our determination to continue the reduction in public borrowing so that we can get back to our core belief of reducing taxation as soon as it is prudent to do so.
We are united in our determination to back a Budget that will sustain and strengthen Britain's growing recovery. That recovery is showing some of the most impressive signs and statistics seen in Britain for many years—inflation at 2 per cent.; unemployment coming down for the past 20 months, month after month; and 450,000 people have come off the register since December 1992.
What the hon. Member for Dunfermline, East said at the beginning of the debate on the 1993 Budget resolutions bears repeating:
"I make one Budget forecast—that, after the Budget, unemployment will rise this month, next month and for months afterwards."—[Official Report, 17 March 1993; Vol. 221, c. 289.]
He was wrong that month, next month, the month after and the month afterwards. The unemployment figures fell by 45,000 in the month of October, they fell by 28,000 in

875
the month of September, and they are coming down by 1,000 a day.
The feel-good factor might not be here yet, but the feel-safe factor is here. People feel safer because of my right hon. and learned Friend's excellent Budget, which will stand the test of time and sustain the recovery. I commend my right hon. and learned Friend's Budget to the House.
Question put, That the amendment be made:—
The House divided: Ayes 274, Noes 317.

Division No. 20]

[22.00 pm

AYES

Abbott, Ms Diane

Cummings, John

Adams, Mrs Irene

Cunliffe, Lawrence

Ainger, Nick

Cunningham, Jim (Covy SE)

Ainsworth, Robert (Cov'try NE)

Dafis, Cynog

Allen, Graham

Dalyell, Tam

Alton, David

Darling, Alistair

Anderson, Donald (Swansea E)

Davidson, Ian

Anderson, Ms Janet (Ros'dale)

Davies, Bryan (Oldham C'tral)

Armstrong, Hilary

Davies, Rt Hon Denzil (Llanelli)

Ashton, Joe

Davies, Ron (Caerphilly)

Austin-Walker, John

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

Banks, Tony (Newham NW)

Denham, John

Barnes, Harry

Dewar, Donald

Barron, Kevin

Dixon, Don

Battle, John

Dobson, Frank

Bayley, Hugh

Donohoe, Brian H

Beckett, Rt Hon Margaret

Dowd, Jim

Beith, Rt Hon A J

Dunnachie, Jimmy

Bell, Stuart

Dunwoody, Mrs Gwyneth

Benn, Rt Hon Tony

Eagle, Ms Angela

Bennett, Andrew F

Eastham, Ken

Bermingham, Gerald

Enright, Derek

Berry, Roger

Etherington, Bill

Betts, Clive

Evans, John (St Helens N)

Blunkett, David

Ewing, Mrs Margaret

Boateng, Paul

Fatchett, Derek

Boyes, Roland

Field, Frank (Birkenhead)

Bradley, Keith

Fisher, Mark

Bray, Dr Jeremy

Flynn, Paul

Brown, Gordon (Dunfermline E)

Foster, Rt Hon Derek

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

Foster, Don (Bath)

Bruce, Malcolm (Gordon)

Foulkes, George

Burden, Richard

Fraser, John

Byers, Stephen

Fyfe, Maria

Callaghan, Jim

Galloway, George

Campbell, Mrs Anne (C'bridge)

Gapes, Mike

Campbell, Menzies (Fife NE)

Garrett,John

Campbell, Ronnie (Blyth V)

George, Bruce

Campbell-Savours, D N

Gerrard, Neil

Canavan, Dennis

Gilbert, Rt Hon Dr John

Cann, Jamie

Godsiff, Roger

Chidgey, David

Golding, Mrs Llin

Chisholm, Malcolm

Gordon, Mildred

Church, Judith

Graham, Thomas

clark, Dr David (South Shields)

Grant Bemie (Tottenham)

clelland, David

Griffiths, Nigel (Edinburgh S)

Clwyd, Mrs Ann

Griffiths, Win (Bridgend)

Cohen, Harry

Grocott, Bruce

Connarty, Michael

Gunnell, John

Cook, Frank (Stockton N)

Hain, Peter

Cook, Robin (Livingston)

Hall, Mike

Corbett, Robin

Hanson, David

Corbyn, Jeremy

Hardy, Peter

Corston, Jean

Harman, Ms Harriet

Cousins, Jim

Harvey, Nick

Cox, Tom

Hattersley, Rt Hon Roy

876

Henderson, Doug

Moonie, Dr Lewis

Heppell,John

Morgan, Rhodri

Hill, Keith (Streatham)

Morley, Elliot

Hinchliffe, David

Morris, Rt Hon Alfred (Wy'nshawe)

Hodge, Margaret

Morris, Rt Hon John (Aberavon)

Hoey, Kate

Mudie, George

Hogg, Norman (Cumbernauld)

Mullin, Chris

Home Robertson, John

Oakes, Rt Hon Gordon

Hood, Jimmy

O'Brien, Mike (N W'kshire)

Hoon, Geoffrey

O'Brien, Bill (Normanton)

Howarth, George (Knowsley N)

O'Hara, Edward

Howells, Dr. Kim (Pontypridd)

Olner, Bill

Hoyle, Doug

O'Neill, Martin

Hughes, Kevin (Doncaster N)

Orme, Rt Hon Stanley

Hughes, Robert (Aberdeen N)

Parry, Robert

Hughes, Roy (Newport E)

Patchett, Terry

Hutton, John

Pendry, Tom

Illsley, Eric

Pickthall, Colin

Ingram, Adam

Pike, Peter L

Jackson, Glenda (H'stead)

Pope, Greg

Jackson, Helen (Shef'ld, H)

Powell, Ray (Ogmore)

Jamieson, David

Prentice, Bridget (Lew'm E)

Janner, Greville

Prentice, Gordon (Pendle)

Jones, Barry (Alyn and D'side)

Prescott, John

Jones, Ieuan Wyn (Ynys Mon)

Primarolo, Dawn

Jones, Jon Owen (Cardiff C)

Purchase, Ken

Jones, Lynne (B'ham S O)

Quin, Ms Joyce

Jones, Martyn (Clwyd, SW)

Radice, Giles

Jones, Nigel (Cheltenham)

Randall, Stuart

Jowell, Tessa

Raynsford, Nick

Kaufman, Rt Hon Gerald

Reid, Dr John

Keen, Alan

Rendel, David

Kennedy, Charles (Ross,C&S)

Robertson, George (Hamilton)

Kennedy, Jane (Lpool Brdgn)

Robinson, Geoffrey (Co'try NW)

Khabra, Piara S

Roche, Mrs Barbara

Kilfoyle, Peter

Rogers, Allan

Kirkwood, Archy

Rooney, Terry

Lestor, Joan (Eccles)

Ross, Ernie (Dundee W)

Lewis, Terry

Rowlands, Ted

Liddell, Mrs Helen

Ruddock, Joan

Litherland, Robert

Salmond, Alex

Livingstone, Ken

Sedgemore, Brian

Lloyd, Tony (Stretford)

Sheerman, Barry

Llwyd, Elfyn

Sheldon, Rt Hon Robert

Loyden, Eddie

Shore, Rt Hon Peter

McAllion, John

Short, Clare

McAvoy, Thomas

Simpson, Alan

McCartney, Ian

Skinner, Dennis

Macdonald, Calum

Smith, Andrew (Oxford E)

McFall, John

Smith, Llew (Blaenau Gwent)

McKelvey, William

Soley, Clive

Mackinlay, Andrew

Spearing, Nigel

McLeish, Henry

Spellar, John

Maclennan, Robert

Squire, Rachel (Dunfermline W)

McMaster, Gordon

Steel, Rt Hon Sir David

McNamara, Kevin

Steinberg, Gerry

MacShane, Denis

Stevenson, George

McWilliam, John

Stott, Roger

Madden, Max

Strang, Dr. Gavin

Maddock, Diana

Straw, Jack

Mahon, Alice

Sutcliffe, Gerry

Mandelson, Peter

Taylor, Mrs Ann (Dewsbury)

Marek, Dr John

Taylor, Matthew (Truro)

Marshall, David (Shettleston)

Thompson, Jack (Wansbeck)

Marshall, Jim (Leicester, S)

Timms, Stephen

Martin, Michael J (Springburn)

Tipping, Paddy

Martlew, Eric

Turner, Dennis

Maxton, John

Tyler, Paul

Meacher, Michael

Vaz, Keith

Meale, Alan

Walker, Rt Hon Sir Harold

Michael, Alun

Wallace, James

Michie, Bill (Sheffield Heeley)

Walley, Joan

Michie, Mrs Ray (Argyll & Bute)

Wardell, Gareth (Gower)

Milburn, Alan

Wareing, Robert N

Miller, Andrew

Watson, Mike

Mitchell, Austin (Gt Grimsby)

Welsh, Andrew

877

Wicks, Malcolm

Wray, Jimmy

Wigley, Dafydd

Wright, Dr Tony

Williams, Rt Hon Alan (SW'n W)

Young, David (Bolton SE)

Williams, Alan W (Carmarthen)

Wilson, Brian

Tellers for the Ayes:

Winnick, David

Mr. Eric Clarke and

Worthington, Tony

Mr. Joe Benton.

NOES

Ainsworth, Peter (East Surrey)

Curry, David (Skipton & Ripon)

Aitken, Rt Hon Jonathan

Davies, Quentin (Stamford)

Alexander, Richard

Davis, David (Boothferry)

Alison, Rt Hon Michael (Selby)

Day, Stephen

Allason, Rupert (Torbay)

Deva, Nirj Joseph

Amess, David

Devlin, Tim

Arbuthnot, James

Dicks, Terry

Arnold, Jacques (Gravesham)

Dorrell, Rt Hon Stephen

Arnold, Sir Thomas (Hazel Grv)

Douglas-Hamilton, Lord James

Ashby, David

Dover, Den

Aspinwall, Jack

Duncan, Alan

Atkins, Robert

Duncan Smith, Iain

Atkinson, David (Bour'mouth E)

Dunn, Bob

Atkinson, Peter (Hexham)

Durant, Sir Anthony

Baker, Rt Hon K (Mole Valley)

Dykes, Hugh

Baker, Nicholas (Dorset North)

Eggar, Tim

Baldry, Tony

Elletson, Harold

Banks, Matthew (Southport)

Emery, Rt Hon Sir Peter

Bates, Michael

Evans, David (Welwyn Hatfield)

Batiste, Spencer

Evans, Jonathan (Brecon)

Bellingham, Henry

Evans, Nigel (Ribble Valley)

Bendall, Vivian

Evans, Roger (Monmouth)

Beresford, Sir Paul

Evennett, David

Biffen, Rt Hon John

Faber, David

Body, Sir Richard

Fabricant, Michael

Bonsor, Sir Nicholas

Fenner, Dame Peggy

Booth, Hartley

Field, Barry (Isle of Wight)

Boswell, Tim

Fishburn, Dudley

Bottomley, Peter (Eltham)

Forman, Nigel

Bottomley, Rt Hon Virginia

Forsyth, Michael (Stirling)

Bowden, Sir Andrew

Forsythe, Clifford (Antrim S)

Bowis, John

Forth, Eric

Boyson, Rt Hon Sir Rhodes

Fowler, Rt Hon Sir Norman

Brandreth, Gyles

Fox, Dr Liam (Woodspring)

Brazier, Julian

Fox, Sir Marcus (Shipley)

Bright Sir Graham

Freeman, Rt Hon Roger

Brooke, Rt Hon Peter

French, Douglas

Brown, M (Brigg & Cl'thorpes)

Fry, Sir Peter

Browning, Mrs. Angela

Gale, Roger

Bruce, Ian (Dorset)

Gallie, Phil

Budgen, Nicholas

Gardiner, Sir George

Burns, Simon

Garel-Jones, Rt Hon Tristan

Burt, Alistair

Garnier, Edward

Butcher, John

Gillan, Cheryl

Butler, Peter

Goodlad, Rt Hon Alastair

Butterfill, John

Goodson-Wickes, Dr Charles

Carlisle, John (Luton North)

Gorman, Mrs Teresa

Carlisle, Sir Kenneth (Lincoln)

Gorst, Sir John

Carrington, Matthew

Grant, Sir A (Cambs SW)

Carttiss, Michael

Greenway, Harry (Ealing N)

Cash, William

Greenway, John (Ryedale)

Channon, Rt Hon Paul

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, Rt Hon Sir Archibald

Clifton-Brown, Geoffrey

Hamilton, Neil (Tatton)

Coe, Sebastian

Hanley, Rt Hon Jeremy

Colvin, Michael

Hannam, Sir John

Congdon, David

Hargreaves, Andrew

Conway, Derek

Harris, David

Coombs, Simon (Swindon)

Haselhurst, Alan

Cope, Rt Hon Sir John

Hawkins, Nick

Cormack, Patrick

Hawksley, Warren

Couchman, James

Hayes, Jerry

Cran, James

Heald, Oliver

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

Heath, Rt Hon Sir Edward

878

Heathcoat-Amory, David

Neubert, Sir Michael

Hendry, Charles

Newton, Rt Hon Tony

Heseltine, Rt Hon Michael

Nicholls, Patrick

Hicks, Robert

Nicholson, David (Taunton)

Higgins, Rt Hon Sir Terence

Nicholson, Emma (Devon West)

Hill, James (Southampton Test)

Norris, Steve

Hogg, Rt Hon Douglas (G'tham)

Onslow, Rt Hon Sir Cranley

Horam, John

Oppenheim, Phillip

Hordem, Rt Hon Sir Peter

Ottaway, Richard

Howard, Rt Hon Michael

Page, Richard

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

Paice, James

Howell, Rt Hon David (G'dford)

Patnick, Sir Irvine

Howell, Sir Ralph (N Nortolk)

Patten, Rt Hon John

Hughes, Robert G (Harrow West)

Pattie, Rt Hon Sir Geoffrey

Hunt, Rt Hon David (Wirral W)

Pawsey, James

Hunt, Sir John (Ravensbourne)

Peacock, Mrs Elizabeth

Hurd, Rt Hon Douglas

Pickles, Eric

Jack, Michael

Porter, Barry (Wirral S)

Jackson, Robert (Wantage)

Porter, David (Waveney)

Jenkin, Bernard

Portillo, Rt Hon Michael

Jessel, Toby

Powell, William (Corby)

Johnson Smith, Sir Geoffrey

Rathbone, Tim

Jones, Gwilym (Cardiff N)

Redwood, Rt Hon John

Jones, Robert B (W Hertfdshr)

Renton, Rt Hon Tim

Kellett-Bowman, Dame Elaine

Richards, Rod

Key, Robert

Riddick, Graham

King, Rt Hon Tom

Robathan, Andrew

Kirkhope, Timothy

Roberts, Rt Hon Sir Wyn

Knapman, Roger

Robertson, Raymond (Ab'd'n S)

Knight, Mrs Angela (Erewash)

Robinson, Mark (Somerton)

Knight, Greg (Derby N)

Roe, Mrs Marion (Broxbourne)

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

Ross, William (E Londonderry)

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)

Shepherd, Richard (Aldridge)

Lidington, David

Shersby, Michael

Lilley, Rt Hon Peter

Sims, Roger

Lloyd, Rt Hon Peter (Fareham)

Skeet, Sir Trevor

Lord, Michael

Smith, Sir Dudley (Warwick)

Luff, Peter

Smith, Tim (Beaconsfield)

Lyell, Rt Hon Sir Nicholas

Soames, Nicholas

MacGregor, Rt Hon John

Speed, Sir Keith

MacKay, Andrew

Spencer, Sir Derek

Maclean, David

Spicer, Sir James (W Dorset)

McLoughlin, Patrick

Spicer, Michael (S Worcs)

McNair-Wilson, Sir Patrick

Spink, Dr Robert

Madel, Sir David

Sproat, Iain

Maitland, Lady Olga

Squire, Robin (Hornchurch)

Malone, Gerald

Stanley, Rt Hon Sir John

Mans, Keith

Steen, Anthony

Marland, Paul

Stephen, Michael

Marlow, Tony

Stem, Michael

Marshall, John (Hendon S)

Stewart, Allan

Marshall, Sir Michael (Arundel)

Streeter, Gary

Martin, David (Portsmouth S)

Sumberg, David

Mates, Michael

Sweeney, Walter

Mawhinney, Rt Hon Dr Brian

Sykes, John

Mellor, Rt Hon David

Tapsell, Sir Peter

Merchant, Piers

Taylor, Ian (Esher)

Mills, Iain

Taylor, Rt Hon John D (Strgfd)

Mitchell, Andrew (Gedling)

Taylor, John M (Solihull)

Mitchell, Sir David (Hants NW)

Taylor, Sir Teddy (Southend, E)

Moate, Sir Roger

Temple-Morris, Peter

Molyneaux, Rt Hon James

Thomason, Roy

Monro, Sir Hector

Thompson, Sir Donald (C'er V)

Montgomery, Sir Fergus

Thompson, Patrick (Norwich N)

Moss, Malcolm

Thomton, Sir Malcolm

Needham, Rt Hon Richard

Thurnham, Peter

Nelson, Anthony

Townend, John (Bridlington)

879

Townsend, Cyril D (Bexl'yh'th)

Wells, Bowen

Tracey, Richard

Whitney, Ray

Tredinnick, David

Whittingdale, John

Trend, Michael

Widdecombe, Ann

Trimble, David

Wiggin, Sir Jerry

Trotter, Neville

Wilkinson, John

Twinn, Dr Ian

Willetts, David

Vaughan, Sir Gerard

Wilshire, David

Viggers, Peter

Winterton, Mrs Ann (Congleton)

Walden, George

Winterton, Nicholas (Macc'f'ld)

Walker, A Cecil (Belfast N)

Wolfson, Mark

Wood, Timothy

Walker, Bill (N Tayside)

Yeo, Tim

Waller, Gary

Young, Rt Hon Sir George

Ward, John

Wardle, Charles (Bexhill)

Tellers for the Noes:

Waterson, Nigel

Mr. David Lightbown and

Watts, John

Mr. Sydney Chapman.

Question accordingly negatived.
Main Question agreed to.
Resolved,

Ways and Means

  1. VALUE ADDED TAX (FUEL AND POWER)
  That—

  (1) The Value Added Tax Act 1994 shall be amended as follows.

  (2) In section 2 (rate of VAT) in subsection (1) the words "and paragraph 7 of Schedule 13" shall be omitted, and the following subsections shall be inserted after that subsection—

  "(1A) VAT charged on—

  (a) any supply for the time being falling within paragraph 1 of Schedule A1; or

  (b) any equivalent acquisition or importation, shall be charged at the rate of 8 per cent.

  (1B) The reference in subsection (1A) above to an equivalent acquisition or importation, in relation to any supply for the time being falling within paragraph 1 of Schedule Al, is a reference (as the case may be) to—

  (a) any acquisition from another member State of goods the supply of which would be such a supply; or

  (b) any importation from a place outside the member States of any such goods.

  (1C) The Treasury may by order vary Schedule Al by adding to or deleting from it any description of supply for the time being specified in it or by varying any other provision for the time being contained in it."

  (3) The following Schedule shall be inserted immediately before Schedule 1—

  SCHEDULE A1
  Charge at Reduced Rate

  The supplies

  1.—

  (1) The supplies falling within this paragraph are supplies for qualifying use of—

  (a) coal, coke or other solid substances held out for sale solely as fuel;

  (b) coal gas, water gas, producer gases or similar gases;

  (c) petroleum gases, or other gaseous hydrocarbons, whether in a gaseous or liquid state;

  (d) fuel oil, gas oil or kerosene; or

  (e) electricity, heat or air-conditioning.

  (2) In this paragraph "qualifying use" means—

  (a) domestic use; or

  (b) use by a charity otherwise than in the course or furtherance of a business.

  (3) Where there is a supply of goods partly for qualifying use and partly not—

  (a) if at least 60 per cent. of the goods are supplied for qualifying use, the whole supply shall be treated as a supply for qualifying use; and

  (b) in any other case, an apportionment shall be made to determine the extent to which the supply is a supply for qualifying use.

  Interpretation

  2. For the purposes of this Schedule the following supplies are always for domestic use—

  (a) a supply of not more than one tonne of coal or coke held out for sale as domestic fuel;

  (b) a supply of wood, peat or charcoal not intended for sale by the recipient;

  791

  (c) a supply to a person at any premises of piped gas (that is, gas within paragraph 1(1)(b) above, or petroleum gas in a gaseous state, provided through pipes) where the gas (together with any other piped gas provided to him at the premises by the same supplier) was not provided at a rate exceeding 150 therms a month or, if the supplier charges for the gas by reference to the number of kilowatt hours supplied, 4397 kilowatt hours a month;

  (d) a supply of petroleum gas in a liquid state where the gas is supplied in cylinders the net weight of each of which is less than 50 kilogrammes and either the number of cylinders supplied is 20 or fewer or the gas is not intended for sale by the recipient;

  (e) a supply of petroleum gas in a liquid state, otherwise than in cylinders, to a person at any premises at which he is not able to store more than two tonnes of such gas;

  (f) a supply of not more than 2,300 litres of fuel oil, gas oil or kerosene;

  (g) a supply of electricity to a person at any premises where the electricity (together with any other electricity provided to him at the premises by the same supplier) was not provided at a rate exceeding 1000 kilowatt hours a month.

  3.—

  (1) For the purposes of this Schedule supplies not within paragraph 2 above are for domestic use if and only if the goods supplied are for use in—

  (a) a building, or part of a building, which consists of a dwelling or number of dwellings;

  (b) a building, or part of a building, used for a relevant residential purpose;

  (c) self-catering holiday accommodation;

  (d) a caravan; or

  (e) a houseboat.

  (2) For the purposes of this Schedule use for a relevant residential purpose means use as—

  (a) a home or other institution providing residential accommodation for children;

  (b) a home or other institution providing residential accommodation with personal care for persons in need of personal care by reason of old age, disablement, past or present dependence on alcohol or drugs or past or present mental disorder;

  (c) a hospice;

  (d) residential accommodation for students or school pupils;

  (e) residential accommodation for members of any of the armed forces;

  (f) a monastery, nunnery or similar establishment; or

  (g) an institution which is the sole or main residence of at least 90 per cent. of its residents,

  except use as a hospital, a prison or similar institution or an hotel or inn or similar establishment.

  (3) For the purposes of this Schedule self-catering holiday accommodation includes any accommodation advertised or held out as such.

  (4) In this Schedule "houseboat" means a boat or other floating decked structure designed or adapted for use solely as a place of permanent habitation and not having means of, or capable of being readily adapted for, self-propulsion.

  792

  4.—

  (1) Paragraph 1(1)(a) above shall be deemed to include combustible materials put up for sale for kindling fires but shall not include matches.

  (2) Paragraph 1(1)(b) and (c) above shall not include any road fuel gas (within the meaning of the Hydrocarbon Oil Duties Act 1979) on which a duty of excise has been charged or is chargeable.

  (3) Paragraph 1(1)(d) above shall not include hydrocarbon oil on which a duty of excise has been or is to be charged without relief from, or rebate of, such duty by virtue of the provisions of the Hydrocarbon Oil Duties Act 1979.

  (4) In this Schedule "fuel oil" means heavy oil which contains in solution an amount of asphaltenes of not less than 0.5 per cent. or which contains less than 0.5 per cent. but not less than 0.1 per cent. of asphaltenes and has a closed flash point not exceeding 150 degreesC.

  (5) In this Schedule "gas oil" means heavy oil of which not more than 50 per cent. by volume distils at a temperature not exceeding 240 degreesC and of which more than 50 per cent. by volume distils at a temperature not exceeding 340 degreesC.

  (6) In this Schedule "kerosene" means heavy oil of which more than 50 per cent. by volume distils at a temperature not exceeding 240 degreesC.

  (7) In this Schedule "heavy oil" shall have the same meaning as in the Hydrocarbon Oil Duties Act 1979."

  (4) In section 97 (orders etc.) in subsection (4) (orders requiring approval) the following paragraph shall be inserted immediately before paragraph (a)—

  "(aa) an order under section 2(1C);".

  (5) In Schedule 13 (transitional provisions and savings) paragraph 7 (fuel and power) shall be omitted.

  (6) This Resolution shall apply in relation to any supply made on or after 1st April 1995 and any acquisition or importation taking place on or after that date.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  This year's Budget is being debated on the Floor of the House rather frequently and at an earlier stage than usual. This debate should conclude our discussion of the tax measures that will take effect before the Finance Bill is introduced. It will also put in place, intact, the Budget judgment and keep the Government's economic policy on course.
  A healthy economic recovery forms an essential background to the debate. The House is familiar with the Government's record of growth, rising industrial production, rising manufacturing production, falling unemployment and good records on productivity and inflation. We know that the recovery must be sustained and made stronger to deliver the prosperity and the increased number of jobs that are essential aims of all economic policy.
  Keeping our recovery going and ensuring that it is one of the strongest and most effective in the developed world imposes certain duties and obligations on the Government and the House of Commons. In order to sustain our recovery and to keep it strong, we must keep inflation down so that high inflation does not halt recovery again, as it often has in the past. We must also ensure that we can deliver healthy public finances.
  The Government have other obligations, such as supporting increased competitiveness in industry, but our two preconditions for a sustained and strong recovery are to deliver a macro-economic climate in which inflation is low and to deliver healthy public finances as quickly as we can upon emerging from the recession.

  793
  I emphasise those points because they underline the decisions that the House is being asked to take. We are growing so strongly and the business community is so optimistic about the outlook for output and jobs because the Government are on top of the job of keeping inflation down and delivering healthy public finances.

  1. VALUE ADDED TAX (FUEL AND POWER)
  That—

  (1) The Value Added Tax Act 1994 shall be amended as follows.

  (2) In section 2 (rate of VAT) in subsection (1) the words "and paragraph 7 of Schedule 13" shall be omitted, and the following subsections shall be inserted after that subsection—

  "(1A) VAT charged on—

  (a) any supply for the time being falling within paragraph 1 of Schedule Al; or

  (b) any equivalent acquisition or importation, shall be charged at the rate of 8 per cent.

  (1B) The reference in subsection (1A) above to an equivalent acquisition or importation, in relation to any supply for the time being falling within paragraph 1 of Schedule A 1, is a reference (as the case may be) to—

  (a) any acquisition from another member State of goods the supply of which would be such a supply; or

  (b) any importation from a place outside the member States of any such goods.

  (1C) The Treasury may by order vary Schedule A1 by adding to or deleting from it any description of supply for the time being specified in it or by varying any other provision for the time being contained in it."

  (3) The following Schedule shall be inserted immediately before Schedule 1—

  SCHEDULE A1
  Charge at Reduced Rate

  The supplies

  1.—

  (1) The supplies falling within this paragraph are supplies for qualifying use of—

  (a) coal, coke or other solid substances held out for sale solely as fuel;

  (b) coal gas, water gas, producer gases or similar gases;

  (c) petroleum gases, or other gaseous hydrocarbons, whether in a gaseous or liquid state;

  (d) fuel oil, gas oil or kerosene; or

  (e) electricity, heat or air-conditioning.

  (2) In this paragraph "qualifying use" means—

  (a) domestic use; or

  (b) use by a charity otherwise than in the course or furtherance of a business.

  (3) Where there is a supply of goods partly for qualifying use and partly not—

  (a) if at least 60 per cent. of the goods are supplied for qualifying use, the whole supply shall be treated as a supply for qualifying use; and

  880

  (b) in any other case, an apportionment shall be made to determine the extent to which the supply is a supply for qualifying use.

  Interpretation

  2. For the purposes of this Schedule the following supplies are always for domestic use—

  (a) a supply of not more than one tonne of coal or coke held out for sale as domestic fuel;

  (b) a supply of wood, peat or charcoal not intended for sale by the recipient;

  (c) a supply to a person at any premises of piped gas (that is, gas within paragraph 1(1)(b) above, or petroleum gas in a gaseous state, provided through pipes) where the gas (together with any other piped gas provided to him at the premises by the same supplier) was not provided at a rate exceeding 150 therms a month or, if the supplier charges for the gas by reference to the number of kilowatt hours supplied, 4397 kilowatt hours a month;

  (d) a supply of petroleum gas in a liquid state where the gas is supplied in cylinders the net weight of each of which is less than 50 kilogrammes and either the number of cylinders supplied is 20 or fewer or the gas is not intended for sale by the recipient;

  (e) a supply of petroleum gas in a liquid state, otherwise than in cylinders, to a person at any premises at which he is not able to store more than two tonnes of such gas;

  (f) a supply of not more than 2,300 litres of fuel oil, gas oil or kerosene;

  (g) a supply of electricity to a person at any premises where the electricity (together with any other electricity provided to him at the premises by the same supplier) was not provided at a rate exceeding 1000 kilowatt hours a month.

  3.—

  (1) For the purposes of this Schedule supplies not within paragraph 2 above are for domestic use if and only if the goods supplied are for use in—

  (a) a building, or part of a building, which consists of a dwelling or number of dwellings;

  (b) a building, or part of a building, used for a relevant residential purpose;

  (c) self-catering holiday accommodation;

  (d) a caravan; or

  (e) a houseboat.

  (2) For the purposes of this Schedule use for a relevant residential purpose means use as—

  (a) a home or other institution providing residential accommodation for children;

  (b) a home or other institution providing residential accommodation with personal care for persons in need of personal care by reason of old age, disablement, past or present dependence on alcohol or drugs or past or present mental disorder;

  (c) a hospice;

  (d) residential accommodation for students or school pupils;

  (e) residential accommodation for members of any of the armed forces;

  881

  (f) a monastery, nunnery or similar establishment; or

  (g) an institution which is the sole or main residence of at least 90 per cent. of its residents,

  except use as a hospital, a prison or similar institution or an hotel or inn or similar establishment.

  (3) For the purposes of this Schedule self-catering holiday accommodation includes any accommodation advertised or held out as such.

  (4) In this Schedule "houseboat" means a boat or other floating decked structure designed or adapted for use solely as a place of permanent habitation and not having means of, or capable of being readily adapted for, self-propulsion.

  4.—

  (1) Paragraph 1(1)(a) above shall be deemed to include combustible materials put up for sale for kindling fires but shall not include matches.

  (2) Paragraph 1(1)(b) and (c) above shall not include any road fuel gas (within the meaning of the Hydrocarbon Oil Duties Act 1979) on which a duty of excise has been charged or is chargeable.

  (3) Paragraph 1(1)(d) above shall not include hydrocarbon oil on which a duty of excise has been or is to be charged without relief from, or rebate of, such duty by virtue of the provisions of the Hydrocarbon Oil Duties Act 1979.

  (4) In this Schedule "fuel oil" means heavy oil which contains in solution an amount of asphaltenes of not less than 0.5 per cent. or which contains less than 0.5 per cent. but not less than 0.1 per cent. of asphaltenes and has a closed flash point not exceeding 150 degreesC.

  (5) In this Schedule "gas oil" means heavy oil of which not more than 50 per cent. by volume distils at a temperature not exceeding 240 degreesC and of which more than 50 per cent. by volume distils at a temperature not exceeding 340 degreesC.

  (6) In this Schedule "kerosene" means heavy oil of which more than 50 per cent. by volume distils at a temperature not exceeding 240 degreesC.

  (7) In this Schedule "heavy oil" shall have the same meaning as in the Hydrocarbon Oil Duties Act 1979."

  (4) In section 97 (orders etc.) in subsection (4) (orders requiring approval) the following paragraph shall be inserted immediately before paragraph (a)—

  "(aa) an order under section 2(1C);".

  (5) In Schedule 13 (transitional provisions and savings) paragraph 7 (fuel and power) shall be omitted.

  (6) This Resolution shall apply in relation to any supply made on or after 1st April 1995 and any acquisition or importation taking place on or after that date.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  MR. DEPUTY SPEAKER then, pursuant to order [9 December] put the Questions necessary to dispose of the further motions.

  2. SPIRITS (RATE)
  Motion made, and Question put,
  That—

  (1) In section 5 of the Alcoholic Liquor Duties Act 1979 for "£19.81" there shall be substituted "£20.60".

  (2) This Resolution shall come into force on 1st January 1995.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
  The House divided: Ayes 317, Noes 275.

  Division No. 21]

  [22.16 pm

  AYES

  Ainsworth, Peter (East Surrey)

  Devlin, Tim

  Aitken, Rt Hon Jonathan

  Dicks, Terry

  Alexander, Richard

  Dorrell, Rt Hon Stephen

  Alison, Rt Hon Michael (Selby)

  Douglas-Hamilton, Lord James

  Allason, Rupert (Torbay)

  Dover, Den

  Amess, David

  Duncan, Alan

  Arbuthnot, James

  Duncan Smith, Iain

  Arnold, Jacques (Gravesham)

  Dunn, Bob

  Arnold, Sir Thomas (Hazel Grv)

  Durant, Sir Anthony

  Ashby, David

  Dykes, Hugh

  Aspinwall, Jack

  Eggar, Tim

  Atkins, Robert

  Elletson, Harold

  Atkinson, David (Bour'mouth E)

  Emery, Rt Hon Sir Peter

  Atkinson, Peter (Hexham)

  Evans, David (Welwyn Hatfield)

  Baker, Rt Hon K (Mole Valley)

  Evans, Jonathan (Brecon)

  Baker, Nicholas (Dorset North)

  Evans, Nigel (Ribble Valley)

  Baldry, Tony

  Evans, Roger (Monmouth)

  Banks, Matthew (Southport)

  Evennett, David

  Bates, Michael

  Faber, David

  Batiste, Spencer

  Fabricant, Michael

  Bellingham, Henry

  Fenner, Dame Peggy

  Bendall, Vivian

  Field, Barry (Isle of Wight)

  Beresford, Sir Paul

  Fishburn, Dudley

  Biffen, Rt Hon John

  Forman, Nigel

  Bonsor, Sir Nicholas

  Forsyth, Michael (Stirling)

  Booth, Hartley

  Forsythe, Clifford (Antrim S)

  Boswell, Tim

  Forth, Eric

  Bottomley, Peter (Eltham)

  Fowler, Rt Hon Sir Norman

  Bottomley, Rt Hon Virginia

  Fox, Dr Liam (Woodspring)

  Bowden, Sir Andrew

  Fox, Sir Marcus (Shipley)

  Bowis, John

  Freeman, Rt Hon Roger

  Boyson, Rt Hon Sir Rhodes

  French, Douglas

  Brandreth, Gyles

  Fry, Sir Peter

  Brazier, Julian

  Gale, Roger

  Bright Sir Graham

  Gallie, Phil

  Brooke, Rt Hon Peter

  Gardiner, Sir George

  Brown, M (Brigg & Cl'thorpes)

  Garel-Jones, Rt Hon Tristan

  Browning, Mrs. Angela

  Garnier, Edward

  Bruce, Ian (Dorset)

  Gillan, Cheryl

  Budgen, Nicholas

  Goodlad, Rt Hon Alastair

  Burns, Simon

  Goodson-Wickes, Dr Charles

  Burt, Alistair

  Gorman, Mrs Teresa

  Butcher, John

  Gorst, Sir John

  Butler, Peter

  Grant, Sir A (Cambs SW)

  Butterfill, John

  Greenway, Harry (Ealing N)

  Carlisle, John (Luton North)

  Greenway, John (Ryedale)

  Carlisle, Sir Kenneth (Lincoln)

  Griffiths, Peter (Portsmouth, N)

  Carrington, Matthew

  Grylls, Sir Michael

  Carttiss, Michael

  Gummer, Rt Hon John Selwyn

  Cash, William

  Hague, William

  Channon, Rt Hon Paul

  Hamilton, Rt Hon Sir Archibald

  Churchill, Mr

  Hamilton, Neil (Tatton)

  Clappison, James

  Hanley, Rt Hon Jeremy

  Clarke, Dr Michael (Rochbid)

  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, Simon (Swindon)

  Heald, Oliver

  Cope, Rt Hon Sir John

  Heath, Rt Hon Sir Edward

  Cormack, Patrick

  Heathcoat-Amory, David

  Couchman, James

  Hendry, Charles

  Cran, James

  Heseltine, Rt Hon Michael

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

  Hicks, Robert

  Curry, David (Skipton & Ripon)

  Higgins, Rt Hon Sir Terence

  Davies, Quentin (Stamford)

  Hill, James (Southampton Test)

  Davis, David (Boothferry)

  Hogg, Rt Hon Douglas (G'tham)

  Day, Stephen

  Horam, John

  Deva, Nirj Joseph

  Hordem, Rt Hon Sir Peter

  883

  Howard, Rt Hon Michael

  Ottaway, Richard

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

  Page, Richard

  Howell, Rt Hon David (G'dford)

  Paice, James

  Howell, Sir Ralph (N Norfolk)

  Patnick, Sir Irvine

  Hughes, Robert G (Harrow West)

  Patten, Rt Hon John

  Hunt, Rt Hon David (Wirral W)

  Pattie, Rt Hon Sir Geoffrey

  Hunt, Sir John (Ravensbourne)

  Pawsey, James

  Hurd, Rt Hon Douglas

  Peacock, Mrs Elizabeth

  Jack, Michael

  Pickles, Eric

  Jackson, Robert (Wantage)

  Porter, Barry (Wirral S)

  Jenkin, Bernard

  Porter, David (Waveney)

  Jessel, Toby

  Portillo, Rt Hon Michael

  Johnson Smith, Sir Geoffrey

  Powell, William (Corby)

  Jones, Gwilym (Cardff N)

  Rathbone, Tim

  Jones, Nigel (Cheltenham)

  Redwood, Rt Hon John

  Jones, Robert B (W Hertfdshr)

  Renton, Rt Hon Tim

  Kellett-Bowman, Dame Elaine

  Richards, Rod

  Key, Robert

  Riddick, Graham

  King, Rt Hon Tom

  Robathan, Andrew

  Kirkhope, Timothy

  Roberts, Rt Hon Sir Wyn

  Knapman, Roger

  Robertson, Raymond (Ab'd'n S)

  Knight, Mrs Angela (Erewash)

  Robinson, Mark (Somerton)

  Knight, Greg (Derby N)

  Roe, Mrs Marion (Broxbourne)

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

  Ross, William (E Londonderry)

  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

  Shephard, Colin (Hereford)

  Lester, Jim (Broxtowe)

  Shepherd, Richard (Aldridge)

  Lidington, David

  Shersby, Michael

  Lilley, Rt Hon Peter

  Sims, Roger

  Lloyd, Rt Hon Peter (Fareham)

  Skeet, Sir Trevor

  Lord, Michael

  Smith, Sir Dudley (Warwick)

  Luff, Peter

  Smith, Tim (Beaconsfield)

  Lyell, Rt Hon Sir Nicholas

  Soames, Nicholas

  MacGregor, Rt Hon John

  Speed, Sir Keith

  MacKay, Andrew

  Spencer, Sir Derek

  Maclean, David

  Spicer, Sir James (W Dorset)

  McLoughlin, Patrick

  Spicer, Michael (S Worcs)

  McNair-Wilson, Sir Patrick

  Spink, Dr Robert

  Madel, Sir David

  Sproat, Iain

  Maitland, Lady Olga

  Squire, Robin (Hornchurch)

  Malone, Gerald

  Stanley, Rt Hon Sir John

  Mans, Keith

  Steen, Anthony

  Marland, Paul

  Stephen, Michael

  Marlow, Tony

  Stem, Michael

  Marshall, John (Hendon S)

  Stewart, Allan

  Marshall, Sir Michael (Arundel)

  Streeter, Gary

  Martin, David (Portsmouth S)

  Sumberg, David

  Mates, Michael

  Sweeney, Walter

  Mawhinney, Rt Hon Dr Brian

  Sykes, John

  Mellor, Rt Hon David

  Tapsell, Sir Peter

  Merchant Piers

  Taylor, Ian (Esher)

  Mills, Iain

  Taylor, Rt Hon John D (Strgfd)

  Mitchell, Andrew (Gedling)

  Taylor, John M (Solihull)

  Mitchell, Sir David (Hants NW)

  Taylor, Sir Teddy (Southend, E)

  Moate, Sir Roger

  Temple-Morris, Peter

  Molyneaux, Rt Hon James

  Thomason, Roy

  Monro, Sir Hector

  Thompson, Sir Donald (C'er V)

  Montgomery, Sir Fergus

  Thompson, Patrick (Norwich N)

  Moss, Malcolm

  Thomton, Sir Malcolm

  Needham, Rt Hon Richard

  Thumham, Peter

  Nelson, Anthony

  Townend, John (Bridlington)

  Neubert, Sir Michael

  Townsend, Cyril D (Bexl'yh'th)

  Newton, Rt Hon Tony

  Tracey, Richard

  Nicholls, Patrick

  Tredinnick, David

  Nicholson, David (Taunton)

  Trend, Michael

  Nicholson, Emma (Devon West)

  Trimble, David

  Norris, Steve

  Trotter, Neville

  Onslow, Rt Hon Sir Cranley

  Twinn, Dr Ian

  Oppenheim, Phillip

  Vaughan, Sir Gerard

  884

  Viggers, Peter

  Wiggin, Sir Jerry

  Walden, George

  Wilkinson, John

  Walker, A Cecil (Belfast N)

  Willetts, David

  Walker, Bill (N Tayside)

  Wilshire, David

  Waller, Gary

  Winterton, Mrs Ann (Congleton)

  Ward, John

  Winterton, Nicholas (Macc'fld)

  Wardle, Charles (Bexhill)

  Wolfson, Mark

  Wood, Timothy

  Waterson, Nigel

  Yeo,Tim

  Watts, John

  Young, Rt Hon Sir George

  Wells, Bowen

  Whitney, Ray

  Tellers for the Ayes:

  Whittingdale, John

  Mr. Sydney Chapman and

  Widdecombe, Ann

  Mr. David Lightbown.

  NOES

  Abbott, Ms Diane

  Dafis, Cynog

  Adams, Mrs Irene

  Dalyell, Tam

  Ainger, Nick

  Darling, Alistair

  Ainsworth, Robert (Cov'try NE)

  Davidson, Ian

  Allen, Graham

  Davies, Bryan (Oldham C'tral)

  Alton, David

  Davies, Rt Hon Denzil (Llanelli)

  Anderson, Donald (Swansea E)

  Davies, Ron (Caerphilly)

  Anderson, Ms Janet (Ros'dale)

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

  Armstrong, Hilary

  Denham, John

  Ashton, Joe

  Dewar, Donald

  Austin-Walker, John

  Dixon, Don

  Banks, Tony (Newham NW)

  Dobson, Frank

  Barnes, Harry

  Donohoe, Brian H

  Barron, Kevin

  Dowd, Jim

  Battle, John

  Dunnachie, Jimmy

  Bayley, Hugh

  Dunwoody, Mrs Gwyneth

  Beckett, Rt Hon Margaret

  Eagle, Ms Angela

  Beith, Rt Hon A J

  Eastham, Ken

  Bell, Stuart

  Enright, Derek

  Benn, Rt Hon Tony

  Etherington, Bill

  Bennett, Andrew F

  Evans, John (St Helens N)

  Bermingham, Gerald

  Ewing, Mrs Margaret

  Berry, Roger

  Fatchett, Derek

  Betts, Clive

  Field, Frank (Birkenhead)

  Blunkett, David

  Fisher, Mark

  Boateng, Paul

  Flynn, Paul

  Boyes, Roland

  Foster, Rt Hon Derek

  Bradley, Keith

  Foster, Don (Bath)

  Bray, Dr Jeremy

  Foulkes, George

  Brown, Gordon (Dunfermline E)

  Fraser, John

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

  Fyfe, Maria

  Bruce, Malcolm (Gordon)

  Galloway, George

  Burden, Richard

  Gapes, Mike

  Byers, Stephen

  Garrett, John

  Callaghan, Jim

  George, Bruce

  Campbell, Mrs Anne (C'bridge)

  Gerrard, Neil

  Campbell, Menzies (Fife NE)

  Gilbert, Rt Hon Dr John

  Campbell, Ronnie (Blyth V)

  Godsiff, Roger

  Campbell-Savours, D N

  Golding, Mrs Llin

  Canavan, Dennis

  Gordon, Mildred

  Cann, Jamie

  Graham, Thomas

  Chidgey, David

  Grant, Bemie (Tottenham)

  Chisholm, Malcolm

  Griffiths, Nigel (Edinburgh S)

  Church, Judith

  Griffiths, Win (Bridgend)

  Clark, Dr David (South Shields)

  Grocott, Bruce

  Clarke, Tom (Monklands W)

  Gunnell, John

  Clelland, David

  Hain, Peter

  Clwyd, Mrs Ann

  Hall, Mike

  Cohen, Harry

  Hanson, David

  Connarty, Michael

  Hardy, Peter

  Cook, Frank (Stockton N)

  Harman, Ms Harriet

  Cook, Robin (Livingston)

  Harvey, Nick

  Corbett, Robin

  Hattersley, Rt Hon Roy

  Corbyn, Jeremy

  Henderson, Doug

  Corston, Jean

  Heppell, John

  Cousins, Jim

  Hill, Keith (Streatham)

  Cox, Tom

  Hinchliffe, David

  Cummings, John

  Hodge, Margaret

  Cunliffe, Lawrence

  Hoey, Kate

  Cunningham, Jim (Covy SE)

  Hogg, Norman (Cumbernauld)

  885

  Home Robertson, John

  Mullin, Chris

  Hood, Jimmy

  Oakes, Rt Hon Gordon

  Hoon, Geoffrey

  O'Brien, Mike (N W'kshire)

  Howarth, George (Knowsley N)

  O'Brien, Bill (Normanton)

  Howells, Dr. Kim (Pontypridd)

  O'Hara, Edward

  Hoyle, Doug

  Olner, Bill

  Hughes, Kevin (Doncaster N)

  O'Neill, Martin

  Hughes, Robert (Aberdeen N)

  Orme, Rt Hon Stanley

  Hughes, Roy (Newport E)

  Parry, Robert

  Hughes, Simon (Southwark)

  Patchett, Terry

  Hutton, John

  pickthall, Colin

  Illsley, Eric

  Pike, Peter L

  Ingram, Adam

  Pope, Greg

  Jackson, Glenda (H'Stead)

  Powell, Ray (Ogmore)

  Jackson, Helen (Shef'ld, H)

  Prentice, Bridget (Lew'm E)

  Jamieson, David

  Janner, Greville

  Prentice, Gordon (Pendle)

  Jones, Barry (Alyn and D'side)

  Prescott, John

  Jones, Ieuan Wyn (Ynys Mon)

  Primarolo, Dawn

  Jones, Jon Owen (Cardiff C)

  Purchase, Ken

  Jones, Lynne (B'ham S O)

  Quin, Ms Joyce

  Jones, Martyn (Clwyd, SW)

  Radice, Giles

  Jones, Nigel (Cheltenham)

  Randall, Stuart

  Jowell, Tessa

  Raynsford, Nick

  Kaufman, Rt Hon Gerald

  Reid, Dr John

  Keen, Alan

  Rendel, David

  Kennedy, Charles (Ross,C&S)

  Robertson, George (Hamilton)

  Kennedy, Jane (Lpool Brdgn)

  Roche, Mrs Barbara

  Khabra, Piara S

  Rogers, Allan

  Kirkwood, Archy

  Rooney, Terry

  Lestor, Joan (Eccles)

  Ross, Ernie (Dundee W)

  Lewis, Terry

  Rowlands, Ted

  Liddell, Mrs Helen

  Ruddock, Joan

  Litherland, Robert

  Salmond, Alex

  Livingstone, Ken

  Sedgemore, Brian

  Lloyd, Tony (Stratford)

  Sheerman, Barry

  Llwyd, Elfyn

  Sheldon, Rt Hon Robert

  Loyden, Eddie

  Shore, Rt Hon Peter

  McAllion, John

  Short, Clare

  McAvoy, Thomas

  Simpson, Alan

  McCartney, Ian

  Skinner, Dennis

  Macdonald, Calum

  Smith, Andrew (Oxford E)

  McFall, John

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

  McKelvey, William

  Smith, Llew (Blaenau Gwent)

  Mackinlay, Andrew

  Soley, Clive

  McLeish, Henry

  Spearing, Nigel

  McMaster, Gordon

  Spellar, John

  Squire, Rachel (Dunfermline W)

  McNarmara, Kevin

  Steel, Rt Hon Sir David

  McWilliam, John

  Steinberg, Gerry

  Madden, Max

  Stevenson, George

  Maddock, Diana

  Stott, Roger

  Mahon, Alice

  Strang, Dr. Gavin

  Mandelson, Peter

  Straw, Jack

  Marek, Dr John

  Sutcliffe, Gerry

  Marshall, David (Shettleston)

  Taylor, Mrs Ann (Dewsbury)

  Marshall, Jim (Leicester, S)

  Taylor, Matthew (Truro)

  Martin, Michael J (Springburn)

  Thompson, Jack (Wansbeck)

  Martlew, Eric

  Timms, Stephen

  Maxton John

  Tipping, Paddy

  Meacher, Michael

  Turner, Dennis

  Meale, Alan

  Tyler, Paul

  Michael, Alun

  Vaz, Keith

  Michie, Bill (Sheffield Heeley)

  Walker, Rt Hon Sir Harold

  Michie, Mrs Ray (Argyll & Bute)

  Wallace, James

  Milburn, Alan

  Walley, Joan

  Miller, Andrew

  Wardell, Gareth (Gower)

  Mitchell, Austin (Gt Grimsby)

  Moonie, Dr Lewis

  Wareing, Robert N

  Morgan, Rhodri

  Watson, Mike

  Morley, Elliot

  Welsh, Andrew

  Morris, Rt Hon Alfred (Wy'nshawe)

  Wicks, Malcolm

  Morris, Rt Hon John (Aberavon)

  Wigley, Dafydd

  Mudie, George

  Williams, Rt Hon Alan (SW'n W)

  886

  Williams, Alan W (Carmarthen)

  Wright, Dr Tony

  Wilson, Brian

  Young, David (Bolton SE)

  Winnick, David

  Tellers for the Noes:

  Worthinglon, Tony

  Mr. Eric Clarke and

  Wray, Jimmy

  Mr. Joe Benton.

  Question accordingly agreed to.
  Motion made, and Question put,

  3. BEER (RATE)
  That—

  (1) In section 36(1) of the Alcoholic Liquor Duties Act 1979 for "£10.45" there shall be substituted "£10.82".

  (2) This Resolution shall come into force on 1st January 1995.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  The House divided: Ayes 314, Noes 270.

  Division No. 22]

  [22.30 pm

  AYES

  Ainsworth, Peter (East Surrey)

  Channon, Rt Hon Paul

  Aitken, Rt Hon Jonathan

  Chapman, Sydney

  Alexander, Richard

  Churchill, Mr

  Alison, Rt Hon Michael (Selby)

  Clappison, James

  Allason, Rupert (Torbay)

  Clark, Dr Michael (Rochford)

  Amess, David

  Clarke, Rt Hon Kenneth (Ru'clif)

  Arbuthnot, James

  Clifton-Brown, Geoffrey

  Arnold, Jacques (Gravesham)

  Coe, Sebastian

  Arnold, Sir Thomas (Hazel Grv)

  Congdon, David

  Ashby, David

  Conway, Derek

  Aspinwall, Jack

  Coombs, Simon (Swindon)

  Atkins, Robert

  Cope, Rt Hon Sir John

  Atkinson, David (Bour'mouth E)

  Cormack, Patrick

  Atkinson, Peter (Hexham)

  Couchman, James

  Baker, Rt Hon K (Mole Valley)

  Cran, James

  Baker, Nicholas (Dorset North)

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

  Baldry, Tony

  Curry, David (Skipton & Ripon)

  Banks, Matthew (Southport)

  Davies, Quentin (Stamford)

  Batiste, Spencer

  Davis, David (Boothferry)

  Bellingham, Henry

  Day, Stephen

  Bendall, Vivian

  Deva, Nirj Joseph

  Beresford, Sir Paul

  Devlin, Tim

  Biffen, Rt Hon John

  Dicks, Terry

  Body, Sir Richard

  Dorrell, Rt Hon Stephen

  Bonsor, Sir Nicholas

  Douglas-Hamilton, Lord James

  Booth, Hartley

  Dover, Den

  Boswell, Tim

  Duncan, Alan

  Bottomley, Peter (Eltham)

  Duncan Smith, Iain

  Bottomley, Rt Hon Virginia

  Dunn, Bob

  Bowden, Sir Andrew

  Durant, Sir Anthony

  Bowis, John

  Dykes, Hugh

  Boyson, Rt Hon Sir Rhodes

  Eggar, Tim

  Brandreth, Gyles

  Elletson, Harold

  Brazier, Julian

  Emery, Rt Hon Sir Peter

  Bright, Sir Graham

  Evans, David (Welwyn Hatfield)

  Brooke, Rt Hon Peter

  Evans, Jonathan (Brecon)

  Brown, M (Brigg & Cl'thorpes)

  Evans, Nigel (Ribble Valley)

  Browning, Mrs. Angela

  Evans, Roger (Monmouth)

  Bruce, Ian (Dorset)

  Evennett, David

  Budgen, Nicholas

  Faber, David

  Burns, Simon

  Fabricant, Michael

  Burt, Alistair

  Fenner, Dame Peggy

  Butcher, John

  Field, Barry (Isle of Wight)

  Butler, Peter

  Fishburn, Dudley

  Butterfill, John

  Forman, Nigel

  Carlisle, John (Luton North)

  Forsyth, Michael (Stirling)

  Carlisle, Sir Kenneth (Lincoln)

  Forsythe, Clifford (Antrim S)

  Carrington, Matthew

  Forth, Eric

  Carttiss, Michael

  Fowler, Rt Hon Sir Norman

  Cash, William

  Fox, Dr Liam (Woodspring)

  887

  Fox, Sir Marcus (Shipley)

  Lilley, Rt Hon Peter

  Freeman, Rt Hon Roger

  Lloyd, Rt Hon Peter (Fareham)

  French, Douglas

  Lord, Michael

  Fry, Sir Peter

  Luff, Peter

  Gale, Roger

  Lyell, Rt Hon Sir Nicholas

  Gallie, Phil

  MacGregor, Rt Hon John

  Gardiner, Sir George

  MacKay, Andrew

  Garel-Jones, Rt Hon Tristan

  Maclean, David

  Garnier, Edward

  McLoughlin, Patrick

  Gillan, Cheryl

  McNair-Wilson, Sir Patrick

  Goodlad, Rt Hon Alastair

  Madel, Sir David

  Goodson-Wickes, Dr Charles

  Maitland, Lady Olga

  Gorman, Mrs Teresa

  Malone, Gerald

  Gorst, Sir John

  Mans, Keith

  Grant, Sir A (Cambs SW)

  Marland, Paul

  Greenway, Harry (Ealing N)

  Marlow, Tony

  Greenway, John (Ryedale)

  Marshall, John (Hendon S)

  Griffiths, Peter (Portsmouth, N)

  Marshall, Sir Michael (Arundel)

  Grylls, Sir Michael

  Martin, David (Portsmouth S)

  Gummer, Rt Hon John Selwyn

  Mates, Michael

  Hague, William

  Mawhinney, Rt Hon Dr Brian

  Hamilton, Rt Hon Sir Archibald

  Mellor, Rt Hon David

  Hamilton, Neil (Tatton)

  Merchant, Piers

  Hanley, Rt Hon Jeremy

  Mills, Iain

  Hannam, Sir John

  Mitchell, Andrew (Gedling)

  Hargreaves, Andrew

  Mitchell, Sir David (Hants NW)

  Harris, David

  Moate, Sir Roger

  Haselhurst, Alan

  Molyneaux, Rt Hon James

  Hawkins, Nick

  Monro, Sir Hector

  Hawksley, Warren

  Montgomery, Sir Fergus

  Hayes, Jerry

  Moss, Malcolm

  Heald, Oliver

  Needham, Rt Hon Richard

  Heath, Rt Hon Sir Edward

  Nelson, Anthony

  Heathcoat-Amory, David

  Neubert, Sir Michael

  Hendry, Charles

  Newton, Rt Hon Tony

  Heseltine, Rt Hon Michael

  Nicholls, Patrick

  Hicks, Robert

  Nicholson, David (Taunton)

  Higgins, Rt Hon Sir Terence

  Nicholson, Emma (Devon West)

  Hill, James (Southampton Test)

  Norris, Steve

  Hogg, Rt Hon Douglas (G'tham)

  Onslow, Rt Hon Sir Cranley

  Horam, John

  Oppenheim, Phillip

  Hordern, Rt Hon Sir Peter

  Ottaway, Richard

  Howard, Rt Hon Michael

  Page, Richard

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

  Paice, James

  Howell, Rt Hon David (G'dford)

  Patnick, Sir Irvine

  Howell, Sir Ralph (N Norfolk)

  Patten, Rt Hon John

  Hughes, Robert G (Harrow W)

  Pattie, Rt Hon Sir Geoffrey

  Hunt, Rt Hon David (Wirral W)

  Pawsey, James

  Hunt, Sir John (Ravensbourne)

  Peacock, Mrs Elizabeth

  Hurd, Rt Hon Douglas

  Pickles, Eric

  Jack, Michael

  Porter, Barry (Wirral S)

  Jackson, Robert (Wantage)

  Porter, David (Waveney)

  Jenkin, Bernard

  Portillo, Rt Hon Michael

  Jessel, Toby

  Powell, William (Corby)

  Jones, Gwilym (Cardiff N)

  Rathbone, Tim

  Jones, Robert B (W Hertfdshr)

  Redwood, Rt Hon John

  Kellett-Bowman, Dame Elaine

  Renton, Rt Hon Tim

  Key, Robert

  Richards, Rod

  King, Rt Hon Tom

  Riddick, Graham

  Kirkhope, Timothy

  Robathan, Andrew

  Knapman, Roger

  Roberts, Rt Hon Sir Wyn

  Knight, Mrs Angela (Erewash)

  Robertson, Raymond (Ab'd'n S)

  Knight, Greg (Derby N)

  Robinson, Mark (Somenon)

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

  Roe, Mrs Marion (Broxbourne)

  Knox, Sir David

  Ross, William (E Londonderry)

  Kynoch, George (Kincardine)

  Rumbold, Rt Hon Dame Angela

  Lait, Mrs Jacqui

  Ryder, Rt Hon Richard

  Lamont, Rt Hon Norman

  Sackville, Tom

  Lang, Rt Hon Ian

  Sainsbury, Rt Hon Tim

  Lawrence, Sir Ivan

  Scott, Rt Hon Nicholas

  Legg, Barry

  Shaw, David (Dover)

  Leigh, Edward

  Shaw, Sir Giles (Pudsey)

  Lennox-Boyd, Sir Mark

  Shephard, Rt Hon Gillian

  Lester, Jim (Broxtowe)

  Shepherd, Colin (Hereford)

  Lidington, David

  Shepherd, Richard (Aldridge)

  Lightbown, David

  Shersby, Michael

  888

  Sims, Roger

  Townsend, Cyril D (Bexl'yh'th)

  Skeet, Sir Trevor

  Tracey, Richard

  Smith, Sir Dudley (Warwick)

  Tredinnick, David

  Smith, Tim (Beaconsfield)

  Trend, Michael

  Soames, Nicholas

  Trimble, David

  Speed, Sir Keith

  Trotter, Neville

  Spencer, Sir Derek

  Twinn, Dr Ian

  Spicer, Sir James (W Dorset)

  Vaughan, Sir Gerard

  Spicer, Michael (S Worcs)

  Viggers, Peter

  Spink, Dr Robert

  Walden, George

  Sproat, Iain

  Walker, Bill (N Tayside)

  Squire, Robin (Hornchurch)

  Waller, Gary

  Stanley, Rt Hon Sir John

  Ward, John

  Steen, Anthony

  Wardle Charles (Bexhill & Battle)

  Stephen, Michael

  Waterson, Nigel

  Stern, Michael

  Watts, John

  Stewart, Allan

  Wells, Bowen

  Streeter, Gary

  Whitney, Ray

  Sumberg, David

  Whittingdale, John

  Sweeney, Walter

  Widdecombe,Ann

  Sykes, John

  Wiggin, Sir Jerry

  Tapsell, Sir Peter

  Wilkinson, John

  Taylor, Ian (Esher)

  Willetts, David

  Taylor, Rt Hon John D (Strgfd)

  Wilshire, David

  Taylor, John M (Solihull)

  Winterton, Mrs Ann (Congleton)

  Taylor, Sir Teddy (Southend, E)

  Winterton, Nicholas (Macc'f'ld)

  Temple-Morris, Peter

  Wolfson, Mark

  Thomason, Roy

  Yeo,Tim

  Thompson, Sir Donald (C'er V)

  Young, Rt Hon Sir George

  Thompson, Patrick (Norwich N)

  Thornton, Sir Malcolm

  Tellers for the Ayes:

  Thumham, Peter

  Mr. Timothy Wood and

  Townend, John (Bridlington)

  Mr. Michael Bates.

  NOES

  Abbott, Ms Diane

  Chidgey, David

  Adams, Mrs Irene

  Chisholm, Malcolm

  Ainger, Nick

  Church, Judith

  Ainsworth, Robert (Cov'try NE)

  Clark, Dr David (South Shields)

  Allen, Graham

  Clarke, Tom (MonHands W)

  Alton, David

  Clelland, David

  Anderson, Donald (Swansea E)

  Clwyd, Mrs Ann

  Anderson, Ms Janet (Ros'dale)

  Cohen, Harry

  Armstrong, Hilary

  Connarty, Michael

  Ashton, Joe

  Cook, Frank (Stockton N)

  Austin-Walker, John

  Cook, Robin (Livingston)

  Banks, Tony (Newham NW)

  Corbett, Robin

  Barnes, Harry

  Corbyn, Jeremy

  Barron, Kevin

  Corston, Jean

  Battle, John

  Cousins, Jim

  Bayley, Hugh

  Cox, Tom

  Beckett, Rt Hon Margaret

  Cummings, John

  Beith, Rt Hon A J

  Cunliffe, Lawrence

  Bell, Stuart

  Cunningham, Jim (Covy SE)

  Benn, Rt Hon Tony

  Dalyell, Tam

  Bennett, Andrew F

  Darling, Aistair

  Bermingham, Gerald

  Davidson, Ian

  Berry, Roger

  Davies, Bryan (Oldham C'tral)

  Betts, Clive

  Davies, Rt Hon Denzil (Llanelli)

  Blunkett, David

  Davies, Ron (Caerphilly)

  Boateng, Paul

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

  Boyes, Roland

  Denham, John

  Bradley, Keith

  Dewar, Donald

  Bray, Dr Jeremy

  Dixon, Don

  Brown, Gordon (Dunfermline E)

  Dobson, Frank

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

  Donohoe, Brian H

  Bruce, Malcolm (Gordon)

  Dowd, Jim

  Burden, Richard

  Dunnachie, Jimmy

  Byers, Stephen

  Dunwoody, Mrs Gwyneth

  Callaghan, Jim

  Eagle, Ms Angela

  Campbell, Mrs Anne (C'bridge)

  Eastham, Ken

  Campbell, Menzies (Fife NE)

  Enright, Derek

  Campbell, Ronnie (Blyth V)

  Etherington, Bill

  Campbell-Savours, D N

  Evans, John (St Helens N)

  Canavan, Dennis

  Ewing, Mrs Margaret

  Cann, Jamie

  Fatchett, Derek

  889

  Field, Frank (Birkenhead)

  McAvoy, Thomas

  Fisher, Mark

  McCartney, Ian

  Flynn, Paul

  Macdonald, Calum

  Foster, Rt Hon Derek

  McFall, John

  Foster, Don (Bath)

  McKelvey, William

  Foulkes, George

  Mackinlay, Andrew

  Fraser, John

  McLeish, Henry

  Fyfe, Maria

  Maclennan, Robert

  Galloway, George

  McMaster, Gordon

  Gapes, Mike

  McNamara, Kevin

  Garrett, John

  MacShane, Denis

  George, Bruce

  McWilliam, John

  Gerrard, Neil

  Madden, Max

  Gilbert, Rt Hon Dr John

  Maddock, Diana

  Godsiff, Roger

  Mahon, Alice

  Golding, Mrs Llin

  Mandelson, Peter

  Gordon, Mildred

  Marek, Dr John

  Graham, Thomas

  Marshall, David (Shettleston)

  Grant, Bernie (Tottenham)

  Marshall, Jim (Leicester South)

  Griffiths, Nigel (Edinburgh S)

  Martin, Michael J (Springburn)

  Griffiths, Win (Bridgend)

  Martlew, Eric

  Grocott, Bruce

  Maxton, John

  Gunnell, John

  Meacher, Michael

  Hain, Peter

  Meale, Alan

  Hall, Mike

  Michael, Alun

  Hanson, David

  Michie, Bill (Sheffield Heeley)

  Hardy, Peter

  Michie, Mrs Ray (Argyll & Bute)

  Harman, Ms Harriet

  Milburn, Alan

  Harvey, Nick

  Miller, Andrew

  Hattersley, Rt Hon Roy

  Mitchell, Austin (Gt Grimsby)

  Henderson, Doug

  Moonie, Dr Lewis

  Heppell, John

  Morgan, Rhodri

  Hill, Keith (Streatham)

  Morley, Elliot

  Hinchliffe, David

  Morris, Rt Hon Alfred (Wy'nshawe)

  Hodge, Margaret

  Morris, Rt Hon John (Aberavon)

  Hoey, Kate

  Mudie, George

  Hogg, Norman (Cumbernauld)

  Mullin, Chris

  Home Robertson, John

  Oakes, Rt Hon Gordon

  Hood, Jimmy

  O'Brien, Mike (N W'kshire)

  Hoon, Geoffrey

  O'Brien, Bill (Normanton)

  Howarth, George (Knowsley N)

  O'Hara, Edward

  Howells, Dr. Kim (Pontypridd)

  Olner, Bill

  Hoyle, Doug

  O'Neill, Martin

  Hughes, Kevin (Doncaster N)

  Orme, Rt Hon Stanley

  Hughes, Robert (Aberdeen N)

  Parry, Robert

  Hughes, Roy (Newport E)

  Patchett, Terry

  Hughes, Simon (Southwark)

  Pickthall, Colin

  Hutton, John

  Pike, Peter L

  Illsley, Eric

  Pope, Greg

  Ingram, Adam

  Powell, Ray (Ogmore)

  Jackson, Glenda (H'stead)

  Prentice, Bridget (Lew'm E)

  Jackson, Helen (Shefld, H)

  Prentice, Gordon (Pendle)

  Jamieson, David

  Prescott, Rt Hon John

  Janner, Greville

  Primarolo, Dawn

  Jones, Barry (Alyn and D'side)

  Purchase, Ken

  Jones, Jon Owen (Cardiff C)

  Quin, Ms Joyce

  Jones, Lynne (B'ham S O)

  Radice, Giles

  Jones, Martyn (Clwyd, SW)

  Randall, Stuart

  Jones, Nigel (Cheltenham)

  Raynsford, Nick

  Jowell, Tessa

  Reid, Dr John

  Kaufman, Rt Hon Gerald

  Rendel, David

  Keen, Alan

  Robertson, George (Hamilton)

  Kennedy, Charles (Ross, C&S)

  Roche, Mrs Barbara

  Kennedy, Jane (Lpool Brdgn)

  Rogers, Allan

  Khabra, Piara S

  Rooney, Terry

  Kilfoyle, Peter

  Ross, Ernie (Dundee W)

  Kirkwood, Archy

  Rowlands, Ted

  Lestor, Joan (Eccles)

  Ruddock, Joan

  Lewis, Terry

  Salmond, Alex

  Liddell, Mrs Helen

  Sedgemore, Brian

  Litherland, Robert

  Sheerman, Barry

  Livingstone, Ken

  Sheldon, Rt Hon Robert

  Lloyd, Tony (Stretford)

  Shore, Rt Hon Peter

  Llwyd, Elfyn

  Short, Clare

  Loyden, Eddie

  Simpson, Alan

  McAllion, John

  Skinner, Dennis

  890

  Smith, Andrew (Oxford E)

  Vaz, Keith

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

  Walker, Rt Hon Sir Harold

  Smith, Llew (Blaenau Gwenf)

  Wallace, James

  Soley, Clive

  Walley, Joan

  Spearing, Nigel

  Wardell, Gareth (Gower)

  Spellar, John

  Wareing, Robert N

  Squire, Rachel (Dunfermline W)

  Watson, Mike

  Steel, Rt Hon Sir David

  Welsh, Andrew

  Steinberg, Gerry

  Wicks, Malcolm

  Stevenson, George

  Williams, Rt Hon Alan (SW'n W)

  Stott, Roger

  Williams, Alan W (Carmarthen)

  Strang, Dr. Gavin

  Wilson, Brian

  Winnick, David

  Straw, Jack

  Worthington, Tony

  Sutcliffe, Gerry

  Wray, Jimmy

  Taylor, Mrs Ann (Dewsbury)

  Wright, Dr Tony

  Taylor, Matthew (Truro)

  Young, David (Balton SE)

  Thompson, Jack (Wansbeck)

  Timms, Stephen

  Tellers for the Noes:

  Tipping, Paddy

  Mr. Eric Clarke and

  Turner, Dennis

  Mr. Joe Benton.

  Question accordingly agreed to.
  Resolved,

  4. CIDER (RATE)
  That—

  (1) In section 62(1) of the Alcoholic Liquor Duties Act 1979 for "£22.82" there shall be substituted "£23.78".

  (2) This Resolution shall come into force on 1st January 1995.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  5. WINE AND MADE-WINE (RATES) (No. 2)
  Resolved,
  That the Resolution of the House (wine and made-wine (rates)) of 6th December shall have effect—

  (a) with the substitution for 22.46, 40.44, 134.77 and 19.81 of 23.41, 42.14, 140.44 and 20.60 respectively;

  (b) with the substitution for 192.53 (in each place) of 200.64.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  6. TOBACCO PRODUCTS (RATES) (No. 2)
  Resolved,
  That as respects any time after 31st December 1994 the Resolution of the House (tobacco products (rates)) of 6th December shall have effect with the substitution for £55.58, £82.56 and £36.30 of £57.64, £85.61 and £37.64 respectively.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  7. HYDROCARBON OIL (RATES) (No. 2)
  Motion made, and Question put,
  That as respects any time after 31st December 1994 the Resolution of the House (hydrocarbon oil (rates)) of 6th December shall have effect with the substitution for £0.3526 and £0.3044 of £0.3614 and £0.3132 respectively.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
  The House divided: Ayes 302, Noes 37.

  Division No. 23]

  [22.43 pm

  AYES

  Ainsworth, Peter (East Surrey)

  Dorrell, Rt Hon Stephen

  Aitken, Rt Hon Jonathan

  Douglas-Hamilton, Lord James

  Alexander, Richard

  Dover, Den

  Alison, Rt Hon Michael (Selby)

  Duncan, Alan

  Allason, Rupert (Torbay)

  Duncan Smith, Iain

  Amess, David

  Dunn, Bob

  Arbuthnot, James

  Durant, Sir Anthony

  Arnold, Jacques (Gravesham)

  Dykes, Hugh

  Arnold, Sir Thomas (Hazel Grv)

  Eggar, Tim

  Ashby, David

  Elletson, Harold

  Aspinwall, Jack

  Emery, Rt Hon Sir Peter

  Atkins, Robert

  Evans, David (Welwyn Hatfield)

  Atkinson, David (Bour'mouth E)

  Evans, Jonathan (Brecon)

  Atkinson, Peter (Hexham)

  Evans, Nigel (Ribble Valley)

  Baker, Rt Hon K (Mole Valley)

  Evans, Roger (Monmouth)

  Baker, Nicholas (Dorset North)

  Evennett, David

  Baldry, Tony

  Faber, David

  Banks, Matthew (Southport)

  Fabricant, Michael

  Batiste, Spencer

  Fenner, Dame Peggy

  Bellingham, Henry

  Field, Barry (Isle of Wight)

  Bendall, Vivian

  Fishburn, Dudley

  Beresford, Sir Paul

  Forman, Nigel

  Biffen, Rt Hon John

  Forsyth, Michael (Stirling)

  Bonsor, Sir Nicholas

  Forth, Eric

  Booth, Hartley

  Fowler, Rt Hon Sir Norman

  Boswell, Tim

  Fox, Dr Liam (Woodspring)

  Bottomley, Peter (Eltham)

  Fox, Sir Marcus (Shipley)

  Bowden, Sir Andrew

  Freeman, Rt Hon Roger

  Bowis, John

  French, Douglas

  Boyson, Rt Hon Sir Rhodes

  Fry, Sir Peter

  Brandreth, Gyles

  Gale, Roger

  Brazier, Julian

  Gallie, Phil

  Bright Sir Graham

  Gardiner, Sir George

  Brooke, Rt Hon Peter

  Garel-Jones, Rt Hon Tristan

  Brown, M (Brigg & Cl'thorpes)

  Garnier, Edward

  Browning, Mrs. Angela

  Gillan, Cheryl

  Bruce, Ian (Dorset)

  Goodlad, Rt Hon Alastair

  Budgen, Nicholas

  Goodson-Wickes, Dr Charles

  Burns, Simon

  Gorman, Mrs Teresa

  Burt, Alistair

  Gorst, Sir John

  Butler, Peter

  Grant, Sir A(Cambs SW)

  Butterfill, John

  Greenway, Harry (Ealing N)

  Carlisle, John (Luton North)

  Greenway, John (Ryedale)

  Carlisle, Sir Kenneth (Lincoln)

  Griffiths, Peter (Portsmouth, N)

  Carrington, Matthew

  Grylls, Sir Michael

  Carttiss, Michael

  Gummer, Rt Hon John Selwyn

  Cash, William

  Hague, William

  Channon, Rt Hon Paul

  Hamilton, Rt Hon Sir Archibald

  Chapman, Sydney

  Hamilton, Neil (Tatton)

  Churchill, Mr

  Hannam, Sir John

  Clappison, James

  Hargreaves, Andrew

  Clark, Dr Michael (Rochford)

  Harris, David

  Clarke, Rt Hon Kenneth (Ru'clif)

  Haselhurst, Alan

  Clifton-Brown, Geoffrey

  Hawkins, Nick

  Coe, Sebastian

  Hawksley, Warren

  Congdon, David

  Hayes, Jerry

  Conway, Derek

  Heald, Oliver

  Coombs, Simon (Swindon)

  Heath, Rt Hon Sir Edward

  Cope, Rt Hon Sir John

  Heathcoat-Amory, David

  Cormack, Patrick

  Hendry, Charles

  Couchman, James

  Heseltine, Rt Hon Michael

  Cran, James

  Higgins, Rt Hon Sir Terence

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

  Hill, James (Southampton Test)

  Curry, David (Skipton & Ripon)

  Hogg, Rt Hon Douglas (G'tham)

  Davies, Quentin (Stamford)

  Horam, John

  Davis, David (Boothferry)

  Hordem, Rt Hon Sir Peter

  Day, Stephen

  Howard, Rt Hon Michael

  Deva, Nirj Joseph

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

  Devlin, Tim

  Howell, Rt Hon David (G'dford)

  Dicks, Terry

  Howell, Sir Ralph (N Norfolk)

  892

  Hughes, Robert G. (Harrow West)

  Pickles, Eric

  Hunt, Rt Hon David (Wirral W)

  Porter, David (Waveney)

  Hunt, Sir John (Ravensbourne)

  Portillo, Rt Hon Michael

  Hurd, Rt Hon Douglas

  Powell, William (Corby)

  Jack, Michael

  Rathbone, Tim

  Jackson, Robert (Wantage)

  Redwood, Rt Hon John

  Jenkin, Bernard

  Renton, Rt Hon Tim

  Jessel, Toby

  Richards, Rod

  Jones, Gwilym (Cardiff N)

  Riddick, Graham

  Jones, Robert B (W Hertfdshr)

  Robathan, Andrew

  Key, Robert

  Roberts, Rt Hon Sir Wyn

  King, Rt Hon Tom

  Robertson, Raymond (Ab'd'n S)

  Kirkhope, Timothy

  Robinson, Mark (Somerton)

  Knapman, Roger

  Roe, Mrs Marion (Broxbourne)

  Knight, Mrs Angela (Erewash)

  Ross, William (E Londonderry)

  Knight, Greg (Derby N)

  Rumbold, Rt Hon Dame Angela

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

  Ryder, Rt Hon Richard

  Knox, Sir David

  Sackville, Tom

  Kynoch, George (Kincardine)

  Sainsbury, Rt Hon Tim

  Lait, Mrs Jacqui

  Scott, Rt Hon Nicholas

  Lamont, Rt Hon Norman

  Shaw, David (Dover)

  Lang, Rt Hon Ian

  Shaw, Sir Giles (Pudsey)

  Lawrence, Sir Ivan

  Shephard, Rt Hon Gillian

  Legg, Barry

  Shepherd, Colin (Hereford)

  Leigh, Edward

  Shepherd, Richard (Aldridge)

  Lennox-Boyd, Sir Mark

  Shersby, Michael

  Lester, Jim (Broxtowe)

  Sims, Roger

  Lidington, David

  Skeet, Sir Trevor

  Lightbown, David

  Smith, Sir Dudley (Warwick)

  Lilley, Rt Hon Peter

  Smith, Tim (Beaconsfield)

  Lloyd, Rt Hon Peter (Fareham)

  Soames, Nicholas

  Lord, Michael

  Speed, Sir Keith

  Luff, Peter

  Spencer, Sir Derek

  Lyell, Rt Hon Sir Nicholas

  Spicer, Sir James (W Dorset)

  MacGregor, Rt Hon John

  Spicer, Michael (S Worcs)

  MacKay, Andrew

  Spink, Dr Robert

  Maclean, David

  Sproat, Iain

  McLoughlin, Patrick

  Squire, Robin (Hornchurch)

  McNair-Wilson, Sir Patrick

  Stanley, Rt Hon Sir John

  Madel, Sir David

  Steen, Anthony

  Maitland, Lady Olga

  Stephen, Michael

  Malone, Gerald

  Stern, Michael

  Mans, Keith

  Stewart, Allan

  Marland, Paul

  Streeter, Gary

  Marlow, Tony

  Sumberg, David

  Marshall, John (Hendon S)

  Sweeney, Walter

  Marshall, Sir Michael (Arundel)

  Sykes, John

  Martin, David (Portsmouth S)

  Tapsell, Sir Peter

  Mawhinney, Rt Hon Dr Brian

  Taylor, Ian (Esher)

  Mellor, Rt Hon David

  Taylor, John M (Solihull)

  Merchant, Piers

  Taylor, Sir Teddy (Southend, E)

  Mills, Iain

  Temple-Morris, Peter

  Mitchell, Andrew (Gedling)

  Thomason, Roy

  Mitchell, Sir David (Hants NW)

  Thompson, Sir Donald (C'er V)

  Moate, Sir Roger

  Thompson, Patrick (Norwich N)

  Molyneaux, Rt Hon James

  Thornton, Sir Malcolm

  Monro, Sir Hector

  Thumham, Peter

  Montgomery, Sir Fergus

  Townend, John (Bridlington)

  Moss, Malcolm

  Townsend, Cyril D (Bexf'yh'th)

  Needham, Rt Hon Richard

  Tracey, Richard

  Nelson, Anthony

  Tredinnick, David

  Neubert, Sir Michael

  Trend, Michael

  Newton, Rt Hon Tony

  Trimble, David

  Nicnlls, Patrick

  Trotter, Neville

  Nicholson, David (Taunton)

  Twinn, Dr Ian

  Nicholson, Emma (Devon West)

  Vaughan, Sir Gerard

  Norris, Steve

  Viggers, Peter

  Onslow, Rt Hon Sir Cranley

  Walden, George

  Ottaway, Richard

  Walker, Bill (N Tayside)

  Page, Richard

  Waller, Gary

  Paice, James

  Ward, John

  Patnick, Sir Irvine

  Wardle, Charles (Bexhill)

  Patten, Rt Hon John

  Waterson, Nigel

  Pattie, Rt Hon Sir Geoffrey

  Watts, John

  Pawsey, James

  Wells, Bowen

  Peacock, Mrs Elizabeth

  Whitney, Ray

  893

  Whittingdale, John

  Winterton, Nicholas (Macc'fld)

  Widdecombe, Ann

  Wolfson, Mark

  Wiggin, Sir Jerry

  Young, Rt Hon Sir George

  Wilkinson, John

  Willetts, David

  Tellers for the Ayes:

  Wilshires, David

  Mr. Timothy Wood and

  Winterton, Mrs Ann (Congleton)

  Mr. Michael Bates.

  NOES

  Abbott, Ms Diane

  Lewis, Terry

  Austin-Walker, John

  Llwyd, Elfyn

  Barnes, Harry

  Loyden, Eddie

  Beith, Rt Hon A J

  McAvoy, Thomas

  Bruce, Malcolm (Gordon)

  Maclennan, Robert

  Campbell, Menzies (Fife NE)

  Maddock, Diana

  Canavan, Dennis

  Marshall, David (Shettleston)

  Chidgey, David

  Michie, Mrs Ray (Argyll & Bute)

  Corbyn, Jeremy

  Pike, Peter L

  Dunnachie, Jimmy

  Rendel, David

  Foster, Don (Bath)

  Salmond, Alex

  Galloway, George

  Skinner, Dennis

  Gordon, Mildred

  Steel, Rt Hon Sir David

  Graham, Thomas

  Taylor, Matthew (Truro)

  Harvey, Nick

  Tyler, Paul

  Home Robertson, John

  Wallace, James

  Hood, Jimmy

  Wareing, Robert N

  Jones, Nigel (Cheltenham)

  Tellers for the Noes:

  Kennedy, Charles (Ross,C&S)

  Mrs. Margaret Ewing and

  Kirkwood, Archy

  Mr. Andrew Welsh.

  Question accordingly agreed to.

  SUPREME COURT OF ENGLAND AND WALES
  Motion made, and Question put forthwith, pursuant to Standing Order No. 101(5),
  That the draft Maximum Number of Judges Order 1994, which was laid before this House on 16th November, be approved.—[Mr. Andrew Mitchell.]
  Question agreed to.

  Ordered,
  That Mr. Stanley Orme be added to the Committee Privileges.—[Mr. Andrew Mitchell.]

Child Witnesses
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Andrew Mitchell.]
10.56 pm
Mr. Julian Brazier: I am grateful for the opportunity to raise for the second time the important issue of child witnesses in child abuse cases.
It is a subject that we are often reluctant to think about because it involves some very sad cases. However, thanks to Government action and a great deal of hard work by the voluntary sector, progress has been made, especially in the past three or four years. I am thinking especially of the Criminal Justice Act 1991, which allows prerecorded videos, the package introduced jointly by the Government and the National Society for the Prevention of Cruelty to Children for best practice for courts and child witnesses and the provisions of the Criminal Justice and Public Order Act 1994, which have also assisted child witnesses. My hon. Friend the Minister of State, Home Office, the hon. Member for Penrith and The Border (Mr. Maclean), will be familiar with those provisions and I am delighted that he is to reply to the debate.
The fact remains that court is still a deeply harrowing experience for children who have often already been very seriously damaged. Of course, I am not suggesting—no reasonable person would—that children's testimony should not be tested in a proper legal process. It is inconceivable that we could start to convict people on the basis of allegations alone, but I am saying that, far from promoting justice, many features of our legal system in fact undermine it and do two things in the process. First, they further damage children who have already undergone extremely traumatic experiences and, secondly, they still often discourage the police and social services from pressing charges for the straightforward reason that they do not want to put a child through the horrendous experience that court all too often is.
I want to focus on four particular aspects. The first is delay. I know that the Government are trying to get such cases fast-tracked, as the Royal Commission on criminal justice recommended, but I have seen two surveys in the past week. One was carried out in Surrey by the National Society for the Prevention of Cruelty to Children, and the other, which is still in the process of compilation, is being conducted in Kent by the National Children's Home. They both suggest that, typically, child cases are still taking 10 to 12 months to come to court. That is a area in which I suggest that justice delayed is all too often justice denied. For a child to have to remember the exact details that long, very often to be denied therapy because of the danger of that causing the case to collapse and, worse still, frequently seeing the listings postponed and postponed, is prejudicial to justice.
The second issue, which seems to be imperative, is the training of judges and barristers. For divorce cases, when child custody issues are involved, we have specialist family courts, in which the judges and the lawyers concerned have had specialist training in how to deal with children. For criminal cases, of course, we cannot have such specialisation because it would further worsen the listings problems and we would have more delays rather than fewer. But we could have a sensible level of training for judges and barristers.

895
Very often, judges will allow barristers to ask children completely unintelligible questions. In a recent case—I am indebted to the NSPCC for the cases—a prosecution lawyer, supposed to be on the side of the child, asked him the following question:
"My learned friend has suggested that the incident you described earlier was in fact inaccurate. Was it accurate or not?"
That was asked of a mentally retarded 12-year-old. I am not even sure whether I would have known what it meant myself.
Worse still, often, judges allow defence barristers to bully people. Another case from the NSPCC survey said:
"Lucy had been questioned through the CCTV link by prosecution and had just begun cross-examination by the defence when the defendant was heard crying and wailing in the courtroom."
The defendant was a male adult. The case continued:
"As the defendant was distressed, the judge agreed to a 15 minute break to allow him to compose himself. The child waited for 15 minutes. Then, just after the questioning began again, the court decided to break for lunch. She returned to be confronted by repeated accusations of lying from the defence counsel until, eventually, the young child broke down and cried."
The judge allowed no adjournment in that case. A male adult was allowed an adjournment because he had burst into tears, yet a young girl was not.
That brings me to my third point, which is what I call the last-minute syndrome. All too often, the child is told only on or just before the day whether his or her recorded evidence will be allowed to be shown, whether a video link will be used for cross-examination, and whether the ridiculous paraphernalia—for a children's case—of wigs and gowns are to be used.
Mr. Alan Howarth: I am sure that the whole House is very grateful to my hon. Friend for raising these important and difficult issues. He is describing some intensely unsatisfactory aspects of court procedure. Does he agree that we need to assemble a model of best practice and to guide the courts in very clear terms that they should adhere to it?
Mr. Brazier: I am most grateful to my hon. Friend. I should note at this point that I am very impressed by the number of hon. Members on the Government and Opposition Benches who have chosen to support this debate. It shows the degree of interest in the subject. My hon. Friend the Member for Basildon (Mr. Amess) is here, and the right hon. Member for Berwick-upon-Tweed (Mr. Beith) and the hon. Member for Newcastle-under-Lyme (Mrs. Golding) are also present, as well as my hon. Friend the Member for Chislehurst (Mr. Sims).
Another aspect of the last-minute syndrome is whether a child will be allowed to review his or her evidence before taking the witness stand. Indeed, recently, an entire case collapsed after months of work and preparation, because when the child was finally confronted with the interview notes and requested to read them out on the witness stand, he could not read the original interviewer's handwriting. Of course, we need best practice. I suggest that we need a straightforward pro forma in which the bulk of those items are identified. The Lord Chancellor's office should send out a requirement for judges to notify the prosecution in advance so that the child can be told what is going to happen in respect of each of those items.
896
That brings me to my fourth and final point. The most important point for a child is that it should have a supporting adult throughout the trial. If the child is to be placed in a cubicle for a video recording, it is unfair that the child should go in only with a court usher who is a complete stranger and who often wears a rather strange-looking gown.
However, the present guidelines state that in such cases, there should be another adult apart from a court usher only "under exceptional circumstances" and with the permission of the defence. Sadly, with our adversarial system, that permission is unlikely to be granted because, alas, with the declining ethics of the Bar today, the defence is very seldom willing to concede anything to help the child, as that would promote the chances of a conviction.
Surely we should be striking a balance. Surely it is intolerable that a judge should give better treatment to a male adult suspect than to a young child victim. Surely, even within our antiquated legal system, there must be room for judges to make decisions at least a few days in advance and formally notify the prosecution so that the child can be told what to expect and be prepared for it. Is it really right that children should not know until the day whether they will have an adult with them throughout the trial? Those questions are important and fundamental to British justice.
I end with this thought: there is a great deal of concern in this country today, which is being registered in several cases, one of which is sub judice but which was very widely reported, and another of which involved a child molester who was released on a technicality at the very beginning of a trial. All that concern comes down to the fact that the people are worried that, today, the victim is treated in a grossly inferior manner in comparison with the rights of the suspect. Surely we should be starting to restore the balance in the case of children.
I commend the Government on the progress that they have already made over the past few years and I hope that the points that I have raised will be examined to restore the balance still further.
11.7 pm
Mr. Roger Sims: I intervene briefly to commend my hon. Friend the Member for Canterbury (Mr. Brazier) on securing this opportunity to ventilate this very important matter, and to express my support for my hon. Friend.
Like the hon. Member for Newcastle-under-Lyme (Mrs. Golding), I was involved in the early stages in efforts to gain acceptance by the courts of video evidence by children. I recall particularly seeing some of the pioneering work carried out in Bexley before the general principle was accepted. I am delighted that my hon. Friend the Member for Canterbury is maintaining a watching brief on the way in which the changes are being implemented.
One of the arguments in favour of allowing video evidence to be shown to the courts was that, when the video was shown privately to a defendant who might be minded to plead guilty, he would change his plea to guilty and avoid the ordeal of the child having to appear before the court.

897
I am aware that the Home Office has commissioned research into how the legislation is operating, and I wonder whether the Minister can make an assessment of the extent to which the hopes that I have expressed have been fulfilled.
Whatever the situation, the fact is that—alas—there are still many contested cases. A child has been through a terrifying experience at the time of the alleged offence. It is then asked to recount what happened before a video camera, and many months later the child may be asked to appear and relive the incident again, either in court or perhaps in an adjacent room, in an unusual setting with a video camera pointing at him or her. That would be a considerable ordeal for an adult. It is not difficult to imagine how overwhelming or terrifying that must be for a small child.
Judges, barristers and court officials must apply sensitivity and flexibility when dealing with child witnesses, particularly in child abuse cases—for example, in allowing the child's memory to be refreshed on incidents that might have happened some time ago, and asking the child a few informal, friendly questions to ease the tension before starting cross-examination. Of course the defendant is entitled to a fair trial and justice must be done, but that principle applies as much to the child witness as it does to the defendant.
11.10 pm
The Minister of State, Home Office (Mr. David Maclean): I am grateful to my hon. Friend the Member for Canterbury (Mr. Brazier) for bringing this important issue before the House. He has been a forceful campaigner for child witnesses in cases of child abuse for some years. I am grateful also for the speech of my hon. Friend the Member for Chislehurst (Mr. Sims) and for the intervention of my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth). Indeed, when the Criminal Justice and Public Order Bill was being considered in Committee, my hon. Friend the Member for Basildon (Mr. Amess) was lobbying me hard on this point, as was my hon. Friend the Member for Gravesham (Mr. Arnold). Several amendments were successfully moved by my hon. Friend the Member for Brecon and Radnor (Mr. Evans), so he and others should take some of the credit for the changes that have been made in recent years.
I cannot underestimate the importance of having the right laws and procedures in place to ensure that the perpetrators of child abuse can be brought to justice. Child abusers can be convicted and punished only if it is possible for the children who have been their victims to give evidence effectively.
Until a few years ago, child witnesses seemed almost to be misfits in a criminal justice system which was designed by adults, for adults. They were even presumed to be incompetent as witnesses. But, as my hon. Friend the Member for Canterbury will know, the Government have done much to bring about change, to remove the old and outdated prejudices against children as witnesses, and to adapt the system to accommodate the needs of children, particularly those who have suffered a traumatic experience.
The Criminal Justice Act 1988 abolished the presumption that children were incompetent as witnesses. It also introduced the system which allows children to give their evidence at court by means of a closed-circuit
898
television link. Building on that, the Criminal Justice Act 1991 extended the closed-circuit television link provisions, forbade the cross-examination of the child directly by the accused, and provided for a video-recorded interview with the child, conducted by police or social workers soon after the incident, to serve as the child's evidence-in-chief at the trial. The Act also provided for committal proceedings to be bypassed in cases involving children.
My hon. Friend was kind enough to acknowledge those reforms in his previous Adjournment debate on this subject nearly three years ago. Since then the Government have produced an important set of guidelines, the 1992 memorandum of good practice, for those involved in preparing for and making the video-recorded interview with child witnesses which may then serve as their evidence at trial. I believe that the memorandum has performed a useful function in enabling the police and social workers to interview a child soon after the alleged offence, and to do so in a way which increases the chances of the video being declared admissible in court.
We have also made legislative improvements to the provisions in the 1991 Act. The Criminal Justice and Public Order Act 1994 cleared up any remaining doubts about the abolition of the competence test for children by requiring judges to admit their testimony, unless the child is incapable of giving intelligible testimony. It is only fair to pay tribute to my hon. Friend the Member for Brecon and Radnor for being instrumental in having that amendment accepted.
We also accepted an amendment in another place during the passage of the Bill to enable the prosecution to examine the child witness on any matter not adequately dealt with in the video recording. That ensures that the prosecution is able to bring what may be important and relevant points to the attention of the court when an issue is mentioned but not fully explored in the video recording. Also in the Act, we abolished the requirement that the jury in sexual offence cases must be warned of the danger of convicting on the uncorroborated evidence of the complainant.
I believe that this level of activity and response to the needs of children demonstrates the Government's commitment to making it easier for them to give evidence in court. But we are always open-minded about possible legislative and administrative improvements which can be made, and we are prepared to consider any proposals which will help to ensure that the current provisions can be made to operate to maximum effect.
At present, we are not convinced that it would be right to make further radical structural changes to the system for taking children's evidence, but I do not rule these out, if, in the light of experience, they seem to be justified.
Mr. Brazier: I am most grateful to my hon. Friend for giving way. The National Society for the Prevention of Cruelty to Children asked me specifically to thank my hon. Friend for the very flexible and positive approach which he has brought to his office in building on moves which were already in train. However, I suggest that almost all the points that I listed in my speech come back to the need for judges to change their attitudes and to change the way in which they run their courts—and, of course, training and a memorandum from the Lord

899
Chancellor are part of the solution. But we have identified very little that needs changing in the law—we need to change the climate in which judges operate.
Mr. Maclean: I am grateful to my hon. Friend for pointing out that he thinks that the law is adequate. Some people would disagree and would like to see legal changes. At present, I do not think that it would be wise to make substantial legal changes. We need some experience of how the current system is working and we need to receive the results of research in this area. Nevertheless, I take on board my hon. Friend's point: I think that the Lord Chancellor is very much aware of the need for training and sensitivity in dealing with those cases.
It was clear when the provisions allowing the video-recorded testimony of children to be submitted as their evidence-in-chief were introduced through the 1991 Act that it would be necessary to keep a close eye on how the provisions were working in practice. Accordingly, we commissioned a major independent research project by Professor Graham Davies of Leicester university into the effectiveness of the current provisions, and I can tell the hon. Member for Chislehurst that we hope to receive the results very shortly.
The research team aimed to obtain the views of a number of practitioners—police and social workers, barristers and judges—on the provisions of the 1991 Act at an early stage in its implementation, and also after they had had more experience of its operation. They have also been studying a number of video-recorded interviews and tracing their progress through the criminal justice system.
We shall be considering the findings of the project very carefully in deciding what further changes need to be made. If we had rushed into changes without commissioning the research or when the research was halfway through, we would rightly be subject to severe criticism if the research came to conclusions contrary to the hasty ones that we had arrived at.
I may be criticised and accused—unfairly—of wishing to hang people before giving them a fair trial, but I hope that my hon. Friend will accept that even I agree that we must consider the balance between the interests of the child and the interests of justice. In an ideal world, the two would be one and the same. In the past, the stress of criminal proceedings for children has resulted in cases being abandoned—or not even begun—because the child's evidence was not heard.
Mr. A. J. Beith: Will the hon. Gentleman give way?
Mr. Maclean: I want to cover the subject and crack on.
Too often the interests of justice have been frustrated, and the child further harmed, because it has not been possible for the child to cope with the full court process. But children have a right to justice, and their evidence is essential if society is to protect their interests and deal effectively with those who would harm them. Putting the child's interests first is our priority—but not to the extent of removing the defendant's right to a fair trial and to have the case against him properly tested.
Getting the balance right will always be a difficult and delicate task. Many people will be convinced that in individual cases the balance is not right—if they were the
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judge and the jury. Nevertheless, I hope that my hon. Friend will agree that the Government have been able to improve the lot of child witnesses since his previous Adjournment debate and that we remain open to the possibility of further changes, where they can be justified.
I turn now to the points that my hon. Friend raised tonight. As he pointed out, there is some evidence that it is taking too long for child abuse cases to reach court. The criminal justice agencies are well aware of the adverse effect on the child of any unnecessary delay in bringing the ordeal to an end, and considerable efforts are being made to ensure that that delay is kept to an absolute minimum.
In the Crown court, cases involving child witnesses are given high priority for hearing dates. Guidelines have been issued to listing officers, recommending that such cases be given a fixed date for trial, to ensure that expert and other witnesses have sufficient notice to make themselves available and so reduce the risk of late changes to the hearing dates. They also recommend that cases involving child witnesses should be given the earliest available date and that trial dates in such cases must be changed only in exceptional circumstances.
Child liaison officers are also charged with ensuring, as far as it is within the ability of the court to do so, that there is no unnecessary delay in bringing the cases to trial. Again, we are helping to fund research into the main reasons for delay.
The Crown Prosecution Service recently issued guidance about cases involving child witnesses, which reminds prosecutors to use the procedures that are in force to help expedite cases involving child witnesses through the court and provides practical guidance about how those procedures can be used.
The Home Office-chaired steering group on child evidence has been looking into the issue and each of the agencies involved in the process has looked both at how delays arise at present and how the process can be streamlined in future. There are a number of positive initiatives in different parts of the country, including some fast tracking projects.
So we are tackling the problem of delays in a number of ways, but like my hon. Friend I hope that further improvements can be made to speed up the process of bringing child abuse cases to court.
My hon. Friend raised the issue of therapy for children who have been abused. When a child receives certain types of counselling and therapy, the defence is liable to allege that the child has been coached, thus undermining the weight of his or her evidence. There is no absolute ban on children receiving therapy while investigations are taking place, but it is important that therapists operate within certain guidelines, so as not to prejudice a fair trial.
The Crown Prosecution Service has set up a seminar group to consider that issue. The group brings together legal practitioners and clinical experts. They are working on proposed guidance for therapists involved in treating child witnesses before trial. I very much hope that that guidance will make it easier for children who need therapy to receive it before trial, without in any way tainting their evidence in the eyes of the court.
My hon. Friend referred to judicial training and the need for training for the judiciary on conduct towards children in court. That is a matter for my right hon. and learned Friend the Lord Chancellor, but I can tell my hon.

901
Friend and the House that the training of judges includes lectures on child evidence, child abuse and rape. Sessions have also been held on techniques for interviewing children.
The subject of judicial training is also on the agenda for the next meeting of the Home Office-chaired steering group on child evidence, when it hopes to discuss the issue with a representative of the Judicial Studies Board.
My hon. Friend also referred to the number of important decisions made at the last minute by the judge, such as whether to allow evidence to be given by a video link. I hope that the introduction of plea and direction hearings—in stages from the new year—in cases committed or transferred to the Crown court will make a significant difference to the problem.
At the plea and direction hearing, ail parties will be required to identify whether any witnesses need special attention, including child witnesses. The judge can then ensure that all the necessary steps, including applications for the use of video-recorded evidence, television links or screens, have been taken in good time. That should reduce the number of cases in which a decision about granting such an application is delayed.
My hon. Friend referred to guidelines preventing an adult from being present in the room when a child is giving evidence by closed circuit television link. Under the Crown court rules, the child witness
"shall be accompanied by a person acceptable to a judge of the Crown Court, and unless the judge otherwise directs, by no other person".
The prescribed form for making applications includes a section in which the applicant may propose a named individual to accompany the witness, and give his or her reasons for doing so, for the judge to consider.
In October 1991, the deputy chief justice, Lord Justice Watkins, gave a direction that a court usher would be the most appropriate person to accompany a child witness. That person would fulfil a number of important functions—ensuring that the equipment is used properly in the first place, alerting the judge to any needs that the child might have, preventing unauthorised access to the room, and ensuring that the child is not prompted in any
902
way when giving evidence. The court usher has the independence that a child's relative or friend might not have and would be sufficiently knowledgeable about the procedures and equipment to be able to discharge the responsibility completely.
However, nothing would preclude an independent adult from accompanying the child, as long as the person was named on the application form. Of course, the final decision on who accompanies the child in the witness room is for the judge who considers the application.
My hon. Friend referred to the issue of cross-examination before trial. While the 1991 Act provided for children to give their evidence-in-chief in a video-recorded interview, it is still possible for a child to be cross-examined during the trial.
Quite often there will be a considerable delay between the giving of evidence on video and cross-examination upon that evidence. This could be seen to prolong the trauma for the child, and also to create an opportunity for defence counsel to exploit inconsistencies between the video recording and the answers to questions given on cross-examination. Being cross-examined can be a harrowing experience for adults, let alone children who have suffered abuse.
That underlies the suggestion that both the examination-in-chief and cross-examination of children should take place before trial. This could be done in a number of ways. One possibility, which was debated in the House as a proposed amendment to the Criminal Justice and Public Order Act 1994, would be to allow the evidence of children to be taken "on commission". The court could appoint an independent commissioner who would oversee the questioning of the child by both the prosecution and defence counsel, and that would be recorded on video.
A similar system has just begun to operate in Scotland. My hon. Friend may detect—
The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned accordingly at twenty-six minutes past Eleven o'clock.

LORD CHANCELLOR'S DEPARTMENT

  Public Bodies
  Dr. Wright
  To ask the Parliamentary Secretary, Lord Chancellor's Department which of the appointments made to public bodies by his Department were advertised in the period from April 1992 to December 1993.

  Mr. John M. Taylor
  Four appointments to the Law Commission were advertised in the period from April 1992 to December 1993, although three of those appointed did not take up post until 1994.

  In addition, two vacancies for barristers on the Legal Aid Board were also advertised in Bar News, a publication distributed to all subscribing members of the Bar.

  Dr. Wright
  To ask the Parliamentary Secretary, Lord Chancellor's Department what is his Department's policy regarding the use of executive search consultants in making appointments to public bodies; and if he will list(a) the appointments where such consultants have been used and (b) the cost in each case in the period April 1992 to December 1993.

  Mr. John M. Taylor
  The use of executive search consultants is one of the recruitment options considered when making public appointments. Such consultants were not, however, used in the period in question.

  Special Advisers
  Mr. Milburn
  To ask the Parliamentary Secretary, Lord Chancellor's Department which of the special advisers serving in his Department during the last five years were subject to positive security vetting.

  Mr. John M. Taylor
  The Lord Chancellor's Department has not employed any special advisers during the last five years.

  Magistrates Court Service
  Mr. Michael Brown
  To ask the Parliamentary Secretary, Lord Chancellor's Department when he will announce the results of the review conducted by his Department and the magistrates courts service into the operation of the formula for allocating revenue grant to the magistrates courts service.

  Mr. John M. Taylor
  The Lord Chancellor has today completed his consideration of the proposals made by the working group, comprising representatives of the service and his Department, and of the representations made by the service regarding those proposals.

  The Lord Chancellor has concluded that the review has demonstrated that the current formula for revenue grant allocation, introduced on 1 April 1992, as set out in the answer given on 18 October 1991, Official Report, column 288, does not represent the best method of allocation. It does not adequately encourage local
  544
  managers to achieve the best value for money in their use of resources, while also reflecting the varying needs of magistrates courts committees. He, therefore, intends to allocate revenue grant in 1995–96, and in subsequent years, on the basis of a revised formula. The allocation formula will operate on the following basis:

  Per cent.

  Average expenditure outturn over the previous 5 years, expressed at constant prices

  45

  The annual estimate of general population produced by the Office of Population Census and Surveys

  10

  Completed weighted caseload, averaged over a 3, growing to 5, year rolling period

  35

  Fine enforcement averaged over a 2, growing to 5, year rolling period

  5

  Time taken to deal with triable either-way and indictable only cases, averaged over a 2, growing to 5, year rolling period

  5

  The Lord Chancellor intends, over the coming years, to reduce the areas of expenditure which are wholly or partially excluded from the cash limiting formula. In a number of instances this will be subject to further consideration, in conjunction with the service, of suitable alternative procedures. There are also a number of further matters he wishes his Department to consider. All of these will be subject to consultation with the service. Copies of a paper setting out the full details of the allocation formula to apply from 1995–96 onwards, the issues for further consideration and the allocations to apply for 1995–96 have been placed in the Library of the House and sent today to members of the Magistrates Courts Consultative Council, the clerks to all MCCs and the chief executives of all paying authorities.

HOUSE OF COMMONS

  Special Advisers
  Mr. Milburn
  To ask the Lord President of the Council which of the special advisers serving in his office during the last five years were subject to positive security vetting.

  Mr. Newton
  All special advisers are currently required to have positive vetting.

TRANSPORT

  Thames Transport
  Sir Michael Neubert
  To ask the Secretary of State for Transport what conclusions the River Thames working group has reached from its study into transport on the Thames.

  Mr. Deva
  To ask the Secretary of State for Transport what conclusions the River Thames working group has reached from its study into transport on the Thames.

  Mr. Norris
  The River Thames working group has now completed its work examining the potential for increasing
  545
  traffic on the River Thames and its report will be published tomorrow. The Thames is a unique river with its own special characteristics, opportunities and problems. The group has concluded that there is scope for increasing freight volumes and for improving tourist services and suggests what is needed to allow this to happen. I will place a copy of the report in the Library tomorrow.

  Special Advisers
  Mr. Milburn
  To ask the Secretary of State for Transport which of the special advisers serving in his Department during the last five years were subject to positive security vetting.

  Dr. Mawhinney
  All special advisers are currently required to have positive vetting.

  Payment of Bills
  Mr. Betts
  To ask the Secretary of State for Transport what percentage of invoices to his Department were paid within agreed terms or 30 days for the last financial year.

  Mr. Norris
  A total of 93.6 per cent.

  Buses (Wheelchair Accessibility)
  Mr. Day
  To ask the Secretary of State for Transport what guidance is given to bus and minibus manufacturers and operators by his Department on the provision of adequate restraint of wheelchairs in buses and minibuses, on the provision of seat belts to restrain wheelchair occupants and on the suitability of various types of wheelchair for carrying occupants in buses and minibuses; what information he has on the extent to which such guidance has been adopted by bus and minibus manufacturers; and what representations he has received with respect to amendments to any existing guidance or codes of practice covering the above issues.

  Mr. Norris
  Guidance is given in a code of practice entitled "The Safety of Passengers in Wheelchairs on Buses". This code of practice is used by vehicle inspectorate certifying officers when examining vehicles, designed for the carriage of passengers in wheelchairs, for public service vehicle certification. The code deals with the restraint of both wheelchairs and their occupants and takes account of the various types and sizes of wheelchair available, including those powered by electricity. The only deviation which has been allowed from the terms of the code is in respect of low-floor buses and we will review the recommendations of the code when trials on these buses are complete.

  Information on the extent to which manufacturers have taken up this guidance is not available but we are aware that, in addition to PSVs, local authorities and voluntary groups have adopted the recommendations of the code for vehicles which they operate.

  Research
  Mr. Battle
  To ask the Secretary of State for Transport what sum was spent by his Department on research in each of the last 10 years; what percentage this was of the total annual budget; what is the research budget for the forthcoming year; what percentage this is of his total budget; and what additional new research is to be undertaken.
  546
  Mr. Norris
  The figures requested are given in the following table:

  Year

  Net research expenditure

  Research as a percentage of total expenditure

  1985–86

  25.0

  0.9

  1986–87

  24.6

  0.9

  1987–88

  26.4

  1.0

  1988–89

  27.2

  1.0

  1989–90

  28.6

  0.8

  1990–91

  30.5

  0.7

  1991–92

  36.4

  0.7

  1992–93

  39.7

  0.6

  1993–94

  39.0

  0.7

  1994–95

  38.0

  0.6

  1995–96

  39.0

  0.9

  Gospel Oak to Barking Line
  Mr. Corbyn
  To ask the Secretary of State for Transport what arrangements will be made after privatisation to fund resignalling of the Gospel Oak to Barking line between South Tottenham and Woodgrange Park; and what is the estimated cost for such works.

  Mr. Norris
  Investment in rail infrastructure is a matter for Railtrack in consultation with the franchising director and train operating companies. This relationship will not be affected by privatisation.

  Mr. Corbyn
  To ask the Secretary of State for Transport what resignalling, infrastructure repair and improvement works programme for the South Tottenham to Gospel Oak section of the Gospel Oak to Barking line prior to the flotation of Railtrack are planned and authorised by his Department; what arrangements will be made after privatisation to fund such projects where there are economic, social and environmental benefits to the local community; and what is the estimated cost for such planned or projected works.

  Mr. Norris
  I understand that the Barking to Gospel Oak line is being looked at in the context of plans Railtrack is currently developing for the whole of the North London line, in consultation with the train operating company, North London Railways. The signal cabling between South Tottenham and Wanstead Park is currently being replaced and is scheduled for completion by 12 December. Investment in rail infrastructure is a matter for Railtrack in consultation with the franchising director and train operating companies. This relationship will not be affected by privatisation.

  Mr. Corbyn
  To ask the Secretary of State for Transport what assessment he has made of the delays to the existing passenger train service caused by the absence of signals between South Tottenham signal box control area and Wanstead Park on the Gospel Oak to Barking line when additional trains are routed over the line; and if the resignalling installation planned between South Tottenham and Woodgrange Park as part of the Liverpool Street resignalling project remains in the resignalling programme currently authorised by his Department.

  Mr. Norris
  The signal cabling between South Tottenham and Wanstead Park is currently being replaced and this has resulted in trains being delayed by 30 seconds. No other delay assessments have been carried
  547
  out. No plans currently exist for full resignalling between South Tottenham and Woodgrange Park.

  Mr. Corbyn
  To ask the Secretary of State for Transport what restrictions exist on the weight or type of train permitted to use the railway between Woodgrange Park and South Tottenham on the Gospel Oak to Barking line or between South Tottenham and Gospel Oak; why such restrictions exist; what remedial works are planned to eliminate such restrictions; and if he will make a statement.

  Mr. Norris
  I understand that the route is classified at 90 tonne gross laden weight for four axle bogie vehicles but, due to lack of capacity on six bridges, the classification is reduced to 75 tonnes. Railtrack plans to strengthen or reconstruct these structures over the next four years.

  Buses
  Mr. Dunn
  To ask the Secretary of State for Transport whether he will support the retention of the traditional double-decker omnibus; and if he will make a statement.

  Mr. Norris
  Yes. a European Commission proposal for a directive on bus and coach construction is expected next year. We will be seeking any necessary amendments to ensure the survival of not only the double-decker but any other type of vehicle whose economic future may be threatened by the provisions of the directive.

  Bridges
  Mr. Corbyn
  To ask the Secretary of State for Transport what steps have been taken to conduct a general condition survey of all road bridges over and under both operational and disused railways in the north London area, following the failure and collapse of Crouch Hill bridge over the former railway alignment in north Islington; what Government funding is available to local authorities, Railtrack or any other authority responsible for maintenance and repair of bridges more than 30 years old; and what information he has as to why the bridge collapsed.

  Mr. Norris
  The authorities responsible for the structures in question are required to ensure that they are maintained in a safe condition and to carry out regular inspections as appropriate.

  The bridge at Crouch hill is owned by the local highway authority, the London borough of Islington. The partial collapse of the bridge occurred while strengthening work was under way. Investigation of the cause of the collapse is a matter for the borough and those involved with the strengthening operations.

  Central Government funding is available to local highway authorities to assist their programmes of bridge assessment and strengthening. This can include funding of the assessment of structures owned by Railtrack.

  Railway Regulator
  Mr. Cousins
  To ask the Secretary of State for Transport how many examinations by the railway regulator into track access charges and train leasing costs have been made; when he expects the regulator to report; and if the regulator's conclusions will be placed in the Library.
  548
  Mr. Watts
  The rail regulator informs me that his office is nearing completion of a review of Railtrack's track access charges for both franchised passenger services and freight services. Consultation papers, "Framework for the Approval of Railtrack's Track Access Charges for Franchised Passenger Services" and "Framework for the Approval of Railtrack's Track Access Charges for Freight Services", were published by the office in June and October respectively. A policy statement, "Railtrack's Track Access Charges for Franchised Passenger Services: Developing the Structure of Charges", was published in November. Copies of all these documents have been placed in the Library of the House. The regulator intends to publish final policy statements on the levels of passenger and freight access charges in January.

  The regulator has not undertaken any examination of train leasing costs, which are not subject to his approval.

  Driver and Vehicle Licensing Agency
  Mrs. Dunwoody
  To ask the Secretary of State for Transport whether the introduction of automated first registration and licensing involves a transfer of an undertaking from the Driver and Vehicle Licensing Agency to motor dealers within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 1981.

  Mr. Norris
  This is an operational matter for the Driver and Vehicle Licensing Agency. I have asked the chief executive to write to the hon. Member.

  Letter from Stephen Curtis to Mrs. Gwyneth Dunwoody, dated 13 December 1994:
  Thank you for your recent question about the application of the Transfer of Undertakings (Protection of Employment) Regulations 1981 to the Automated First Registration and Licensing Project. Interpretation of the law is for the Courts and this matter has not been tested in this way. However as always I would be very happy to discuss such matters with members of the staff and their representatives if they consider it would be helpful.

  Channel Tunnel Rail Link
  Mr. Rowe
  To ask the Secretary of State for Transport what is his estimate of the numbers of commuters likely to benefit form the channel tunnel rail link; and how much subsidy per head he intends to authorise.

  Mr. Watts
  The Government intend to secure substantial capacity on the channel tunnel rail link for domestic passenger services. The four consortia invited to bid for the role of promoter have been asked to submit bids on two bases: to provide capacity for eight and 12 trains per hour each way during the peak. The precise service specification will be determined in the light of the bids received. The amount of subsidy will be determined as a result of the competition currently under way and of the competition which the Government intend to hold at a later stage to select an operator to run domestic services.

  Air Traffic Control
  Mr. Welsh
  To ask the Secretary of State for Transport (1) how much funding is required to complete the new Scottish air traffic control centre;
  549
  (2) when the new Scottish air traffic control centre will be operational;

  (3) on what date the oceanic control centre equipment known as flight data processing system, FDPS II, will be in operation; and where this new equipment will be housed;

  (4) what arrangements are being made to handle the expected increase in air traffic over air space covered by the Scottish air traffic control centre.

  Mr. Norris
  [holding answer 12 December 1994]: The new Scottish centre—NSC—is being built at a cost of approximately £200 million to meet the predicted increase in the level of air traffic movements over Scotland and the north Atlantic. The CAA plans to have the NSC operational by 2000.

  The CAA aims to have the new flight data processing system—FDPS—installed and operational in the NSC by 1998, subject to the satisfactory conclusion of a contract under the private finance initiative.

  Re-sectorisation of the Scottish air space is being carried out to ensure that there is adequate capacity available until the new Scottish centre commences operation.

  Passenger Transport Grant
  Mr. McLeish
  To ask the Secretary of State for Transport what level of metropolitan grant will be payable to the English passenger transport executives for 1995–96; and what total grant will be payable by all passenger transport executives to passenger train operators for 1995–96.

  Mr. Watts
  [holding answer 12 December 1994]: We intend to lay before Parliament, early next year, a special grant report in respect of the metropolitan railway grant for 1995–96 in England and Wales.

  Total grant payable to the English PTEs will be calculated pursuant to that report, based on the costs of passenger train operations in all the PTE areas.

PRIME MINISTER

  Inward Investment, Chester
  10. Mr Brandreth
  To ask the Prime Minister what plans he has to visit the City of Chester to discuss inward investment.

  The Prime Minister
  I have no immediate plans to do so. However, I am aware of the success that Chester has enjoyed in recent years in attracting inward investment to the city.

  Ministers
  Mr. Austin Mitchell
  To ask the Prime Minister (1) how many Ministers there were in the Home Office in 1978; how many there are now; and to what extent the current responsibilities and work of the Department are different from those in 1978;

  (2) how many Ministers there are in the Department of Trade and Industry; how many there were in the Department of Trade and Industry in 1978; and to what extent the current responsibilities and work of the Department are different from those at that date;
  550
  (3) how many Ministers there are in the Department of the Environment; how many were in the corresponding Department in 1978; and to what extent the work and responsibilities of that Department have changed since that date.

  The Prime Minister
  This is a matter of public record. The current details of ministerial responsibilities are contained in the Cabinet Office's "List of Ministerial Responsibilities", which is available in the Library of the House.

  Honours System
  Dr. Wright
  To ask the Prime Minister, pursuant to his answer of 2 December 1994,Official Report, column 923, if he will identify (a) the 15 people who have had an honour cancelled since 1979 and (b) the nature of the disrepute in each of these cases.

  The Prime Minister
  No. The names have been published in the London Gazette.

  Engagements
  Sir Peter Tapsell
  To ask the Prime Minister if he will list his official engagements for Tuesday 13 December.

  Mr. Harry Greenway
  To ask the Prime Minister if he will list his official engagements for Tuesday 13 December.

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

  Nagorno-Karabakh
  Mr. Madden
  To ask the Prime Minister if he will make a statement on the outcome of the Conference on Security and Co-operation in Europe with particular reference to Nagorno-Karabakh; what further action Her Majesty's Government propose taking within the UN Security Council in relation to peacekeeping forces in Nagorno-Karabakh; and whether Her Majesty's Government have been invited to participate in any way in relation to peacekeeping in Nagorno-Karabakh.

  The Prime Minister
  I refer the hon. Member to the statement I made last week,Official Report, 7 December 1994, columns 220–22. In relation to Nagorno-Karabakh, we welcome the outcome of the Conference on Security and Co-operation in Europe's Budapest summit as a positive step towards a peaceful resolution of that tragic conflict.

  We will fully support the co-ordinated efforts of the CSCE Minsk group and the Russian Federation to work with the parties to the dispute in achieving a political agreement which will make it possible to establish a multinational peacekeeping operation. We will be ready to support appropriate action in the United Nations Security Council when that agreement has been reached.

  We have undertaken to provide a small number of signals personnel for a possible CSCE monitoring mission in Nagorno-Karabakh. Any further contribution would have to be considered in the light of our other commitments, and of the conditions under which a peacekeeping operation was to be established.

  Ecclesiastical Appointments
  Dr. Wright
  To ask the Prime Minister what is the total number of ecclesiastical appointments for which he is responsible; and if he will list them.

  The Prime Minister
  I have already advised the hon. Member of the main categories of appointments, including church appointments, for which I am responsible. But the total number, including those appointments on which I advise Her Majesty the Queen, cannot be accurately calculated since I have discretion in some cases as to how many appointments I make; and in the case of church appointments, some vacancies fall casually and unpredictably to the Crown by virtue of the royal prerogative.

  Special Advisers
  Mr. Milburn
  To ask the Prime Minister which of the special advisers serving in his office during the last five years were subject to positive security vetting.

  The Prime Minister
  All special advisers are currently required to have positive vetting.

ENVIRONMENT

  Private Sector Rented Accommodation
  Mr. Denham
  To ask the Secretary of State for the Environment what is his estimate of the average private sector residential rent in(a) Southampton, (b) Portsmouth and (c) Hampshire; and, in each case, what is the total number of private sector residential tenancies.

  Mr. Robert B. Jones
  Information is not available on the average private sector residential rent in Southampton, Portsmouth and Hampshire. Details of the number of private sector residential tenancies in these areas are contained in table 20 of the 1991 "Census County Report: Hampshire", part 1.

  Domestic Waste Disposal
  Mr. Scott
  To ask the Secretary of State for the Environment how many local authorities in England dispose of their domestic waste(a) by incineration and (b) by the use of landfill sites.

  Mr. Atkins
  Information on the waste disposal practices of individual local authorities is not held centrally.

  Approximately 20 million tonnes of domestic waste arise annually in England and Wales. Of this, around 85 per cent. is landfilled and 10 per cent. is incinerated. There are currently 21 incinerators for the disposal of municipal waste operating in the United Kingdom.

  Energy Efficiency
  Ms Walley
  To ask the Secretary of State for the Environment what information and data from the 1991 English house condition survey on energy consumption, energy efficiency and condition of housing he has provided to the Chancellor of the Exchequer.

  Mr. Robert B. Jones
  Data on the subjects mentioned by the hon. Member are contained in the report of the survey, which is a public document.

  Single Regeneration Budget
  Mr. Gunnell
  To ask the Secretary of State for the Environment if he will list for each metropolitan district and London borough the value of the funding for the first year of the single regeneration budget, the bid for funds from the first year of the single regeneration budget, the totals received under the urban programme in 1992–93, 1993–94 and 1994–95 and the totals for section 11 funding in 1992–93,1993–94 and 1994–95.

  Mr. Curry
  The bids received for funding new projects under the single regeneration budget and the 201 successful bids announced on 6 December represent comprehensive responses by partnerships to local needs, which in some cases cross local authority boundaries. As a result, the information requested is not available in the form sought, but I sent details of all the successful bids to the hon. Member on 5 December.

  Details of funding provided under the urban programme and section 11 in each metropolitan district and London borough is given in the tables. The section 11 grant allocations for 1994–95 include Home Office funded projects and those funded from the single regeneration budget.

  Funding under the urban programme

  £ million

  1992–93

  1993–94

  1994–95 allocation

  Metropolitan Districts

  Barnsley

  1.995

  1.219

  0.700

  Birmingham

  20.295

  13.558

  6.779

  Bolton

  3.712

  2.055

  0.282

  Bradford

  4.177

  2.865

  1.462

  Coventry

  4.287

  2.786

  1.367

  Doncaster

  2.069

  1.141

  0.627

  Dudley

  1.448

  0.941

  0.461

  Gateshead

  —

  4.798

  2.459

  Kirklees

  1.082

  0.662

  0.343

  Knowsley

  4.749

  2.378

  0.946

  Leeds

  4.783

  3.178

  1.554

  Liverpool

  16.763

  11.043

  5.675

  Manchester

  119.401

  8.349

  3.738

  Newcastle

  215.057

  4.871

  2.378

  North Tyneside

  3.030

  1.974

  0.951

  Oldham

  3.563

  2.384

  0.965

  Rochdale

  3.496

  2.263

  1.047

  Rotherham

  2.067

  1.336

  0.667

  St. Helens

  1.568

  1.098

  0.593

  Salford

  1

  4.280

  1.120

  Sandwell

  4.260

  2.801

  1.261

  Sefton

  1.612

  0.910

  0.516

  Sheffield

  5.482

  3.655

  1.762

  South Tyneside

  4.574

  2.938

  1.502

  Sunderland

  4.650

  3.073

  1 148

  Walsall

  1.662

  0.922

  0.429

  Wigan

  2.555

  1.527

  0.634

  Wirral

  3.377

  2.154

  1.168

  Wolverhampton

  4.782

  3.127

  1 494

  London Boroughs

  Brent

  2.483

  1.351

  0.573

  Greenwich

  1.401

  1.013

  0.436

  Hackney

  4.890

  3.041

  1.269

  Hammersmith and Fulham

  2.321

  1.557

  0.654

  Haringey

  2.747

  1.852

  0.869

  Islington

  7.875

  5.311

  2.445

  Kensington and Chelsea

  1.716

  1.115

  0.546

  553

  Funding under the urban programme

  £ million

  1992–93

  1993–94

  1994–95 allocation

  Lambeth

  7.790

  5.340

  2.731

  Lewisham

  2.278

  1.326

  0.567

  Newham

  2.929

  1.755

  0.811

  Southwark

  2.477

  1.622

  0.669

  Tower Hamlets

  4.011

  2.723

  0.880

  Wandsworth

  2.918

  1.918

  0.450

  1 combined funding given to Manchester and Salford in 1992–93

  2 combined funding given to Newcastle and Gateshead in 1992–93

  Funding Under Section 11

  £ million

  1992–93

  1993–94

  1994–95 allocation

  Metropolitan Districts

  Birmingham

  7.498

  7.895

  5.551

  Bolton

  1.089

  1.171

  0.881

  Bradford

  5.892

  6.084

  4.468

  Bury

  0.409

  0.486

  0.355

  Calderdale

  1.073

  1.165

  0.853

  Coventry

  2.853

  3.033

  2.254

  Doncaster

  0.112

  0.164

  0.119

  Dudley

  1.248

  1.327

  1.030

  Gateshead

  0.031

  0.063

  0.044

  Kirklees

  3.143

  3.472

  2.515

  Leeds

  2.191

  2.542

  1.983

  Liverpool

  0.176

  0.217

  0.165

  Manchester

  2.746

  3.029

  2.329

  Newcastle

  0.438

  0.467

  0.342

  North Tyneside

  0.151

  0.162

  0.116

  Oldham

  2.443

  2.618

  1.968

  Rochdale

  1.455

  1.587

  1.193

  Rotherham

  0.432

  0.476

  0.352

  St. Helens

  0.010

  0.019

  0.014

  Salford

  0.062

  0.065

  0.047

  Sandwell

  1.513

  1.644

  1.281

  Sheffield

  2.642

  2.635

  1.870

  Stockport

  0.100

  0.103

  0.076

  Sunderland

  0.111

  0.116

  0.087

  Tameside

  0.809

  0.825

  0.627

  Trafford

  0.287

  0.329

  0.243

  Wakefield

  0.348

  0.437

  0.322

  Walsall

  2.049

  2.174

  1.598

  Wigan

  0.056

  0.060

  0.044

  Wirral

  0.064

  0.110

  0.087

  Wolverhampton

  1.973

  2.104

  1.575

  London Boroughs

  Barking and Dagenham

  0.335

  0.323

  0.231

  Barnet

  1.479

  1.287

  0.964

  Bexley

  0.093

  0.193

  0.125

  Brent

  2.780

  3.011

  2.142

  Camden

  1.372

  1.602

  1.161

  Croydon

  1.203

  1.446

  1.027

  Ealing

  2.799

  3.682

  2.802

  Enfield

  1.240

  1.644

  1.219

  Greenwich

  1.573

  1.856

  1.354

  Hackney

  4.357

  4.323

  3.382

  Hammersmith and Fulham

  0.916

  1.056

  0.780

  Haringey

  2.183

  3.389

  2.730

  Harrow

  0.877

  0.974

  0.719

  Havering

  0.052

  0.051

  0.039

  Hillingdon

  0.440

  0.496

  0.369

  Hounslow

  1.754

  1.899

  1.390

  Islington

  1.980

  2.103

  1.502

  Kensington and Chelsea

  1.140

  1.204

  0.933

  554

  Funding Under Section 11

  £ million

  1992–93

  1993–94

  1994–95 allocation

  Kingston upon Thames

  0.120

  0.152

  0.107

  Lambeth

  1.260

  1.615

  1.110

  Lewisham

  2.078

  2.178

  1.637

  Merton

  0.521

  0.706

  0.490

  Newham

  3.013

  3.404

  2.462

  Redbridge

  1.182

  1.239

  0.933

  Richmond upon Thames

  0.063

  0.077

  0.056

  Southwark

  2.339

  2.543

  1.965

  Sutton

  0.056

  0.063

  0.047

  Tower Hamlets

  8.922

  9.703

  7.211

  Waltham Forest

  1.893

  2.149

  1.639

  Wandsworth

  1.993

  2.083

  1.608

  Westminster

  1.876

  2.046

  1.543

  Notes:

  The figures include payments to local authorities, grant-maintained schools, further education colleges and sixth form colleges.

  Mr. Burden
  To ask the Secretary of State for the Environment what proportion of the successful single regeneration on budget bids in the west midlands region was for housing projects which would previously have qualified for funding under the estates action programme.

  Mr. Curry
  Of the 13 successful west Midlands bids for the single regeneration budget, six contain housing projects which would previously have been eligible to be considered for estate action funding. These housing projects will receive £23 million of the total west midlands SRB funding of £156.686 million.

  English Nature (Grants)
  Mr. Denham
  To ask the Secretary of State for the Environment what guidance he has given English Nature on the issuing of grants to voluntary bodies; and if he will list the nature of the work undertaken by those bodies that have been assisted.

  Mr. Atkins
  English Nature is provided with comprehensive advice on grant giving in its financial memorandum. Summaries of grants given and the work undertaken by grant-aided bodies are included in English Nature's annual reports.

  VAT (Fuel)
  Ms Walley
  To ask the Secretary of State for the Environment (1) what information he has about the proportion of disposable income which will be used by households to maintain a temperature of 16 deg C inside their homes over the winter months as a result of the imposition of VAT of 17.5 per cent. on fuel, taking account of the compensation package; and if he will make a statement;

  (2) what assessment he has made of the environmental and public health impacts of the imposition of VAT at 17.5 per cent. on domestic fuel bills.

  Mr. Robert B. Jones
  My right hon. and learned Friend the Chancellor of the Exchequer has announced that the proposed increase in VAT on domestic fuel bills will not now take place.

  Ms Walley
  To ask the Secretary of State for the Environment what account had been taken of the information and data obtained for the 1991 English house
  555
  condition survey when calculating the compensation package associated with value added tax on domestic fuel bills.

  Mr. Robert B. Jones
  It is not possible to specify the account which was taken of any particular source of information among the many that were considered as the package of help for VAT on fuel was prepared. The package directed additional resources to vulnerable groups, especially pensioners, who were among those highlighted in the English house condition survey.

  Ms Walley
  To ask the Secretary of State for the Environment what proposals he has to include energy efficiency in the housing fitness standard following the imposition of VAT on domestic fuel bills; and what proportion of disposable income he considers reasonable for maintaining a temperature of 16 deg C within homes.

  Mr. Robert B. Jones
  We have no proposals. The proportion of disposable income reasonable for maintaining a temperature of 16 deg C will depend on the disposable income of the individual household.

  Parliamentary Questions
  Mr. Gordon Prentice
  To ask the Secretary of State for the Environment how many parliamentary questions tabled in the last Session of Parliament were not answered

  National Park

  Local authority and number of appointees

  Secretary of State appointees

  Constituencies forming part of National Parks

  Dartmoor

  Devon CC

  11

  7

  Devon West and Torridge

  South Hams DC

  1

  Teignbridge

  Teignbridge DC

  1

  Tiverton

  West Devon DC

  1

  South Hams

  Exmoor

  Somerset CC

  10

  7

  Bridgwater

  Devon CC

  3

  Taunton

  West Somerset DC

  2

  Devon North

  North Devon DC

  2

  Lake District

  Cumbria CC

  16

  10

  Copeland

  Allerdale DC

  1

  Westmorland and Lonsdale

  Copeland DC

  1

  Penrith and the Border

  Eden DC

  1

  Workington

  South Lakeland DC

  1

  North Yorkshire Moors

  North Yorkshire CC

  12

  9

  Langbaurgh

  Cleveland CC

  2

  Richmond (Yorkshire)

  Langbaurgh DC

  1

  Scarborough

  Ryedale DC

  1

  Rye dale

  Scarborough DC

  1

  Hambleton DC

  1

  Northumberland

  Northumberland CC

  18

  10

  Berwick upon Tweed

  Alnwick DC

  1

  Hexham

  Berwick-upon-Tweed DC

  1

  Tynedale DC

  1

  Peak District

  Derbyshire CC

  8

  11

  Derbyshire North East

  Sheffield CC

  2

  Littleborough and Saddleworth

  Staffordshire CC

  2

  Staffordshire Moorlands

  Cheshire CC

  2

  Derbyshire West

  Staffordshire

  Sheffield Hallam

  Moorlands DC

  11

  Colne Valley

  Derbyshire Dales DC

  2

  Macclesfield

  Barnsley MBC

  1

  Sheffield Hillsborough

  Oldham MBC

  1

  High Peak

  556
  on the grounds that the information sought was not held centrally by the Department.

  Mr. Gummer
  Twenty-five.

  Rio Conference
  Mr. Llew Smith
  To ask the Secretary of State for the Environment what additional measures he intends to introduce to assist in meeting the carbon dioxide reduction targets agreed at the 1992 Rio conference following the Government's decision to abandon the planned second tranche rise in VAT on domestic fuel and power.

  Mr. Atkins
  I refer the hon. Member to the answer that I gave the hon. Member for Lewisham, Deptford (Ms Ruddock) on 12 December 1994,Official Report, column 435.

  National Parks
  Mr. McLoughlin
  To ask the Secretary of State for the Environment (1) which local authorities appoint representatives to serve on national park committees; and how many people each appoint;

  (2) how many people he appoints to each national park committee;

  (3) if he will list all the constituencies which form part of national parks.

  Mr. Atkins
  The information is set out in the table. Information relating to national parks in Wales is a matter for my right hon. Friend the Secretary of State for Wales.
  557

  National Park

  Local authority and number of appointees

  Secretary of State appointees

  Constituencies forming part of National Parks

  North East Derbyshire DC

  11

  Barnsley West and Penistone

  Kirklees MBC

  2

  High Peak BC

  1

  Macclesfield BC

  11

  Yorkshire Dales

  North Yorkshire CC

  12

  8

  Richmond Yorkshire

  Cumbria CC

  1

  Skipton and Ripon

  Richmondshire DC

  1

  Westmorland and Lonsdale

  South Lakeland DC

  1

  Craven DC

  1

  1 These authorities share two places on the Peak Park Board on a two-year rotating basis.

  Housing
  Mr. Cousins
  To ask the Secretary of State for the Environment if he will list(a) the sum paid out in housing benefit (i) to council and (ii) to non-council tenants and (b) the sum tenants received in housing revenue account subsidy in each local housing authority area in 1993–94; and what is the size of the surplus or deficit in each local housing authority.

  Mr. Robert B. Jones
  I refer the hon. Member to the answer that I gave him on 12 December 1994,Official Report, column 433.

  Hampshire
  Mr. Denham
  To ask the Secretary of State for the Environment what was the total sum claimed in(a) expenses and (b) attendance allowances by councillors on Hampshire district councils and Hampshire county council in the most recent year; and how many councillors in total serve on these councils.

  Mr. Robert B. Jones
  Details of expenses and attendance allowances payments made by local authorities to councillors are not held centrally, but 102 councillors serve on Hampshire county council, and a total of 586 on the Hampshire district councils.

  Housing Association Rents
  Ms Gordon
  To ask the Secretary of State for the Environment what has been the percentage change in rents for new housing association assured tenancies between 1989 and 1994; and what has been the change in the retail prices index over the same period.

  Mr. Robert B. Jones
  I refer the hon. Member to the reply that I gave the hon. Member for Lewisham, East (Mrs. Prentice) on 30 November 1994,Official Report, column 724.

  Local Government Finance
  Mr. Jim Cunningham
  To ask the Secretary of State for the Environment if he will make it his policy to keep the system of local authority funding under review.

  Mr. Robert B. Jones
  It is already our policy to do so.

  Mr. Jim Cunningham
  To ask the Secretary of State for the Environment if he will increase credit approvals and capital grants to local authorities in 1995–96 to maintain current expenditure levels.

  Mr. Robert B. Jones
  Capital allocations to local authorities in 1995–96 will reflect the Government's general policy on public expenditure control. However,558
  central Government support is only one means through which local authorities can undertake capital expenditure; they can also finance it out of usable capital receipts from the sale of assets, and from revenue. Authorities therefore have some scope to fund higher levels of capital expenditure if they choose to do so.

  National Non-domestic Rate
  Mr. Jim Cunningham
  To ask the Secretary of State for the Environment what consideration he has given to allowing the national non-domestic rate to be placed under local authority control.

  Mr. Robert B. Jones
  I have no plans to return the setting of non-domestic rates to local authority control.

  Local Authorities (Pensioners)
  Mr. Jim Cunningham
  To ask the Secretary of State for the Environment what measures he is taking to alleviate the additional costs placed on local authorities for compensation to pensioners.

  Mr. Robert B. Jones
  My right. hon. Friend the Secretary of State laid the Local Government (Compensation for Redundancy) Regulations 1994 before the House on 5 December. These allow local authorities to compensate pensioners whose payments were reduced following the Court of Appeal judgment in Allsop v. North Tyneside MBC. Where authorities choose to make such payments, they must do so from their own available resources.

  Fire Safety
  Mr. Jim Cunningham
  To ask the Secretary of State for the Environment if he will make a statement regarding the responsibilities of landlords in ensuring fire safety in houses of multiple occupation.

  Mr. Robert B. Jones
  The Housing (Management of Houses in Multiple Occupation) Regulations 1990—SI 1990 No. 830—require managers of HMOs to ensure the repair, maintenance and good order of means of escape from fire, including display signs, and apparatus, systems and other things provided by way of fire precautions. The manager is also required to take reasonable precautions for the general safety of residents, which can include fire precautions. Failure to comply is punishable by a fine not exceeding level three on the standard scale, which is currently £1,000.

  Local housing authorities have the power to serve a notice under section 352 of the Housing Act 1985, as amended, requiring the person having control of or

  559
  managing the house to provide adequate means of escape from fire and other fire precautions. Failure to comply is punishable by a fine not exceeding level four on the standard scale, currently £2,500. Local authorities may carry out works in default and recover their expenses from the person on whom the notice was served.

  Landlords may also have a general duty under section 3 of the Health and Safety at Work, etc. Act 1974 to conduct their undertaking in such a way as to ensure, so far as is reasonably practicable, that persons not in their employment are not exposed to risks to their health or safety, and this can include tenants in HMOs. The risks can include fire risks. Failure to comply is punishable by a fine not exceeding £20,000.

  Rented Housing
  Mr. Hardy
  To ask the Secretary of State for the Environment what estimate has been made of the number of new homes available for rent which need to be built in the area of each housing authority in England.

  Mr. Robert B. Jones
  The Department does not make such estimates. Local housing authorities make assessments of the full range of housing needs when they draw up their housing strategy statements for their areas. Authorities are expected to publish their statements.

  Non-domestic Rating
  Mr. Waller
  To ask the Secretary of State for the Environment what changes are now proposed to the current system of appeals against non-domestic rating assessments in England and Wales, in the light of responses to the consultation papers.

  Mr. Curry
  My right hon. Friend the Secretary of State, together with my right hon. Friend the Secretary of State for Wales, has decided to streamline the current arrangements and make them simpler for business to use. The changes will apply to appeals against the new rating lists which come into effect on 1 April 1995.

  There was a full and helpful response to the consultation papers we issued in September. There was a warm welcome for our proposals that the Valuation Office agency should notify occupiers direct of their proposed new rateable value in January, instead of leaving them to find it out when they receive their rate bill for 1995–96; to abandon the six-month limit on submission of appeals following a material change of circumstances, or relevant tribunal or court decision; and to shorten from six months to three the period after which the VOA has to pass an unresolved appeal on to the valuation tribunal. We will therefore proceed with all these reforms.

  We had also proposed a tightening up of the current system of time limits for appeals against the values originally shown in the list, which has not worked well. Respondents endorsed our analysis of the problem but many favoured the more radical step of abolishing the time limits altogether, on the grounds that their potential benefits were outweighed by the practical drawbacks. We found their representations persuasive. We have therefore decided that ratepayers should be able to appeal on any of the permitted grounds at any time during the currency of the list.

  These new arrangements will be far easier for business, particularly small business, to deal with and will help to
  560
  ensure speedier settlement of appeals. We will be bringing forward regulations to implement them in the new year.

  Compulsory Competitive Tendering Personnel Services
  Mr. Evennett
  To ask the Secretary of State for the Environment what are his proposals for extending compulsory competitive tendering to local authority personnel services.

  Mr. Robert B. Jones
  The Government announced on 10 November 1992 their intention to extend compulsory competitive tendering to local authority and other defined authorities' corporate and professional services, including personnel services. My officials have subsequently had valuable discussions with a joint services working group which included representatives of the local authority associations and the Audit Commission and Chartered Institute of Public Finance and Accountancy on how the CCT regime might be applied to personnel services.

  Following these discussions, we are today issuing a consultation paper inviting comments on the Government's detailed proposals for extending CCT to personnel services. This follows similar consultations for local authorities' housing management, legal, construction and property, IT and finance services. It represents the last of the services which are being considered for inclusion in the CCT regime.

  Copies of today's consultation paper will be placed in the Library. It proposes a definition which captures a range of authorities' personnel services, including training and human resource management, but does not encompass the day-to-day line management functions undertaken by many staff.

  Authorities will wish, for a variety of reasons, to retain certain elements of personnel work in-house, both to enable an authority to fulfil its democratic responsibilities and to act as an expert client for bought-in services. We propose that local authorities be permitted to carry out up to 65 per cent. by value of personnel work using their own staff without going through competition. Authorities will be able to retain at least £300,000 worth of defined activity work in-house free of competition. This is intended to recognise and encourage the mixed economy of in-house and contracted-out service provision which is a feature of personnel services.

  As with previous consultations on professional services, the consultation paper also gives details of modifications which we intend to make to the statutory framework for competitive tendering. This will ensure that authorities will continue to be able to deliver services in a way which meets their own operational objectives.

  Following careful consideration of comments received on the proposals included in this consultation document, I will submit to the House the statutory instrument required under the Local Government Act 1988 to give effect to our proposals. I anticipate that, subject to the conclusions we draw from consultation and to parliamentary approval of the subsequent order defining the activity, CCT for personnel services will take effect from 1 October 1996 in metropolitan districts, London boroughs and certain other defined authorities.

  For shire local authorities, personnel CCT will take effect once the Local Government Commission's review of local authority structure is complete and, where appropriate, changes have been made. The

  561
  implementation timetable for the new police authorities will be the subject of separate consultation.

  My right hon. Friends the Secretaries of State for Scotland and for Wales are issuing separate consultation papers. The proposals contained therein follow much of what I have outlined above, although implementation dates will again take account of the programme for local government restructuring in both those countries.

  Experience with the services already subject to CCT has shown that competition brings not only financial savings but also significant improvements in the management, efficiency and quality of public services. I fully expect that CCT will bring the same benefits to personnel services.

  Mr. Sumberg
  To ask the Secretary of State for the Environment if he will make a statement about compulsory competitive tendering in relation to local government review and reorganisation and about the introduction of CCT for legal services, construction and property services and further manual services.

  Mr. Robert B. Jones
  On 2 August, my Department issued and invited comments from local authorities, industry and others on draft regulations and a draft guidance paper for shire county and district authorities, containing detailed proposals for the operation of compulsory competitive tendering in shire authorities during the period of local government review and reorganisation. These amplified the proposals announced by my predecessors on 29 March 1993,Official Report, column 55, and 17 December 1993, Official Report, column 1096.

  The Government's main objective in determining these arrangements is to strike the right balance between maintaining and extending the benefits which CCT has brought to local authorities and the users of their services and easing administrative burdens on local authorities undergoing reorganisation.

  One hundred and forty-seven organisations commented on the proposals. I have considered these, and have now made regulations under sections 19 and 26(4) of the Local Government Act 1992. The regulations will be laid next week, and my Department will then also issue the guidance paper to local authorities, a copy of which I shall place in the Library. Both the regulations and the guidance paper take account of the many comments and helpful suggestions received.

  The guidance paper confirms that CCT for professional support services will start to come into effect two years after the coming into being of individual reorganised authorities, giving them good time in which to decide upon their new organisational structure, consider how they wish to organise their business and review their approach to the provision of support services.

  As regards shire counties or districts which are unchanged following local government review, the proposal reflected in the August consultation drafts was that CCT for professional services would start to come into effect from April 1998. However, I have concluded that I wish to reconsider this timetable, in the interests of securing the benefits of competitive tendering as soon as possible in "status quo" authorities. I shall therefore consult local authorities further in the new year on alternative proposals. Any new arrangements,
  562
  if adopted following consultation, will ensure that status quo authorities will have at least as much time to prepare for and implement CCT following the decisions on their future, as the two years provided for reorganised authorities following their establishment.

  The 1992 Act regulations and the guidance paper confirm the timetable arrangements previously announced for the implementation of housing management CCT. Local authorities are making good progress with their preparations, including consultation with their tenants. I have, however, decided to drop the proposal in the August consultation drafts to link the HMCCT exemption for the reorganised authorities to preparation of a detailed specification which their direct service organisations would have to meet.

  For other services already subject to CCT, the requirement to invite external tenders will be lifted in authorities undergoing reorganisation, for the period between the making of statutory reorganisation orders and 18 months after successor authorities take over, in recognition of the pressure of work on outgoing and successor authorities in this period. This exemption does not apply to short-term and low-value contracts which do not normally involve significant administrative effort. These are defined as work which will last for less than 12 months or be less than £200,000 in annual value. I have considered local authorities' arguments for widening this exemption, but have not been persuaded that this would be appropriate. As indicated in the August consultation drafts, all local authorities must at all times maintain DSO accounts, meet the specified financial objectives and maintain services fully to specification.

  The other arrangements provided for in the 1992 Act regulations and guidance paper are as set out in the August consultation proposals. I shall place in the Library a list of the consultation responses received. Copies of individual responses can be obtained through the Library.

  On 2 November, the House approved orders under section 2(3) of the Local Government Act 1988, to extend CCT to legal services, construction and property services, and three further manual services—security work, supervision of on-street parking and management of vehicles. I have now made regulations under section 6(3) of the 1988 Act, which set out the timetable for these services to become subject to CCT, and the proportions of legal services and construction and property services to be subject to completion.

  These regulations give effect to the Government's decisions which my predecessor announced on 14 June 1994, Official Report, column 346, and 19 July 1994, Official Report, column 109, and which I set out to the House on 2 November 1994, Official Report, column 1606, other than as regards the implementation timetable for "status quo" shire authorities, on which, as I have indicated, the Government wish to consult further with local authorities. Further 1988 Act regulations will be made to give effect to the decisions taken on this aspect of the arrangements, following the further consultation.

  Nickel and Vanadium Emissions
  Mr. Ainger
  To ask the Secretary of State for the Environment if he will list those large combustion plants which emit nickel and vanadium, the fuel they burn, the
  563
  total annual emissions permitted for each plant of nickel and vanadium, the actual total annual emissions of nickel and vanadium for each plant in the last three years and the maximum emission rate of nickel and vanadium for each plant.

  Mr. Atkins
  [holding answer Thursday 8 December 1994]: All large combustion plants burning oil, coal or orimulsion will release vanadium or nickel. The table provides as much information as the inspectorate has been able to assemble without disproportionate expense. This information covers 1993.

  Vanadium release to air

  Nickel release to air

  Site

  Fuel

  Maximum Rate (mgm/m3)

  Annual Permission (tonnes)

  Annual Actual (tonnes)2

  Maximum Rate (mm/m3

  Annual Permission (tonnes)

  Annual Actual (tonnes)2

  National Power Pembroke

  HFO (Heavy Fuel Oil)

  0.21

  1—

  14

  0.042

  1—

  3

  National Power Aberthaw A

  Coal and HFO

  0.583

  1—

  7.5

  0.378

  1—

  5

  National Power Aberthaw B

  Coal and HFO

  0.378

  1—

  7.5

  0.185

  1—

  5

  National Power Uskmouth

  Coal and HFO

  0.22

  1—

  0.16

  0.14

  1—

  0.10

  National Power West Burton

  Coal

  0.15

  1—

  12.3

  0.14

  1—

  8.2

  National Power Blyth A

  Coal

  0.64

  1—

  —

  392

  1—

  —

  National Power Blyth B

  Coal

  0.229

  1—

  —

  0.14

  1—

  —

  National Power Eggborough

  Coal

  0.22

  1—

  —

  0.14

  1—

  —

  National Power Drax

  Coal

  0.22

  1—

  —

  0.14

  1—

  —

  National Power Skelton Grange

  Coal

  0.604

  1—

  —

  0.392

  1—

  —

  Powergen Ince

  Orimulsion or

  27 (1993)

  HFO

  —

  160

  75 (1994)

  —

  1—

  —

  Powergen Ratcliffe-on-Soar3

  Coal

  0.4

  1—

  1

  0.019

  1—

  0.45

  Powergen Drakelow

  Coal and HFO

  —

  1—

  —

  —

  1—

  —

  National Power Rugeley A & B

  Coal and HFO

  0.22

  1—

  —

  0.14

  1—

  —

  National Power Willington

  Coal and HFO

  0.6

  1—

  —

  0.39

  1—

  —

  National Power Ironbridge

  Coal and HFO

  0.22

  1—

  —

  0.14

  1—

  —

  Powergen Richborough

  Orimulsion

  —

  40

  6.17

  —

  1—

  0.81

  Powergen Grain

  HFO

  —

  1—

  less than 50

  —

  1—

  less than 11

  National Power Littlebrook

  HFO

  —

  1—

  less than 348

  —

  1—

  less than 79

  Powergen Kingsnorth

  Coal

  —

  1—

  less than 26

  —

  1—

  less than 31

  National Power Fawley

  HFO

  3

  1—

  —

  —

  1—

  —

  National Power Didcot

  Coal and HFO

  0.22

  1—

  —

  0.14

  1—

  —

  1 No limit specified in the authorisation document.

  2 Annual actual releases have been calculated from information in the application together with 1993-94 operating data. These figures are believed to be reasonably representative of releases for 1993. There is little information available for the last three years.

  3 This power station has limits of 0.435 for vanadium and 0.175 for nickel with respect to releases to water.

  Sites of Community Interest
  Mr. Morgan
  To ask the Secretary of State for the Environment what consultations he has had with his counterparts in France, Ireland, Spain and Portugal concerning equivalence of progress on the designation of sites of community interest in the Atlantic biogeographical region, pursuant to article 1(c)(iii) of the EU habitats directive.

  Mr. Atkins
  A meeting attended by representatives of the Commission and relevant member states of the Atlantic biogeographic region to establish a common understanding for the application of the directive to the region and on aspects of implementation was held in Edinburgh from 12 to 14 October. Member states reported their progress on the identification of candidate sites of Community interest. Community-wide discussions on these topics are held at regular meetings of the adaptation committee for the directive, chaired by the Commission.
  564
  Her Majesty's inspectorate of pollution authorises releases of these substances in different ways depending on the detail of the application for authorisation under the Environmental Protection Act 1990 and the local circumstances. Some of these substances are given specific limits, but, in all cases, there is a residual duty under the Act to use best available techniques not entailing excessive cost to prevent the release of all prescribed substances, which include release to air of vanadium, nickel and their compounds, and to render harmless any other substance, which is not prescribed.

  Special Advisers
  Mr. Milburn
  To ask the Secretary of State for the Environment which of the special advisers serving in his Department during the last five years were subject to positive security vetting.

  Mr. Gummer
  All special advisers are required to have positive vetting.

  Radioactive Waste Disposal
  Mr. Llew Smith
  To ask the Secretary of State for the Environment whether the contract recently awarded to Safeguard International to assume the responsibilities of the national radioactive waste disposal service was put out to competitive tender.

  Mr. Charles Wardle
  I have been asked to reply.

  Arrangements for the provision of this service are a management matter for the United Kingdom Atomic Energy Authority.

HOME DEPARTMENT

  Fire Advisory Panel
  Mr. Jim Cunningham
  To ask the Secretary of State for the Home Department if the remit of the proposed fire advisory panel will include advice to the Government on national standards.

  Mr. Nicholas Baker
  The Government are currently considering the 61 conclusions and recommendations in the report of the review of fire safety legislation and enforcement in the light of responses to the recent public consultation exercise. No decisions have been taken on any of the recommendations, including those relating to the proposed new advisory panel.

  Morgan Report
  Mr. Jim Cunningham
  To ask the Secretary of State for the Home Department what plans he has to implement the recommendations of the Morgan report relating to the role of local councils.

  Mr. Maclean
  The Government issued their response to the Morgan report in December 1992. A copy was placed in the Library. We see no need to implement the specific recommendations in the report about the role of local authorities in crime prevention.

  Dyfed Powys Police
  Mr. Alex Carlile
  To ask the Secretary of State for the Home Department what was the funding of the Dyfed Powys police in both cash and real terms in each year since 1987; and if he will make a statement.

  Mr. Maclean
  The following table shows the total amounts of Home Office grant, in cash terms and at 1993–94 prices, paid to the Dyfed Powys police between 1987–88 and 1993–94 in respect of both current and capital expenditure.

  Home Office grant payments—Dyfed Powys police

  £ million

  Grant paid

  Grant at 1993–94 prices

  1987–88

  12.154

  17.067

  1988–89

  12.899

  16.977

  1989–90

  15.056

  18.522

  1990–91

  16.038

  18.267

  1991–92

  18.925

  20.281

  1992–93

  20.848

  21.486

  1993–94

  22.828

  22.828

  The balance of the funding is made up of revenue support grant, which is the responsibility of my right hon. Friend the Secretary of State for Wales, national non-domestic rates and a precept on billing authorities for the proportion of the budget met by the community charge or the council tax.

  Armley Prison (Young Offenders)
  Mr. Michael
  to ask the Secretary of State for the Home Department how many(a) remanded and (b) sentenced prisoners aged under 21 years have been received into Armley prison since 1 August 1994; what was the number of such prisoners detained in Armley prison at the most recent convenient date; and why
  566
  prisoners of this age are being held at Armley rather that at Moorland young offender institution.

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

  Letter from Derek Lewis to Mr. Alun Michael, dated 13 December 1994:
  The Home Secretary has asked me to reply to your recent Question about young offenders at Leeds prison.
  There are currently no prisoners aged under 21 years detained at Leeds. Such prisoners have been held at Leeds on two occasions since August 1994.
  In one case, a sentenced prisoner aged 20 who had been reclassified as adult was held at Leeds, in view of his record of behaviour in custody. He had taken hostages and committed affray and was unsuited to young offender conditions. He was released from custody in September 1994. The other case involved a remand prisoner who claimed he was 21. He was only held at Leeds for two days until a check with the Registrar of Births proved that he was under 21 and he was transferred to Doncaster.

  British Citizen Children
  Ms Harman
  To ask the Secretary of State for the Home Department in how many cases over the past three years immigration enforcement action with a view to removal from the United Kingdom has been commenced against custodial parents of minor British citizen children; in how many such cases a custodial parent has been removed from the United Kingdom whether accompanied or not by the British citizen child or children; what is the breakdown by nationality of parents of British citizen children against whom such enforcement action has been commenced; and at what level of seniority decisions are taken to commence enforcement action which affect the rights of British citizen children.

  Mr. Nicholas Baker
  The information requested is not available and could be obtained only at disproportionate cost.

  The level of seniority at which decisions to commence enforcement action against the parent(s) of a British citizen child may vary according to the type of case, but in all such cases the decision to remove the parent(s) is taken at ministerial level.

  Secure Remands (Juveniles)
  Sir Ivan Lawrence
  To ask the Secretary of State for the Home Department how the Government intend to defray the costs of local authorities accommodating juveniles subject to court ordered secure remands.

  Mr. Howard
  It is intended that the Home Office will pay fees to local authorities in accordance with a tariff which will be established in consultation with interested parties, including the local authority associations. My Department will initiate discussions about the basis of the tariff in due course.

  Police Funding Formula
  Sir Irvine Patnick
  To ask the Secretary of State for the Home Department if he will make a statement on the police funding formula for South Yorkshire; and what assessment he has made of its effect.
  567
  Mr. Maclean
  Under the Government's proposals announced on 1 December, £146.22 million will be available to the South Yorkshire police in 1995–96.

  The new police funding formula has bee constructed by considering the determinants of the need for policing. The approach is similar—but more developed—to that of the formula which has been used since 1990 to distribute additional manpower to forces. Police needs are identified as falling into six main areas—maintaining a stable presence in the community, responding to calls for assistance, dealing with crimes, traffic management, maintaining public order, and community relations. Police pensions are also taken into account.

  The new analyses were considered in the context of factors that have previously been used to assess expenditure needs. We concluded that, for 1995–96, the size of approved police establishments should be included in the formula. As a result, the extent of change next year will be limited.

  Immigration Rules
  Ms Walley
  To ask the Secretary of State for the Home Department if he will investigate whether Bulgarian replacement crews due to arrive in Glasgow on 8 December are adhering to all immigration rules in respect of the Bulgarian fishing vessels Afala, Aktinia, Kaprela, Ofelia and Rotalia in United Kingdom waters; and if he will make a statement.

  Mr. Nicholas Baker
  Under the immigration rules people seeking entry to join a vessel as members of its crew are eligible for admission if they are under contract to join a ship due to leave British waters. If the immigration officer is so satisfied he will grant leave to enter.

  Authority

  1992–93 £ million

  1993–94 £ million

  Cash difference £ million

  Percentage difference

  Dyfed Powys

  20.848

  22.827

  +1.979

  +9.5

  Gwent

  21.852

  21.770

  -0.082

  -0.4

  North Wales

  29.332

  31.105

  +1.773

  +6.0

  South Wales

  67.177

  69.310

  +2.133

  +3.2

  From 1 April 1995 police authorities will become freestanding authorities with their own cash-limited police grant and SSA allocations, the proposals for which were announced on 1 December.

  Mr. Barry Jones
  To ask the Secretary of State for the Home Department if he will make available more grants to the North Wales police authority in order to facilitate the provisions of more police officers and special constables on the beat on housing estates; and if he will make a statement.

  Mr. Maclean
  Proposed allocations of grant to police forces were announced by my right hon. and learned Friend in reply to a question from the hon. Member for Uxbridge (Mr. Shersby) on 1 December at columns 844–45. It is for the chief constable in consultation with his police authority to decide how the available resources should be deployed in the force area.

  Mr. Barry Jones
  To ask the Secretary of State for the Home Department what plans he has to meet the police

  Merseyside Police
  Mr. Matthew Banks
  To ask the Secretary of State for the Home Department what financial support(a) he provided to Merseyside police in 1993–94 and (b) is proposed for 1994–95; and if he will make a statement.

  Mr Maclean
  Details of Home Office grant payments to Merseyside police in respect of current and capital expenditure are as follows:

  £ million

  Current expenditure

  Capital expenditure

  1993–94 (actual)

  103.267

  3.044

  1994–95 (estimated)

  109.622

  3.708

  Police Authorities, Wales
  Mr. Barry Jones
  To ask the Secretary of State for the Home Department what was(a) the cash increase and (b) the percentage increase in grants and moneys to each of the police authorities in Wales in the most recent year for which figures are available; and if he will make a statement.

  Mr. Maclean
  There are no separate standard spending assessments—SSAs—for police authorities in Wales for this or previous years, on which to base year-on-year comparisons. County council SSAs include provision for police services. Expenditure on policing is determined by county councils in the light of their statutory responsibilities, local needs and available resources. Fifty-one per cent. of actual net police expenditure—both capital and current—is met by Home Office grant. The increase in police grant payable to each Welsh police authority between 1992–93 and 1993–94, in cash arid percentage terms, is as follows:

  authority in North Wales to discuss its budget provisions; and if he will make a statement.

  Mr. Maclean
  My right hon. and learned Friend has no plans at present to meet the North Wales police authority. The setting of the force budget is a matter for the police authority.

  Asylum Seekers
  Mr. Robert Ainsworth
  To ask the Secretary of State for the Home Department how many asylum seekers are currently held in HMP Winchester; and how long these individuals have been held under Immigration Act powers.

  Mr. Nicholas Baker
  As at 8 December 1994, a total of five people who had sought asylum were detained at HM prison Winchester. All these cases have spent between two to six months in detention at HM prison Winchester.
  569
  Mrs. Roche
  To ask the Secretary of State for the Home Department, pursuant to his answer of 23 November,Official Report, columns 159–61, how long each of the detainees referred to in table C had been in police cells.

  Mr. Nicholas Baker
  [holding answer 12 December 1994]: Figures for the length of detention of those detained in police cells on 18 November 1994 are not available retrospectively and details relating to those currently detained could be obtained only at disproportionate cost.

  Applications1 received for asylum in the United Kingdom, excluding dependants, by location of application and month, 1993 to end-November 1994

  Number of principal applicants

  1993

  1994

  Applied in port

  Applied in-country

  Total2

  Applied in port

  Applied in-country

  Total2

  January

  600

  1,355

  1,960

  775

  1,575

  2,350

  February

  440

  1,740

  2,180

  720

  1,285

  2,000

  March

  515

  1,250

  1,765

  770

  1,990

  2,755

  April

  420

  1,400

  1,820

  790

  1,720

  2,505

  May

  660

  1,205

  1,865

  760

  1,895

  2,650

  June

  560

  1,290

  1,850

  735

  1,730

  2,465

  July

  660

  1,335

  1,995

  755

  1,890

  2,645

  August

  590

  705

  1,295

  900

  1,795

  2,695

  September

  625

  1,360

  1,990

  1,315

  2,385

  3,695

  October

  655

  945

  1,600

  950

  2,045

  2,995

  November

  665

  1,140

  1,805

  745

  2,375

  3,125

  December

  925

  1,320

  2,245

  —

  —

  —

  Total

  7,320

  15,050

  22,370

  9,210

  20,680

  29,890

  1 Provisional and estimated figures rounded to the nearest 5.

  2 Figures exclude applications made overseas.

  War Crimes Act 1991
  Mr. Peter Bottomley
  To ask the Secretary of State for the Home Department which audit body is responsible for value for money spent on investigations under the War Crimes Act 1991; what the budget is for these investigations; and what spending is already committed.

  Mr. Maclean
  The Metropolitan police war crimes unit is responsible for investigations carried out under the War Crimes Act 1991 in England and Wales. The unit's expenditure is subject to audit by the Metropolitan police service internal audit branch and the National Audit Office.

  Provision for police specific grant included £500,000 to support the Metropolitan police in their war crimes investigations in 1994–95. After precept, this amount generated a sum of £962,000. A total of £589,850 had already been spent by 31 October 1994 and the remaining is committed expenditure.

  Entry Visas
  Mr. Cox
  To ask the Secretary of State for the Home Department what is the present waiting time for interview for entry visas for the United Kingdom at British high commission offices in Pakistan, Sri Lanka and India for(a) husbands, (b) wives and (d) fiancés and fiancées.

  Mr. Nicholas Baker
  Information on waiting times to first interview for applicants in the settlement queues in Pakistan and India is published in table 2.5 of the Home Office Statistical Bulletin issue 25/94 "Control of Immigration: Statistics UK First and Second Quarters
  570
  Mr. Robert Ainsworth
  To ask the Secretary of State for the Home Department (1) what was the number of applications for asylum(a) made at ports and (b) made in the country in each month in 1993;

  (2) what was the number of applications for asylum (a) made at ports and (b) made in the country in each month in 1994.

  Mr. Nicholas Baker
  The information requested is given in the table.

  1994" published on 20 October 1994, a copy of which is in the Library. Information on Sri Lanka is not collected centrally.

  Energy Expenditure
  Mr. Matthew Taylor
  To ask the Secretary of State for the Home Department what was the total expenditure on energy for offices and buildings by(a) his Department and (b) his agencies in each of the last three years for which figures are available.

  Mr. Nicholas Baker
  The Home Office leases one property used, for security reasons, as the London residence of the Home Secretary of the day. The total expenditure on energy—gas and electricity—at the property in each of the last three financial years was:

  1991–92: £1,079

  1992–93: £1,628

  1993–94: £4,699

  Disclosure of Evidence
  Mr. Mullin
  To ask the Secretary of State for the Home Department pursuant to his answer of 2 December,Official Report, column 915, when he expects to complete his consideration on the disclosure of evidence; and what plans he has for announcing the outcome.

  Mr. Nicholas Baker
  We are making arrangements to give effect to the judgment of the Divisional court in ex parte Hickey and others, which concerned the procedure by which decisions are taken in cases where it is represented to us that a miscarriage of justice has
  571
  occurred. Separately, the case of Mr. Malone, one of the applicants to the Divisional court, was referred to the Court of Appeal on 8 December.

DEFENCE

  Drug Testing
  Mr. Butler
  To ask the Secretary of State for Defence what plans he has to introduce random compulsory drug testing in the armed forces.

  Mr. Jamieson
  To ask the Secretary of State for Defence what plans he has to introduce random compulsory drug testing in the armed services.

  Mr. Soames
  The House will be aware that we have for some time been working on plans to introduce random compulsory drug tests in the armed forces.

  The Government attach very high priority to tackling the problem of drug misuse. This is reflected in the proposals set out in the recent Green Paper "Tackling Drugs Together". In the spirit of the Green Paper, a number of measures are already taken in the armed forces to educate recruits and service personnel about the dangers of drugs, and the unlawful possession or supply of a controlled substance is contrary to service as well as civilian law.

  Following detailed studies, a broad policy framework was agreed last year for the introduction of a compulsory drug testing regime in each of the three services, should that be judged necessary. I can now announce that, following an anonymous trial of testing procedures in the Army, we have decided as a further deterrent to introduce compulsory drug testing in the Army.

  With immediate effect, Army personnel may be required to provide urine specimens for testing at any time and with no prior warning. Personnel who are tested positive or who refuse to provide a specimen will in the case of officers be required to resign and soldiers will normally be discharged. Lance corporals and below may in certain circumstances be given a second chance and allowed to remain in the Army for counselling.

  The Royal Navy is initiating compulsory drug testing trials, which will allow decisions to be taken as to whether there is a need to introduce a drug testing regime. The Royal Air Force does not need to introduce compulsory drug testing for the moment, but it is keeping its policy under review. In the meantime the RN and RAF will continue to apply other measures to deter drugs misuse.

  Quangos
  Mr. Fatchett
  To ask the Secretary of State for Defence (1) how many quangos his Department was responsible for(a) in 1979 and (b) in the latest year for which a number is available;

  (2) if he will list (a) those quangos his Department has abolished since 1979 and (b) those quangos established since 1977.

  Mr. Soames
  I refer the hon. Member to the answer given to the hon. Member for Scarborough (Mr. Skyes) on 25 November 1994,Official Report, column 458. No records are available prior to 1979.

  Mr. Fatchett
  To ask the Secretary of State for Defence how many members of quangos to which he is 572
  responsible for appointing members are employed by companies which supply his Department.

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

  Mr. Fatchett
  To ask the Secretary of State for Defence (1) how many members of quangos to which he is responsible for appointing members have previously served as councillors representing(a) the Conservative party, (b) the Labour party and (c) the Liberal Democrat party;

  (2) how many members of quangos to which he is responsible for appointing members have stood as candidates for boroughs, city, district or county councils for (a) the Conservative party, (b) the Labour party and (c) the Liberal Democrat party;

  (3) how many members of quangos to which he is responsible for appointing members have stood as parliamentary candidates for (a) the Conservative party; (b) the Labour party and (c) the Liberal Democrat party;

  (4) how many known members of (a) the Conservative party, (b) the Labour party and (c) the Liberal Democrat party currently serve on quangos to which he is responsible for appointing members;

  (5) how many members of quangos to which he is responsible for appointing members currently serve as councillors representing (a) the Conservative party, (b) the Labour party and (c) the Liberal Democrat party.

  Mr. Soames
  Members of Ministry of Defence non-departmental public bodies are appointed on the basis of suitability and merit. Information on members' political allegiance and record is neither sought nor held and could be provided only at disproportionate cost.

  United Nations Peacekeeping
  Mr. Jim Cunningham
  To ask the Secretary of State for Defence what consultations he has had with the Foreign Secretary in drawing up clear operational guidelines for future United Nations peacekeeping.

  Mr. Soames
  The United Kingdom has played an active part in discussions aimed at enhancing the capacity of the United Nations to mount peacekeeping operations. In addition, the British Army is developing a manual on peacekeeping on which there has been consultation with the United Nations. My Department is in regular contact with the Foreign and Commonwealth Office on these matters.

  Consultants
  Mr. Fatchett
  To ask the Secretary of State for Defence if he will(a) list those consultancy contracts awarded by his Department in 1989, 1990, 1991, 1992 and 1993 and (b) the purpose of each individual contract.

  Mr. Freeman
  The Department's central contracts branch has placed in excess of 500 contracts with consultants in each of the last few years. In addition to this figure, consultancy contracts are placed as part of specific projects and as low value orders of under £10,000. Under the Department's arrangements for the delegation of contractual authority, such contracts are placed without reference to the central contracts branch and so cannot be identified separately.

  In view of this and the large number of centrally placed contracts involved over the last 15 years, an answer to

  573
  this question could be provided only at disproportionate cost and effort.

  Animal Testing
  Mr. Fatchett
  To ask the Secretary of State for Defence, pursuant to his answer of 2 December,Official Report, column 898, if he will list (a) the type of animals used for experiments and (b) the nature of the experiments for 1989, 1990, 1991, 1992 and 1993.

  Mr. Soames
  The species of animals used by the Department for experiments were rats, mice, guinea pigs, rabbits, sheep, goats, pigs, miniature pigs, marmosets and rhesus monkeys.

  These experiments were designed to:

  Investigate gravitational effects;

  demonstrate the results of exposure to different pressures of air or oxygen;

  assess the potential harm of chemical or biological agents; devise medical countermeasures;

  demonstrate the efficacy of and safety of medical counter-measures;

  All the experiments involving the use of animals fully meet the spirit and letter of the Animals (Scientific Procedures) Act 1986.

  Exercise Iron Tempest
  Mr. Key
  To ask the Secretary of State for Defence how many close air support missions with cannon were flown by Jaguar aircraft over Salisbury plain training area during Exercise Iron Tempest.

  Mr. Soames
  The planned close air support mission by two Jaguar aircraft on 10 December was cancelled due to poor weather, and no such missions were therefore flown.

  Nuclear Weapons
  Mr. Jim Cunningham
  To ask the Secretary of State for Defence if he will make it his policy to keep the United Kingdom's nuclear deterrence under constant review.

  Mr. Soames
  We continue to keep our defence policy as a whole under review. We believe, however, that our nuclear forces continue to provide the ultimate guarantee of this country's security and remain an important element of NATO's strategy of war prevention.

  Official Service Residences
  Mr. Jim Cunningham
  To ask the Secretary of State for Defence what savings he plans to make from the official service residences.

  Mr. Soames
  The review by Sir Peter Cazalet of representational entertainment in the armed forces, which is examining the requirement for senior officers to entertain and the means by which the entertainment should be carried out, will in particular consider whether there are alternative and more cost-effective means than the use of official service residences and other service married quarters, and, in the light of that, whether any properties can be disposed of. I shall report to the House in due course on the outcome of this work.

  Redundancies
  Mr. Jim Cunningham
  To ask the Secretary of State for Defence what consultations he has had with the 574
  Secretary of State for Employment in formulating a policy for the provision of high-grade training for service personnel made redundant.

  Mr. Soames
  The successful improvements introduced into the services resettlement programme, following "Options for Change", were developed with the full co-operation and assistance of the Department of Employment. In addition to participating in the strategic planning of the programme, Department of Employment staff work closely with my Department to provide a range of services which ensure that those leaving the armed forces have available the advice, training and job search opportunities to help best exploit their service skills in moving to a second career.

  Research
  Mr. Battle
  To ask the Secretary of State for Defence what sum was spent by his Department on research in each of the last 10 years; what percentage this was of the total annual budget; what is the research budget for the forthcoming year; what percentage this is of his total budget; and what additional new research is to be undertaken.

  Mr. Freeman
  The sums spent on research and development by the Department for the last 10 years were reported in the statistical supplement to the 1994 "Forward Look of Government-funded Science, Engineering and Technology." The expenditure on research and development and the percentage that this expenditure was of total departmental expenditure are as follows:

  R and D expenditure £ millions

  Percentage of total expenditure

  1985–86

  2,018.2

  11.1

  1986–87

  1,941.5

  10.5

  1987–88

  1,910.7

  10.1

  1988–89

  1,879.8

  9.8

  1989–90

  2,028.6

  9.8

  1990–91

  2,062.9

  9.5

  1991–92

  2,267.0

  9.8

  1992–93

  2,220.9

  9.4

  1993–94

  2,461.1

  10.5

  1994–95

  2,314.6

  9.9

  The expenditure on research and development in the coming year has still to be determined, and will be reported in the statistical supplement to the 1995 "Forward Look".

  Information on new research areas is given in paragraph 437 of the "Statement on the Defence Estimates 1994"—Cm 2550.

  Special Advisers
  Mr. Milburn
  To ask the Secretary of State for Defence which of the special advisers serving in his Department during the last five years were subject to positive security vetting.

  Mr. Soames
  All special advisers are currently required to have a security clearance which will depend on the level of access they require to carry out their duties.

  Military Equipment
  Mr. Cousins
  To ask the Secretary of State for Defence what was the share by value, and the total value in current and standard prices, of British production of(a) warships, (b) aircraft for military purposes, including the training of pilots, and (c) tanks and other armoured vehicles which was for (i) domestic and (ii) export purposes in each year since 1984.

  Mr. Charles Wardle
  I have been asked to reply.

  The information is given in the following tables.

  Table 1: Defence production expenditure for domestic (United Kingdom) use

  £ millions

  Sea equipment

  Air equipment

  Fighting vehicles

  Current prices

  1984–85

  1,925

  3,003

  131

  1985–86

  2,128

  2,761

  155

  1986–87

  2,134

  2,644

  148

  1987–88

  2,475

  2,807

  212

  1988–89

  2,421

  2,652

  235

  1989–90

  2,642

  2,717

  180

  1990–91

  2,700

  2,718

  252

  1991–92

  2,809

  2,930

  243

  1992–93

  2,720

  2,460

  149

  1993 prices

  1984–85

  1,210

  1,887

  82

  1985–86

  1,413

  1,833

  103

  1986–87

  1,464

  1,813

  102

  1987–88

  1,784

  2,023

  153

  1988–89

  1,850

  2,027

  180

  1989–90

  2,161

  2,223

  147

  1990–91

  2,350

  2,366

  219

  1991–92

  2,604

  2,716

  225

  1992–93

  2,630

  2,379

  144

  Source:

  Table 1.6 UK Defence Statistics series or from the Defence Analytical Services Agency, table 2.1 "Economic Trends", October 1994.

  Notes:

  Sea equipment includes the full militarisation of the standard equipment.

  Air equipment excludes the cost of training pilots. This information is not available.

  Fighting vehicles excludes maintenance.

  Estimates of 1993 prices were derived from current price figures using the implied deflator for GDP at market prices.

  Table 2: United Kingdom exports of defence equipment

  £ millions

  Warships

  Military aircraft and parts

  Armoured fighting vehicles and parts

  SBAC identified additional aerospace equipment

  Current prices

  1984

  40

  212

  146

  1,310

  1985

  4

  174

  127

  940

  1986

  12

  192

  87

  1,312

  1987

  61

  326

  56

  1,853

  1988

  26

  813

  59

  1,406

  1989

  41

  1,524

  52

  717

  1990

  3

  1,206

  70

  1,904

  1991

  8

  1,367

  66

  807

  1992

  3

  838

  89

  811

  1993

  24

  1,310

  147

  n/a

  576

  Table 2: United Kingdom exports of defence equipment

  £ millions

  Warships

  Military aircraft and parts

  Armoured fighting vehicles and parts

  SBAC identified additional aerospace equipment

  1993 prices

  1984

  25

  133

  92

  823

  1985

  3

  116

  84

  624

  1986

  8

  132

  60

  900

  1987

  44

  235

  40

  1,335

  1988

  20

  621

  45

  1,074

  1989

  34

  1,247

  43

  587

  1990

  3

  1,050

  61

  1,657

  1991

  7

  1,267

  61

  748

  1992

  3

  810

  86

  784

  1993

  24

  1,310

  147

  n/a

  Source:

  Table 1.11 UK Defence Statistics series or the Defence Analytical Services Agency.

  Table 2.1 "Economic Trends", October 1994.

  Notes:

  These figures for exports of identified defence equipment are understated because of dual-use products, for example Land Rovers. The estimates of additional military exports are based on figures from the Society of British Aerospace Companies. They relate only to those items where the official commodity classifications do not distinguish between military and civil aerospace equipment.

  These are liable to alter from year to year in line with changes to the classifications.

  Exports for collaborative projects are excluded.

  Estimates of 1993 prices were derived from current price figures using the implied deflator for GDP at market prices.

  n/a—Not available.

  Departmental Telephone Bills
  Dr. David Clark
  To ask the Secretary of State for Defence what were his Department's telephone bills in each of the last five years.

  Mr. Freeman
  The Department's direct telephone running costs for the year's 1991–92, 1992–93 and 199394 were £67.1 million, £64.9 million and £61.4 million respectively. Figures prior to these dates are not available.

ATTORNEY-GENERAL

  Special Advisers
  Mr. Milburn
  To ask the Attorney-General which of the special advisers serving in his Departments during the last five years were subject to positive security vetting.

  The Attorney-General
  There have been no special advisers in the Departments for which I am responsible during the last five years.

DUCHY OF LANCASTER

  Special Advisers
  Mr. Milburn
  To ask the Chancellor of the Duchy of Lancaster which of the special advisers serving in his Department during the last five years were subject to positive security vetting.
  577
  Mr. Robert G. Hughes
  All special advisers are currently required to have positive vetting.

  Consultants
  Dr. Wright
  To ask the Chancellor of the Duchy of Lancaster what is his Department's policy regarding the use of executive search consultants in making appointments to public bodies; and if he will list(a) the appointments where such consultants have been used and (b) the cost in each case in the period April 1992 to December 1993.

  Mr. Robert G. Hughes
  It is the policy of my Department to follow the guidance provided in the "Guide on Public Appointments Procedures" which advises that the use of executive search consultants is one option which may be appropriate for certain full and some part-time posts.

  Executive search consultants were used for the appointments of the Director General of the Research Councils and chief executives of the Engineering and Physical Sciences Research Council, Natural Environment Research Council and the Particle Physics and Astronomy Research Council. The total cost was £78,960 including VAT. This fee was negotiated to cover all four appointments and it is not possible to disaggregate the figure.

  Research Council
  Mr. Duncan Smith
  To ask the Chancellor of the Duchy of Lancaster what decisions were taken on the fourth framework programme at the Research Council on 1 December.

  Mr. Robert G. Hughes
  The Council reached agreement on the remaining aspects of the fourth framework programme. This will enable the Commission to issue calls for proposals on most, if not all, of the outstanding specific programmes in December. We believe that the framework programme presents United Kingdom researchers with a worthwhile challenge to which they will be able to respond fully, as they have done in the past.

TRADE AND INDUSTRY

  Casual Staff
  Mr. Austin Mitchell
  To ask the President of the Board of Trade what estimate he has made of the costs of recruiting, appointing and training casual staff appointed to replace casual staff whose period of placement has expired.

  Mr. Ian Taylor
  Casual staff are recruited where the requirement for staff is likely to be for less than 12 months. Exceptionally, their appointment can be extended. The need to replace casual staff with other casual staff does not therefore usually arise. Recruitment costs of casual staff are minimal.

  Manufacturing Output
  Mr. Austin Mitchell
  To ask the President of the Board of Trade, pursuant to his oral answer of 23 November,Official Report, column 583, what has been
  578
  the change in manufacturing output since (a) 1973 and (b) 1979 together with the change in imports of manufactures.

  Mr. Needham
  The information is available from the Central Statistical Office's central shared database which can be accessed in the Library of the House.

  Companies House
  Mr. Jon Owen Jones
  To ask the President of the Board of Trade when he intends to publish the reports of consultants SRU Ltd. into(a) the privatisation of Companies House, (b) the concept of competing company registrars, and (c) the contracting out of Companies House; and what view was expressed by SRU Ltd. on whether its report into the contracting out of Companies House should be published.

  Mr. Heseltine
  I expect to publish SRU's report on the possibility of contracting out Companies House services when I announce a decision on the future of Companies House.

  Tile Manufacturing
  Ms Walley
  To ask the President of the Board of Trade, pursuant to his answer of 30 November,Official Report, column 705, what criteria he has established to assess the likely impact on the United Kingdom tile and sanitary ware industry of investment projects; and if he will publish details of the assessment he has made of the likely impact of the investment project in Merseyside on existing United Kingdom tile manufacturing.

  Mr. Charles Wardle
  No specific criteria have been established for the tile and sanitaryware industry. All applications are appraised against published criteria. This includes not only the likely impact that an investment might have on United Kingdom industry but also the extent to which the national and regional economy would benefit from any offer of assistance. This information is commercially confidential and is not available for publication.

  Insolvency Service
  Dr. Lynne Jones
  To ask the President of the Board of Trade what advice he has received on the effect contracting out of the Insolvency Service might have on the future disqualification and prosecution of bankrupts.

  Mr. Jonathan Evans
  Stoy Hayward reported that the contracting out of the Official Receiver's case administration functions upon the making of the insolvency order would enable him to concentrate more on his investigatory role.

  Dr. Lynne Jones
  To ask the President of the Board of Trade what advice he has received on the effects of the Transfer of Undertakings (Protection of Employment) Regulations 1981 on the contracting out of the Insolvency Service.

  Mr. Jonathan Evans
  No decision to contract out has been taken; it is, therefore, too early to consider the issue of Transfer of Undertakings (Protection of Employment) Regulations, the implications of which may not become clear until the nature of proposals in any bidding process could be assessed.

  Fire Safety
  Mr. Raynsford
  To ask the President of the Board of Trade if he will list all the organisations and individuals who submitted written responses to the proposals of the interdepartmental fire safety scrutiny team contained in the report "Fire Safety Legislation and Enforcement".

  Mr. Jonathan Evans
  To date, some 460 organisations and individuals have provided written comments on the report of the interdepartmental scrutiny of fire safety legislation and enforcement.

  I have placed a copy of the list in the Library of the House.

  British Coal Enterprise
  Mr. Hardy
  To ask the President of the Board of Trade what assessment he has made of the contribution by British Coal Enterprise to the welfare and economy of coalfield areas; and if he will make a statement on its future.

  Mr. Charles Wardle
  The job creation and economic regeneration efforts of British Coal Enterprise in areas affected by colliery closures are well known and recognised.

  The Government and British Coal are currently exploring options for the services provided by British Coal Enterprise. No final decisions have been taken about its future.

  EC Legislation
  Mr. Steen
  To ask the President of the Board of Trade what liaison arrangements exist between his Department and overseas posts in order to provide him with information about the implementation in other member states of European Community legislation.

  Mr. Ian Taylor
  Overseas posts are under standing instructions to report on the general position on implementation of single market legislation in other member states; and on implementation of specific measures when requested.

  Pearl Assurance Ltd
  Mr. Hinchliffe
  To ask the President of the Board of Trade how many complaints have been received about Pearl Assurance Ltd. within the past year.

  Mr. Jonathan Evans
  It is not this Department's policy to disclose publicly information relating to individual companies.

  Post Office
  Mr. Harry Greenway
  To ask the President of the Board of Trade if he will make a statement on the automation of Post Office business.

  Mr. Charles Wardle
  [holding answer 5 December 1994]: The project to automate the payment of benefit at post offices has two main aims: to provide the post office network with a streamlined and modern business infrastructure; and to help the Benefits Agency ensure that losses through payment fraud are minimised. It will put new electronic terminals in 20,000 post offices and will play a key part in supporting an expanded range of products and services for the 28 million people who visit them each week. When complete it will put post offices
  580
  at the leading edge of using technology to improve services to customers.

  Following rigorous evaluation of formal bids from potential suppliers, five have been asked to develop their ideas further. Detailed proposals will be considered and tested over coming months, with a final decision on the choice of system and supplier being made next winter. We expect to see the first offices automated in the spring of 1996.

NORTHERN IRELAND

  Energy Expenditure
  Mr. Matthew Taylor
  To ask the Secretary of State for Northern Ireland what was the total expenditure on energy for offices and buildings by(a) his Department and (b) his agencies in each of the last three years for which figures are available.

  Mr. Ancram
  The total expenditure by Northern Ireland Departments and agencies in each of the three years is given in the table:

  1991–92 £ millions

  1992–93 £ millions

  1993–94 £ millions

  Departments

  19.50

  19.09

  19.11

  Agencies

  0.49

  0.59

  1.17

  Labour Statistics
  Mr. Spellar
  To ask the Secretary of State for Northern Ireland what are the latest figures for the number of employees in the(a) catering, (b) clothing manufacture, (c) linen and (d) road haulage industries.

  Mr. Ancram
  The latest available figures from the quarterly employment survey show that at June 1994 there were an estimated 22,990 persons employed in hotels and catering and 14,800 employed in the manufacture of footwear and clothing. More detailed figures on industrial activities such as linen and road haulage are available only from the census of employment. Results from the September 1991 census show that there were 1,866 persons employed in the linen industry and 4,243 in road haulage.

  Mr. Spellar
  To ask the Secretary of State for Northern Ireland how many people have been unemployed for more than(a) six months and (b) 12 months.

  Mr. Ancram
  The latest available figures, for October 1994, show that in Northern Ireland 65,326 people have been unemployed for more than six months and 53,049 have been unemployed for more than 12 months.

  Ophthalmology Out-patient Clinics
  Rev. Martin Symth
  To ask the Secretary of State for Northern Ireland how many referrals from general practitioners to ophthalmology out-patients clinics were made in 1990–91 and 1991–92.

  Mr. Moss
  The information details the number of general practitioner written referral requests to opthalmology out-patient clinics in Northern Ireland:
  581

  Year

  Number of referrals

  1990–91

  10,452

  1991–92

  13,050

  Hill Farming
  Mr. Spellar
  To ask the Secretary of State for Northern Ireland what acreage has been put into regeneration of the natural habitat in hill farming.

  Mr. Ancram
  By June 1994 about 220,000 hectares of hill land had been designated under the environmentally sensitive areas scheme. To date, 30,000 hectares of this area have been entered into agreements under which farmers agree to pursue farming practices which aim to protect and enhance the natural environment of their farms.

  Pigs
  Mr. Tyler
  To ask the Secretary of State for Northern Ireland what grant aid is available to pig producers in Northern Ireland to convert sow tether and stall accommodation.

  Northern £

  Southern £

  Eastern £

  Western £

  1991–92

  5,577,831

  4,502,548

  7,710,908

  3,227,379

  1992–93

  1,012,744

  (2,276,927)

  9,394,771

  2,346,866

  1993–94

  1,543,080

  931,037

  (1,755,150)

  2,233,802

  Notes:

  Figures in brackets indicate "deficits". Figures quoted for 1993–94 exclude surpluses made by general practitioner fundholders.

OVERSEAS DEVELOPMENT ADMINISTRATION

  Colombia
  Mr. Llwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what aid was provided to Colombia in 1990, 1991, 1992 and 1993; and if he will make a statement.

  Mr. Baldry
  Aid provided to Colombia in financial years 1990–91, 1991–92, and 1992–93 was £3.66 million, £3.789 million and £2.433 million respectively. The provisional figure for 1993–94 is £2.454 million. Assistance included technical co-operation, emergency aid support, aid and trade provision activity, and anti-drugs technical assistance.

  Colombia no longer qualifies for aid and trade provision support, but other programmes continue. Priorities agreed with the Government of Colombia for the technical co-operation programme include the modernisation of public sector administration and the sustainable management of renewable natural resources. Assistance in the latter sector has concentrated on coffee pest and disease control, and the post-harvest processing of fruit and vegetables.

  Mr. Llwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what evaluation of the standards of human rights in Colombia his Department has undertaken during the last five years; what were the
  582
  Mr. Ancram
  [holding reply 12 December 1944]: Grant assistance is available to pig producers in Northern Ireland under the sub-programme for agriculture and rural development for the conversion or replacement of existing dry sow accommodation at a grant rate of 30 per cent. of expenditure of up to £25,000.

  Health Authority Finance
  Mr. Milburn
  To ask the Secretary of State for Northern Ireland what(a) surpluses and (b) deficits were recorded by each health authority in each of the last three years.

  Mr. Moss
  [holding reply 12 December 1994]: As cash-limited organisations, health and social services boards are not permitted to overspend, that is, to make cash deficits. However, goods and services, for example equipment, building works etcetera, ordered in one financial year are frequently not received until the next. This can lead to "surpluses" in one year, when the allocation has been underspent, and "deficits" in the following year, when that year's allocation is overspent.

  The "surpluses" and "deficits" for Northern Ireland's four health and social services boards for the periods 1991–92 to 1993–94 are as follows:

  findings; how they affected the evaluation of aid to the Colombian regime; and if he will make a statement.

  Mr. Baldry
  Our ambassador in Bogota reports regularly on human rights in Colombia. Our embassy is in frequent touch with a wide range of governmental and non-governmental organisations in Colombia, as well as with our European Union partners on human rights issues.

  Human rights violations in Colombia have complex causes. Illegal drugs production and trafficking, the activities of guerrilla organisations and military and para-military forces, failure to bring successful prosecutions, as well as conditions of poverty and social inequality all contribute to the high level of abuses there. The administration of President Samper is addressing these issues frankly and openly. The priority which the Government of Colombia attach to these issues is welcome. We wish them success in their attempt to improve human rights observance.

  Human rights considerations have not significantly affected decisions on the nature of our modest bilateral aid programme with Colombia. The programme is entirely technical co-operation, operating mainly through non-governmental organisations and autonomous institutions.

  Rwanda
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what response he has
  583
  made to the UN Secretary-General's Rwanda emergency normalisation plan.

  Mr. Baldry
  Britain has provided bilateral assistance for priority health care, refugee repatriation, infrastructure repair and help to Rwanda Government ministries. The European Union's new programme of rehabilitation assistance, worth approximately £52 million, will include help for Kigali airport, road repair, health and education. The United Kingdom share of this programme is about £9 million.

  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs which countries have responded to the Rwanda trust fund: how much they have contributed; and what is the proposed United Kingdom contribution.

  Mr. Baldry
  We understand that to date the Dutch have contributed $5 million to the UN trust fund for Rwanda. We will consider whether to make a contribution as part of our preparations for the United Nations development programme round table on Rwanda in January 1995.

  Mr. Worthington
  To ask the Secretary of Stale for Foreign and Commonwealth Affairs what contribution is made by Her Majesty's Government to the training of civilian police in Rwanda.

  Mr. Baldry
  We have not been asked to help bilaterally in training civil police and have no plans to do so given the very different Rwandan and British policing systems.

  European Aid
  Sir David Steel
  To ask the Secretary of State for Foreign and Commonwealth Affairs what measures he has taken to ensure that the United Kingdom will be able to honour its share of the commitment made at the Edinburgh summit to increase European aid by 60 per cent. by the end of the decade.

  Mr. Baldry
  British contributions to both the European development fund and the EC aid budget are charged to the United Kingdom aid programme. The levels agreed for the aid programme in this year's public expenditure survey, for the years 1995–96 to 1997–98, include provision in each year for these costs. My right hon. Friend the Foreign Secretary would expect to put forward proposals for later years, in future public expenditure surveys, on the same basis.

  Aid Provision
  Mr. Llwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs to what extent the human rights record of a country is a criterion for the provision of aid; and if he will make a statement.

  Mr. Baldry
  Aid allocation decisions take account of a range of criteria. These include human rights as part of good government. Other criteria include poverty and commitment to appropriate development policies.

  Trade Unions
  Mr. MacShane
  To ask the Secretary of State for Foreign and Commonwealth Affairs what percentage of know-how fund money has been allocated by country to the Trades Union Congress or to trade unions to support the development of democratic trades unionism in the countries covered by the know-how fund for the years(a) 1991–92, (b) 1992–93 and (c) 1993–94.
  584
  Mr. Baldry
  The know-how fund has allocated some £200,000 to trades union-related assistance in the region since 1991. Further funds have been allocated, and new projects are being planned.

  The breakdown by country, expressed as a percentage of the total country programmes, is as follows:

  Country

  1991–92

  1992–93

  1993–94

  Bulgaria

  2.49

  0.09

  0.00

  Czechoslovakia

  0.11

  0.53

  0.00

  Czech Republic

  0.00

  0.00

  0.13

  Hungary

  0.02

  0.00

  0.00

  Poland

  0.27

  0.99

  0.00

  Romania

  0.58

  0.00

  0.45

  Russia

  0.00

  <0.01

  <0.01

  Energy Efficiency Projects
  Mr. Bayley
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer of 22 November,Official Report, column 70, about energy efficiency projects, if he will list the members of the British Soviet business consortium awarded the energy efficiency training project for Russia in 1992–93.

  Mr. Baldry
  The Members of the British Soviet business consortium awarded the energy efficiency training project for Russia in 1992–93 were British Gas, British Coal, Scottish Power, NIFES, WS Atkins, Linden Consulting Partnership, BICC-Andover Controls, GEC-Satchwell Controls, Freeman Group, Babcock, Phoenix Burners-Nor Ray Vac, Lighting Enterprises Consultancy and March Consulting Group.

  Eritrea
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what Overseas Development Administration assistance currently goes to Eritrea.

  Mr. Baldry
  In 1993–94 Eritrea received £5.8 million in bilateral assistance, including emergency aid. Eritrea is also a recipient of multilateral assistance to which Britain makes a significant contribution. Our share of the European Union's rehabilitation and development assistance since 1993 is £7 million. Eritrea also receives emergency aid from the European Union.

NATIONAL HERITAGE

  Royal Palaces
  Mr. Gordon Prentice
  To ask the Secretary of State for National Heritage which(a) occupied and (b) unoccupied royal palaces have fire certificates.

  Mr. Sproat
  Under the terms of the Fire Precautions Act 1971, fire certificates are required only for premises employing more than 20 persons or more than 10 persons above the ground floor. Therefore, only specific areas of royal palaces require fire certificates.

  (a) occupied royal palaces: At Windsor castle, certificates have been issued for the Round tower and the Saxon tower. Applications are being processed for two other areas.
  585
  Applications are being processed for eight areas in other places.

  (b) unoccupied royal palaces: At the Tower of London a certificate has been issued for the new armouries. Applications are being processed for one other area at the tower and two areas at Hampton Court palace.

  Millennium Fund
  Mr. Bernie Grant
  To ask the Secretary of State for National Heritage what plans he has to use the millennium fund to build a permanent museum or monument dedicated to those who suffered and died during the period of African enslavement; and if he will make a statement.

  Mr. Dorrell
  It will be for the millennium commissioners to determine the purposes to which they apply their share of the national lottery proceeds in response to the applications they receive. Copies of the Millennium Commission's detailed guidance on how to make applications for lottery funds, along with those produced by the other distributing bodies, have been placed in the Library of the House.

  Export of Works of Art Review
  Mr. Waterson
  To ask the Secretary of State for National Heritage when the report of the Reviewing Committee on the Export of Works of Art, 1993–94, will be published.

  Mr. Dorrell
  The reviewing committee's annual report, 1993–94, has been published today, and copies have been laid before Parliament.

  Television Licence Fee
  Mr. Wigley
  To ask the Secretary of State for National Heritage what would be the cost of a 25 per cent. reduction in television licence fees paid by single pensioner households; and if he will make a statement.

  Mr. Dorrell
  [holding answer 12 December 1994]: The current cost of providing a 25 per cent. reduction in television licence fees for all single pensioner households would be about £60 million per annum.

  National Lottery
  Mrs. Jane Kennedy
  To ask the Secretary of State for National Heritage what steps he is taking to monitor the weekly expenditure of households in the United Kingdom on national lottery tickets.

  Mr. Dorrell
  [holding answer 12 December 1994]: I understand that the family expenditure survey includes an explicit code to capture expenditure on the national lottery.

  Special Advisers
  Mr. Milburn
  To ask the Secretary of State for National Heritage which of the special advisers serving in his Department since its establishment were subject to positive security vetting.

  Mr. Dorrell
  I do not currently have any special advisers, but all special advisers were required to have positive vetting.

  Energy Expenditure
  Mr. Matthew Taylor
  To ask the Secretary of State for National Heritage what was the total expenditure on energy for offices and buildings by(a) his Department and (b) his agencies in each of the last three years for which figures are available.

  Mr. Dorrell
  My Department was established in April 1992 but did not occupy its own premises until May 1993. In the year 1993–94 we spent £72,089 on energy for offices and buildings. In the current year to date we have spent £39,902.

  My agencies the Royal Parks agency and the Historic Royal Palaces agency are unable to identify the energy costs for offices and buildings as much of their energy expenditure is in respect of lighting and maintaining parks, gardens and grounds.

TREASURY

  Smuggling
  Mr. Dalyell
  To ask the Chancellor of the Exchequer if he will make an assessment of the effect of the enforced retirement of substantial numbers of Customs and Excise officers on the continuing problem of beer and Scotch whisky smuggling.

  Mr. Heathcoat-Amory
  The fundamental expenditure review—FER—carried out by Customs and Excise will mean that the Department reduces in size by about 4,000 over five years. All possible steps will be taken to avoid redundancy and it is envisaged that the reductions will be achieved through natural wastage and voluntary severance schemes.

  The amount or resources devoted to detecting the smuggling of alcoholic drinks and tobacco products will not be affected by the FER. Indeed, there will soon be a modest increase in the number of excise verification officers deployed by the Department.

  Mr. Steen
  To ask the Chancellor of the Exchequer how many Customs and Excise officers are involved in reducing drug smuggling and the unauthorised importation of alcoholic drinks in the financial year 1994–95; and how many officers will be involved in each of the next three years.

  Mr. Heathcoat-Amory
  In 1994–95 Customs expects to have deployed about 5,100 staff years on drugs control work. As well as including staff years from the customs function, this figure includes elements on investigation, intelligence, legal support, training and information systems.

  Enforcement techniques established in Customs over recent years have increased the use of better targeted, intelligence-led interceptions in place of static routine checks. This has enabled a more effective enforcement effort while allowing freer movement of legitimate traffic. The customs fundamental expenditure review shows that further moves in this direction can be made.

  To combat smuggling of excise goods from other EU member states, Customs has allocated some 240 staff to single market excise work, most of whom are specially trained excise verification officers. The EVO effort is intelligence directed, and is supported by specialist investigation staff and the control measures taken by Excise and VAT visiting officers.
  587
  The resource will not be affected by the fundamental expenditure review. Indeed, there will be a modest increase in the number of EVOs deployed by the Department. However staff numbers for the next three financial years have not yet been finally determined.

  Beer
  Mr. Dalyell
  To ask the Chancellor of the Exchequer what representations he has received from other countries of the European Union about the movement towards parity of duty on beer.

  Mr. Heathcoat-Amory
  No representations have been received from other countries of the European union about the movement towards parity of duty on beer.

  Mr. Dalyell
  To ask the Chancellor of the Exchequer what assessment he has made of the volume of beer purchased at French ports by customers on day visits from the United Kingdom; and what is his estimate of the effect of such sales on the domestic beer industry.

  Mr. Heathcoat-Amory
  Customs estimates that before allowing for additional consumption, the total value of personal beer imports from the EU by legitimate cross-border shoppers is equivalent to less than 1 per cent. of the United Kingdom market.

  Manufactures
  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer what was the net rate of return on exports of manufactures, as defined in the Central Statistical Office "First Release" (94) 205, for each quarter from 1975.

  Mr. Nelson
  Estimates for net rate of return on exports of manufactures are unavailable. The net rate of return for manufacturing companies defined in the CSO "First Release" is derived from the gross operating surplus and net capital stock employed by such companies. The CSO does not collect information on whether the operating surplus and capital stock employed relate to manufacturing for domestic markets or for export. Many businesses would be unable to provide a meaningful split, particularly of capital stock employed.

  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer on what grounds he is forecasting a continuing decline in the United Kingdom share of world trade in manufactures in his "Financial Statement and Budget Report".

  Mr. Nelson
  The United Kingdom is forecast to increase its share of export markets in 1994 and 1995. However, United Kingdom export markets are forecast to grow a little slower than world trade because trade in Europe—our main export market—is projected to rise more slowly than trade between Asian economies.

  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer how the Treasury calculates the profitability of exports of(a) manufactures and (b) services; and how these calculations compare with the estimate of profitability of domestic manufacturers.

  Mr. Nelson
  Export profit margins for manufactures are calculated from the ratio of manufacturing export prices to estimated manufacturing costs. Estimates of export profit margins for services are not available. It is estimated that manufacturers' export profit margins have risen faster recently than their margins on production for the domestic market.

  Imports
  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer what evidence he has to show that the increase in non-oil imports in 1994 compared to 1993 mentioned in paragraph 3.5 of the "Financial Statement and Budget Report", is due to import substitution rather than a falling off in United Kingdom demand for goods of the same description; and if he will publish the forecast change in import penetration in each of the principle import-competing and export industries in 1994 compared with 1993 and 1992.

  Mr. Nelson
  Import price competitiveness for manufactured goods, which accounts for around 80 per cent. of trade in non-oil goods, is estimated to be more than 6.5 per cent. better than in the first three quarters of 1992. Historical experience suggests that improvements in price competitiveness lead, over a period of time, to lower import penetration than would otherwise have occurred. The Treasury does not publish forecasts of import penetration for individual industries.

  Exchange Rate
  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer what are the economic conditions which in the Government's assessment has to be fulfilled before a rate of exchange can be described as competitive.

  Mr. Nelson
  A nation's competitiveness depends on much more than its exchange rate. Our ability to sell goods and services into world markets and achieve a sustained rise in living standards depend fundamentally on improving productivity and controlling costs. Policies directed at permanently low inflation and competitive markets provide the best environment in which to achieve this.

  Inflation
  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer if it is the policy of Her Majesty's Government to shadow the deutschmark to bring down the rate of inflation.

  Mr. Nelson
  The Government's monetary policy is clearly set out at paragraph's 2.03 to 2.08 of the "Financial Statement and Budget Report 1995–96". Minutes of the discussion at the Chancellor's monthly monetary meetings with the Governor of the Bank of England are also published. Movements in the exchange rate are considered as part of general assessments of monetary conditions in setting monetary policy. The Government recognise the value of a stable exchange rate but do not set target rates.

  Inheritance Tax Exemptions
  Mr. Tipping
  To ask the Chancellor of the Exchequer, pursuant to his answer of 30 November,Official Report, column 760, what assessment he has made of the effectiveness of the publicity to make the public aware of access arrangements.

  Sir George Young
  The level of publicity to be given to the agreed public access arrangements required in return for conditional exemption is negotiated on a case-by-case basis by the heritage advisory agencies which have the appropriate experience and expertise. Owners of conditionally exempt land are required to
  589
  submit annual reports to the responsible heritage body covering the undertakings they have given, including the publicity given to the public access arrangements. In addition, the heritage advisory agencies make on-site visits to conditionally exempt land. The Inland Revenue also separately reviews all such cases at five-yearly intervals. There is no evidence that publicity given to public access arrangements is deficient.

  Mr. Tipping
  To ask the Chancellor of the Exchequer if he will give the number of countryside sites where public access has been granted by the landowner in return for exemption from inheritance tax in(a) 1992–93, (b) 1993–94 and (c) 1994–95 to date.

  Sir George Young
  I refer to the answer I gave the hon. Member on 30 November,Official Report, column 760. As I explained, figures for designations of land alone on a year-by-year basis are not available at acceptable cost.

  Mr. Tipping
  To ask the Chancellor of the Exchequer, pursuant to his answer of 30 November,Official Report, column 760, if he will list the counties where public access has been granted by landowners in return for exemption from inheritance tax.

  Sir George Young
  A list for conditionally exempt land alone is not available at acceptable cost. The counties in England where public access has been granted by owners of land and buildings in return for conditional exception from inheritance tax or capital transfer tax are as follows:

  Berkshire

  Buckinghamshire

  Cheshire

  Cornwall

  Cumbria

  Derbyshire

  Devon

  Dorset

  Essex

  Gloucestershire

  Hampshire

  Herefordshire and Worcestershire

  Hertfordshire

  Humberside

  Isle of Wight

  Kent

  Lancashire

  Leicestershire

  Lincolnshire

  Merseyside

  Norfolk

  Northamptonshire

  Northumberland

  North Yorkshire

  Nottinghamshire

  Oxfordshire

  Shropshire

  Somerset

  Staffordshire

  Suffolk

  Surrey

  Sussex

  Warwickshire

  West Yorkshire

  Wiltshire

  Overseas Debt
  Miss Lestor
  To ask the Chancellor of the Exchequer (1) how much debt owed by developing countries has been cancelled by the Paris Club since the introduction of the Trinidad terms in 1990;

  (2) how much debt owed by severely indebted low-income countries has been cancelled by the Paris Club since the introduction of the Trinidad terms in 1990.

  Mr. Nelson
  The following figures are World bank estimates of debt forgiveness since 1990 by the Paris Club, in net present value terms:

  US$ billion

  (a)

  All Developing Countries

  2.2

  (b)

  Severely Indebted Low Income Countries SILICs (as of end 1993)

  1.7

  Tax Relief
  Mr. Cohen
  To ask the Chancellor of the Exchequer in what circumstances tax relief is available for expenditure in connection with public duties of the taxpayer or of his or her spouse; what limit applies to the amount; and for which individuals exceptional arrangements are made.

  Sir George Young
  There are various tax deductions and reliefs available to individuals in connection with public duties, as for other employees and officeholders. More information is in the Inland Revenue "Guide to Benefits and Expenses"—booklet 480—copies of which are available in the House Library.

  VAT (Public Transport)
  Mr. Pendry
  To ask the Chancellor of the Exchequer what is his estimate of the revenue likely to be generated by the imposition of VAT on non-essential public transport during the financial year beginning 1 April 1994.

  Mr. Heathcoat-Amory
  None. The changes come into effect from 1 April 1995.

  Mr. Barry Field
  To ask the Chancellor of the Exchequer if his proposals to extend value added tax on public transport apply to(a) boat trips on (i) inland waterways, (ii) estuaries and (iii) coastal waters, (b) private railways, (c) coach tours and (d) road trains.

  Mr. Heathcoat-Amory
  [holding answer 12 December 1994]: The proposed restrictions to the VAT zero-rating for public passenger transport will not affect boat trips—including the Isle of Wight ferry—which are currently zero-rated and which take place on the open sea, inland waterways or other waters to which the general public have access. Coach tours will also be unaffected. Similarly, the VAT position of the other examples cited in the question will remain unchanged except where they are covered by admission charges to places such as theme or safari parks or working museums. In these cases, where admission charges are apportioned at present, they will become wholly liable to VAT at the standard rate.

  Steam Railways
  Mr. Luff
  To ask the Chancellor of the Exchequer if he intends to apply value added tax to fares on steam railways operated by railway preservation societies.
  591
  Mr. Heathcoat-Amory
  I have no plans to disturb the current VAT zero-rating for public passenger transport, including steam railways, where the service is confined to that of public transport in its widely accepted sense. I can confirm that the proposed restrictions to the zero-rating under the VAT (Transport) Order 1994 will not normally affect steam railways, and therefore most operators will be able to continue to apply the zero rate. The exception is when payment for admission to places such as theme or safari parks or working museums includes a steam engine ride. In these cases, where admission charges are

  Figures in £ billions

  Petrol duty

  Derv duty

  VED

  1VAT on petrol and derv

  2VAT on vehicle sales

  Car tax

  1992–93

  8.2

  3.0

  3.3

  1.6

  2.9

  0.6

  1993–94

  8.8

  3.7

  3.6

  1.7

  3.3

  0.0

  1 Derived from Central Statistical Office estimates of consumers' expenditure.

  2 Non-reclaimable VAT.

  The total revenue in 1994–95 expected from all hydrocarbons including minor oils is £14.6 billion from VED £3.8 billion.

  Interest Rates
  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer what is his estimate of the level of real interest rates(a) on 7 December and (b) on 1 December in (i) August 1992 and (ii) 1978.

  Mr. Nelson
  Real interest rates can be calculated in several ways, using either short or longer-term nominal interest rates, and either past or expected future rates of inflation.

  Data on interest rates and inflation are available in the CSO publications "Financial Statistics" table 7.10 and "Economic Trends" table 3.1. Data on expected future inflation rates are published in the Treasury's monthly review of independent forecasters, and the Bank of England's inflation report.

  As at close 1 and 7 December 1994 three-month and 10-year nominal interest rates were:

  3 month

  10 year

  1 December

  6.19

  8.58

  7 December

  6.38

  8.74

  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer what is the effect of the 1/2 per cent. increase in lending rates on the cost of the PSBR for the rest of the current financial year; and what is his estimate of the PSBR for the next financial year.

  Mr. Nelson
  The effect of the ½ per cent. increase in lending rates on the cost of financing the public sector borrowing requirement for the current financial year will depend upon the level and structure of interest rates, the rate of inflation and the type of debt issued.

  My latest estimate of the PSBR for 1995–96 is £21.5 billion.

  VAT (Fuel)
  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer what is his estimate of the cost in interest of substituting borrowing for the deficiency caused by not raising VAT on heating from 8 per cent. to 17½ per cent.
  592
  apportioned at present, they will become wholly liable to VAT at the standard rate.

  Tax Yields
  Mr. Robert Ainsworth
  To ask the Chancellor of the Exchequer what was the yield in 1992–93 and 1993–94 and the latest estimate of yield for 1994–95 from(a) petrol duty, (b) derv duty, (c) vehicle excise duty, (d) VAT on petrol and derv rate, (e) VAT on vehicle sales and (f) car tax.

  Mr. Heathcoat-Amory
  The tax yield is as follows.

  for (a) the rest of the present year and (b) the whole of next year.

  Mr. Nelson
  The cost of servicing any particular amount of borrowing will depend upon the level and structure of interest rates, the rate of inflation and the type of debt issued. My right hon. and learned Friend the Chancellor announced to the House on 8 December measures to ensure that not raising VAT on fuel and power to 17½ per cent. will have no significant impact on borrowing either this year or next year.

  Imports and Exports
  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer what is his estimate of the amount by which imports and exports of manufactures were under or over-recorded in 1993 compared with the old system of recording in the case of trade with the EEC; and what is his estimate currently.

  Mr. Nelson
  Revised adjustments for under-recording of United Kingdom imports and exports to and from other European Union countries were given in the August 1994 edition of "Economic Trends", which announced the outcome of a review of the Intrastat system carried out by the Central Statistical Office and Her Majesty's Customs and Excise. The effect on the statistics for trade in manufacturers was as follows:

  United Kingdom trade with other European Union countries Manufacturers (SITC Rev, 3 section 5 to 8) (1993, million on a balance of payments basis)

  United Kingdom imports

  United Kingdom exports

  Balance

  Pre review

  55,533

  52,098

  -3,435

  Post review

  55,748

  51,878

  -3,870

  Revision

  +215

  -220

  -435

  The review also established that there were faults in the old system of recording which caused, for example, total imports from other European Union countries to be overstated by an estimated £2,175 million in 1992. Estimates of the effect of the changed recording system at the level of manufactured goods are not available.

  Customs and Excise
  Mr. Ainger
  To ask the Chancellor of the Exchequer what is the planned reduction in the number of Her Majesty's Customs officers based at each of the Welsh ports and airports.

  Mr. Heathcoat-Amory
  [holding answer 8 December 1994]: The reduction in the number of Her Majesty's Customs officers based at each of the Welsh ports and airports has not yet been decided.

  Changes at particular ports and airports will be determined by the head of the executive unit in Wales. Factors to be taken into account will be the assessment of risk in locations together with his ability to make maximum use of flexible anti-smuggling teams.

  Mr. Steen
  To ask the Chancellor of the Exchequer how many litres of alcohol Customs and Excise officers have intercepted; and what value of drugs and alcohol have been seized by Customs and Excise officers in Devon and Cornwall in each of the last three years.

  Mr. Heathcoat-Amory
  The following amounts have been seized by Customs and Excise officers in Devon and Cornwall over the last three years:

  Year

  Litres of alcohol

  Value of drugs £

  Value of alcohol £

  1992

  54

  10,772,849

  685

  1993

  16,658

  14,487,868

  24,855

  1994 (up to 30 November)

  7,059

  28,199,289

  17,836

  Public Sector Borrowing Requirement
  Mr. Campbell-Savours
  To ask the Chancellor of the Exchequer if he will set out the assumptions he made as to the increase in gross domestic product when forecasting the PSBR for 1995–96, 1996–97 and 1997–98.

  Mr. Aitken
  [holding answer 12 December 1994]: The assumptions for GDP growth which underlie the PSBR projections are set out in table 3A.1 of the 1995–96 "Financial Statement and Budget Report".

  Market Testing
  Mr. Milburn
  To ask the Chancellor of the Exchequer if he will list those services that have been market-tested by his Department and won by the private sector, indicating the organisation that won the tender and its value.

  Mr. Nelson
  [holding answer 12 December 1994]: In Her Majesty's Treasury, no services have been awarded to a private sector supplier as a result of market testing which involved an in-house team. However, following a strategic decision to contract out most internal audit work, contracts were awarded, following competition, to Price Waterhouse and Touche Ross.

  Consumer Spending and VAT
  Mr. Wigley
  To ask the Chancellor of the Exchequer what were at 1993 prices(a) for 1978 and (b) for the last available year (i) total consumer spending, (ii) the value added tax take and (iii) column (ii) as a percentage of (i).
  594
  Mr. Nelson
  [holding answer 12 December 1994]: Estimates of consumers' expenditure and value added tax are not readily available at 1993 prices. Information at current prices is available as indicated below on the CSO database which may be accessed via the House of Commons Library.

  Consumers' expenditure—series AIIK

  Total value added tax—series GTAS

  Thin Capitalisation
  Mr. Kirkwood
  To ask the Chancellor of the Exchequer if it is his policy that the thin capitalisation proposals issued by the Inland Revenue on Budget day are intended to apply to the voluntary sector; and if he will make a statement.

  Sir George Young
  [holding answer 12 December 1994]: The thin capitalisation proposals were not intended to have an adverse effect on the voluntary sector. It is now apparent that, in some cases, they could do so. I therefore intend amending the provision at the Committee stage of the Finance Bill to exclude charities and their subsidiaries from its scope.

  Occupation Pensions
  Mr. Ingram
  To ask the Chancellor of the Exchequer if he will list each of the occupational pension schemes covered by Government guarantees and give details of the main elements of each scheme.

  Mr. Aitken
  [holding answer 12 December 1994]: Occupational pension schemes covered by Government guarantees are:

  The National Rivers Authority (Closed Fund);

  British Coal (Closed) Schemes and;

  The Pensioners Sections of the Railways Pension Scheme.

  Details of the pension benefits are available from the schemes themselves.

SCOTLAND

  Health Boards and Hospital Trusts (Property)
  Mr. Galbriath
  To ask the Secretary of State for Scotland how many houses on their property were in private ownership for each health board and hospital trust.

  Lord James Douglas-Hamilton
  I refer the hon. Member to the reply which I gave him on 1 December at column 835.

  Scottish Heart Transplant Centre
  Mr. Galbraith
  To ask the Secretary of State for Scotland (1) what was the number of operations predicted for the year 1994 in the initial proposal for the Scottish heart transplant centre;

  (2) how many operations the Scottish heart transplant centre at Glasgow royal infirmary is contracted to do each year.

  Lord James Douglas-Hamilton
  Greater Glasgow health board's bid in 1991 for the heart transplant service predicted an activity of 25 patients for year one, rising to 50 patients per annum in subsequent years.
  595
  The contracted activity level for heart transplants in 1994–95 has been set at 25 based on the actual activity over the last two years—23 operations in each year.

  Parliamentary Questions
  Mr. Gordon Prentice
  To ask the Secretary of State for Scotland how many parliamentary questions tabled in the last Session of Parliament were not answered on the grounds that the information sought was not held centrally by the Department.

  Mr. Lang
  There was a total of 4,101 written and 425 oral parliamentary questions tabled for my Department between 26 November 1993 and 11 November 1994. Of these, 91 were answered on the basis that the information was not held centrally.

  Schools Finance
  Mr. Hain
  To ask the Secretary of State for Scotland what is the total figure for the financial balances held by all(a) primary schools and (b) secondary schools.

  Lord James Douglas-Hamilton
  The information sought is not held centrally. Nor will such information be available generally until devolved school management—DSM—arrangements are fully in place. The target date for final implementation of the DSM arrangements in Scottish schools is April 1998.

  Local Government Reorganisation
  Mr. Kynoch
  To ask the Secretary of State for Scotland if he will announce his plans for funding the costs of local government reorganisation in 1995–96.

  Mr. Lang
  Following consultation with the Convention of Scottish Local Authorities, I have decided that, with one exception, all the provision for the costs of local government reorganisation which I expect will be incurred in 1995–96 should be allocated to the new shadow councils rather than to the existing authorities. I plan to allocate a total of £36 million to the shadow councils. This sum is entirely additional to the 1995–96 settlement for the existing local authorities which I announced on 29 November. In terms of section 25 of the Local Government etc. (Scotland) Act 1994, the shadow councils may be funded either by grant or by borrowing consent. I am still considering which of these funding methods to use and I shall announce my decision as soon as possible. COSLA is being consulted about the distribution of the £36 million among the shadow councils.

  The one exception is provision of £5 million to cover the estimated cost of the elections of the shadow councils in April. That provision is included in the 1995–96 settlement for the existing authorities. A new grant-aided expenditure—GAE—assessment will be created for this amount and the GAE will be distributed among the nine regional councils on a basis agreed with COSLA.

  It is clearly important that, in order to achieve as smooth a transition to the new structure as possible, the existing authorities play their full part during 1995–96 in helping the shadow councils to prepare for reorganisation. However, I would not expect the existing authorities to incur additional costs next year as a result of reorganisation. My impression is that the preparation work which is already under way in many authorities is, in the great majority of cases, being carried out by
  596
  existing staff. I expect that that will also be the case next year. Where the existing authorities do incur costs next year in preparing for reorganisation, I would expect these to be offset by a rundown in their staffing and other activity as 1 April 1996 approaches. In other words, I would expect to see, in general, changes in one cancelling out changes in the other. But if a situation were to arise in which an existing authority had to undertake a major piece of preparation work which, for example, involved the recruitment of extra staff or the commissioning of consultants, I would expect such work to be undertaken only with the agreement of the relevant shadow council or councils and with the costs being met by that council or those councils concerned.

  I consider that the provision that I am making for reorganisation costs in 1995–96 and the approach which I have outlined with regard to its distribution will ensure that the process of reorganisation will proceed smoothly and efficiently in the lead up to the transfer to the new councils on 1 April 1996.

  Public Expenditure
  Mr. Kynoch
  To ask the Secretary of State for Scotland if he will announce the provision that he has made in his public expenditure plans for Government-supported expenditure and aggregate external finance in 1996–97 and 1997–98.

  Mr. Lang
  My plans for Government supported expenditure—GSE—and aggregate external financeAEF— for 1996–97 and 1997–98 and the actual figures for 1995–96 which I announced on Budget day are shown in the following table. The plans for 1996–97 and 1997–98 will, in the normal way, be subject to review in future public expenditure surveys.

  1995–96 £ million

  1996–97 £ million

  1997–98 £ million

  GSE

  6,116.9

  6,211

  6,201

  AEF

  5,306.0

  5,336

  5,300

  Community Care

  The above amounts of GSE and AEF are inclusive of the following sums which are being transferred to local authorities in respect of their care in the community and the independent living fund responsibilities.

  1995–96 £ million

  1996–97 £ million

  1997–98 £ million

  172.1

  211.6

  245.0

  Local Government Reorganisation

  In determining my plans for GSE and AEF for the two forward years, I have assumed that the new councils will incur local government reorganisation related costs of £70 million in 1996–97 and £20 million in 1997–98. The 1996–97 figure is £15 million greater than I assumed in my 1993 public expenditure plans. Twelve months ago I estimated that redundancy costs of £15 million would be incurred in 1995–96. I have now transferred this provision to 1996–97. In all, I am assuming that redundancy costs totalling £43 million will be incurred as a result of reorganisation. I am making provision for £40 million of

  597
  these costs to be met in 1996–97 and £3 million in 1997–98. I expect other reorganisation related costs to amount to £30 million in 1996–97 and £17 million in 1997–98.

  The new local government structure will be cheaper to operate than the existing one and I estimate that savings of £40 million per annum will be achieved from 1997–98. I recognise, however, that this full level of annual saving may not be achievable in the first year of the new structure, given that councils are likely to require time to shed the surplus staff which they inherit from the existing authorities. My plans therefore assume a saving of £30 million in 1996–97.

  Overall, therefore, my plans assume reorganisation related net costs of £40 million in 1996–97 and net savings of £20 million in 1997–98.

  Orthopaedic Consultants
  Mr. Maclennan
  To ask the Secretary of State for Scotland what is the number of vacant consultant orthopaedic posts; and if he will make a statement.

  Lord James Douglas-Hamilton
  We are aware of two vacant consultant posts in orthopaedic surgery. The establishment of senior registrars in the specialty was increased from 21 to 23 earlier this year.

  Forestry Commission Land
  Mr. Maclennan
  To ask the Secretary of State for Scotland what proposals he has to ensure that public access is maintained to Forestry Commission land which passes into private ownership.

  Sir Hector Monro
  We introduced arrangements in 1991 for securing continued public access to woodlands sold by the Forestry Commission. We have recently reviewed these arrangements and concluded that they should be strengthened. Further details are given in "Our Forests—The Way Ahead"—Cm 2644—a copy of which is in the Library of the House.

  Special Advisers
  Mr. Milburn
  To ask the Secretary of State for Scotland which of the special advisers serving in his Department during the last five years were subject to positive security vetting.

  Mr. Lang
  During the last five years all special advisers in my Department have been subject to positive vetting.

  Health (Revenue Allocations)
  Mr. Kynoch
  To ask the Secretary of State for Scotland what revenue allocations he has made to health boards, the Common Services Agency and the State hospital for 1995–96; what allocation provision he has made to those bodies for capital expenditure; and what provision for capital expenditure he proposes to make within the external financial limit for NHS trusts.

  Lord James Douglas-Hamilton
  My right hon. Friend has allocated £2,595.3 million to health boards to meet their revenue expenditure commitments on hospital and community health services in 1995–96. The Common Services Agency has been allocated £104.6 million and the State hospital £12.9 million.

  Taken with health boards' own cash releasing efficiency savings these allocations give an increase in
  598
  available resources of 5.1 per cent. for health boards, 0.7 per cent for the Common Services Agency and 4.62 per cent. for the State hospital.

  Capital provision of £18.4 million has been made for direct expenditure by health boards, the Common Services Agency and the State hospital. In addition, my right hon. Friend proposes to provide within NHS trusts' external financing limit for gross capital expenditure of some £212.4 million.

  Details of the allocations are contained in the following table.

  NHS in Scotland Allocations: 1995–96

  Health Board

  Revenue allocation £000

  Capital allocation £000

  Capital provision for trusts by board area £000

  Argyll and Clyde

  217,251

  970

  9,261

  Ayrshire and Arran

  179,324

  0

  17,906

  Borders

  57,702

  110

  2,731

  Dumfries and Galloway

  79,674

  160

  5,634

  Fife

  163,893

  180

  16,039

  Forth Valley

  128,578

  15

  7,213

  Grampian

  249,500

  90

  15,138

  Greater Glasgow

  517,977

  565

  45,080

  Highland

  108,180

  270

  7,276

  Lanarkshire

  249,373

  0

  16,008

  Lothian

  380,652

  110

  33,835

  Orkney

  11,993

  4,845

  N/A

  Shetland

  13,310

  2,960

  N/A

  Tayside

  217,552

  220

  23,405

  Western Isles

  20,895

  2,250

  N/A

  CSA

  104,565

  8,300

  N/A

  State Hospital

  12,938

  5,685

  N/A

  Scottish Ambulance Service

  N/A

  N/A

  9,840

  Unallocated

  N/A

  N/A

  3,000

  Scotland

  2,713,357

  26,730

  212,366

  Travelling People
  Dr. Godman
  To ask the Secretary of State for Scotland what recent discussions he has held with the representatives of travelling people in Scotland concerning those sections of the Criminal Justice and Public Order Act 1994 which relate to trespass; and if he will make a statement.

  Lord James Douglas-Hamilton
  [holding answer 7 December 1994]: None. My right hon. Friend has an advisory committee on issues concerned with travelling people, on which the traveller community in Scotland are represented.

  Dr. Godman
  To ask the Secretary of State for Scotland if his advisory committee on Scotland's travelling people will draw up guidelines relating to those sections in the Criminal Justice and Public Order Act 1994 which relate to trespass; how they may be administered by local authorities and police forces; and if he will make a statement.

  Lord James Douglas-Hamilton
  [holding answer 7 December 1994]. It would not be appropriate for the advisory committee to issue guidelines on those sections of the Criminal Justice and Public Order Act 1994 which relate to trespass in Scotland. The Scottish Office has, however, recently issued a guide which gives basic information on the provisions of the Act as it affects

  599
  Scotland. This has been sent to chief executives of local authorities, chief constables and to other interested parties. Interpretation of the new powers on trespass is essentially a matter for the police and the courts to determine. Notwithstanding the new provisions on trespass in the Act, the policy of toleration of illegal encampments will continue to apply where local authorities have not achieved the targets set by the Secretary of State for traveller site provision.

  Hospital Construction, Lanarkshire
  Mr. Norman Hogg
  To ask the Secretary of State for Scotland if he has yet received plans from Lanarkshire health board for the construction of a new hospital; and if he will make a statement.

  Lord James Douglas-Hamilton
  [holding answer 5 December 1994]: No. Lanarkshire health board is currently considering plans for the facility that will afford future occupants maximum privacy and dignity.

  Chapter 10.5 Scheme
  Mr. Welsh
  To ask the Secretary of State for Scotland (1) if he will continue to support the chapter 10.5 scheme;

  (2) what recent representations he has received concerning the review of the chapter 10.5 scheme by the Scottish Office; and if he will make a statement.

  Lord James Douglas-Hamilton
  [holding answer 8 December 1994]: Representations have been received recently from the Scottish General Medical Services committee and from a number of general medical practitioners.

  The chapter 10.5 payments scheme—so called because it derives from chapter 10.5 of the 1989 White Paper "Working for Patients"—was introduced by the then Secretary of State in April 1990. Its purpose was to safeguard the position of doctors in the less populated parts of Scotland who it was thought might be unable to maintain or increase their income under the revised remuneration arrangements of the new GP contract which placed more emphasis than previously on capitation-based payments. A fund of £1.204 million per annum was established in Scotland. There is no equivalent scheme in England. In the event there has been less of a move towards capitation-based remuneration than expected. The position is currently under review.

  Deprivation
  Mr. Welsh
  To ask the Secretary of State for Scotland (1) what recent representations he has received concerning the change in calculation of deprivation payments from an 8 Jarman index to a 7 Jarman index; and if he will make a statement;

  (2) if he will assess the effects of the change in calculation of deprivation from an 8 Jarman index to a 7 Jarman index on the incomes of general practitioners in Scotland; and what comparisons he has made with the incomes of general practitioners in the rest of the United Kingdom.

  Lord James Douglas-Hamilton
  [holding answer 8 December 1994]: Representations have been received recently from the Scottish General Medical Services committee and from a number of general medical practitioners.
  600
  There was no change in overall expenditure on deprivation payments to GPs in Scotland as a consequence of the move from a Jarman 8 index to a Jarman 7 index in 1991. The change was designed to be cost neutral. The use of enumeration districts—around 300 people—as the basis of payment rather than post code sectors—around 5,000 people—allows for better targeting of payments.

  I am satisfied that GPs in Scotland are not disadvantaged by the application of a Jarman 7 index in relation to their colleagues in England where the Jarman 8 index continues to be applied at electoral ward level of around 5,000 people.

  In 1993–94 GPs in Scotland received some £3.8 million under the scheme which is currently based in 1981 census data. Negotiations are under way with the profession about updating the scheme using data from the 1991 census.

  Astronomer Royal
  Mr. Dalyell
  To ask the Secretary of State for Scotland when he hopes to fill the position of Astronomer Royal for Scotland.

  Lord James Douglas-Hamilton
  [holding answer 12 December 1994]Advice will be given shortly to Her Majesty the Queen on an appointment to the Office of Astronomer Royal for Scotland.

  Forth Bridge
  Mr. Darling
  To ask the Secretary of State for Scotland (1) what provision he has made for public expenditure in each of the years 1995–96, 1996–97 and 1997–98 in connection with the planning for and construction of all approach roads and other building operations in connection with the proposed second Forth road bridge; and if he will make a statement;

  (2) what financial provision he has made for all expenditure in connection with the proposed second Forth road bridge in 1995–96, 1996–97 and 1997–98; and if he will make a statement.

  Lord James Douglas-Hamilton
  [holding answer 12 December 1994]: My right hon. Friend's spending plans include provision for further expenditure on the proposals under examination in the "Setting Forth" studies amounting to £4 million, £2 million and £2 million in the years 1994–95, 1995–96 and 1996–97 respectively. The deployment of these provisions will be dependent on decisions yet to be taken in relation to these proposals and it may be necessary to make additional provision in respect of land claims which may occur in the years in question. My right hon. Friend is currently considering detailed feasibility studies into all aspects of the proposals and the comments received on these studies.

WALES

  Single-sex Wards
  Mr. Barry Jones
  To ask the Secretary of State for Wales if he will direct health districts to move to the provision of single-sex wards; and if he will make a statement.
  601
  Mr. Richards
  Hospitals are already required to provide services which take account of an individual's privacy and dignity. The issue of single-sex wards is one that my right hon. Friend and I will consider when the present edition of the patients charter for Wales is reviewed.

  Dual-sex Wards
  Mr. Barry Jones
  To ask the Secretary of State for Wales how many dual-sex wards exist in each of the health districts of Wales; and if he will make a statement.

  Cot deaths1—infants, and children under 5: Wales 1983–92

  1983

  1984

  1985

  1986

  1987

  1988

  1989

  1990

  1991

  1992

  Clwyd

  7

  7

  8

  12

  20

  12

  5

  3

  8

  2

  Dyfed

  7

  0

  8

  13

  5

  11

  5

  11

  8

  1

  Gwent

  9

  9

  12

  7

  13

  14

  14

  8

  6

  6

  Gwynedd

  6

  5

  2

  4

  5

  4

  5

  7

  7

  3

  Mid Glamorgan

  15

  10

  19

  16

  23

  15

  17

  17

  10

  8

  Powys

  3

  4

  7

  3

  5

  3

  0

  4

  2

  2

  South Glamorgan

  14

  12

  16

  12

  14

  10

  12

  7

  10

  4

  West Glamorgan

  4

  3

  5

  8

  13

  14

  12

  5

  4

  7

  Wales

  65

  50

  77

  75

  98

  83

  70

  62

  55

  33

  Source:

  OPCS.

  Note:

  1 All sudden infant deaths where sudden infant death syndrome, cot death or similar term was entered on the death certificate even when other causes were also given. Deaths of children aged one to four are included; there were 29 over the 10-year period.

  1993 data for Wales will be published in an OPCS monitor on 15 December; data for counties will be made available on request from OPCS after that date.

  Energy Expenditure
  Mr. Matthew Taylor
  To ask the Secretary of State for Wales what was the total expenditure on energy for offices and buildings by(a) his Department and (b) his agencies in each of the last three years for which figures are available.

  Mr. Redwood
  The required information for my Department is:

  1991–92 £

  1992–93 £

  1993–94 £

  Welsh Office

  622,399

  553,262

  513,016

  ADAS agency Wales

  1—

  70,126

  49,229

  Planning Inspectorate agency

  1—

  2,298

  2,348

  Cadw agency

  N/A

  N/A

  N/A

  1 Agencies not established.

  N/A. Figures not available.

  Mr. Matthew Taylor
  To ask the Secretary of State for Wales what was the total expenditure on energy for each property owned or leased by his Department for the use of Ministers in each of the last three years for which figures are available.

  Mr. Redwood
  My Department has no properties for sole use by Ministers. Ministers have rooms in properties in Cardiff and London. Total Welsh Office expenditure on energy for each of these properties for the last three years was:

  1991–92 £

  1992–93 £

  1993–94 £

  Cathays Park, Cardiff

  283,155

  293,810

  298,807

  Gwydyr house, London

  9,179

  7,219

  9,456

  602
  Mr. Richards
  The information requested is not held centrally.

  Cot Deaths
  Mr. Barry Jones
  To ask the Secretary of State for Wales how many cot deaths there have been in Wales for each of the last 10 years, broken down by county.

  Mr. Richards
  The information requested is given in the table.

  The Welsh Office is withdrawing from other buildings, saving money on energy in those as it does so.

  Oriel Bookshop
  Mr. Wigley
  To ask the Secretary of State for Wales if he will discuss with the chairman of the Welsh Arts Council its intention to sell off the Oriel bookshop in Cardiff to HMSO; and if he will seek to ensure that, in any such change the role of the bookshop as a main outlet of Welsh language publications and music in Cardiff will be safeguarded.

  Mr. Richards
  The Arts Council of Wales issued invitations to tender for the management of the book selling operations at the Oriel bookshop in Cardiff on 9 September 1994. The Arts Council will be considering the report of its project board at its meeting on 15 December; some aspects of the report have been submitted to the Welsh Office for approval, and these are under consideration. It will be a matter for the Arts Council as to whether the project board's recommendations are accepted.

  The successful tenderer will need to provide services at least equal to those provided by Oriel, including the provision of Welsh language books and periodicals.

  Since the Arts Council is conducting the contracting-out process in accordance with Government guidance on market testing, and the choice of tenderer rests with the Arts Council, my right hon. Friend and I do not intend to meet the chairman to discuss the matter.

  NHS Trusts
  Mr. Barry Jones
  To ask the Secretary of State for Wales how many people currently serve on the boards of each of the NHS trusts as lay appointees; and what is the total cost of their emoluments.

  Mr. Richards
  The information requested is included in "Appointments by the Secretary of State for Wales", which is held in the Library of the House and is regularly updated.

  Consultants
  Mr. Llwyd
  To ask the Secretary of State for Wales what was his Department's expenditure on(a) management and (b) other consultants in each year from 1990 to 1993; and if he will make a statement.

  Mr. Redwood
  Expenditure on management and other consultants engaged by the Welsh Office is as follows:

  Year

  Total payments £000

  1990–91

  229

  1991–92

  1,109

  1992–93

  1,416

  1993–94

  1,454

  1994–951

  427

  1 year to date

  Since 1993, my Department has significantly reduced its use of consultants which is reflected in the year to date figure 1994–95.

  Mr. Morgan
  To ask the Secretary of State for Wales if he will provide figures for 1993–94 and 1994–95 to date for the number of occasions on which management or other consultants have been engaged(a) by his office and (b) by non-departmental public bodies in Wales; and what were the total amounts of authorised payments for those consultants in both years.

  Mr. Redwood
  [holding answer 21 November 1994): Details of management and other consultants engaged by the Welsh Office are as follows:

  Number of occasions

  Total payments—£000s

  1993–94

  87

  1,454

  1994–951

  37

  427

  1 Year to date.

  Information for non-departmental public bodies is not held centrally and could be provided only at disproportionate cost.

  Home Tuition
  Mr. Win Griffiths
  To ask the Secretary of State for Wales (1) how long it takes on average for each local education authority to arrange home tuition for children; what is the greatest and least time recorded by each local education authority to provide home tuition; and if the speed of provision has improved over the last three years;

  (2) what has been the average time provided for home tuition by each local education authority in each of the last three years; and what was the greatest and least amount of time provided for children in each local education authority;
  604
  (3) how many children received home tuition in each of the last three years; and if he will list the numbers by local education authority, distinguishing between primary and secondary school pupils.

  Mr. Richards
  This information is not available centrally.

  Pupil Exclusions
  Mr. Win Griffiths
  To ask the Secretary of State for Wales how many children have been excluded in each of the last three years from school(a) temporarily and (b) permanently, listing the schools by local education authority area.

  Mr. Richards
  Figures for each of the last three years are not available. Information on permanent exclusions from maintained schools in Wales was collected by the Welsh Office over a two-year period, starting with the summer term 1990, under the national exclusions reporting system. A total of 192 permanent exclusions were reported during this period. It is not possible to provide a breakdown of the figure because of assurances given as to confidentiality.

  Hospital Tuition
  Mr. Win Griffiths
  To ask the Secretary of State for Wales how many children received hospital tuition in each of the last three years, if he will list(a) the hospitals where it was provided and (b) the amount of time provided on average along with the greatest and least time provided for children in each hospital.

  Mr. Richards
  Information on the education of children in hospital classes is not held centrally. There is presently one hospital school in Wales, the Harvey Jones adolescent unit, maintained by South Glamorgan local education authority. There are currently 13 children between the ages of 11 and 16 in the unit.

  Wrexham Maelor Hospital
  Dr. Marek
  To ask the Secretary of State for Wales what steps were taken to ensure work on phase 2 of the Wrexham Maelor hospital, Wrexham, was carried out according to schedule; and what checks were made on the subcontractors.

  Mr. Richards
  The project management of phase 2 of the Wrexham Maelor hospital was carried out by the Welsh Health Common Services Authority in accordance with the mandatory health building procedural guidance.

  Dr. Marek
  To ask the Secretary of State for Wales how many complaints have been received from subcontractors on phase 2 of the Wrexham Maelor hospital, Wrexham, about non-payment from the prime contractor.

  Mr. Richards
  Payment disputes are a matter for the contracting parties. I understand that two subcontractors have complained about aspects of payment and one of them is currently pursuing the matter through court proceedings against the main contractor.

  Dental Services
  Mr. Wigley
  To ask the Secretary of State for Wales if he will ensure the availability of free national health dentistry to all who require it; and if he will make a statement.
  605
  Mr. Richards
  This Government remain committed to a comprehensive NHS dental service and the Green Paper "Improving NHS Dentistry" reinforces our commitment"to ensure that all patients who want NHS services have adequate access to them".

  It is for health authorities to assess the adequacy of NHS dental services in their locality and it is for them to decide on the extent of community dental services they need to contract in light of local circumstances. Family health services authorities are encouraged to seek the Secretary of State's permission to employ salaried dentists in areas where there is a shortfall in service provision.

  Special Advisers
  Mr. Milburn
  To ask the Secretary of State for Wales which of the special advisers serving in his Department during the last five years were subject to positive security vetting.

  Mr. Redwood
  All special advisers are currently required to have positive vetting.

  Health Service Staff
  Mr. Ron Davies
  To ask the Secretary of State for Wales what were the costs of(a) managers and administrators and (b) medical staff in the health service in Wales for each year from 1979 to 1994.

  Mr. Redwood
  [holding answer 21 November 1994]: The information requested is set out in the table:

  Medical and front-line support

  (1) Administrative and clerical £000

  (2) Directly employed NHS staff £000

  (3) FHSA contractual staff £000

  1979–80

  27,837

  159,593

  27,238

  1980–81

  33,986

  220,857

  36,434

  1981–82

  36,702

  239,751

  40,921

  1982–83

  37,504

  261,243

  46,444

  1983–84

  42,697

  278,551

  50,538

  1984–85

  46,136

  303,396

  56,803

  1985–86

  48,130

  327,455

  55,020

  1986–87

  50,430

  360,269

  63,485

  1987–88

  57,170

  408,732

  70,996

  1988–89

  63,526

  475,481

  82,607

  1989–90

  73,630

  542,564

  86,186

  1990–91

  87,367

  593,407

  91,753

  1991–92

  107,018

  626,260

  121,454

  1992–93

  117,687

  683,080

  124,219

  Source:

  Annual accounts—financial returns of HAs, SHAs, FHSAs and Pembrokeshire NHS trust.

  Notes:

  (1) Final figures for 1993–94 are not yet available.

  (2) Column (1) figures include the salaries and wages of general and senior managers, and administrators and clerks in health authorities, SHAs, FHSAs and Pembrokeshire NHS trust, including agency staff.

  (3) Column (2) figures include the salaries of medical, dental, nursing, professional and technical staff employed in HAs, SHAs, FHSAs and Pembrokeshire NHS trust. They exclude the costs of ancillary, maintenance and ambulance staff.

  (4) Column (3) figures include the estimated earnings and staff costs of GPs and dentists. Those for pharmaceutical and ophthalmic contractors cannot be disaggregated from service costs and are not included.

  Mr. Ron Davies
  To ask the Secretary of State for Wales what was the number of(a) managers and
  606
  administrators and (b) medical staff working within the health service in Wales in each year from 1979 to 1994.

  Mr. Redwood
  [holding answer 21 November 1994]: The information is given in the table:

  Medical and front-line support

  1Administrative and clerical (whole-time equivalents)

  2Directly employed NHS staff (whole-time equivalents)

  3FHSA contractual staff (numbers, of people employed full-time or part-time)

  1979

  6,229

  25,303

  2,329

  1980

  6,287

  26,749

  2,373

  1981

  6,398

  27,629

  2,415

  1982

  6,446

  28,391

  2,500

  1983

  6,530

  28,824

  2,572

  1984

  6,675

  29,700

  2,618

  1985

  6,837

  30,606

  2,692

  1986

  6,969

  30,959

  2,725

  1987

  7,087

  31,780

  2,811

  1988

  7,326

  32,239

  2,863

  1989

  7,667

  32,839

  2,936

  1990

  8,185

  33,160

  2,979

  1991

  8,865

  33,548

  3,000

  1992

  9,498

  34,318

  3,037

  1993

  10,082

  34,517

  3,075

  1994

  9,905

  N/A

  N/A

  1 These figures include all administrative, clerical and managerial staff employed by health authorities, NHS trusts, family health services authorities and the Welsh Health Common Services Authority at 30 September.

  2 These figures include:

  —medical and dental staff—working in the hospital and community health service, excluding hospital practitioners and clinical assistants.

  —nurses and midwives—excluding pre-registration learners

  —professional and technical staff.

  Since 1991, student and pupil nurses have been classified as students and are no longer included in NHS staff figures.

  3These figures include GPs, principal and assistant dentists, ophthalmic medical practitioners and ophthalmic opticians. Staff directly employed by contractual staff—e.g., practice nurses—are not included since complete information is not collected centrally.

  Tourism
  Mr. Llwyd
  To ask the Secretary of State for Wales what was the total value of section 4 grants distributed by the Wales tourist board in(a) 1991, (b) 1992 and (c) 1993; and if he will make a statement.

  Mr. Gwilym Jones
  [holding answer 12 December 1994]: The amounts for the years in question are:

  1991–92 £

  1992–93 –

  1993–94 £

  3,617,000

  3,738,000

  4,092,000

EDUCATION

  Performance Tables
  10. Mr. Jacques Arnold
  To ask the Secretary of State for Education what prospects there are for the assessment of added value in schools arising from the introduction of testing and the publication of performance tables.
  607
  Mr. Forth
  We are giving priority to the development of a reliable measure of value added by schools. The report by the School Curriculum and Assessment Authority taking this work forward has just been published and copies have been placed in the Library. My right hon. Friend has now commissioned the SCAA to undertake further developmental work.

  Mr. Austin Mitchell
  To ask the Secretary of State for Education what proposals she has for making school performance tables a measure of value added.

  Mr. Forth
  We shall include value added in school performance tables as soon as reliable, easily understood measures are available. As the recent report by the School Curriculum and Assessment Authority recognised, such measures cannot be calculated until the same cohort of pupils has been reliably tested at different ages.

  Grant-maintained Schools
  Mr. Rowe
  To ask the Secretary of State for Education what is the latest figure she has for the number of schools that have now voted in favour of grant-maintained status.

  Mr. Robin Squire
  To date, a total of 1,153 schools in England have voted in favour of grant-maintained status.

  Mr. Flynn
  To ask the Secretary of State for Education if she will list the circumstances in which she has required a second ballot on grant-maintained status.

  Mr. Robin Squire
  Under the Education Act 1993, a second ballot on whether a school should apply to become grant-maintained is required if fewer than 50 per cent. of eligible parents vote in the ballot, or the result is a tie.

  My right hon. Friend has powers to declare a ballot void and require that a fresh ballot be held if it appears to her that the ballot has not been held in accordance with provisions in the 1993 Act, that the governing body has not acted in accordance with the statutory guidance, that there has been interference in the ballot process or that voting in the ballot has been influenced to a significant extent by false or misleading information.

  To date, six ballots have been declared void using the powers in the 1993 Act and those they superseded in the Education Reform Act 1988. In one case, this was as a result of the dissemination of false or misleading literature. Ballots held at the other five schools were declared void because of irregularities in the electoral roll.

  Self-defence Courses
  Mrs. Gorman
  To ask the Secretary of State for Education what plans she has to introduce self-defence courses for girls in schools.

  Mr. Robin Squire
  None. It is for schools to decide what to offer their pupils outside of the minimum statutory national curriculum which applies to all pupils, regardless of gender.

  School League Tables
  Mr. Jim Cunningham
  To ask the Secretary of State for Education what plans she has to provide new data in school league tables.

  Mr. Forth
  My right hon. Friend will be consulting in due course on the content of the 1995 performance tables, taking account of feedback on this year's tables. In the longer term performance tables will include the national 608
  curriculum assessment results of 11-year-olds and, as soon as reliable and easily understood measures have been developed, data on value added.

  Ms Lynne
  To ask the Secretary of State for Education what assessment she has made of the extent to which the Government's school league tables reflect the true record of schools, with particular reference to Rochdale.

  Mr. Forth
  The information in the performance tables was provided by or checked with the schools concerned prior to publication. We have not been notified of any errors in the data in respect of schools in Rochdale.

  Mr. Dalyell
  To ask the Secretary of State for Education what support he has received from educational organisations for the introduction of league tables for schools.

  Mr. Forth
  In commenting earlier this year on proposals for the 1994 round, many organisations acknowledged that the annual performance tables provide information that parents and others want about the performance of schools and colleges. A range of different views were expressed about the coverage and presentation of the data.

  School Funding
  Mrs. Angela Knight
  To ask the Secretary of State for Education if she will make a statement about funding for schools for the coming year.

  Mr. Robin Squire
  Education standard spending will increase by 1.1 per cent. in 1995–96. Local authorities will decide what to spend on the various services for which they are responsible, including schools.

  Pupil Numbers, Liverpool
  Mr. Alton
  To ask the Secretary of State for Education how many children in Liverpool are currently educated in schools with classes of over(a) 30 children and (b) 35 children; and how many such classes there are.

  Mr. Robin Squire
  In January 1994, 14,250 pupils were in 439 classes of more than 30 and, of these, 960 pupils were in 26 classes of more than 35. But the great majority of Liverpool pupils were in classes smaller than these.

  Discretionary Grants
  Mr. Gerrard
  To ask the Secretary of State for Education what representations she has received regarding the availability of discretionary grants.

  Mr. Boswell
  My right hon. Friend has received representations from a variety of sources about the availability of discretionary awards.

  Further Education, Rotherham
  Mr. MacShane
  To ask the Secretary of State for Education if she will make a statement on the funding of further education in Rotherham.

  Mr. Boswell
  The funding of further education in Rotherham is a matter for the Further Education Funding Council.

  Nursery Education
  Mr. Barry Field
  To ask the Secretary of State for Education what steps she is taking to further the spread of pre-school education and playgroups.

  Sir Thomas Arnold
  To ask the Secretary of State for Education if she will make a statement about her future plans for the expansion of nursery education.

  Ms Hodge
  To ask the Secretary of State for Education what plans her Department has to expand nursery provision for children under the age of four.

  Mr. Forth
  My right hon. Friend the Secretary of State has established a task force to draw up proposals to implement my right hon. Friend the Prime Minister's commitment to provide a pre-school place for all four-year-olds whose parents wish them to take it up. We are looking at a range of options to achieve the Prime Minister's target. As the expansion is achieved we want to ensure that it will add to the choice parents have among a range of provision—public, private and voluntary.

  Mr. Jim Cunningham
  To ask the Secretary of State for Education what progress has been made in her policy in respect of universal nursery education.

  Mr. Robin Squire
  My right hon. Friend the Secretary of State for Education is looking at a range of options and is consulting widely with practitioners and existing providers of pre-school provision with a view to drawing up detailed proposals to fulfil my right hon. Friend the Prime Minister's commitment to provide, over time, a pre-school place for all four-year-olds whose parents wish to take it up.

  Technology Colleges
  Mr. Thomason
  To ask the Secretary of State for Education how many schools have now obtained technology college status.

  Mr. Robin Squire
  To date, 50.

  Expenditure Priorities
  Mr. Colin Shepherd
  To ask the Secretary of State for Education what advice she gives local education authorities in respect of their priorities for expenditure.

  Mr. Robin Squire
  It is for local authorities to make their own decisions about spending priorities within the total resources available to them. We do, however, encourage spending in particular areas through our specific grants programmes and through the allocation of credit approvals.

  City Technology Colleges
  Mr. Jim Cunningham
  To ask the Secretary of State for Education if she will make a statement on the record of(a) city technology colleges and (b) the CTC in Birmingham, in the school league tables.

  Mr. Robin Squire
  I refer the hon. Member to the answer that I gave to the hon. Member for Plymouth, Devonport (Mr. Jamieson) on 5 December 1994,Official Report, column 125. The table shows something of the progress that the city technology colleges are making. Of the 10 CTCs which had pupils taking GCSEs in 1994, four bettered the average of their local education authority on the measure of five or more GCSEs at A to C, four improved their results over last year, and all exceeded the
  610
  local LEA average for pupils gaining one or more grades A to G.

  Kingshurst CTC in Solihull takes pupils from Solihull and from Birmingham. The college's GCSE results are above the national average, on a par with the Solihull average, and well above the average for Birmingham.

  State Schools (Private Industry)
  Mr. Jim Cunningham
  To ask the Secretary of State for Education what assessment he has made of the policy of attracting private industry into state schools; and if she will be considering a new approach to providing vocational education in schools.

  Mr. Forth
  The Government's education policy has consistently encouraged greater interaction between business and schools. The latest data show that 90 per cent. of maintained secondary schools and over half our primary schools now have links of some kind with business, and the range and nature of the interaction is growing broader. General national vocational qualifications are already providing a new approach to vocational education in schools. More than 1,500 schools are now approved GNVQ centres. In October, a GNVQ scholarship scheme was launched with sponsorship from 12 major companies.

  Language Training
  Mr. Jim Cunningham
  To ask the Secretary of State for Education what plans she has to improve the linguistic abilities of children; and if she will examine the best practises in language training in other EEC countries.

  Mr. Forth
  My right hon. Friend aims to raise linguistic competence principally through the national curriculum, which requires all pupils between the ages of 11 and 16 to study a modern foreign language. She also provides grant to the Centre for Information on Language Teaching and Research, whose working brief is to promote a greater national capability in languages. In addition, she recently announced plans to extend the specialist schools programme to include modern foreign languages.

  My right hon. Friend is informed of practice in other member states through our participation in European Community activities such as the Lingua programme.

  Ethnic Minorities
  Mr. Jim Cunningham
  To ask the Secretary of State for Education what discussions she has had with the Home Secretary on section 11 funding for the next financial year.

  Mr. Robin Squire
  My right hon. Friend keeps these matters regularly under review with ministerial colleagues. She was pleased that her Department has been able to contribute £5 million in each of the 1995–96 and 1996–97 financial years towards the additional funding for section 11 grant announced by my right hon. and learned Friend the Home Secretary on 22 November Official Report, column 64.

  Capital Expenditure
  Mr. Jim Cunningham
  To ask the Secretary of State for Education what representations she has had from the
  611
  Confederation of British Industry on the length of the capital expenditure programme replacement cycle.

  Mr. Robin Squire
  None.

  Research
  Mr. Battle
  To ask the Secretary of State for Education what sum was spent by her Department on research in each of the last 10 years; what percentage this was of the total annual budget; what is the research budget for the forthcoming year; what percentage this is of her total budget; and what additional new research is to be undertaken.

  Mr. Forth
  The sums spent on research and development by the Department for the last 10 years were reported in the statistical supplement to the 1994 "Forward Look" of Government-funded science engineering and technology. The expenditure on research and development and the percentage that this expenditure was of total Departmental expenditure are as follows:

  R&D Expenditure

  Percentage of total expenditure

  £ million

  1985–86

  70.7

  2.9

  1986–87

  68.9

  2.7

  1987–88

  105.4

  3.7

  1988–89

  73.4

  2.1

  1989–90

  75.1

  1.5

  1990–91

  87.8

  1.6

  1991–92

  53.0

  0.8

  1992–93

  43.4

  0.6

  1993–94

  22.3

  0.2

  1994–95

  123.1

  0.2

  1 Provisional

  The R and D figures do not include research carried out or funded by the Department's funding agencies.

  Total departmental expenditure covers central Government expenditure and grants to local authorities within the Department of Education's programme.

  The expenditure on research and development in the coming year has still to be determined, and will be reported in the statistical supplement to the 1995 "Forward Look".

  Public Bodies
  Dr. Wright
  To ask the Secretary of State for Education which of the appointments made to public bodies by her Department were advertised in the period from April 1992 to December 1993.

  Mr. Boswell
  The Department placed no advertisements for the members of public bodies during the period in question. It did, however, place an advertisement for the first chief executive of the School Curriculum and Assessment Authority, as responsibility for that appointment lay with the Secretary of State.

  Special Advisers
  Mr. Milburn
  To ask the Secretary of State for Education which of the special advisers serving in her Department during the last five years were subject to positive security vetting.

  Mr. Boswell
  All special advisers have been positively vetted.

  Higher Education (Application Refusals)
  Mr. French
  To ask the Secretary of State for Education what is her estimate of the annual number of students whose applications to take courses at colleges of higher education are refused.

  Mr. Boswell
  Higher education colleges received some 162,000 applications for entry to full-time undergraduate courses by the polytechnics central admissions system during the 1992–93 applications cycle. On the broad assumption that each applicant made on average 3.2 applications, this is equivalent to some 51,000 total applicants. Some 32,000 students were admitted to the relevant courses in the academic year 1993–94. This suggests that an estimated 19,000 or 37 per cent. of applicants may have gained entry elsewhere, withdrawn from the system, deferred entry or been refused places. These figures include applicants who will not have been considered suitable for higher education.

  Student Awards
  Mr. Beith
  To ask the Secretary of State for Education whether there is any difference under the Education (Mandatory Awards) Regulations 1994 in the assessment of parental income in respect of a student whose parents are(a) marred or (b) cohabiting on the assumption that the parents in either case have identical financial circumstances and no other dependants.

  Mr. Boswell
  Under the Education (Mandatory Awards) Regulations the assessment of the parental income of married and cohabiting parents in identical financial circumstances will usually be the same, unless one of the cohabiting parents is wholly or mainly financially dependent on the other.

  Schools Expenditure
  Mr. Hain
  To ask the Secretary of State for Education what is the total figure for the financial balances held by all(a) primary schools and (b) secondary schools.

  Mr. Robin Squire
  The Department is at present collating the information on balances contained in the outturn statements prepared by local education authorities for the financial year 1993–94 under section 42 of the Education Reform Act 1988, and I will write to the hon. Member when this work is complete.

  Older People (Learning)
  Sir Andrew Bowden
  To ask the Secretary of State for Education what contribution her Department has made in 1994 to follow up the European Year of Older People and Solidarity between Generations in 1993.

  Mr. Boswell
  The Department for Education is committed to working with employers and other providers of education and training to maximise participation and attainment by people of all ages, as the national targets for education and training make clear.

  Specifically, the Department provides a programme of grants to a number of voluntary bodies–including the Pre-Retirement Association–for work with older learners. The Department also funds the family literacy initiative, which promotes inter-generational learning.

HEALTH

  Scarborough and North East Yorkshire Trust
  Mr. Redmond
  To ask the Secretary of State for Health what discussions she or her Department has had with the chairman of the Scarborough and North East Yorkshire Health Care NHS Trust, following his remarks in the course of a mental health review meeting in January 1994; what plans she has to seek his resignation; and if she will make a statement.

  Mr. Sackville
  I refer the hon. Member to the reply I gave the hon. Member for Sheffield, Brightside (Mr. Blunkett) on 20 October at columns 310–11.

  NHS Trusts
  Mr. Hall
  To ask the Secretary of State for Health what level of financial support the National Association of Health Authorities and Trusts receives from her Department.

  Mr. Sackville
  In the current financial year, the Department has, to date, agreed to payments totalling £58,500 towards the cost of specific projects undertaken by the National Association of Health Authorities and Trusts. The Department does not offer financial support to the association's general running costs.

  GP Fundholding
  Mr. Campbell-Savours
  To ask the Secretary of State for Health (1) if she will make a statement on representations by Angela Fulter, director of the King's Fund, on the use of general practitioner fundholders' resources for the purchase of property and property improvements to fundholder premises;

  (2) what arrangements she is intending to make for the return to the taxpayers of financial resources used by fundholders for the purchase of property and property improvement to fundholders' premises, where fundholder general practitioners dispose of their practices' pecuniary interests on retirement.

  Mr. Malone
  Under the National Health Service (Fund-holding Practices) Regulations 1993, general practitioner fundholders may use efficiency savings to improve practice premises where this is for the benefit of patients. These rules are kept under review. Fundholding general practitioners may not use efficiency savings to purchase new premises.

  Mr. Sheerman
  To ask the Secretary of State for Health what evidence she has of fundholding general practitioner practices selling premises purchased out of public funds for windfall profits.

  Mr. Malone
  None.

  Prescriptions
  Sir Andrew Bowden
  To ask the Secretary of State for Health what is her best estimate of the average number of prescription items used each year by people over state retirement age.

  Mr. Malone
  In 1993, some 176.5 million prescription items were dispensed free of charge by community pharmacists and appliance contractors in England to people who declared on their prescription form that they were either a woman aged 60 and over or a man aged 614
  65 and over. This equates to an annual average of 17.6 prescription items per head for each person of state retirement age or over, resident in England.

  Burnley Health Care NHS Trust
  Mr. Gordon Prentice
  To ask the Secretary of State for Health, pursuant to her answer of 6 December,Official Report, columns 133–34, what considerations she took into account when deciding to correspond privately with the former chairman of Burnley Health Care NHS Trust.

  Mr. Malone
  My right hon. Friend the Secretary of State took all relevant factors into account, in particular her duties in respect of the National Health Service Trusts (Membership and Procedure) Regulations 1990 and reports of recent events at Burnley Health Care NHS Trust, in deciding to write privately to the former chairman.

  NHS Patient Statistics
  Ms Jowell
  To ask the Secretary of State for Health how many patients were treated by the national health service on an(a) out-patient and (b) in-patient basis in 1979, 1986, 1990 and 1993.

  Mr. Sackville
  The information is shown in the table:

  General and acute specialties

  Thousands

  Out-patients first attendances

  Ordinary admissions and day cases finished consultant episodes

  1979

  6,771

  15,099

  1986

  7,835

  16,446

  1990–91

  7,593

  6,936

  1993–94

  8,832

  8,205

  Notes:

  1 Figures have been adjusted to take account of the change from discharges and deaths to finished consultant episodes.

  Sources:

  1979 and 1986, SH3 returns; 1990–91 and 1993–94, KHO9 and KP70 returns.

  Life Expectancy
  Ms Jowell
  To ask the Secretary of State for Health what was life expectancy for men and women at one year, in 1979, 1986, 1990 and 1993.

  Mr. Sackville
  Data on life expectancy at birth in England and Wales for men and women in 1993 are not available. Life expectancy data for the years 1979, 1986, 1990 and 1992, the last available year, are shown in the table:

  Year

  Males

  Females

  1979

  70.3

  76.4

  1986

  72.1

  77.9

  1990

  73.1

  78.8

  1992

  73.8

  79.2

  "The Health of the Nation"
  Ms Jowell
  To ask the Secretary of State for Health on which dates the Cabinet Committee on "The Health of the Nation" met between October 1992 and October 1994;
  615
  and on which dates its sub-committees met during the same period.

  Mr. Sackville
  Details of the timing of meetings of ministerial committees are not given.

  Non-executive Directors
  Mrs. Beckett
  To ask the Secretary of State for Health if she will list(a) the vocational and (b) party political background of the non-executive directors of (i) Brighton Healthcare NHS Trust, (ii) South Downs Healthcare NHS Trust, (iii) the Brighton family health services authority and (iv) East Sussex district health authority; and which of them live in the area covered by the body concerned.

  Mr. Malone
  The names and occupations of non-executive directors of Brighton Healthcare NHS Trust and the South Downs Healthcare NHS Trust are as shown.

  Brighton Healthcare NHS Trust

  Mr. J. Whicker: Retired bank director

  Mr. R. Stiles: Chartered surveyor

  Ms S. Innes: Consultant, The Open College

  Professor C. Carnall: Director of Graduate Studies

  Vacancy

  South Downs Health NHS Trust

  Mr. Q. Barry: Solicitor

  Mrs. J. Langston: Youth worker

  Lady H. Trafford: Company director

  Mr. R. Brett: Bank area director

  Mr. R. Davenport: Information systems manager

  NHS trusts do not have a defined catchment area in which directors could be deemed to live.

  The appointment of non-executive members of district health authorities and family health services authorities is a matter for regional health authorities which have details of vocational background and addresses of appointees.

  Information on the political affiliation of appointees is not collected.

  Long-term Care
  Mr. Jim Cunningham
  To ask the Secretary of State for Health (1) what savings have been made since April 1993 for the national health service by the transfer of funding of continuing care of elderly people to local authorities;

  (2) what consideration she has given to using the savings from the transfer of funding of continuing care to local authorities to be available for the use of councils in providing this service.

  Mr. Bowis
  As a pre-condition of the community care special transitional grant, local authorities have been required to reach agreements with health authorities on their respective responsibilities for long-term care. When reaching these agreements we have made it clear that any changes to long-term care responsibilities should be agreed between the two agencies, including, if appropriate any transfer of resources under section 28A of the National Health Service and Community Care Act 1977.

  Mr. Jim Cunningham
  To ask the Secretary of State for Health if she will make it her policy to ensure that people with acute health needs in continuing care are cared for in hospital and not in a domestic setting.

  Mr. Bowis
  On 12 August we issued, for consultation, draft guidance on national health service responsibilities 616
  for meeting long-term health care needs. The guidance reminded health authorities that they have a responsibility for securing care for people with continuing health care needs. Such care can be provided in a variety of settings, including hospitals or appropriate facilities in the independent sector.

  Orthopaedic Posts
  Mr. Maclennan
  To ask the Secretary of State for Health what is the number of vacant consultant orthopaedic posts; and if she will make a statement.

  Mr. Malone
  There were 31 vacant consultant posts in trauma and orthopaedics in England at 30 September 1993. As a snapshot of vacancies on a single date, they may not fairly reflect the average number of vacancies over the year as a whole.

  Multiple Births
  Mr. Wigley
  To ask the Secretary of State for Health how many sets of(a) twins, (b) triplets, (c) quadruplets, (d) quintuplets and (e) sextuplets were born in England in 1993; what was the total number of maternities in England and Wales; and how many multiple births of each type were conceived as a result of (i) in-vitro fertilisation, (ii) gamete intra-fallopian transfer and (iii) other forms of assisted conception.

  Mr. Sackville
  There were 668,511 maternities in England and Wales in 1993, of which 8,302 resulted in twins, 234 in triplets, 12 in quadruplets and one in sextuplets.

  Information on multiple births in 1992 following assisted conception—the latest year for which figures are available—is contained in the Human Fertilisation and Embryology Authority's annual report. Copies of this report are available in the Library.

  NHS Staff Salary Costs
  Mr. Milburn
  To ask the Secretary of State for Health, pursuant to her answer of 3 November,Official Report, column 1267, if she will now update the information on NHS staff salary costs to include figures for 1993–94 and a recalculation of figures for previous years on the new 1993–94 basis.

  Mr. Malone
  Information on 1993—94 national health service staff salary costs will be placed in the Library. Information on previous year figures at 1993–94 prices was included in the reply I gave the hon. Member on 3 November at column 1267.

  Research
  Mr. Battle
  To ask the Secretary of State for Health what sum was spent by her Department on research in each of the last 10 years; what percentage this was of the total annual budget; what is the budget for the forthcoming year; what percentage this is of her total budget; and what additional new research is to be undertaken.

  Mr. Malone
  The sums spent on research and development by the Department of Health over the last 10 years were reported in the statistical supplement to the "Forward Look of Government-Funded Science, Engineering and Technology 1994", and earlier editions of the "Annual Review of Government Funded Research
  617
  and Development". These figures are set out in the table, together with the percentage of the total Department's spending represented by the research.

  Year

  DH research spending (£ million)

  Percentage of total DH spending spent on research

  1985–86

  20.1

  5.56

  1986–87

  28.8

  7.40

  1987–88

  28.4

  6.88

  1988–89

  33.7

  8.04

  1989–90

  38.7

  5.65

  1990—91

  47.0

  6.83

  1991–92

  56.2

  7.90

  1992–93

  53.0

  6.86

  1993–94 (estimate)

  54.1

  3.88

  1994–95 (estimate)

  50.1

  3.14

  These figures exclude spending on the national health service and on NHS research and development. The constituent parts of total departmental spending have changed over the last 10 years, making comparison difficult across different years.

  Department of Health expenditure on research and development in the coming year has still to be determined, and will be reported in the statistical supplement to the 1995 forward look.

  New and future Departmental strategic research initiatives within the Department's centrally commissioned programme include studies in primary care, mental health services, community health services, personal social services, public and environmental health, information technology, skill mix, effectiveness of purchasing models and prescribing.

  Special Advisers
  Mr. Milburn
  To ask the Secretary of State for Health which of the special advisers serving in her Department during the last five years were subject to positive security vetting.

  Mr. Sackville
  All special advisers are currently required to have positive vetting.

  Patients' Complaints
  Mr. Milburn
  To ask the Secretary of State for Health, pursuant to her answer of 24 November,Official Report, columns 323–24, when she will publish data for 1993–94 on patient complaints.

  Mr. Malone
  I refer the hon. Member to the reply I gave him on 12 December,Official Report, column 472.

EMPLOYMENT

  Career Development Loans
  Mr. Chidgey
  To ask the Secretary of State for Employment how many inquiries about career development loans were received(a) during the 199394 financial year and (b) in response to his Department's advertising campaign.
  618
  Mr. Paice
  During the 1993–94 financial year 90,275 career development loan inquiries were received, of which 36,390 were in direct response to the CDL advertising campaign.

  Labour Statistics
  Sir Andrew Bowden
  To ask the Secretary of State for Employment what percentage of(a) men and (b) women are economically active at age 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65 years and over.

  Mr. Oppenheim
  The available information from the labour force survey is given in the following table:

  Economic activity rates by age—spring 1994 (not seasonally adjusted) Great Britain

  Per cent.

  Age (years)

  Males

  Females

  55

  82

  64

  56

  79

  59

  57

  74

  57

  58

  75

  51

  59

  70

  45

  60

  66

  34

  61

  57

  30

  62

  50

  25

  63

  46

  21

  64

  39

  18

  65 and over

  7

  3

  Source:

  Labour force survey.

  Sir Andrew Bowden
  To ask the Secretary of State for Employment what is his current estimate of the number of people who leave the work force each year; and if he will differentiate between those who leave due to retirement, ill-health, unemployment and other reasons.

  Mr. Oppenheim
  Of those people classified as economically inactive—that is, not employed or ILO unemployed—in the spring 1994 labour force survey for Great Britain, 1,020,000 people said that they had been in employment a year earlier. Reasons given for leaving their last job were: retirement, 22 per cent.; ill-health, 16 per cent.; redundancy, dismissal or a temporary job ending, 15 per cent.; other reasons, 47 per cent.

  Further, of those people classified as ILO unemployed in spring 1994, 760,000 people said they had been in employment a year earlier. The reasons given for leaving employment were: redundancy or dismissal, 32 per cent.; temporary job ending, 18 per cent.; other reasons, 50 per cent.

  Health and Safety Executive
  Mr. Robert Ainsworth
  To ask the Secretary of State for Employment what was the total number of staff employed by the Health and Safety Executive in each of the last five years.

  Mr. Oppenheim
  The total number of staff employed by the Health and Safety Executive in each of the last five years is shown in the table:
  619

  Year (1 April)

  Number of staff employed by HSE

  1990

  3,698.0

  1991

  3,877.0

  1992

  4,321.0

  1993

  4,537.5

  1994

  4,544.5

  Note:

  Figures show full-time equivalent staff.

  Part-time staff counted as 0.5.

  Apprenticeships
  Mr. Jim Cunningham
  To ask the Secretary of State for Employment what consideration he has given to the German model of a firm employment status for apprentices and industry-agreed allowances for trainees; and what plans he has to recommend it in the United Kingdom.

  Mr. Paice
  It is up to employers offering apprenticeship training to decide on employed status and wage levels. Under modern apprenticeships the aim is to offer apprentices employed status as soon as possible and to ensure that realistic wages or allowances are set which reflect the cost of training to the employer and the expectation on behalf of the trainee of higher wages when qualified.

  Pay Differentials
  Mr. Jim Cunningham
  To ask the Secretary of State for Employment what study he has made of the effect of reduced pay differentials in Germany.

  Mr. Oppenheim
  The Department has made no such study.

  Mr. Jim Cunningham
  To ask the Secretary of State for Employment what steps he is taking to encourage employers to lower pay differentials.

  Mr. Oppenheim
  None. Pay is a matter to be determined by the employers and employees concerned. Employers are best able to judge what pay is needed to recruit, retain and motivate their employees at all levels.

  Mr. Jim Cunningham
  To ask the Secretary of State for Employment what assessment he has made of the role of pay differentials in the development of trust between workers and management.

  Mr. Oppenheim
  None. Pay is a matter for the employers and employees concerned.

  Managerial Pay Awards
  Mr. Jim Cunningham
  To ask the Secretary of State for Employment what discussions he has had with the Prime Minister about managerial pay awards; and if he will make a statement.

  Mr. Oppenheim
  My right hon. Friend the Secretary of State periodically discusses pay at all levels and its implications for the economy and jobs with my right hon. Friend the Prime Minister and colleagues. As the Government have made clear on a number of occasions, the remuneration of directors is a matter for companies and their shareholders, within the framework of company law.

  Management and Work Force Co-operation
  Mr. Jim Cunningham
  To ask the Secretary of State for Employment what steps he is taking to encourage co-operation between management and work force in United Kingdom industry; and if he will review his policy.

  Mr. Oppenheim
  The Government believe that co-operation between management and workers is best promoted on a voluntary basis. Only in this way can companies develop flexible arrangements which suit the needs of their business and their employees. Legislation, such as the European works councils directive, is too rigid and not the way to encourage good practice. Compulsion would restrict flexibility, add to costs and stifle innovation.

  The Government continue to encourage voluntary employee involvement practices. Our joint campaign with the Confederation of British Industry, "Managing for Success", offers guidelines on involving employees in aspects of business performance.

  The Government published a booklet, "The Competitive Edge", describing good practice and successful examples of employee involvement, in May this year. A copy is available in the Library.

  FOREIGN AND COMMONWEALTH AFFAIRS

    Cuba
    Mr. Wigley
    To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make representations to the USA Government to seek the normalisation of relationships with Cuba; and if he will make a statement.

    Mr. Douglas Hogg
    We believe that United States-Cuba relations are primarily a matter for the two Governments concerned, not third parties.

    United Nations Educational, Scientific and Cultural Organisation
    Mr. Fisher
    To ask the Secretary of State for Foreign and Commonwealth Affairs what is his preferred number of members of UNESCO's board.

    Mr. Douglas Hogg
    We are of the opinion that international bodies operate more efficiently and cost effectively with small governing bodies. We were therefore not happy with the decision taken at the recent 145th session of the executive board to recommend an increase in the size of the board from 51 to 58. We would have preferred the executive board to recommend a decrease in its size. Failing that, we would have liked to see the status quo maintained.

    Mr. Fisher
    To ask the Secretary of State for Foreign and Commonwealth Affairs what he estimates would be the cost of renewing the United Kingdom's membership of the United Nations Educational, Scientific and Cultural Organisation.

    Mr. Douglas Hogg
    We estimate that the cost of renewing the United Kingdom's membership of UNESCO would be £11 million per annum.

    Mr. Fisher
    To ask the Secretary of State for Foreign and Commonwealth Affairs what is his preferred level of
    621
    subsistence payments to the United Nations Educational, Scientific and Cultural Organisation based members.

    Mr. Douglas Hogg
    We believe that subsistence rates for the UNESCO executive board meetings should be paid only to members from least developed countries and the level reduced to bring it in line with the arrangements in the other UN specialised agencies. At present, all UNESCO executive board members receive a daily subsistence rate based on 140 per cent. of the UN rate plus $$5 for the duration of the twice-yearly executive board sessions.

    Rwanda and Zaire
    Miss Lestor
    To ask the Secretary of State for Foreign and Commonwealth Affairs what arrangements have been made to protect humanitarian aid workers operating in the refugee camps in Rwanda and Zaire.

    Mr. Douglas Hogg
    The non-governmental organisations working in the Rwandan refugee camps have, with the advice and assistance of the Office of the United Nations High Commissioner for Refugees, made their own security and contingency arrangements. We maintain regular contact with British NGOs and UN agencies over the security in the camps and are continually monitoring the situation.

    The UN Secretary-General recently outlined several options for international action to address the security situation in the camps. The Security Council has asked him to investigate the practicalities of the proposals and we await his further response.

    East Timor
    Mr. Cousins
    To ask the Secretary of State for Foreign and Commonwealth Affairs when he received a letter and petition about East Timor from the justice and peace group of St. Charles' church, Gosforth; and when he proposes to reply to it.

    Mr. Douglas Hogg
    We have been unable to trace any letter from the justice and peace group of St. Charles' church. A petition with a large number of signatories from the Gosforth area was received in the Foreign and Commonwealth Office on 20 May 1994. No reply was sent because in the absence of any covering letter it was unclear to whom it should be addressed. If the hon. Member would like to forward a copy of the justice and peace group's letter, I would be happy to reply.

    Nuclear Weapons
    Mr. Robin Cook
    To ask the Secretary of State for Foreign and Commonwealth Affairs what has been Her Majesty's Government's response to the proposal of the Government of the Federal Republic of Germany for the establishment of an international nuclear weapons register; and if he will make a statement.

    Mr. Hurd
    We and other NATO allies have explained our reservations about this proposal to the German Government.

    Mr. Robin Cook
    To ask the Secretary of State for Foreign and Commonwealth Affairs (1) what is Her Majesty's Government's policy towards the establishment of an international nuclear weapons register;

    (2) what discussions he has had with his NATO counterparts on the proposal of the Federal Republic of
    622
    Germany to establish an international nuclear weapons register; and if he will make a statement on their progress.

    Mr. Hurd
    We have discussed the German proposal with NATO allies. We have concluded that the proposal would not make the positive and practical contribution to nuclear arms control which the German Government hoped.

    Mr. Robin Cook
    To ask the Secretary of State for Foreign and Commonwealth Affairs what has been Her Majesty's Government's response to President Yeltsin's invitation to all five nuclear weapons states to enter strategic nuclear arms control talks.

    Mr. Hurd
    We took careful note of all President Yeltsin's references to nuclear arms control in his speech at the United Nations General Assembly. We have not received any detailed representations from the Russians.

    Disarmament Conference
    Mr. Robin Cook
    To ask the Secretary of State for Foreign and Commonwealth Affairs what recommendations his Department is making regarding the current review of the agenda of the conference on disarmament; and if he will make a statement.

    Mr. Hurd
    We participate actively in the review of the agenda of the conference on disarmament. We want the agenda to reflect a sensible balance between nuclear and conventional issues.

    Non-proliferation Treaty
    Mr. Robin Cook
    To ask the Secretary of State for Foreign and Commonwealth Affairs if it is Her Majesty's Government's policy to seek a consensus decision on the extension of the non-proliferation treaty at next year's extension conference.

    Mr. Hurd
    We will be seeking an indefinite and unconditional extension of the non-proliferation treaty. We would welcome it if that decision could be achieved by consensus.

    Mr. Robin Cook
    To ask the Secretary of State for Foreign and Commonwealth Affairs what is his Department's assessment of the progress that has been made towards the achievement of the objectives of articles I and II of the non-proliferation treaty since its entry into force.

    Mr. Hurd
    We believe that there has been widespread compliance with both articles since the treaty entered into force in 1970. But we have at times been concerned about suspected nuclear weapons development programmes which would have been in breach of treaty obligations.

    Mr. Robin Cook
    To ask the Secretary of State for Foreign and Commonwealth Affairs what is his Department's assessment of the progress that has been made towards the achievement of the objectives of article IV of the non-proliferation treaty since its entry into force.

    Mr. Hurd
    We believe that there has been considerable progress towards the wide use of nuclear energy for peaceful purposes.

    Mr. Robin Cook
    To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment Her Majesty's Government have made of the compatibility of a significant increase in the capability of the United Kingdom's strategic nuclear forces with its obligation under article IV of the non-proliferation treaty.
    623
    Mr. Hurd
    The effect of recent changes to the. United Kingdom's nuclear forces will be to reduce the explosive power of our operational nuclear inventory by more than 25 per cent. below the 1990 level.

    Nuclear Tests
    Mr. Robin Cook
    To ask the Secretary of State for Foreign and Commonwealth Affairs what is Her Majesty's Government's policy towards including a clause in a comprehensive test ban treaty that would permit nuclear tests to be conducted under exceptional circumstances.

    Mr. Hurd
    We would expect a comprehensive test ban treaty, in line with a number of international treaties in this field, to include a clause allowing parties to exercise their national sovereignty by withdrawing if they decided that extraordinary events related to the subject matter of the treaty had jeopardised their vital national interests.

    Mr. Robin Cook
    To ask the Secretary of State for Foreign and Commonwealth Affairs what is Her Majesty's Government's policy towards including a clause in a comprehensive test ban treaty that would permit state parties to withdraw from the treaty after five or 10 years if they felt that further testing was required.

    Mr. Hurd
    The conference on disarmament is examining many proposals, including on withdrawal from a CTBT after a certain period, but no decisions have yet been taken. We have made clear our desire to secure an indefinite, effective and verifiable treaty which bans all nuclear tests.

    Mr. Robin Cook
    To ask the Secretary of State for Foreign and Commonwealth Affairs what is his Department's policy regarding the choice of the implementing authority for a comprehensive test ban treaty; and if he will make a statement.

    Mr. Hurd
    The CTBT authority will need to implement an effective and verifiable treaty. It is too early to decide on the details of the authority's organisation and operations.

    Negative Security Assurance
    Mr. Robin Cook
    To ask the Secretary of State for Foreign and Commonwealth Affairs if the Government will consider removing the condition attached to the United Kingdom's negative security assurance which exempts non-nuclear weapons states that are in an alliance or association with a nuclear weapons state from that assurance.

    Mr. Hurd
    No. We would not wish to forswear the possible use of our nuclear deterrent in the case of an attack on the United Kingdom, its dependent territories, its armed forces or its allies by a non-nuclear weapons state in association or alliance with a nuclear weapons state.

    Casablanca Conference
    Mr. Worthington
    To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the Casablanca conference, its outcome and British involvement.

    Mr. Douglas Hogg
    I led a delegation of over 50 British business men and officials to the economic summit for the middle east and north Africa held in Casablanca 624
    from 30 October to 1 November. We fully share the objective of promoting regional economic development and, in particular, encouraging private sector involvement. We and our EU partners will continue to support this initiative through our participation in the follow-up conference to be held in Amman next year, and through the regional economic development working group which the EU chairs.

    Arms Trade
    Mr. Worthington
    To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions are currently taking place with(a) the United Nations, (b) the European Union or (c) other international forums on means of restricting the arms trade.

    Mr. Douglas Hogg
    The United Kingdom strongly supports international efforts to promote responsibility in arms exports. Last month in the first committee of the UN General Assembly, the EU tabled a draft resolution proposing a UN code of conduct on conventional arms transfers. But after considerable opposition from other delegations, the draft resolution was withdrawn. An EU working group on conventional arms exports meets regularly. We are currently involved in multilateral negotiations on proposed new arrangements to promote transparency and responsibility in transfers of conventional arms and sensitive dual-use goods.

    Western Sahara
    Mr. Worthington
    To ask the Secretary of State for Foreign and Commonwealth Affairs if the registration of voters in the Western Sahara has now been completed; what assessment he has made of the extent to which parties accept that this has been done in a fair way; and when the referendum on the future of the Western Sahara will take place.

    Mr. Douglas Hogg
    The deadline for the submission by the parties of applications to vote passed on 25 October. Individuals can still register their applications. Polisario has expressed concern at the large number of last-minute applications submitted by the Moroccan authorities. The UN is still identifying the voter applicants. Despite the UN Secretary-General's recent announcement that additional UN offices will be opened to process applications, this exercise is expected to take several months. It is unlikely that the referendum will be held before next summer.

    Special Advisers
    Mr. Milburn
    To ask the Secretary of State for Foreign and Commonwealth Affairs which of the special advisers serving in his Department during the last five years were subject to positive security vetting.

    Mr. Baldry
    All the special advisers in my Department during the past five years have been subject to positive security vetting.

    Entry Clearance
    Mr. Mans
    To ask the Secretary of State for Foreign and Commonwealth Affairs when he intends to lay before
    625
    the House the first report by Lady Anson, the independent monitor of refusal of entry clearance where there is no right of appeal.

    Mr. Hurd
    I have arranged for Lady Anson's first report to be laid before both Houses today and copies to be placed in the House Libraries. I welcome the report and note Lady Anson's recommendations, which will be carefully considered. Some have already been implemented.

  AGRICULTURE, FISHERIES AND FOOD

    Coarse Fishing
    Mr. David Howell
    To ask the Minister of Agriculture, Fisheries and Food what representations he has received concerning changes to the protective close season for coarse fishing; and if he will make a further statement.

    Mr. Jack
    We have received some 250 objections, from angling bodies, conservation organisations and individuals, to various aspects of the National Rivers Authority's proposals for the introduction of uniform arrangements in England and Wales for a close season for coarse fish. These included objections to both the proposed abolition of the close season on those stillwaters which are at present subject to such restrictions and to the proposed imposition of a close season on waters where currently no such rules apply. The NRA has now submitted its proposals for confirmation. In deciding whether to confirm the proposals, we will take into account both the NRA's case for proposing these changes and the objections to them that we have received.

    British Fishery Protection Service
    Mr. Gill
    To ask the Minister of Agriculture, Fisheries and Food if British fishery officers are authorised to work outside the United Kingdom.

    Mr. Jack
    Yes. British sea fishery officers have powers under the Sea Fish Conservation Act 1967, as amended, to enforce fisheries legislation on all vessels within British fishery limits and on UK fishing vessels anywhere outside those limits.

    Mr. Gill
    To ask the Minister of Agriculture, Fisheries and Food if the British fishery protection service is authorised to work outside the limits of the waters under the jurisdiction of the United Kingdom.

    Mr. Jack
    All commissioned officers of the Royal Navy's fishery protection squadron are empowered, as British sea fishery officers, to enforce European Union fisheries legislation on all vessels within British fishery limits and on UK vessels anywhere outside these limits. The Royal Navy's fishery protection squadron may also undertake operations relating to the protection of UK vessels from harassment within or outside British fishery limits.

    Slaughterhouses
    Mr. Olner
    To ask the Minister of Agriculture, Fisheries and Food what is the total number of slaughterhouses in England with EU export certificates for each standard region of the United Kingdom.
    626
    Mrs. Browning
    MAFF's records of slaughterhouses in England are maintained by state veterinary service region. At 8 December 1994 the number of slaughterhouses fully approved under EC directives 64/433/EEC for red meat and 71/118/EEC for poultry meat and therefore eligible to export to other member states of the European Union was 75 and 135 respectively. The breakdown by English region was:

    Region

    Red meat

    Poultry meat

    Eastern region

    17

    44

    South Eastern region

    7

    15

    South Western region

    16

    12

    Midlands and Western region

    20

    42

    Northern region

    15

    22

    Embassies
    Mr. Steen
    To ask the Minister of Agriculture, Fisheries and Food (1) what contacts his Department has with the British embassy in Paris and the staff there dealing with agricultural matters;

    (2) what contacts his Department has with the British embassy in The Hague and the staff there dealing with agricultural matters.

    Mr. Jack
    Our agricultural attachés in all EU countries provide an important service in monitoring and reporting on developments in agriculture, food and fisheries matters. They also play a vital role in conveying the views of the United Kingdom Government to the Governments in their host countries. My Department is, therefore, in frequent contact with attachés on a wide range of agricultural and related issues.

    Special Advisers
    Mr. Milburn
    To ask the Minister of Agriculture, Fisheries and Food which of the special advisers serving in his Department during the last five years were subject to positive security vetting.

    Mr. Jack
    During the last five years all special advisers to the Minister have been subject to positive vetting.

    Lindane
    Mr. Corbett
    To ask the Minister of Agriculture, Fisheries and Food what research he has conducted into the pesticide lindane in relation to breast cancer.

    Mrs. Browning
    The Ministry has not conducted specific research on lindane in relation to breast cancer. However, the independent advisory committee on pesticides has reviewed a very substantial body of evidence on the toxicology of lindane in the course of a recent review of its non-agricultural uses. The committee concluded that the approved non-agricultural uses represent no unacceptable risk to human health. The committee is currently reviewing the agricultural uses of lindane. The relevant evidence will be studied in the course of this review. The Department of Health committee on carcinogenicity will be looking into the relationship between organochlorine pesticides, which include lindane, and breast cancer in March 1995. However, most of the data which will be considered relates to another organochlorine, DDT.

    Animal Transportation
    Mr. Morley
    To ask the Minister of Agriculture, Fisheries and Food, pursuant to his answer of 7 December,Official Report, column 290, (1) what were the whereabouts of the official Ministry of Agriculture, Fisheries and Food veterinary surgeon during the period in which the animals were left in unattended lorries in France on the night of 1 December;

    (2) if the veterinary surgeon employed by the shipping company was in a position to feed and water the animals in the livestock lorries that were left without drivers in France on the night of 1 December.

    Mrs. Browning
    It was intended that a veterinary officer should fly with the drivers to meet the vessel at Cherbourg in order to monitor the arrangements at disembarkation. However, the flight did not take place so the officer remained in this country. The veterinary surgeon employed by the company was not in a position to feed and water the calves in the livestock lorries which were delayed in Calais as this could not be done without unloading the calves from the lorries.

    Mr. Morley
    To ask the Minister of Agriculture, Fisheries and Food (1) how long the animals flown from Coventry airport to France, back to Coventry airport, and subsequently back to France again on the night of 6 December and morning of 7 December remained in the aircraft; what provision there was for them to be fed, watered and rested during the journey; and if he will make a statement;

    (2) what steps he has taken to satisfy himself that all the animals flown from Coventry airport, to France, back to Coventry airport, and subsequently back to France again on the night of 6 December and morning of 7 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.

    Mrs. Browning
    [holding answer 12 December 1994]: I am informed that the calves journeyed from premises in Somerset to Coventry airport, where they were loaded under official supervision for a flight to Rennes. Local turbulence prevented the plane from touching down at Rennes, so it returned to Coventry airport, where the calves were unloaded under official supervision. The calves were then sent back to their home premises where they were immediately given suitable liquid food and subsequently inspected by a local veterinary inspector. He was satisfied with their condition but administered prophylactic treatment. The entire journey, including the aborted landing and return to the premises of origin, took 15½ hours.

    Private Finance Initiative
    Mr. Brazier
    To ask the Minister of Agriculture, Fisheries and Food if he will list the actions being taken by his Ministry to meet the aims of the private finance initiative.

    Mr. Waldegrave
    I have identified two areas where I believe there is scope for attracting private finance.

    My officials, assisted by those of Property Holdings, are developing schemes for a new office building at Crewe and either a redevelopment of our present offices at Northallerton or a new building there. If these are successful the schemes will be taken forward under the private finance initiative with the private sector funding
    628
    the projects and bearing any land acquisition, design, construction and ownership risks. On completion the Ministry will take leases on the new buildings based on partial or full occupancy.

    Officials are also examining, with Property Holdings, the scope for using private finance to refurbish our increasingly aged Whitehall buildings. Expenditure is likely to be some years off because of the complexity of the scheme. Suitable temporary accommodation will need to be found for some of the staff whilst work is in progress. We would expect the provision of temporary accommodation to be part of the private finance package. Detailed costings are not available but the whole scheme is likely to be in the tens of millions of pounds range.

    My Ministry will continue to require authorities responsible for flood defence and coast protection schemes to obtain private sector contributions towards the cost of capital works needed to facilitate current or future developments, and will strongly encourage authorities to do so where defences provide a particular direct benefit to a business.

    Bovine Somatotropin
    Mr. Morley
    To ask the Minister of Agriculture, Fisheries and Food if he intends to publish his response to the consultation exercise on BST before the December meeting of the Council of Agriculture Ministers.

    Mrs. Browning
    [holding answer 9 December 1994]: A list of those who responded has been placed in the Libraries of both Houses. A full set of responses has been available in the Library of the Ministry of Agriculture, Fisheries and Food since September 1994. The Government will not be issuing a formal response but all the replies have been carefully considered, along with the other representations received, and as indicated in the consultation letter, a copy of which is also in the House Library, will be borne in mind in the current discussions in Brussels.

    Milk
    Mr. Campbell-Savours
    To ask the Minister of Agriculture, Fisheries and Food what estimates have been made as to the volume in litres of black market milk trading; what factors he believes are responsible for the current black market in milk; and if he will forecast what the consequences will be of the market in black milk with particular reference to its effect on the price and demand for milk.

    Mr. Jack
    [holding answer 12 December 1994]: The Intervention Board is currently investigating information that it has received concerning allegations about illegal trading in milk. The extent of these alleged irregularities has not yet been established, so it is impossible to say how much milk is involved or the effect this matter may be having on the market for milk. Anyone involved in illegal trading in milk runs the risk of a heavy fine, payment of super-levy on undeclared sales of milk and, possibly, imprisonment.

    Rabies
    Mr. Tyler
    To ask the Minister of Agriculture, Fisheries and Food if he will commission an independent and authoritative full economic audit of current policy and
    629
    practice to prevent the spread of rabies to the United Kingdom following the report of the Agriculture Select Committee.

    Mrs. Browning
    [holding answer 12 December 1994]: The Government are carefully considering the Agriculture Select Committee's report and will publish its response in due course.

  SOCIAL SECURITY

    Benefits
    Mr. Wicks
    To ask the Secretary of State for Social Security what is the average amount of all social security and related benefits paid to those on(a) the lowest decile and (b) the second lowest decile of earnings; and what percentage of total earnings this represents for each year since 1979.

    Mr. Burt
    The available information is in the table.

    The average amounts of social security and related benefits shown are for those in each of the lowest two deciles of earnings. The average benefit income is then presented as a percentage of average earnings for each decile.

    Average amount of benefit income in the lowest two deciles of earnings and these amounts as a percentage of average earnings in the lowest two deciles.

    Average amount of benefit income in:

    Average amount of benefit income as a percentage of average earnings in:

    Lowest decile of earnings £ per week

    Second lowest decile of earnings £ per week

    Lowest decile of earnings Per cent.

    Second lowest decile of earnings Per cent.

    1979

    46

    13

    101

    12

    1981

    49

    15

    121

    15

    1987

    46

    17

    99

    16

    1988–9

    38

    13

    74

    11

    1990–1

    44

    17

    89

    14

    1991–2

    49

    21

    108

    18

    Notes:

    1. The analysis is on a benefit unit basis: a benefit unit being a single adult or a couple together with any dependent children. All benefit units reporting some earnings have been ranked by their level of gross earnings; the lowest and second lowest deciles of earnings have been selected from these rankings. Earnings and benefit income are the averages of the amounts for the requested deciles. Earnings are gross of income tax and national insurance contributions. For employees, earnings relate to the usual gross amount. Earnings include income of the self-employed which relates to profit or loss over the latest 12-month period for which information is available.

    2. Benefit income includes all income-related and non-income-related benefits plus the value of free school meals, free welfare milk and free school milk.

    3. The source of the data is the households below average income datasets for 1979, 1981, 1987, 1988–89, 1990–91 and 1991–92, where for example 1991–92 is the combined calendar years of 1991 and 1992. Data for the intervening years are not available.

    4. All benefit income figures are rounded to the nearest pound and are expressed in April 1994 prices.

    Retirement Pensions
    Mr. Dewar
    To ask the Secretary of State for Social Security if he will publish figures estimating the cost of reintroducing earnings uprating for the retirement pension and other linked benefits beginning in April 1997 on the basis of the assumptions used in "Options for Equality in State Pension Age", giving annual figures in current prices over a 10-year period.

    Mr. Arbuthnot
    The table gives the estimated additional cost of uprating retirement pension and other linked benefits in line with earnings, from 1997. The consultation document "Options for Equality in State Pension Age" used an assumption of an increase in earnings 1.5 per cent. greater than prices. The same assumption has been applied to derive this estimate.

    Year

    Extra costs (£ billion at April 1994 prices)

    1997–98

    0.5

    1998–99

    1.1

    1999–00

    1.6

    2000–01

    2.2

    2001–02

    2.8

    2002–03

    3.4

    2003–04

    4.0

    2004–05

    4.7

    2005–06

    5.3

    2006–07

    6.1

    Source:

    Government Actuary's Department.

    Funeral Expenses
    Mr. Dewar
    To ask the Secretary of State for Social Security what is the(a) mean and (b) median payment for funeral expenses from the social fund for the latest period for which figures are available; how many applicants were successful in that period; how many of the grants made were between £875 and £1,000; and how many were over £1,000.

    Mr. Roger Evans
    The information is set out in the table. It is for the current financial year to 30 November.

    Since 1988–89, the average funeral payment award has been rising by 6 per cent. per annum more than the rate of inflation and the total cost has risen from £18 million to over £60 million in 1993–94.

    Number of funeral payment awards April-November 1994

    44,428

    Number of awards made between £875 and £1,0001

    8,718

    Number of awards over £1,000

    19,791

    Average award size

    £919

    Median award size1

    £967

    Source:

    Benefits Agency's policy, budget and management information system.

    Note:

    1 These figures are estimates based on data which provide the number of awards by cash bands of £100. The available data on cash band do not take account of payments that are returned in the accounting period in which the awards were made.

    Mr. Dewar
    To ask the Secretary of State for Social Security (1) if he will define the category of remote relatives being those who may no longer claim funeral
    631
    expenses in terms of his announcement of changes to the social fund rules announced on 30 November;

    (2) how many of the applicants receiving grants for funeral expenses from the social fund during the latest period for which figures are available he estimates would not have been eligible to claim if the limitation excluding remote relatives announced by him on 30 November had been in force.

    Mr. Roger Evans
    From April 1995, a funeral payment may not be awarded to a claimant where another close relative had equal or closer contact with the deceased, and either that relative is not in receipt of a qualifying benefit1 or has capital exceeding the disregard for a social fund funeral payment.

    Funeral payment awards by cashband1

    Year

    0 to £200

    £201 to £400

    £401 to £600

    £601 to £800

    £800 to £1,000

    over £1,000

    Southern Territory

    1991–92

    1,604

    1,430

    1,724

    4,173

    5,777

    2,712

    1992–93

    1,537

    1,252

    1,317

    3,239

    6,208

    5,742

    1993–94

    1,504

    1,165

    1,142

    2,113

    6,033

    10,246

    Wales and Central Territory

    1991–92

    1,960

    1,894

    2,915

    7,598

    6,604

    2,140

    1992–93

    1,795

    1,706

    2,199

    6,074

    9,183

    4,399

    1993–94

    1,834

    1,584

    1,800

    4,664

    10,490

    8,598

    Scotland and Northern Territory

    1991–92

    1,403

    1,429

    2,082

    5,320

    5,118

    1,751

    1992–93

    1,156

    1,239

    1,583

    4,134

    6,283

    4,235

    1993–94

    1,185

    1,183

    1,386

    3,190

    6,929

    7,150

    Note:

    1The available data on awards by cash band do not take account of payments that are returned in the accounting period in which the awards were made.

    Source:

    Benefits Agency's policy budget and management information system.

    Income Support
    Mr. Dewar
    To ask the Secretary of State for Social Security (1) whether the restrictions to income support assistance with mortgage interest payments from(a) April 1995 and (b) October 1995 will apply equally to households claiming (i) a disability premium, (ii) a severe disability premium, (iii) a carer's premium, (iv) a disabled child premium, (v) disability living allowance, (vi) the higher rate care component of disability living allowance, (vii) a lone parent premium, (viii) a pensioner premium or (ix) people who are terminally ill;

    (2) whether the restrictions on income support assistance with mortgage interest payments from (a) April 1995 and (b) October 1995 will apply equally to households where the claimant or partner is over 60 years of age;

    (3) whether the restrictions in income support with mortgage interest payments from (a) April 1995 and (b) October 1995 will apply equally to households in which the claim has resulted from marital breakdown or the death of a spouse.

    Mr. Roger Evans
    The reduction in the capital limit to £100,000 from April 1995 will apply equally to all income support claimants except where a loan has been taken out to adapt a dwelling for the special needs of a disabled person. As now, any loan taken out for this
    632
    A precise estimate of the impact of this change is not available. However we estimate that about 1,5002 relatives and acquaintances will be affected.

    1Funeral payment qualifying benefits are income support, family credit, disability working allowance, housing benefit and council tax benefit.

    2Less than 2 per cent. of all awards using 1993–94 figures.

    Mr. Bradley
    To ask the Secretary of State for Social Security how many social fund grants were awarded for between(a) £10 and £100, (b) £200 and £400, (c) £400 and £600, (d) £600 and £800 and (e) thereafter up to the sum of £2,000 for funeral expenses, by region in each of the last three years.

    Mr. Roger Evans
    [holding answer 6 December 1994]: The information that is readily available is set out in the tables. It is by Benefits Agency territory.

    purpose will not count toward the capital limit. A disabled person, for this purpose, is defined in the Income Support (General) Regulations 1987, S.I 1987 No. 1967, schedule 3 paragraph 7B. This definition will remain unchanged in April 1995.

    The October 1995 changes will be subject to wide consultation and the position of particular groups will be considered during the consultation process. The position of pensioners will be protected.

    Cold Weather Payments
    Mr. Dewar
    To ask the Secretary of State for Social Security what he estimates to be the full year cost of changes announced in the Budget and uprating statements of the cold weather payments and the home energy efficiency scheme.

    Mr. Roger Evans
    Cold weather payments will rise to £8.50 from 1 November 1995. The full year cost of this change will depend on the number of cold weather payments made, but if the same number of payments are made as in 1993–94, costs will increase by £3.15 million between 1994–95 and 1995–96.

    The Department of Environment have agreed additional resources of £30 million in each of the next three years for the home energy efficiency scheme—a 43 per cent. increase in funding compared with expenditure in 1994–95.
    633
    Mr. Pike
    To ask the Secretary of State for Social Security what is his estimate of the total annual cost for(a) cold weather payments and (b) the home energy efficiency scheme for 1994–95 and 1995–96; and if he will make a statement.

    Mr. Roger Evans
    On the assumption of the same number of cold weather payments made in 1993–94, expenditure is estimated at £14.7 million in 1994–95, and £17.85 million in 1995–96.

    The total annual cost of the home energy efficiency scheme including 2.55 per cent. management costs will be £75.2 million in 1994–95, almost double the amount available in 1993–94. In 1995–96, it will be £106.2 million, an increase of 43 per cent. on the previous year.

    Children
    Mr. Denham
    To ask the Secretary of State for Social Security how many children live in households receiving(a) income support or (b) family credit in the areas covered by Benefits Agency offices serving predominantly (i) Southampton, (ii) Portsmouth, (iii) Hampshire, (iv) Dorset (v) East Sussex, (vi) West Sussex, (vii) Kent, (viii) Berkshire and (ix) Surrey.

    Mr. Roger Evans
    The best estimated information available is set out in the table, but some figures, particularly those for family credit, are estimated from a small number of sample cases and should therefore be treated with caution.

    Number of children1 in households receiving Income Support and Family Credit paid by Benefits Agency offices predominantly serving2 the areas shown

    Area

    Income support3 thousands

    Family Credit4 thousands

    Southampton

    17

    5

    Portsmouth

    16

    4

    Hampshire

    73

    23

    Dorset

    25

    8

    East Sussex

    34

    10

    West Sussex

    27

    7

    Kent

    81

    20

    Berkshire

    33

    9

    Surrey

    22

    6

    Notes:

    1Income support figures include children under 16 and dependants aged under 19 still living in the parental home. Family credit figures include children under 16 and aged 16 to 18 if still in full-time education.

    2A Benefits Agency office has been regarded as predominantly serving an area where more than half of its case load resides in the area.

    3Source: "Income Support Statistics Quarterly Enquiry" February 1994,5 per cent. sample of income support awards.

    4 Source: 5 per cent. sample of family credit awards at 30 April 1994.

    5All figures have been rounded to the nearest thousand.

    Mortgage Interest
    Mr. Dewar
    To ask the Secretary of State for Social Security if he will publish figures broken down by claimant group for the number of recipients of income support assistance with mortgage interest payments who receive help for(a) less than two months, (b) over two months, (c) over six months and (d) over nine months, giving the most recent available figures.

    Mr. Roger Evans
    Details are only available for the number of claimants who were receiving mortgage 634
    interest payments at the point in time when the survey was carried out. These are set out in the table:

    Income support claimants with mortgage interest payments

    Number of mortgage interest claimants by duration of current IS claim

    Less than 2 months 000

    2–6 months 000

    6–9 months 000

    9 months or more 000

    Pensioner

    2

    5

    3

    87

    Sick/Disabled

    2

    6

    5

    64

    Lone parent

    5

    11

    9

    96

    Unemployed

    20

    47

    23

    126

    Other

    3

    7

    3

    27

    All cases

    31

    76

    42

    399

    Source:

    "Income Support Statistics Quarterly Enquiry" February 1994.

    (1) Figures are rounded to the nearest thousand and may not sum.

    Mr. Denham
    To ask the Secretary of State for Social Security what estimate he has made of the total annual savings accruing to his Department in each of the next five years from the proposed changes to the availability of income support for mortgage interest payments; and what assumptions he has made in making those calculations with regard to the number of people who will not be eligible under the new rules for such payments and the average level of income support no longer payable.

    Mr. Roger Evans
    I refer the hon. Member to the reply I gave him on Thursday 8 December at column 363.

    Back-to-work Bonus
    Mr. Dewar
    To ask the Secretary of State for Social Security whether the proposed back-to-work bonus will be transferable from one spouse to another.

    Mr. Roger Evans
    The back-to-work bonus will normally be attributed and paid to the person who has made the claim for benefit under which entitlement to the bonus is accrued. In certain circumstances, for example where couples separate, it may be appropriate to transfer bonus amounts between partners. We are looking at the detailed mechanisms for achieving this.

    Agency Heads
    Mr. Spellar
    To ask the Secretary of State for Social Security, pursuant to his answer of 5 December,Official Report, column 2, what considerations led to his decision not to give the details of the terms of employment of heads of agencies.

    Mr. Hague
    The total remuneration for each agency chief executive appears in their agency accounts. Their entitlement to a performance bonus is largely dependent upon the achievement of a range of specific targets published in the individual business plans. However, the personal pay arrangements for individual members of staff remain confidential.

    Income-related Benefits
    Mr. Dewar
    To ask the Secretary of State for Social Security if he will estimate the effect on the numbers of claimants of(a) income support, (b) housing benefit, (c) family credit, (d) community charge or council tax benefit and (e) all income-related benefits of the freeze in the limits for capital or savings since 1988.

    Mr. Roger Evans
    The upper capital limit was raised in April 1990 from £6,000 to £8,000 in income support and family credit and to £16,000 in housing benefit and
    635
    community charge benefit. Had the lower capital limit of £3,000 been increased in line with the retail prices index to 1994–95 prices, it is estimated that a further 10,000 claimants would become entitled to income support. The effect on the numbers of those claiming other income-related benefits is negligible.

    Note:

    Estimate based on data drawn from the 1990–91–92 family expenditure surveys, uprated to 1994–95 prices and benefit levels, making adjustments for numbers with capital reported on the 1993 statistical inquiry.

    Numbers of claimants are rounded to the nearest 5,000.

  Housing Benefit
  Mr. Denham
  To ask the Secretary of State for Social Security what is his estimate of the average housing benefit paid to private sector tenants in(a) Southampton (b) Portsmouth and (c) Hampshire; and, in each case, what is the total number of claimants.

  Mr. Roger Evans
  The information is set out in the table:

  Private sector Housing Benefit recipients

  Private sector average weekly Housing Benefit £

  Southampton

  9,350

  51.81

  Portsmouth

  8,530

  50.29

  Hampshire

  40,510

  49.92

  Source:

  Housing Benefit Management Information System 100 per cent. count taken at the end of August 1994.

  Notes:

  (1) Figures are for benefit units which may be a single person or a couple;

  (2) The caseload and average for Hampshire include Southampton and Portsmouth;

  (3) Private sector includes housing associations.

  Jobseeker's Allowance
  Mr. Dewar
  To ask the Secretary of State for Social Security if he will estimate the effect of the abolition of the adult dependency increase paid with unemployment benefit on the number of claimants of income-based jobseeker's allowance in the first 182 days of a claim.

  Mr. Roger Evans
  It is estimated that, at any one time, 5,000 people would be entitled to income-based jobseeker's allowance as a result of there being no adult dependency increase in the contributory element.

  Notes:

  (1) Assumes 2.4 million unemployed; 500,000 unemployment benefit cases.

  (2) Estimates rounded to the nearest 5,000.

  (3) Based on 1993 and 1994 unemployment benefit statistics and the policy simulation model using 1990–91–92 family expenditure survey data.

  (4) Assumes contributory entitlement lasts six months.

  (5) Estimates do not include tax or behavioural implications.

  Child Support Agency
  Mr. Steen
  To ask the Secretary of State for Social Security what is the cost to public funds of the child maintenance review pack published by the Child Support Agency; and if he will make a statement as to the amount of money earmarked for the Child Support Agency in 636
  each of the last two years and, within that budget, how much was earmarked for literature, supporting documents, papers, forms, letters of explanation and other material.

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

  Letter from Ann Chant to Mr. Anthony Steen, dated 13 December 1994:
  I am replying to your recent Parliamentary Question to the Secretary of State for Social Security about the cost of Child Support Agency publications.

  The following data show the costs for 1993–94.

  Financial Year 1993–94

  Operating costs: £109 million

  Publications: £2.5 million

  Financial Year 1994–95

  Estimated budget: £185 million

  Publications: £3 million

  Six hundred and forty thousand Child Support Maintenance Review packs have been ordered since April 1993 at a cost of £328,000 over both financial years.

  I hope this reply is helpful.

  Fraud
  Ms Primarolo
  To ask the Secretary of State for Social Security at what financial threshold the decision is taken on the prosecution of an individual or organisation for social security fraud.

  Mr. Arbuthnot
  The Benefits Agency uses no financial threshold when deciding whether to initiate criminal proceedings. Each case is considered individually and the amount of benefit overpaid is only one of a number of factors taken into account.

  Ms Primarolo
  To ask the Secretary of State for Social Security what is his estimate of the level of social security fraud.

  Mr. Arbuthnot
  In the year ending March 1994 Benefits Agency fraud investigators identified 312,000 irregularities and saved an estimated £654 million. Although the full extent of social security fraud is not known, we are examining ways of producing a reliable estimate of the sum which might be involved.

  Incapacity Benefit
  Mr. Flynn
  To ask the Secretary of State for Social Security how many of the members of the panel on assessment of incapacity who did not agree to publication of their names were or are employed by(a) the Benefits Agency medical service, (b) the Department of Social Security and (c) the Department of Health; how many had medical qualifications; when he decided that the names of members of the panel on assessment of incapacity should not be published without their agreement; what were his reasons for so deciding; if he sought the agreement of organisations responding to the consultation document on assessment of incapacity to the publication of their names in annex 2 to the report "The Medical Assessment for Incapacity Benefit"; and if he will seek the consent of members of the sub-group on mental health and incapacity, who agreed to publication of their names in the report "The Medical Assessment of Incapacity Benefit", to the disclosure of their membership of the sub-group.

  Mr. Hague
  Of the 10 panel members who did not want their names published, one is employed by the
  637
  Benefits Agency medical service, one by the Department of Social Security and one by the Department of Health. Of the 10, six have medical qualifications. The panel members undertook their work as individuals and it was considered appropriate that the wishes of those who did not want their names to be made public should be respected.

  The organisations listed in annex 2 of the report were responding to a public consultation and it was appropriate for their interest to be acknowledged.

  Special Advisers
  Mr. Milburn
  To ask the Secretary of State for Social Security which of the special advisers serving in his Department during the last five years were subject to positive security vetting.

  Mr. Hague
  In accordance with current guidance, all special advisers are required to have positive vetting. This Department has complied with this during the last five years.

  Public Appointments
  Dr. Wright
  To ask the Secretary of State for Social Security how many public appointments(a) he is

  Col. 1

  Col. 2 Date of introduction

  Col. 3 Date from which current rate applicable

  Col. 4 1995 value if increased in line with prices since date at col. 3 £

  Col. 5 1995 value if increased in line with average earnings since date at col. 3 £

  (a) £1,000 widow's payment.

  April 1988

  April 1988

  1,417.90

  1,583.00

  (b) £3,000 and £8,000 capital limits for income support and family credit:

  £3,000

  April 1988

  April 1988

  4,179.80

  4,748.90

  £8,000

  April 1988

  April 1990

  10,119.45

  10,600.50

  (c) £3,000 and £16,000 capital limits, for housing benefits:

  £3,000

  April 1988

  April 1988

  4,179.80

  4,748.90

  £16,000

  April 1988

  April 1990

  20,238.95

  21,200.95

  (d) £2 per day earnings limit for unemployment benefit.

  July 1948

  March 1982

  3.85

  5.00

  (e) £12 earnings limit under the normal idle day rule.

  December 1989

  December 1989

  16.10

  17.35

  (f) £5 and £15 earnings disregards for income support:

  £5.00

  April 1988

  April 1988

  6.95

  7.95

  £15.00

  April 1988

  April 1988

  20.85

  23.80

  (g) £5, £10 and £25 earnings disregards for housing and council tax benefits:

  £5

  April 1988

  April 1988

  6.95

  7.95

  £10

  April 1988

  April 1988

  13.95

  15.85

  £25

  April 1988

  October 1990

  31.60

  33.15

  (h) £10 war pension disregard for income-related benefits.

  April 1988

  April 1990

  12.65

  13.75

  (i) £10 disregard of charitable or voluntary payments

  April 1988

  April 1990

  12.65

  13.25

  (j) £20 disregard of income from a boarder, (plus half of charge in excess of £20).

  April 1988

  April 1990

  25.25

  26.45

  (k) £200 disregard of a training bonus.

  September 1988

  September 1988

  283.55

  316.70

  (l) £15 maintenance disregard for income-related benefits other than income support.

  April 1992

  April 1992

  17.10

  16.85

  (m) £10 disregard of student loans.

  September 1990

  September 1990

  12.65

  13.25

  (n) £35 occupational pension limit for unemployment benefit.

  April 1981

  April 1981

  74.20

  98.70

  (o) £200 savings limit for the lower rate of voluntary unemployment deduction.

  November 1980

  April 1988

  278.70

  316.70

  638
  responsible for making and (b) require his approval, including those not listed in "Public Bodies", and if he will divide this figure into (i) appointments to executive bodies, (ii) appointments to advisory bodies and (iii) other appointments.

  Mr. Hague
  The information is in the table.

  Number of appointments the Secretary of State is responsible for making

  Number of appointments that require approval from the Secretary of State

  Executive bodies

  11

  2

  Advisory bodies

  1876

  0

  Other bodies

  19

  0

  1 This figure includes 798 members of local war pension committees.

  Means Testing (Limits)
  Mr. Flynn
  To ask the Secretary of State for Social Security if he will update the information given in his answer of 27 October,Official Report, columns 794–98, by substituting 1995–96 values for current values in columns 4 and 5 of the table.

  Mr. Roger Evans
  The information is set out in the table:
  639

  Col. 1

  Col. 2 Date of introduction

  Col. 3 Date from which current rate applicable

  Col. 4 1995 value if increased in line with prices since date at col. 3 £

  Col. 5 1995 value if increased in line with average earnings since date at col. 3 £

  (p) £27 (£8 if living in a hostel) protected earnings and the £1 margin over protected earnings, where income support is paid after a trade dispute is recoverable.

  April 1988

  April 1988

  37.55

  42.70

  (q) £52.50 rate of statutory sick pay.

  April 1990

  April 1990

  65.35

  69.60

  (r) £100 maternity payment from the Social Fund.

  April 1987

  April 1990

  126.50

  132.50

  (s) £500 and £1,000 capital limits for maternity and funeral payments from the Social Fund:

  £500

  April 1990

  April 1990

  632.50

  662.50

  £1,000

  April 1990

  April 1990

  1,264.95

  1,325.10

  (t) £75 limit on additional expenses included in a funeral payment from the Social Fund.

  April 1987

  April 1987

  107.85

  127.95

  (u) 25 pence age addition to retirement pension.

  September 1971

  September 1971

  1.60

  2.70

  (v) £10 Christmas bonus.

  December 1972

  December 1972

  67.15

  98.45

  (w) £2,500 exempt payments limit for recovery of benefits from compensation payments.

  September 1990

  September 1990

  3,110.80

  3,312.65

  (x) £30,000 vaccine damage payment.

  March 1979

  April 1991

  33,661.30

  36,269.90

  Notes:

  (1) The figures have been rounded to two decimal places.

  (2) In each step of the calculation the amount has been rounded to the nearest 5p.

  (3) The retail prices index—all items—and the retail prices index—all items except housing ROSSI—as published by the Central Statistical Office have been used for the prices uprating—ROSSI in relation to amounts which apply to income-related benefits.

  (4) Average earnings index—whole economy unadjusted—as published by the Employment Department has been used to calculate the earnings uprating.

  Benefit Uprating
  Mr. Flynn
  To ask the Secretary of State for Social Security if he will list details of the April 1995 benefit uprating, including those benefit rates, disregards and capital and income limits which will not be increased.

  Benefit Description

  April 1994£ per week

  April 1995£ per week

  Child Dependency Increase: increase in earnings limit pertaining to second or subsequent children

  16.00

  16.00

  Christmas Bonus

  10.00

  10.00

  Compensation recovery small payments limit

  2,500

  2,500

  Council Tax Benefit, Disability Working Allowance, Family Credit, Housing Benefit, Income Support: disregard from grant for students' books and equipment

  273.00 per year

  276.00 per year

  Housing Benefit:

  Disregard from students' eligible rent:

  London

  24.80

  25.00

  Elsewhere

  17.20

  17.35

  Child's earning disregard

  5.00

  5.00

  Where disabled child premium is payable

  15.00

  15.00

  Overriding Income Disregard

  10.00

  10.00

  Family Credit: free living accommodation treated as earnings

  12.00

  12.00

  Incapacity Benefit—the additional rate frozen at April 1994 levels (the earnings-related additional pension currently paid with Invalidity Benefit) no fixed rate

  no fixed rate

  Industrial Death Benefit, Widows Pension Initial Rate

  57.65

  57.65

  Income Support Mortgage: limit on outstanding capital with which Income Support will help with interest repayments

  125,000

  100,000

  Pneumoconiosis, Byssinosis and Miscellaneous Diseases Scheme Death Benefit (lump sum)

  300.00

  300.00

  Social Fund:

  Funeral Payment

  No limit

  Maximum of 875.00

  Additional Expenses

  75.00

  75.00

  War Pensions:

  Education Allowance

  Maximum of 120.00 per year

  Maximum of 120.00 per year

  640
  Mr. Hague
  I refer the hon. Member to the reply my right hon. Friend the Secretary of State gave to my hon. Friend the Member for Thanet, North (Mr. Gale) on 8 December at column 376.

  The table refers to benefit rates, disregards and capital and income limits which are not covered by the table of main benefit rates which has been placed in the Library.
  641

  Benefit Description

  April 1994 £ per week

  April 1995 £ per week

  Parents and other Dependants Pensions:

  One parent

  Maximum of 75.00 per year

  Maximum of 75.00 per year

  Two parents

  100.00 per year

  100.00 per year

  Other adult

  54.00 per year

  54.00 per year

  One juvenile

  26.00 per year

  26.00 per year

  More than one juvenile (aggregate)

  75.00 per year

  75.00 per year

  Single Pensioners
  Mr. Winnick
  To ask the Secretary of State for Social Security if he will list the numbers and percentage of single pensioners whose total income is below(a) £80 per week, (b) £75 per week and (c) £70 per week.

  Mr. Arbuthnot
  [holding answer 9 December 1994]: The information is in the tables.
  642

  Table 1. Estimated number and percentage of single pensioners with net before housing costs income under £80, £75, £70 (1992).

  £80

  £75

  £70

  Numbers

  1,700,000

  1,400,000

  1,100,000

  Percentages

  39

  31

  26

  Table 2. Estimated number and percentage of single pensioners with net before housing costs income under £80, £75, £70 (1992).

  £80

  £75

  £70

  Numbers

  2,900,000

  2,700,000

  2,500,000

  Percentages

  65

  61

  57

Preamble
The House met at half-past two of the clock: The CHAIRMAN OF COMMIITEES on the Woolsack.
Prayers—Read by the Lord Bishop of Worcester.
Lord Chetwode —Took the Oath.

Myanmar: Relations
Baroness Cox Baroness Cox asked Her Majesty's Government:
What is their current policy towards the SLORC (State Law and Order Restoration Council) regime in Myanmar (Burma).
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, our policy, and that of our European Union partners, is one of "critical dialogue" with the SLORC. It is important that it understands that the resumption of normal relations depends on progress in key areas, including human rights and political and economic reform.
Baroness Cox: My Lords, I thank my noble friend for her reply. Is she aware that I recently visited the Karen people, who are trapped in the jungle, and received first hand evidence of the atrocities perpetrated against them and other ethnic minorities such as the Mon by the SLORC regime, including torture, murder, forced labour and forced relocation? Is she therefore aware that the Karen people, who fought alongside British forces, are especially disappointed by indications that Britain may have allowed commercial interests to weaken the pressure on the SLORC regime to desist from these gross violations of human rights?
Baroness Chalker of Wallasey: My Lords, I am aware that my noble friend recently made a visit to Burma. We are extremely concerned about all Burma's ethnic groups, particularly the internally displaced and refugees. It is vitally important that humanitarian and human rights agencies are given access to the worst affected areas like the Irrawaddy delta and other Karen and Mon areas. Unless that happens there will be no hope of stopping some of the atrocities of which my noble friend spoke. We recognise the support given by the Karen to us during the Second World War. We continue to encourage the SLORC to meet the Karen and other ethnic groups to discuss the possibility of lasting peace. As to trade, we cannot prevent the private sector being involved. There is an embargo on arms sales, and quite rightly so. But there is no wider trade embargo. Most of the activity is that which is sought by British industry. There is no reason to restrict it when other nations are in no way restricting their trade. Perhaps through contact we can improve the way SLORC treats its own people.
The Earl of Listowel: My Lords, as the last Secretary of State for Burma, may I supplement what the noble Baroness, Lady Cox, said by asking the Minister
1194
whether some concern might not be expressed in relation to Aung San Suu Kyi, the leader of the party that won the last general election in Burma, who has been under house arrest for the past five years?
Baroness Chalker of Wallasey: My Lords, I well understand the anxiety of all Members of your Lordships' House about Aung San Suu Kyi. Her detention for so long without charge is totally indefensible. I would say to the noble Earl, Lord Listowel, that the detention is in flagrant contradiction of all principles of justice. We have repeatedly called for her early and unconditional release. We issue statements to that effect. There is one sign of slight movement. SLORC has recently held meetings with Aung San Suu Kyi. We are encouraging it to continue those meetings because we hope they will lead to a serious and lasting dialogue and to her release; and the sooner the better.
Lord Ennals: My Lords, I congratulate the noble Baroness on her visit which has proved extremely useful. Does the Minister agree that there is a possibility at least of improving relations with SLORC because it shows a wish to do so? Will she answer two questions? First, what was the result of the meeting in New York between the German Foreign Minister, representing the European Union, and the Burmese ambassador? Secondly, is she in favour of giving international NGOs a role in Burma, particularly in helping supervise refugees returning to rather dangerous parts of the country?
Baroness Chalker of Wallasey: My Lords, indeed there is a sign of improvement in relations. I cannot give the noble Lord a readout on the discussions between the German Foreign Minister and the SLORC in New York, but I shall look into what he said. We have recently had a senior Foreign and Commonwealth Office official in Burma. Certainly, the dialogue shows some evidence of improvement, but we wait to see that really happen. As regards international non-governmental organisations, they are to be assisted in what they do because they give sound humanitarian aid. They may indeed be able to lighten the load for the returnees.
Lord Jenkins of Putney: My Lords, as regards Aung San Suu Kyi, is the noble Baroness in a position to give an absolute guarantee that her unconditional release will precede any upgrading of recognition of the military regime?
Baroness Chalker of Wallasey: My Lords, the noble Lord, Lord Jenkins of Putney, knows that I am not given to issuing absolute guarantees on anything because one cannot predict the future. But I say to him that I am pretty certain that he is right in this case.
Lord Weatherill: My Lords, is the Minister aware that forced labour is being used by the regime for the restoration of ancient sites in Burma for 1996? Can she assure the House that no British contribution will be

1195
made to this and that there will be no contribution through international agencies with which we are connected?
Baroness Chalker of Wallasey: My Lords, I am indeed aware of the reported use of forced labour and military porters. We have expressed our concern in the international fora. We have also warned companies that contracts involving forced labour will attract not only criticism but condemnation.
Lord Archer of Sandwell: My Lords, will the noble Baroness accept that she has the full support of these Benches in saying that the SLORC must win its way back among the normal community of nations by recognition of international human rights commitments? Is she aware that this very afternoon Anti-Slavery International is launching a book by Martin Smith documenting some of the infringements of human rights in Burma? Can she arrange that her officials read it before there is any resumption of trade relations?
Baroness Chalker of Wallasey: Yes, my Lords.
Lord Murray of Epping Forest: My Lords, will the noble Baroness ensure that in the critical dialogue with this regime there is raised a complaint at the failure or refusal of the regime to grant a visa to no less a person than the president of the Methodist Conference, the Reverend Dr. Leslie Griffiths, presumably on the basis of his known campaigning for human rights?
Baroness Chalker of Wallasey: My Lords, I note what the noble Lord says. It is not only a question of refusing visas but of refusing to have any discussion even with the people to whom visas are granted. That is something we must follow up.
Lord Young of Dartington: My Lords, in view of what the Karen people have done for us in the past will the Minister consider offering some visible support to those people who almost alone are standing out in that country against the SLORC?
Baroness Chalker of Wallasey: My Lords, we are already providing help to the Karen, the Mon, the Kachin and other ethnic minorities who have suffered, and we shall continue to do so.

Gibraltar: Building Societies
2.48 p.m.
Lord Merrivale Lord Merrivale asked Her Majesty's Government:
When Gibraltar will be added to the list of countries and territories quoted in Part II of the Building Societies (Designation of Qualifying Bodies) (No. 2) Order (S.I. No. 989) empowered to form a body corporate or Mortgage Indemnity Insurance Captive.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Henley): My Lords, my right honourable friend the Chancellor of the Exchequer
1196
will consider this issue further when all the provisions of Gibraltar's amended Financial Services Commission Ordinance are fully in operation.
Lord Merrivale: My Lords, I thank my noble friend the Minister for his reply. Is it not a fact that the Gibraltar financial services legislation has been amended; that the Chancellor informed the Chief Minister in May that there would be four United Kingdom and three Gibraltarian members of the commission and that Her Majesty's Government appointed the commissioner on 25th July? Therefore, why is it that the assurances given to the Chief Minister in February in London have not yet been implemented?
Lord Henley: My Lords, my right honourable friend the Chancellor applied two conditions. The first was the passage of the amended Financial Services Commission Ordinance and the second was that the commission and the commissioner were operating effectively in accordance with the provisions. The first condition has now been met but we still need to see evidence that the second condition is being fulfilled. I say to my noble friend that they have not yet appointed banking or insurance supervisors. We want to see all of them in place in the commission and be sure that they were operating effectively before my right honourable friend gives the go ahead.
Lord Boyd-Carpenter: My Lords, can my noble friend indicate that Her Majesty's Government have great respect for the way in which the Gibraltar Government carry on and will help them to achieve this freedom?
Lord Henley: My Lords, I can certainly give my noble friend the assurance that we have great respect for the way in which the Gibraltar Government operate. However, although we can provide a certain amount of help, it is now for the Gibraltar authorities to get the right people in place and to show that they can operate the appropriate procedures correctly.
Lord Merrivale: My Lords, with the leave of the House perhaps I may ask a further question. What is the present attitude of the Building Societies Commission to this issue? It is difficult to see why Gibraltar should be excluded from the list of territories and countries in which a body corporate or MIIC can be formed when, for instance, Lichtenstein, Jersey, Guernsey and Alderney are included.
Lord Henley: My Lords, I cannot speak for the Building Societies Commission; I can speak only for Her Majesty's Government. I can assure my noble friend that he is incorrect in that Lichtenstein is not included. My right honourable friend the Chancellor of the Exchequer has applied two conditions to the Gibraltar authorities. As I said, they have met one of them but not the other. If they can meet the other condition, my right honourable friend will then consider the matter further.

Rockall: Oil/Gas Exploration Licensing
2.50 p.m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
Whether they intend to include blocks in the area around Rockall in the forthcoming 17th round of licensing offshore oil and gas exploration.
The Minister of State, Department of Trade and Industry (Earl Ferrers): My Lords, the closing date for nominations for the 17th round of licensing offshore oil and gas exploration is 8th March 1995. Depending on the areas which companies nominate, decisions will be taken about which blocks to offer for licensing.
Lord Campbell of Croy: My Lords, I am grateful to my noble friend for his Answer. Can he confirm that at least three other countries have made claims to Rockall? Is he aware that I was the Secretary of State who put through Parliament the 1972 Act which consolidated Rockall as part of Scotland?
Noble Lords: Hear, hear!
Lord Campbell of Croy: My Lords, is my noble friend further aware that the United Kingdom's position was strengthened unintentionally when Mr. Tom McLean, the lone Atlantic rower, demonstrated that it was a habitable island by camping on it for four weeks although the average seagull finds it difficult to maintain a perch, leaning hard against the wind?
Earl Ferrers: My Lords, peculiarly my noble friend is not wholly accurate in his first supplementary question. Three countries have not made claim to Rockall. Ireland does not recognise UK sovereignty over Rockall, but has not made a claim. We have no doubt about the United Kingdom's sovereignty over Rockall. Iceland and the Faroes claim the seabed to the west of Rockall, which is beyond the 200 miles from St. Kilda, but they do not dispute the UK's sovereignty over Rockall itself.
A number of things happened when my noble friend was Secretary of State for Scotland, of which periodically he is kind enough to remind us, and the passing of that Act did indeed take place under his authority. I am grateful for that. As regards Mr. McLean, I can only tell my noble friend that our sovereignty over Rockall does not rest over whether it can sustain human life. Mr. McLean is a private citizen. His action of camping on Rockall did nothing to strengthen the United Kingdom's sovereignty—nor, I dare say, did it do much to strengthen the seagulls' sovereignty.
Lord Ewing of Kirkford: My Lords, is the noble Earl aware that I agree with him that the noble Lord, Lord Campbell of Croy, is from time to time keen to remind us of some of the things, but only some of the things, that happened when he was Secretary of State, but when I take the opportunity in your Lordships' House to remind the noble Lord of some of the other things that happened under his stewardship he is quite keen to forget them? Is that not a contradiction?
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Is the noble Earl aware that the 17th licensing round is an important issue especially in relation to Rockall which is a disputed territory? As I understand it, the claim of the Faroe Islands and others to the seabed around Rockall has still to be resolved. Perhaps the Minister can enlighten your Lordships on the current position of the dispute over the area. Is the noble Earl further aware that from a reading of the Cabinet minutes of 1955—nearly 40 years ago—when the United Kingdom annexed Rockall, it is clear that the UK did so for a completely different reason? It was because of the rich, fertile fishing grounds and had nothing to do with oil and gas. However, here we are, with the 17th licensing round in prospect, and for the first time there is a conflict between licensing and drilling for oil and gas and those very fertile fishing grounds. Can the Minister give the House an absolute assurance that, before any decisions are made, there will be extensive discussions with the fishing industry and the other interests involved in this important question?
Earl Ferrers: My Lords, the noble Lord chided my noble friend Lord Campbell of Croy for reminding us of some of the things that he did during his tenure of the distinguished office of Secretary of State for Scotland. The noble Lord said that he sometimes reminds my noble friend of the things that he did wrong. When the noble Lord is Secretary of State for Scotland he will be able to remind us of the things that he has done, but I doubt whether he will have that opportunity.
The noble Lord continued by saying that fisheries have nothing to do with oil and gas. He is right, the fisheries issue in relation to Rockall has nothing to do with oil and gas and does not come into this. What we are talking about is geology. The rocks on Rockall are of the same geology as the rocks of Scotland. Therefore, we claim that there is a prolongation and that the rocks in Rockall and in Scotland are of granite-gneiss, which are 2,000 million years old—if you believe that kind of thing. The Faroes rocks are basalt and they are only 60 million years old; and the Iceland rocks are lavas and are less than 30 million years old, which in time and space is merely the other day. We claim that the rock structure around Rockall is the same as that in Scotland.
The Earl of Lauderdale: My Lords, can my noble friend confirm that, in the Moray Firth and elsewhere on the continental shelf, differences of interest between oil, on the one hand, and fishing, on the other hand, have always been resolved satisfactorily?
Earl Ferrers: My Lords, they are usually resolved satisfactorily although periodically there are hiccups. In this instance, however, there is no correlation between the right to fisheries and the right to oil and gas exploration.
Lord Campbell of Croy: My Lords, I thank my noble friend for his further answer about the United Kingdom's position and the relevance of Mr. McLean's feat. However, is he aware that experts in international law have pointed out that the United Kingdom's position

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might be strengthened if there were to be a British wedding on the island or, better still, a birth, but that no one, however patriotic, should be encouraged to try that?
Earl Ferrers: My Lords, I am not quite sure what one concludes from that, other than the fact that anyone who tried to be married on Rockall must need their head examined, as must anyone who tried to have a baby there.

European Union: Single Currency
2.58 p.m.
Lord Barnett Lord Barnett asked Her Majesty's Government:
Whether they have permanently ruled out joining a single currency in the European Union.
Lord Henley: My Lords, no. As my right honourable friend the Chancellor of the Exchequer has repeatedly made clear, the United Kingdom has a completely open option on when and whether to seek to participate in Stage 3.
Lord Barnett: My Lords, does the Minister agree that if there is to be the kind of integration in Europe, which I hope that we would both like to see, inevitably it must result in a single currency? However, given the constitutional importance of such an event, does he accept that it would be important to get the support of the British people by way of a referendum?
Lord Henley: My Lords, I can do no better than repeat what my right honourable friend the Prime Minister said yesterday: that obviously we believe in the primacy of Parliament. However as he made clear, we have never ruled out a referendum; and he made clear only yesterday that one might be appropriate on a single currency or on moves towards further political integration. That decision cannot be made now. It is something for the future.
Lord Clark of Kempston: My Lords, does my noble friend agree that it is premature to talk about a single currency, particularly in view of the fact that the ecu is being used more widely not just for commercial but for government funding? Would it not be a good idea to drop this business of a single currency? Let us see how the ecu develops. We might then be in a better position to make up our minds.
Lord Henley: My Lords, my noble friend is right. It is premature to talk about a single currency and a referendum. It might be necessary to go down that route in the future, but those are not decisions that we have to take at the moment.
Lord Bruce of Donington: My Lords, addressing oneself to the Question which refers to "permanently ruled out", will the Minister confirm that under the British constitution no government of any party can bind their successors who can do exactly as they wish? In
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case he may be uncertain, will the Minister confirm that with his noble and learned friend Lord Hailsham of Saint Marylebone?
Lord Henley: My Lords, I can answer the noble Lord briefly. Yes.
Earl Russell: My Lords, I am grateful to the Minister for repeating the Prime Minister's remark that we cannot rule out a referendum. But in the event of the other members of the European Union agreeing on a single currency, and Her Majesty's Government refusing to participate in the agreement, could we have a referendum on that refusal, and, if not, why not?
Lord Henley: My Lords, that is a hypothetical question. Given the present degree of economic convergence, it is unrealistic to suggest that a majority of countries will be ready to go ahead with Stage 3 by 1997, or whenever. It would be a gross economic mistake to go ahead prematurely. We shall make the appropriate decision at the appropriate time.
Lord Wyatt of Weeford: My Lords, is the Minister aware that, according to the rules of the single currency, only Britain, Germany and Luxembourg are likely to meet the conditions, and that will be some time in the next century?
Lord Henley: My Lords, I can take the noble Lord even further. I believe that at the moment only Luxembourg meets the two primary conditions on debt and deficit. It will be a long time before the majority of countries gets anywhere near meeting them.
Lord Beloff: My Lords, does my noble friend agree that as Luxembourg has no currency of its own but uses the Belgian franc, it is of interest to note that it is also the only country which has a single currency with another country without a single government? Is it not a fact that a single currency naturally necessitates a single government to be responsible for it? Therefore, in talking about a single currency we are talking about whether we wish to have a single government for the whole of Europe.
Lord Henley: My Lords, my noble friend makes the valid point that moving to a single currency is an important step in the development of the European Union. That is a decision which will have to be considered carefully if and when it has to be made.
Lord Campbell of Alloway: My Lords, is not the single currency, from a practical point of view, in any event on the back burner indefinitely while we consider the vast enlargement with all the other states? What on earth has that to do with a sensible referendum?
Lord Henley: My Lords, the point my noble friend makes, with which I agree, is that this is something which is a long way off; it is not something that we need waste time discussing today, tomorrow or for the foreseeable future.
Lord Peston: My Lords, I am not sure what is a long way off. I hope that the Minister meant that a referendum was a long way off. Is he aware that some

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of us, at least, are strongly in favour of a single currency, and regard it as central to the future of the Union?
A noble Lord: Some of us are not.
Lord Peston: My Lords, I should have thought that a majority of your Lordships' House was in favour of a single currency, but that is something that we will discover one day. Will the Minister clarify an answer which staggered me? He said that he thought that only one country would meet the convergence criteria under Maastricht within the foreseeable future. I thought that he said something like that. Does he agree that in the very near future probably six, if not eight, of the present countries within the Union will meet those criteria? That is my view. Does he agree with me? Two, if not all three, of the countries joining will meet those criteria. What is paradoxical, within all of that, is that if there is one country upon which I would bet to meet those criteria, it is our own.
Lord Henley: My Lords, the noble Lord is right. We will meet them relatively soon and we shall do so as a result of the economic policies that Her Majesty's Government have been pursuing, which have been opposed by the party opposite for a number of years. As regards a single currency, some, like the noble Lord, and, for all I know, like the whole of his party, are in favour of it, but some are not. I am saying that it is not a decision that we have to take today. It is one that is some way off, because I still believe that we are a long way from the majority of the countries meeting those convergence criteria.
Lord Peston: My Lords, will the Minister take the opportunity at some time to explain why we are a long way off? Will he accept from me—I am becoming very puzzled by this—that we on this side at least are not engaged in electioneering? I am becoming more and more fed up—
Noble Lords: Oh!
Lord Peston: My Lords, no. I at no stage make any such remarks at any time. I am becoming more and more irritated by noble Lords on the Government Front Bench assuming. that there is going to be an election any day. If there is, I should like them to tell us.
Lord Henley: My Lords, all I can say is that the noble Lord has come jolly close to misleading the House in that respect. I just do not agree with what he had to say.
Lord Boardman: My Lords, does my noble friend agree that from the remarks of the Opposition Front Bench, it seems that the Opposition are not just in favour of a single currency but inevitably, flowing from
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that, a single European bank, a single European fiscal system, and, as my noble friend Lord Beloff said, a single European government?
Lord Henley: My Lords, my noble friend is correct; that is what one has to presume when the Official Opposition Treasury spokesman makes such remarks from the Dispatch Box.
Lord Monson: My Lords, does the Minister agree that, were the UK to join a single currency, no future Chancellor of the Exchequer would ever be able to fine tune the economy by persuading the Governor of the Bank of England to make slight adjustments, upwards or downwards, to interest rates? The only weapon left to the Chancellor would be the fiscal weapon—the power to raise or lower taxes once a year in November. That is a very blunt instrument and not always a very efficient one.
Lord Henley: My Lords, as I have already made clear, joining a single European currency would have major consequences. These are not decisions that we have to make today, tomorrow or even in the foreseeable future. We shall leave them to the appropriate time.
Lord Stoddart of Swindon: My Lords, may I assure the Minister that there are many people in the Labour Party who do not believe in a single currency and who will fight against it? He should not assume that there is a majority in the House for a single currency. Does he agree with his noble friend Lord Lawson that a single currency implies a single government? Can we have an assurance from this Government that under no circumstances will they consider giving away our sovereignty to the extent that we have a single government in Europe, which would result in the sweeping away of our parliamentary democracy?
Lord Henley: My Lords, I cannot speculate upon the myriad of different views within the party opposite. All I can say is that Official Opposition policy seems to be that they would join the single currency as soon as possible. We recognise the significance of such a decision, and that is why my right honourable friend negotiated the UK protocol to the Maastricht Treaty, which I should have thought the noble Lord would have welcomed. That will ensure that no move can be made without the approval of a full Act of Parliament.
The Earl of Gowrie: My Lords, immensely enjoyable though it is, does my noble friend agree that it is foolish of us to argue about a purely notional European federation, including a common currency, at a time when all the major European powers are following the sensible lead of Her Majesty's Government and becoming Euro-sceptical?
Lord Henley: My Lords, my noble friend makes a valid point. The most important thing is that the question is hypothetical. It is not one that we have to address at the moment.

House of Lords' Offices: Select Committee Report
3.9 p.m.
The Chairman of Committees (Lord Boston of Faversham): My Lords, I beg to move that the first report from the Select Committee on House of Lords Offices be agreed to.
Moved, That the first report from the Select Committee be agreed to (HL Paper 10).—(The Chairman of Committees.)
Following is the report referred to:
1. Appointment of Sub-Committees
The Committee has appointed the following Sub-Committees and Panel—
Finance and Staff Sub-Committee

L. Boston of Faversham (Chairman),

V. Cranborne (L. Privy Seal),

B. Gould of Potternewton,

L. Jenkins of Hillhead,

L. Lane of Horsell,

L. Peston,

L. Richard,

L. Renfrew of Kaimsthorn,

L. Rodgers of Quarry Bank,

B. Seccombe,

L. Weatherill.

Administration and Works Sub-Committee

L. Boston of Faversham (Chairman),

E. Gowrie,

L. Graham of Edmonton,

L. Harris of Greenwich,

B. Hylton-Foster,

L. McColl of Dulwich,

L. Peston,

L. Renfrew of Kaimsthorn,

B. Serota,

L. Strathclyde,

V. Tenby.

Library and Computers Sub-Committee

L. Allen of Abbeydale,

L. Avebury,

L. Brougham and Vaux,

L. Hollick,

L. Lewis of Newnham,

L. Macaulay of Bragar,

L. McIntosh of Haringey,

L. Mustill,

L. Renfrew of Kaimsthorn (Chairman),

V. St. Davids,

B. Trumpington.

Refreshment Sub-Committee

E. Arran,

V. Allenby of Megiddo,

B. Birk,

L. Graham of Edmonton,

L. Harris of Greenwich,

B. Hylton-Foster,

L. Mackie of Benshie,

L. Merlyn-Rees,

V. Montgomery of Alamein,

L. Peston (Chairman),

E. Strathmore and Kinghorne.

Advisory Panel on Works of Art

L. Armstrong of IlMinster,

B. Birk,

L. Cavendish of Furness,

L. Charteris of Amisfield,

V. De L'Isle,

E. Gowrie (Chairman),

L. Lucas,

L. Morris of Castle Morris,

Ly. Saltoun of Abernethy.

2. Black Rod's Garden Entrance
The Committee has approved modifications, sought by Westminster City Council but costing no more than the original scheme, to the Black Rod's Garden Entrance project which will make Black Rod's Garden the main southern entrance to the Palace of Westminster after the summer recess 1995. Westminster City Council's arboriculturalist has made recommendations, which the Administration and Works Sub-Committee will be considering, as to which trees should be planted in Black Rod's Garden when the works there have been completed.
3. New Pelican Crossing
The Committee has been informed that Westminster City Council has approved the installation of a Pelican Crossing to facilitate access between 6–7 Old Palace Yard and the House of Lords.
The Committee has approved, consequential on installation of the Pelican Crossing, new arrangements to meet police concerns about lobby queues and traffic circulation and a new lay-out for the main House of Lords car park which will increase the number of parking spaces by three.
4. Car parking
The Committee has agreed that greater use of the Abingdon Street car park by peers should be encouraged; and has authorised the acquisition of fourteen extra spaces there for a 3 months' trial period, during which parking in the main House of Lords car park and in the Abingdon Street car park will be monitored to assess demand.
The Committee has authorised Black Rod, consequent on the changes which will follow the installation of the Pelican Crossing between the House and 6–7 Old Palace Yard, to circulate a notice to peers, setting out the arrangements for car parking in the House of Lords.
5. 6–7 Old Palace Yard
The Committee has been informed that work on 6–7 Old Palace Yard has been completed within cost and that it will be ready for occupation in early January 1995.
6. Lords' Reimbursement Allowances
The Committee has been informed of changes to the rate of car mileage, subsistence and secretarial allowances which were approved by resolutions of the House on 20 July 1994. The Committee has approved the conditions whereby a member of the House of Lords who is away from his main place of residence in the United Kingdom when Parliament is recalled during a recess may be reimbursed the extra costs incurred in travelling to attend the House.
7. History of Parliament Trust
The Committee has been informed that in accordance with the recommendations of the Ibbs Report it is proposed that funding of the History of Parliament Trust should be transferred from the Treasury to Parliament. The Committee has agreed, to the extent that the House of Lords may in future be included in the works of the History of Parliament Trust, to consider contributing towards the costs.
8. Staff of the House
The Committee has been informed of the following appointments—

—an additional Clerk in the Committee Office for one year in the first instance;

—an additional secretary in the Law Lords' Office;

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—two additional attendants for 6–7 Old Palace Yard;

—replacement of a part-time secretary by a full-time temporary secretary in Black Rod's office;

—the extension for one year of a temporary part-time typist in the Record Office.

The Committee has also been informed of the following—

—that Mr. Derek Rippengal and Sir James Nursaw have agreed to continue to serve part-time, sharing the work of Counsel of the Chairman of Committees for a further year, ending 30 November 1995;

—that Mr. R.H. Walters has been promoted in post as Establishment Officer to Grade 4, with effect from 1 August 1994;

—that Mr. T.V. Mohan, Committee Office, has been promoted to Chief Clerk (Grade 5) with effect from 9 July 1994;

—that Mr. E.C. Ollard, Public Bill Office, has been promoted to Chief Clerk (Grade 5) with effect from 4 August 1994

—that Miss L.J. Mouland has been appointed a Clerk with effect from 10 October 1994;

—that Major Arthur Charlesworth has been appointed Staff Superintendent with effect from January 1995, in succession to Major Peter Horsfall;

—that Mr. M. Skelton has been appointed to succeed Mr. J. Emmerson as Principal Doorkeeper, with effect from January 1995.

9. Retirement of Head of Security
The committee has been informed that the Head of Security, Chief Superintendent A.E.F. Longhurst, will retire in February 1995. The Committee has expressed its thanks to him for his professional and dedicated service to the House during his tenure of office.
The Committee has been informed of the appointment of Superintendent C.M. Harris as the new Head of Security.
On Question, Motion agreed to.

Private International Law (Miscellaneous Provisions) Bill [H.L.]
The Chairman of Committees: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That as proposed by the Committee of Selection the following Lords be named of the Special Public Bill Committee on the Private International Law (Miscellaneous Provisions) Bill [H.L.]—

L. Brightman (Chairman),

L. Coleraine,

L. Irvine of Lairg,

L. Mackay of Clashfern (L. Chancellor),

B. Mallalieu,

L. Meston,

B. Rawlings,

L. Skelmersdale,

L. Wilberforce.—(The Chairman of Committees.)

On Question, Motion agreed to.

Agricultural Tenancies Bill [H.L.]
3.10 p.m.
The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Earl Howe): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Earl Howe.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMM11TEES in the Chair.]
Clause 15 [Meaning of "tenant's improvement"]:
The Chairman of Committees: If Amendment No. 44 is agreed to I cannot call Amendment No. 45.
Lord Carter Lord Carter moved Amendment No. 44:
Page 7, line 42, leave out from ("improvement") to third ("or") in line 43 and insert ("on the holding undertaken or financed in whole or in part by the tenant, acting individually or in conjunction with others").
The noble Lord said: I shall speak also to Amendments Nos. 45, 46 and 47. Members of the Committee will appreciate that with Clause 15 we move to Part III of the Bill, which deals with the tenant's compensation. The amendments in this group are probing amendments because we seek consideration of the definition of "improvement" and the compensation for the tenant. We also wish to consider more fully a matter that was discussed yesterday. In the light of increased diversification, which under the new regime the Government expect on farms, what will be the effect on the compensation for the tenant's improvements if he is involved with a diversified enterprise?
I presume that the phrase "physical improvement" in Clause 15(a) is intended as a contrast to the phrase in subsection (b), "intangible advantage". Clause 15(a) states:
"any physical improvement which is made on the holding by the tenant by his own effort".
We have discussed the matter outside the Chamber and we have had a meeting with the Minister. We asked what will happen if unpaid family labour is used. If no expense is involved it will not be "by his own effort". If he has used unpaid family labour to carry out the improvement, will that count too?
As regards Amendment No. 44, we believe that the wording in the Bill appears to preclude circumstances in which the tenant might come to an arrangement with a third party to diversify—for example, to run a leisure enterprise on the farm—with the tenant contributing the land and the third party, say, erecting the buildings. We believe that the growth in diversification is likely to occur. However, a tenant without capital or the know-how to run an agricultural enterprise might need to make a wide range of commercial links in order to prosper. In order to meet that point, we propose inserting the words,
"acting individually or in conjunction with others".
Amendment No. 47 makes the same point and proposes the insertion of the words "or in conjunction with others". The intangible improvements could be the goodwill that is attached to a farm shop or leisure enterprise financed and run by a partner or franchisee. We are dealing with the whole area of diversification where other people are involved.
Yesterday we mentioned the compensation for ancillary non-agricultural enterprises. The substance of this group of amendments is whether all improvements, both agricultural and non-agricultural, should be treated in the same way. I am advised to inquire whether the

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Landlord and Tenant Act 1927 applies to improvements under a farm business tenancy. That Act is mentioned in the schedule, which I believe covers the point. However, it would be helpful if the Minister would confirm that.
Lord Stanley of Alderley: I warned my noble friend that I intended to raise a query about this amendment. It relates to intangible assets and in particular goodwill. Will goodwill be included in 1995 tenancy compensation assessments? Goodwill has never applied in previous agricultural tenancies but we are dealing with a farm business tenancy—and I emphasise the word "business"—and I believe that it should now attract compensation. Goodwill is becoming a feature in farms, in particular in the horticultural sector, and in my opinion it should not be discouraged.
The second issue, which is allied to goodwill, is the problem of obtaining the landlord's consent for intangible assets and goodwill in particular. Often goodwill and intangible assets will become evident only because the tenant's efforts to build up a trade, or whatever, become more successful than he originally anticipated. In such a situation, it is more than likely that the tenant will not have asked for his landlord's permission at the start. He may have been unaware that his efforts would produce goodwill or an intangible asset. I should be grateful for clarification of that point.
Earl Howe: I have listened with interest to the noble Lord's explanation of these amendments. The first amendment proposes some new wording to clarify Clause 15(a) and it may be true that it achieves more or less the same result. I am grateful for the noble Lord's clarification of his intentions but I wish to reflect on the matter.
I am not sure why the noble Lord, Lord Carter, takes exception to the phrase "by his own effort". The phrase is intended simply to cover any case where the tenant has provided the improvement but his contribution has been in some form other than a financial one; for example, the tenant may have obtained his landlord's consent to managing the holding so as to qualify for certification as an organic holding. Such certification might carry a value as an intangible advantage, since it might enable the holding to obtain premium prices for its crops or livestock.
Lord Carter: I mentioned unpaid family labour.
Earl Howe: In the situation that I have described, it might be difficult for the tenant to demonstrate that he had incurred any expenditure. However, he clearly would have obtained the certification by his own effort and if it was later assessed as having a value he would deserve to be compensated for it. For that reason, I am inclined towards retaining the existing wording for the time being. However, I take the noble Lord's point about unpaid family labour and had wondered whether that was the point of the amendment.
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If the noble Lord is content, I suggest that we on this side and Members opposite reflect on the wording in this part of the Bill and that we discuss it again at a later stage. I shall certainly consider what the noble Lord said.
He asked me whether the Landlord and Tenant Act 1927 applied to tenant's improvements. It does not; paragraph (5) of the schedule disapplies it.
I should have said a few moments ago that I am advised also that technically unpaid family labour would count as the tenant's own effort if the family are in effect acting as agents for the tenant. Nevertheless, the noble Lord has made some good points on which we shall reflect.
My noble friend Lord Stanley kindly gave me notice of the points he wished to make about intangible advantage. Judging by the note of despair which sometimes creeps into my noble friend's contributions, I cannot help but wonder whether the advantages of his holding are more intangible than most.
When I moved that the Bill be read a second time I referred to the streamlined and simpler framework which it offers, allowing parties to reach sensible agreements between themselves. Clause 15 is a good example of a simple provision which gives people enough scope to agree what will constitute an improvement in their situation. For the mainstream of agricultural activities, I doubt whether there will be many practical problems but because the Bill allows for diversification away from traditional farming it is essential that we do not attempt to prescribe a legal straitjacket which requires amendment of the law to resolve.
In the case of intangible advantage, it is a requirement that the advantage becomes attached to the holding and in the context of the comments of my noble friend Lord Stanley, it will be for the parties to decide whether in their circumstances goodwill becomes so attached.
My noble friend is right to say that the concept of compensating for goodwill has not applied in previous tenancies as a right but parties have always been able to deal with that by separate agreement. The key test for entitlement to compensation is that the landlord must give written consent. If the tenant is aggrieved by the landlord's refusal, there is the right to seek unilateral arbitration.
Lord Stanley of Alderley: Perhaps my noble friend will clarify the matter further. The point is that one may not realise that goodwill is being created. If one suddenly realises that one has generated a lot of goodwill, is it possible for the tenant to go to the landlord and say that he wishes that to be treated as an intangible asset or advantage? If the landlord refuses, is he entitled to go to arbitration?
Earl Howe: The difficulty is that the landlord would not necessarily have prior notice that such a claim for compensation was to be made. That is why it makes all the difference if, at the outset, the landlord and tenant can agree that goodwill should be counted as an intangible advantage.

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We are extremely doubtful whether it would be equitable for landlords to face a claim for goodwill when they have no prior knowledge that they might face such a claim. That is a point which may raise its head in one of our later amendments, but we do see difficulties.
Lord Carter: I am extremely grateful to the Minister. As always, he is helpful and says that there is a point to be looked at. I shall read what he said in Hansard. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 45 to 49 not moved.]
Clause 15 agreed to.
Clause 16 [Tenant's right to compensation for tenant's improvement]:
Lord Carter Lord Carter moved Amendment No. 50:
Page 8, line 12, at end insert ("and the tenant shall not be required to surrender possession of the holding until the landlord has paid such compensation in full.").
The noble Lord said: This is a simple amendment. It has been suggested by a number of people outside this Chamber that if compensation for improvements is to be paid, in order to strengthen the resolution of the landlord in paying the compensation the tenant should not be required to surrender possession of the holding until the landlord has paid such compensation in full.
There may be rights for the tenant under common law. I am not entirely clear on that. However, this is a probing amendment to see whether we can do anything to make sure, through the wording of the Bill, that the tenant receives the compensation to which he is entitled; that he receives it as quickly as possible; and that he has the power to remain in the holding until he has received it.
The amendment raises the question of the definition of "compensation". I am interested to know why the Government rejected the Agricultural Law Association's proposal to define compensation of the tenant's improvements as the "value to the landlord or the incoming tenant, whichever is the greater". The point being looked at is one we touched upon yesterday with regard to tenants' fixtures where the tenant's improvements would be put to much more valuable use by the landlord. Perhaps I may use again the example of conversion of farm buildings. I found it difficult arguing that yesterday, but I believe that it is a fair argument to use here. Let us suppose that a tenant, with consent, has converted an old cart shed into a decent, modern tractor shed. There is hope value in the sense that the landlord may be able to obtain permission to convert it for use for light rural industry. Is there any way in which the tenant could achieve the hope value for that improvement he has made to the farm?
The problem would be overcome if we used the suggested definition, "the value to the landlord or the incoming tenant, whichever is the greater". That is a simple definition which meets the point well. The amendment seeks to ensure that the landlord pays up the compensation which he should do in full and that to
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strengthen his resolve the tenant should be able to remain in possession of the holding until he does so. I beg to move.
Lord Middleton: I am not altogether happy with the noble Lord's amendment. The issues of possession and compensation should be kept separate. I believe that problems may arise if the two are confused. Secondly, the settlement of a tenant's compensation may take some time to negotiate and agree. A problem may arise if, failing agreement, a tenant remains in possession well after the term date.
Lord Stewartby: There is a fundamental problem in what appears superficially to be a reasonable and attractive idea put forward by the noble Lord, Lord Carter. I presume that compensation is in respect of repossession of land to which improvement has been made. Therefore, it cannot reasonably be payable until such land is released to the person who has to pay the compensation.
Perhaps I may give a practical demonstration. It may very well be that the landlord would expect to pay compensation for material improvements either by raising a loan on the security of the land or indeed by selling it or part of it to raise the money. If he were not allowed to regain possession of the land until he had already paid the money, there would be stalemate. I believe that that demonstrates the fact that the compensation cannot, as the noble Lord said, be tied to possession.
Earl Howe: I am grateful to the noble Lord, Lord Carter, for explaining the intention behind the amendment. When I read it, I found it rather confusing. Clause 16 requires the tenant to quit the holding in order to claim compensation but, under the amendment, he would be entitled to remain in possession until compensation was paid. Perhaps, however, we should disregard that detail and concentrate on the issues of principle.
As the noble Lord pointed out, tenants need to be compensated quickly for their improvements so that they will have the money to establish a new business. I agree that that is important. However, as my noble friend Lord Stewartby pointed out, claims for compensation cannot begin to be assessed until after the tenant has quit the holding because until then there will be some degree of uncertainty as to which improvements he will leave on the holding and the condition of those improvements. He must then put in a claim. Therefore, it is clearly in the tenant's interest to do so promptly. Clause 22 sets a time limit of two months from the termination of the tenancy. Reaching agreement on the amount of compensation is then bound to take a little time.
If agreement cannot be reached on the amount of compensation or on the appointment of an arbitrator, Clause 22 allows an application to be made to the president of the Royal Institution of Chartered Surveyors for the appointment of an arbitrator four months after the termination of the tenancy. Under the 1986 Act, it would be necessary to wait eight months. I hope that my remarks will go some way towards

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reassuring the noble Lord that we have attempted to streamline the proceedings as much as possible. However, I do not believe that we should go any further in that process.
The noble Lord asked me a question about hope value. He wanted to know what the Government's feelings were about distinguishing more closely in the Bill between the value to the landlord and the value to the incoming tenant. We shall come shortly to Amendment No. 71 which deals with that issue as an isolated subject. Therefore, with the leave of the Committee, and if the noble Lord is content to wait until that time, I propose to cover the matter at that point.
3.30 p.m.
Lord Carter: I am extremely grateful to the Minister for his response. We seemed to spend a great deal of time yesterday discussing the problems of the impecunious landlord, and it seems we are starting to do so again. Obviously, I take the point that the Minister and other noble Lords have made. I was merely attempting to make the point that there should be some means of persuading the landlord to pay up in full as quickly as possible within the law and according to the arrangements under the Bill. Perhaps surrendering possession of the holding is not the right way to do so. I should like to reflect between now and the Report stage on whether there is a better way to do so through the Bill, although that may not be possible. As I said, I am grateful for the suggestions made by all speakers. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Chairman of Committees: I should mention to Members of the Committee that, if Amendment No. 51 is agreed to, I cannot call Amendments Nos. 52 or 53.
Lord Carter Lord Carter Moved Amendment No. 51:
Page 8, line 18, leave out subsection (3).
The noble Lord said: With the above amendment, and Amendments Nos. 52 and 53, we move on to the vexed question of milk quota. To put it as politely as I can, I believe it to be a very complicated question and one which has been ducked by the Government. I think that I can understand why. In their quest for simplification and deregulation, about which we heard much yesterday, they thought that the easiest way to achieve it was, in effect, to leave it to the landlord and tenant to agree among themselves. Perhaps I may remind Members of the Committee that the last attempt to simplify and deregulate the milk market has not produced the exact results that the Government expected. However, I shall leave that aspect on one side.
There is another point that I would like to mention. I had the chance to put it to the Minister when we met to discuss the Bill and I believe it would be helpful to the Committee if he could deal with the matter. The point has been put to me about the case of a tenant who has a tenancy under the 1986 Act with a milk quota allocated according to the regulations under that legislation. That tenant then takes on a farm business tenancy from the same landlord, perhaps on an adjoining farm or whatever. He buys some milk quota in order to provide
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the resources that he needs to farm the new holding. The tenant then leaves the old holding, so to speak, that he held under the 1986 Act and takes on the new holding under the farm business tenancy. The tenant is happy that he has paid for the second lot of quota on the farm business tenancy holding, but finds to his surprise—as I am advised—that, because of the European rules about a Euro-holding, the landlord will have a share in the second quota. I am not sure that that is correct, but it is a point that was made by a leading practitioner in the field. The group of amendments now before the Committee will give the Minister the chance to reply or, perhaps, to reflect on the matter and then to deal with it at the next stage of the Bill's proceedings.
I do not believe that quotas can be left to the landlord and tenant to agree. Indeed, there must be some form of machinery. We have already tried the suggestion of model clauses and this is the kind of item under what one might call the "model heads of agreement" that the landlord and tenant should almost be forced to consider as a part of the law. Therefore, when they come to draw up a farm business tenancy, they would have to consider such things as milk quota and set-aside. Such items are now central to dairy farming.
There is another way forward. We know that the RICS is working on the drafting of the model agreements and the model clauses. Perhaps that is an alternative way in which to deal with the matter. However, I hope that Members of the Committee will agree that it is important to consider such a subject. The suggestion to leave out the subsection was obviously intended to draw the matter to the attention of the Committee.
At present the milk quota—which, in effect, is a licence to produce milk—is now worth about five times the value of the cow that produces the milk. That is an extraordinary situation, as I am sure Members of the Committee will agree. It illustrates the deficiencies of the quota system; but not for those who were allocated a large amount of quota for nothing under the European rules in 1984. There are now some large sums of money involved. There is also the problem of the SLOM quota, with which I know Members of the Committee are familiar, which must also be dealt with. The purpose of this group of amendments is to bring the subject of milk quotas to the attention of the Committee so that it may be considered.
As regards Amendment No. 52, it seems unjust that the effect of Section 13 and Schedule 1 to the 1986 Act should be avoided by the subsection in the Bill. While it does not look like a serious problem at present, it is not possible to predict the future. There should be some justification for the decision to place the farm business tenants on a different footing from a tenant who has a tenancy under the 1986 Act.
As I said, it is a probing group of amendments designed to bring out the question of milk quota. For reasons that I can understand—indeed, it is highly complicated—I believe that the Government have ducked the matter. They have said that it is a matter for landlord and tenant to agree. As I illustrated, they may have some problems with that approach because of the Euro-holding point which must be considered. However,

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for all those reasons I believe that more thought is required regarding what we do with milk quotas, because of their very substantial value in the concept of the farm business tenancy. I beg to move.
Viscount Mountgarret: I should like to speak on the subject of quota generally. I sympathise with the noble Lord, Lord Carter, in that there is a danger that the Bill will put some tenants on a different footing from those under the 1986 Act. Indeed, it would be surprising if the legislation did not alter in some way—and rightly so, I believe—existing agreements held under the 1986 Act.
However, I turn now to the quota system. My noble friend and I have had correspondence on the matter. As I understand it—and no doubt my noble friend the Minister will correct me if I am wrong; and if I am wrong, I shall be very unhappy—the quota system not only for milk but also for sheep farming, and so on, is rather tied to directives received from Brussels. There is not much that we can do about that as the quota belongs to the producer and not to the landlord. Under the new Bill, landlords will be perfectly entitled to discuss with their prospective tenants any terms that seem to both of them to be a satisfactory way of proceeding with the farm tenancy.
Among those terms could be, although I do not say that it should be, the fact that it was deemed expedient that any tenant who was in possession of quota, be it for milk, livestock or any other quota which might be instituted, could be regarded, for example, as a tenant "fixer" (for want of a better word) so that he was compensated by the landlord when the tenancy was terminated in the same way as any tenant's improvements were met by the landlord. Therefore, any incoming tenant in the normal way, as happens now, would pay for certain improvements and so on, including quota. In other words, one could affect quota belonging to the land rather than to the actual producer as is the case at present. But if, as I understand it from my noble friend with whom I have been in correspondence, it is possible under the new tenancy terms of the Bill to have an arrangement whereby quota—be it milk or livestock—could be agreed between a landlord and tenant as regards how it should be treated, then I do not see that problems would arise.
Earl Howe: I am grateful to the noble Lord for taking the three amendments together, although I realise that they raise three distinct issues. I can assure the noble Lord that the Government have no wish to duck this or, indeed, any other issue. I hope that I can assist the noble Lord and my noble friend Lord Mountgarret in what I am about to say. However, I should point out to my noble friend that the issue is rather more complex than he suggested in his remarks.
Where there is milk quota on a holding held under an existing tenancy, the tenant is entitled to compensation at the end of that tenancy under Section 13 of, and Schedule 1 to, the Agriculture Act 1986. That is for an existing tenancy. Where, after the creation of a farm business tenancy, the tenant takes steps to obtain milk quota for the holding, which then becomes attached to the holding, he will be eligible for compensation under Clause 16(1) of the Bill provided that he has obtained
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his landlord's consent for providing the quota. In this case, Clause 16(3) ensures that the relevant provisions of the Agriculture Act 1986 "shall not apply" in order to avoid the tenant becoming eligible for compensation under those provisions also. Thus it would not be appropriate to delete Clause 16(3), which is what Amendment No. 51 would do.
However, it has been suggested, as the noble Lord, Lord Carter, explained, that where an existing tenancy with milk quota is replaced by a farm business tenancy, Clause 16(3) might exclude the possibility of the parties agreeing that compensation for quota under the old tenancy should be assessed in accordance with the provisions of the Agriculture Act 1986. That is not the case. Parties are free to agree compensation for quota acquired during the Agricultural Holdings Act tenancy, using whatever basis they believe to be appropriate. However, Amendments Nos. 52 and 53 go further and would allow the parties to use the Agriculture Act provisions, even in respect of quota obtained during the farm business tenancy by the tenant at his own expense or by his own effort. In those cases, compensation would be available under the Bill and there seems no reason why the parties should be able to substitute some other basis of compensation.
Milk quota will count as an intangible advantage if supplied by the tenant. So he will be eligible for compensation under the Bill for any such quota that he has provided during the farm business tenancy which obviously remains attached to the holding at the end. The noble Lord referred to Euro-holdings. I shall have to take advice on that as I am not well versed in the matter. Perhaps the noble Lord would care to write to me with further details as I did not note closely enough the point he was making. I recognise that any issue concerning milk quotas always raises legal complexities. I hope that the noble Lord, Lord Carter, will feel able to reflect on what I have said. Between now and Report stage perhaps we can have some discussions which will assist him further.
Lord Carter: I am extremely grateful to the Minister, and to the noble Viscount, Lord Mountgarret, for the point he made about sheep quotas. The amendments we are discussing concern milk quotas but as we are in Committee I suppose we can go a little wider. This is, I believe, a classic example of where the landlord and tenant would not be able to agree something which is not allowed by European law. The European law states that the sheep quota belongs to the tenant. We have had some discussion on that matter in this House. The Government were caused some embarrassment by their own Back-Benchers on a certain Motion if I remember. Even if the landlord and tenant agreed to share the sheep quota, I do not think they would be allowed to do so. That is the point. I see that the Minister is nodding. Therefore it is not correct, as has been said, that the Bill gives the landlord and tenant the freedom to agree between themselves what might seem to be equitable if that runs foul of the European regulations. The same applies to the point I made about the Euro-holding on which I shall write to the Minister. As I said, the point

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was put to me by a leading practitioner and expert in these matters. He believes that the example I gave poses a real problem.
As the Minister said, the two parties are free to reach an agreement. However, what we are concerned about is the situation where they do not reach an agreement because they forget about it or where perhaps there is an unwritten agreement—we referred to this yesterday—which falls within the Bill. A situation may arise where the parties concerned have not dealt with the matter and have to enter into negotiations. We are trying to establish some machinery by which they are reminded about this valuable asset. It is probably one of the most valuable assets on the farm in some ways, excluding the land. As I said, we would like there to be some machinery to remind them to deal with the matter when they come to negotiate their agreement.
I like the idea of the milk quota being an intangible advantage which, by European law, is attached to the land. That is a curious quirk of the European and the British law. Here we have a description of an intangible advantage. How can an intangible advantage be attached to land because it is under European regulations? That is another reason why I think we shall have to return to this issue at a later stage of the Bill. I shall certainly write to the Minister, as he suggests, on the technical point. In the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 52 and 53 not moved.]
Clause 16 agreed to.
Clause 17 [Consent of landlord as condition of compensation for tenant's improvement]:
Lord Gallacher Lord Gallacher moved Amendment No. 54:
Page 8, line 24, at end insert ("save that, unless expressly provided in the written terms of the tenancy, the tenant shall be entitled to claim compensation for such tenant right matters as necessarily relate to the uses permitted under the tenancy without such consent.").
The noble Lord said: The effect of Amendment No. 54 is to drop the absolute requirement for written consent for compensation for tenant-right matters such as growing crops, manurial values and such like. It presumes that uses permitted for the farm imply consent for normal operations which currently warrant compensation. The amendment creates a general head of claim for valuers to seek compensation as warranted by the circumstances of each case.
The structure of the Bill requires written consent for any tenant's improvement to be compensated. While appropriate for major improvements involving significant investment and substantial changes in the character of the holding, there is no separate provision for growing crops and other matters for which compensation would currently be paid and for which tenants would expect to be compensated in future. This needs to be remedied on the face of the Bill both as a practical question and for the reputation of the reforms.
The amendment does not seek to replicate the detailed structure of the present law on tenant right but to provide a head of claim for valuers to interpret as
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appropriate in the circumstances based on the activities implied by the permitted uses of the holding. It is not seen as necessary to define tenant right since this will depend on the circumstances and the evolution of the industry. As an example, there are already areas where deer farming is not fully covered by the present detailed law. Thus it is not seen as appropriate to refer back to the detailed provisions of the current legislation.
Farmers have been accustomed for a great many years to claiming end of tenancy compensation for tenant right, first as a matter of custom and then, for the last century, under the law. It will not feel natural to seek written consent for the growing of crops which may be left behind. Owners may feel it rather odd to be asked for it. The effect of the Bill's wording is that, especially on units without written agreements, the tenant may lose the value of crops he leaves behind. As knowledge of this spreads, so tenants will tend to do less towards the end of the tenancy so reducing economic potential. That would be an entirely counter productive development; the amendment, we believe, would remedy it. I beg to move.
3.45 p.m.
Earl Howe: As the noble Lord, Lord Gallacher, pointed out, tenant-right has its origins in ancient custom which ensured that a departing tenant received at least some of the value left behind on a holding when he quit. There are many examples. Members of the Committee present today may well have experience of settlements in respect of hefted sheep flocks; others may be learned in such matters as sod fertility, with all the fascinating detail contained in Schedule 8 to the 1986 Act concerning "qualifying leys", "excess qualifying leys" and "accepted proportions", subjects of endless fascination in themselves.
The amendment of the noble Lord, Lord Gallacher, would enable parties to contract out of the basic provision of Clause 17 that a tenant shall not be entitled to compensation under Clause 16 of the Bill unless the landlord has given written consent to the provision of a tenant's improvement. It is possible for landlords to give consent to the provision of certain categories of tenant's improvements in the contract of tenancy if parties prefer to do so. This is made clear in Clause 17(2). It will be for them to agree what tenant-right matters are appropriate, if any, to their particular tenancy agreement.
The requirement to obtain consent means that both parties clearly know well in advance what claims will be made when the tenancy ends and may begin to plan accordingly. The requirement to obtain consent in itself gives a right to an aggrieved tenant to seek arbitration if the landlord refuses to give consent to a proposed improvement. That would include tenant-right.
I believe that those are very straightforward provisions which should not need any further elaboration. I hope that in the light of what I have said the noble Lord will see that the Bill caters for

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tenant-right. It allows the parties to cater for it in advance. I hope that what I have said will enable the noble Lord to withdraw the amendment.
Lord Gallacher: I am grateful to the noble Earl for his lengthy explanation of the present position and for his reference to the protection which he says the Bill gives as presently drafted, particularly in respect of written agreements. It has been a constant theme from this side of the Chamber that these agreements need to be in writing. Therefore, to the extent that what the Minister said gives further emphasis to that, we are grateful to him.
However, after listening to the noble Earl I have the impression that even when such agreements are in writing there is a somewhat circuitous procedure to deal with what by ancient custom and right would have been assumed to be the farmer's in any case.
The best that I can do in the light of what the noble Earl said is to take further advice as to whether the procedures in the Bill outlined by the Minister are satisfactory and reasonable in the circumstances. Arbitration over growing crops seems to me to be taking matters rather far, but there we are. If I am advised that all is well and that the various categories which the noble Earl enumerated as having been covered in the past can be covered in the future if private arrangements are made in the tenancy agreement in writing, then I shall not trouble him further. On the other hand, if there is an aspect of the matter which we still feel is unresolved, we may attempt to persuade him yet again of the principle, with a different form of draft, when we reach the Report stage of the Bill. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Chairman of Committees: I should indicate to the Committee that if Amendment No. 55 is agreed to I cannot call Amendments Nos. 56 to 58 inclusive.
Lord Gallacher Lord Gallacher moved Amendment No. 55:
Page 8, line 27, leave out subsection (3).
The noble Lord said: In moving Amendment No. 55 I shall also speak to Amendments Nos. 62, 67 and 70 with which Amendment No. 55 has been grouped.
In relation to Amendment No. 55, our first query is why subsection (3) has to be included in the Bill. As we see it, the parties are free to include such details as they feel to be appropriate and which do not appear to need statutory confirmation. There might be some point in having the subsection if the landlord could be taken to arbitration in the event of his asking for unreasonable terms.
Under Clause 19(5) the arbitrator can approve or withhold approval of a tenant's improvement, but he cannot make any changes to the landlord's demands. In view of that provision we would like the Minister to tell us what is the point of including the subsection. To enable him to give us that guidance, I beg to move.
Earl Howe: The noble Lord, Lord Gallacher, asked why Clause 17(3) needs to be included in the Bill. The purpose of Clause 17(3) as drafted is to ensure that any conditions attached by the landlord to his consent are
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legally binding on the tenant. It would be inequitable if the tenant were able with impunity to ignore any conditions attached to the consent and claim the full amount of compensation nonetheless. For example, the landlord may wish to specify that a building is constructed using certain materials or to ask the tenant to forgo his right to remove the fixture at the end of the tenancy under Clause 8 of the Bill. The clause therefore allows the landlord to require the tenant to accept a specified variation in the terms of the tenancy as a condition of obtaining consent.
That said, I accept that there may be anxiety that some landlords might use that provision to require tenants to accept some unrelated variation in the terms of the tenancy. But the effect of some of these amendments would be to deprive the conditions attached to the landlord's consent of clear legal enforceability. That is the central point at issue here. With the amendments in this particular group there would be no contractual duty on the tenant to comply with the conditions since they would not be terms of the tenancy. I feel sure that it is not the noble Lord's intention to provide for a tenant to receive full compensation even if he has totally ignored the conditions attached to the consent. Indeed, it might be more appropriate for the tenant to forfeit any right to compensation if he had ignored such conditions.
Amendment No. 70 raises separate issues as to whether the arbitrator should be able to lay down conditions. As that is also the subject of Amendment No. 69 tabled by the noble Lord, Lord Northbourne, I should like to address those points more fully when we come to that amendment.
I am not in the least opposed to the idea that any conditions should relate to the improvement that is proposed by the tenant. We shall discuss amendments which are directed to that purpose in a moment. But I am clear that whatever conditions are imposed by the landlord—and accepted by the tenant—they must in some way be made legally enforceable.
I hope that I have explained why the amendments in this group are unsatisfactory, and I hope that the noble Lord will feel able to withdraw them.
Lord Gallacher: The noble Earl has given me the information which I sought in tabling Amendment No. 55 in the first instance. I am grateful to him for that information. I agree with the general thrust of his remarks as to legality and the contractual position of tenant and landlord in this context, together with his references to unfair variations. I shall study his reply and take advice, as I need to do on most of these questions. I hope that I shall not need to return to this matter. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Gallacher Lord Gallacher moved Amendment No. 56:
Page 8, line 27, leave out from ("or") to end of line 28 and insert ("subject to conditions in writing").
The noble Lord said: In moving Amendment No. 56 I shall also speak to Amendments Nos. 63, 66 and 68.
Clause 17 ensures that tenants will be entitled to compensation for tenants' improvements on the termination of the tenancy only where the landlord has given his consent in writing to the improvement. That is the first principle of the Bill. While there is no argument with the principle in subsection (3) that the landlord's consent to improvements may or may not be subject to conditions, it is neither necessary nor helpful that the subsection steers the parties into conditions which require the tenant to agree to specified variations in the terms of the tenancy. It would be preferable to allow the parties to negotiate freely over whether or not to attach conditions to the landlord's consent and, if they decide to do so, what form those conditions should take. It might be in the form of varying the terms of the tenancy, but could well be otherwise depending on the circumstances.
The amendment to Clause 18, which is concerned with compensation for tenants' improvements consisting of planning permissions, is consequential on that proposed in Clause 17, and similar arguments apply.
The amendment to Clause 19(1) (c) is consequential on the proposed amendment to Clause 17. Instead of steering the parties towards the option of varying the terms of the tenancy as a means of attaching conditions to a consent, it is much better to leave the parties to devise whatever conditions suit them. The amendment to Clause 19 brings that clause into line with what is proposed for Clause 17 and refers back to subsection (3) in relation to which the amendment specifies that any conditions attached to a consent must be in writing.
I hope that I have been sufficiently clear to enable the noble Earl to give me some response to the main question. I beg to move.
4 p.m.
Earl Howe: As I said a moment ago, the purpose of Clause 17(3) as drafted is to ensure that any conditions attached by the landlord to his consent are legally binding on the tenant. However, the effect of the amendments would be to create uncertainty as to whether the conditions attached to the landlord's consent were legally enforceable. Once again there would be no contractual duty on the tenant to comply with the conditions since they would not be terms of the tenancy. The noble Lord has indicated that it is not his intention to provide for a tenant to receive full compensation even if he has totally ignored the conditions attached to the consent. I am sure that he will wish to reflect on how that factor impacts on these amendments too.
Amendment No. 66 deals with a somewhat different issue. I believe that while it is a well intentioned amendment, it would serve no useful purpose. Under Clause 17(1) the landlord's consent to a tenant's improvement is required to be in writing. That is to ensure that there is evidence when compensation comes to be assessed that the tenant is entitled to claim compensation on the improvement in question. If written consent has not been given, there is no entitlement.
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Clause 19 concerns the reference to arbitration of refusal or failure to give consent or of conditions attached to the consent. Let us imagine that on the day after receiving the tenant's request the landlord has orally refused consent, for that is the situation addressed by the amendment. The effect of the amendment would simply be that that oral refusal would have no legal validity. What then? The answer is that if no written response was received from the landlord, the tenant would have to wait until two months had elapsed from the date of his written request before he could give a notice to the landlord to demand that the question be referred to arbitration. That, I am sure the noble Lord will agree, does not benefit anyone.
With regard to conditions imposed by the landlord, it is widely accepted that the conditions must in some way be legally enforceable. I hope that I have explained why Amendments Nos. 56, 63 and 68 are inherently unsatisfactory.
Lord Gallacher: I am grateful to the noble Earl. I hope that the slight interruption in the flow of his delivery does not indicate that he has been infected by the disease which afflicts those on this side of the Chamber; namely, that the more amendments we table, the greater the confusion which arises from the answers to the amendments.
I can only say that the queries arise as a result, I believe, of serious study of the Bill. In the light of what the noble Earl said it may be that that study has given rise to misconceptions. I am grateful to him for the clear way in which he has removed certain of those misconceptions. I shall further consider his reply with those who have an interest in this group of amendments. I shall ask them whether they seriously feel that the issues should be further examined at a later stage of the Bill. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Gallacher Lord Gallacher moved Amendment No. 57:
Page 8, line 28, at end insert ("relating to the tenant's improvement which is the subject of the consent.").
The noble Lord said: In moving the amendment, I shall speak also to Amendment No. 64 in accordance with the list of groupings. When the noble Lord, Lord Carter, convened a meeting of parties with an interest in the Bill soon after its publication, there was concern that a landlord could take the opportunity provided by the clause as worded to rewrite any term of the tenancy agreement. My first query therefore is whether that is the Minister's intention. If it is not his intention, we believe that that should be made clear. If it is his intention, in our view, and in the view of our advisers, it could lead to some strange conditions being imposed, in particular if the landlord is reasonably certain that his tenant could not afford to go to arbitration.
We should like to know the view of the Minister. That view, we hope, will help us to decide whether or not to pursue Amendment No. 64. I beg to move.
Earl Howe: I indicated my general position on this issue a few moments ago when we talked about legal enforceability. The noble Lord will be pleased to hear

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that provided the conditions are enforceable I am not in the least opposed to the idea that any such conditions must relate to the improvement proposed by the tenant. Therefore we are prepared to consider the amendments further and possibly to come forward with amendments at a later stage. I am grateful to him for raising the point. With the assurance that we shall be prepared to look constructively at suggestions for linking the conditions to the improvement itself—however that intention can be worded—I hope that the noble Lord will feel able to withdraw the amendment.
Lord Gallacher: I am grateful to the Minister for what he said in respect of the amendments. Naturally, I hasten to accept his offer and look forward to the tabling of amendments which may help to dispel those queries. They were raised originally with Amendment No. 57 and might have been referred to on Amendment No. 64. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Carter Lord Carter moved Amendment No. 58:
Page 8, line 28, at end insert ("save that no such condition shall relate to compensation claimable by the tenant.").
The noble Lord said: The amendment proposes to establish that there is no opportunity to contract out of the proposed statutory valuation basis for tenant's improvements. It is possible that the combination of Clauses 20 and 26 prevents any continuation of the practice of basing compensation on writing down the cost of a tenant's improvements over a period of years. Everyone involved in tenancy agreements has felt that that has been an unfair feature. The tenant provides a substantial improvement to the farm which is written down over 20 years to £1; the tenant goes out, and the landlord is left with a substantial increase in the value of the holding. All sides have agreed that that matter should be dealt with in the Bill. I had hoped that we might have dealt with the matter by amendments to the 1986 Act within this Bill but I am told that that might not be possible.
However, the industry agreement provided that improvements should be paid out on the basis of the value that they add to the holding and on no other basis. The amendment is proposed to give full effect to that intention, and so avoid consent being given on the basis of a certain figure being imposed as a condition attached to the consent setting the nominal value that the improvement adds to the holding.
The Minister may say that the tenant has recourse to arbitration where such agreement is likely to be disregarded but the tenant in an annual tenancy may not feel that that amounts to a practical remedy and therefore may not challenge the valuation condition. The wording of the amendment may not be perfect, but I am sure that the Minister takes the point. The amendment expressly tackles the question. It establishes that there is no opportunity to contract out of the proposed statutory valuation basis for a tenant's improvements. I beg to move.
Earl Howe: The noble Lord has explained why he believes the amendment to be necessary. I am happy to be able to reassure him that it is not in fact required.
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Clause 17(3) does not go so wide as to enable a landlord to require the tenant to sign a variation in the tenancy agreement to the effect that compensation is always to be paid at written-down rather than current value. Clause 26(1) specifically overrides any agreement between the parties, whether in the tenancy agreement or elsewhere, that compensation is to be paid on any other basis than is provided in Part III of the Bill. So the safeguards are already there. I hope that with that reassurance the noble Lord will feel able to withdraw his amendment.
Lord Carter: I am extremely grateful to the Minister to have that assurance on record which I know will be helpful to those who advised me to put the amendment down. I beg to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Carter Lord Carter moved Amendment No. 59:
Page 8, line 30, at end insert ("or other intangible advantage.").
The noble Lord said: Clause 17 deals with the consent of the landlord as condition of compensation for tenant's improvements. The amendment inserts at the end of the clause and after the words "planning permission", the words "or other intangible advantage". I do not propose to move that Clause 18 do not stand part of the Bill when we come to it, but a point was raised at the meeting to which my noble friend referred when all the relevant organisations and others discussed the Bill. The question was why an exception has been made for planning permission in the Bill. It is an intangible advantage so why is it not being dealt with in the same way as all the other intangible advantages that could arise? I have discussed the point with the Minister and it would be helpful to the Committee if he explained why the Government feel that it is important to have special clauses dealing with planning permission.
It seems odd to have a separate rule for planning permission. Requiring the consent of the owner of the land before an application is made will put tenants with farm business tenancies in a different position from every other person. We know that anyone can apply for planning permission on a piece of land, whether or not they own it or have an interest in it. The general planning laws do not require the consent of the owner of the land before an application is made.
The protection for the landlord is that the tenant could not go on to act on the planning permission without the landlord's consent. The Committee will appreciate the central point that, as we understand it, it seems that the tenant is to be denied the rights which apply to everyone else under the general planning law.
There will be some intangible advantages which attach to the farm and for which consent could not realistically be obtained or for which it would be unreasonable to require consent, but it would be unfair for the tenant to go uncompensated. One example has already been mentioned on an earlier amendment, and that is the goodwill attaching to a farm business, especially with greater diversification, for example, into bed and breakfast accommodation or something similar. One can hardly ask for the landlord's consent to obtain

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goodwill. There is also the point which I raised on an earlier group of amendments regarding the additional milk quota acquired during the course of the tenancy.
For all those reasons, this is a probing amendment to ascertain why the exception was made for planning permission in the drafting of the Bill. We achieve the probe by adding the words "or other intangible advantage" at the end of Clause 17. I beg to move.
Lord Middleton: On the amendment itself, apart from the wider question of the application of Clause 17, the clause excludes payment of compensation for planning permission obtained by the tenant. That is catered for by Clause 18. The purpose of Amendment No. 59 is also to exclude from Clause 17 other intangible advantages. That would at the same time take away the necessity for the landlord's consent for an intangible improvement.
In the Bill, intangibles do not come under Clause 18 where consent is obligatory. So, as I see it, under Amendment No. 59 intangibles would emerge as not requiring the landlord's consent at all. I do not believe that that would be quite within the spirit of the Bill. I understand that the noble Lord will not argue that Clause 18 should not stand part.
On the wider question, under the Bill the landlord has an absolute right of veto where a tenant wishes to apply for planning permission. I believe that that is correct because otherwise the landlord will be compensating the tenant for something which the landlord might not want—for example, if permission were for residential housing which he did not want on his land, any compensation might amount to a very large sum indeed.
4.15 p.m.
Earl Howe: Despite the explanation given by the noble Lord, Lord Carter, I find it difficult to see why he seems so opposed to the idea that it is only equitable for the person paying compensation to know well in advance of the end of the tenancy that he is to pay it. In the case, for example, of milk quotas the landlord may be required, as my noble friend said, to pay a substantial sum of money at the end of the tenancy. Indeed, he might decide that the more affordable course would be to grant a further tenancy and that would surely be to the tenant's advantage unless he had a compelling reason to move holding.
By requiring all forms of tenant's improvement to be dealt with on the same principle—namely, that the written consent of the landlord is an essential requirement if compensation is to be paid as of right—parties know exactly where they stand from the outset. The consent requirement is by no means onerous and where the tenant is aggrieved over the lack of consent or conditions attached to it, the Bill ensures that the matter may be resolved with the assistance of an arbitrator.
Clause 17(4) does not exempt planning permission secured by a tenant from the requirement that written consent be obtained from the landlord in order to ensure that compensation may be paid. All that the subsection does is to remove planning permission from the general
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provisions concerning tenant's improvements in Clause 17. Specific rules are provided for planning permission in Clause 18 and it may be of assistance to the Committee if I outline them briefly.
Clause 18 implements the joint industry agreement on agricultural tenancy reform of December 1993 that compensation will be payable in respect of a planning permission gained by a tenant which is related to activities on a holding permitted by the terms of an individual tenancy agreement. It is not intended that the tenant should obtain a share of the development potential by being compensated for the fact that a planning permission enables development other than for the specified purpose for which the consent of the landlord was given.
That means that the requirements for landlord's consent under Clause 18 are slightly different from the provisions in Clause 17 which cover other intangible advantages. A landlord's consent in respect of planning permission must be expressed to be given to enable a specified physical improvement to be made or a specified change of use to be effected. Also, at the end of the tenancy that improvement must not have been completed or the change of use must not have been effected.
Clause 18 imposes a necessary limitation on compensation in respect of planning permission. As Members of the Committee may be aware, there is no legal requirement that planning permission must be sought only by a landowner and planning permission may enable fairly general development or a change of existing use to be made. Clause 18 makes it clear that entitlement to compensation in respect of planning permission is directly related to a physical improvement or change of use that was specified at the time consent was given by the landlord. Thus, although we are introducing for the first time the possibility for the tenant to be compensated for an unused planning permission, there are certain safeguards to ensure that he is not over-generously compensated, that is to say, compensated out of proportion to the value of the improvement for which the permission is sought.
With the leave of the Committee, while we are debating intangible advantages, perhaps I may revert to the question which my noble friend Lord Stanley put to me a while ago. He asked whether a tenant could seek consent part way through a tenancy if he had already begun to build up goodwill. The tenant may seek consent at any time, although, of course, it is prudent to seek it before making the improvement, as I indicated earlier to my noble friend, because the landlord might refuse. What the tenant cannot do is go to the arbitrator to obtain retrospective approval because the tenant has in effect pre-empted the case by going ahead with the improvement, albeit part way. So, as I said earlier, the advice to a tenant would be to seek an agreement with the landlord at the outset. I hope that with those words of explanation, the noble Lord, Lord Carter, will feel able to withdraw the amendment.
Lord Carter: I am very grateful to the Minister and to other noble Lords who have taken part in this debate. This is a complicated point. The reason why I have

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decided not to oppose Clause 18 stand part was that I suspected that we could deal with the issue in relation to this amendment and thus save the time of the Committee.
I still have one concern. As I understand it—and perhaps the Minister can confirm this point—under general planning law anyone can apply for planning permission on a piece of land whether or not they own it or have any involvement with it. It is often the case that developers go round the country and put in for planning permission even without the owner being aware of it until he sees it on the agenda of the local planning committee. Are we saying that the tenant under a farm business tenancy is to be put into a separate category where he will be the only category of person to whom that does not apply? It would be helpful if the Minister could reply on that point. It is central to the debate.
Earl Howe: I am not quite sure that I understand the noble Lord's point. He is, of course, quite right in that the planning laws in this country enable any individual to apply for planning permission on any piece of land, whether it is their land or someone else's. Here, quite clearly, if a tenant has by his own efforts sought and obtained planning permission for a specified development, then it is equitable that at the end of the tenancy, assuming that the development has not proceeded, he should be recompensed for that planning consent. If someone else has been responsible for obtaining the planning consent, then the situation is somewhat different. If, for example, the landlord has applied for the consent, my understanding is that the landlord has a case for claiming that the value of the planning consent should be attached to him. What the tenant has to do is get the landlord's consent first. That is the pre-requisite for obtaining compensation at the end of the day.
Lord Carter: A shaft of light suddenly strikes the Minister on this point. There is a point here which I shall not labour, but on which I am still not clear. It seems to me that, if we are not careful, farm business tenants will be a unique category. Perhaps I may give as an example the situation—it is a little unlikely but is possible—where a tenant decides that there is some development value in the land on which he farms. In the ordinary way, whether or not he had any involvement with that land, he could apply for planning permission. As I understand it, before he can even apply for planning permission on that land he has to get the landlord's consent. I believe that that puts him in a unique category. I see that the noble Earl, Lord Kinnoull, knows something about this subject. I give way to him.
The Earl of Kinnoull: I believe the point is that if a developer makes an application and notifies the owner, he still has to buy the land. He may go through the whole process and the cost of an application and appeal is charged to him, but still he has to negotiate. Hopefully, he will negotiate an option. If the tenant applies, he will have to have had permission from the landowner first if he is to gain anything at all out of this. I am sure that the normal course will be an application
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for a building related to the farm business, not a residential five-acre development. That would be very unusual. If that happened, I assume that the landlord would not give permission because he would feel entitled to gain from that as it would be a residuary interest to his farm.
Lord Stanley of Alderley: As this is Committee stage, perhaps I may enter the debate. I have to get my shafts of light, when I get one, by going outside. I believe that the point has been made that it is vitally important that we have (not on the face of the Bill) these heads of agreement to warn tenants and landlord, before they enter into agreements, of the possible problems that could occur. They were discussed yesterday.
Lord Monkswell: I wonder if I may seek some clarification. The Minister will no doubt correct me if I am wrong. As I understand it, if a landlord does not want to see development on his land, he can effectively deny the tenant the authority to apply for planning permission or to get any benefit from that planning permission. The result is that when the tenancy comes to an end the landlord is not required to compensate the tenant for any planning permission that has been gained. That is right, in the sense that if the landlord was required to compensate the tenant for the planning permission that was gained, the tenant would then almost be forced to go ahead with the development of the land, which the landlord did not want. I can accept that side of the argument. No doubt the Minister will tell me if my interpretation is wrong.
The point that concerns me is this. Where a tenant, with the permission of the landlord, obtains planning permission, from what the Minister said earlier there seems not to be what I would describe as a free market situation in the sense that the tenant and the landlord have to come to an agreement as to how the development gains will be shared. The Minister seemed to imply that even though the tenant had received the planning permission—and that might have been the result of quite extensive work by the tenant—the landlord would be in the position of being, as it were, a privileged party and taking most of the development gains should the development go ahead. I hope that I am wrong, but that is my impression of what the Minister said.
Earl Howe: Perhaps I can be of some help to the noble Lord, Lord Monkswell. He should bear in mind that the land does, after all, belong to the landlord. The landlord is therefore in a privileged position in that sense. It would not make sense for any application for planning permission to go ahead without the landlord's consent under the terms of the Bill. After all, even if the tenant were to go ahead with such an application, the landlord could oppose it when the case came to be considered by the local planning authority. So the landlord in any case has a sanction as an interested party.
If for some reason the tenant is able to proceed with the development—let us suppose, for the sake of argument, that he gets his planning permission notwithstanding the objection of the landowner—then the tenant does so at his own risk. He does so in the

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knowledge that he is not able to claim compensation for the improvement at the end of the term. He may still make a conscious decision that he wishes to go ahead because he needs the building, or whatever it is, to house his animals, or whatever the case may be. But he runs the risk that because he has not obtained the landlord's consent he will not be compensated for that asset. It may not matter that the term of the tenancy may be long enough for it not to matter. He may be able to dismantle the asset (the building, or whatever) when he leaves the holding. There are various other avenues for him to pursue. But he closes his options if he does not obtain the consent of the landowner.
Lord Carter: We have had a "clause stand part" debate even though we did not intend to. It is interesting how often when we discuss issues in this Chamber that the fundamental difference between Right and Left comes into play. It is the difference between concern for property rights and concern for personal rights. However, this is not the time to go into that issue.
In his first reply the Minister said that it could not be expected that the share of any development value should accrue to the tenant rather than to the landlord. I can only say that if a Conservative government ever introduced a measure which allowed the tenant any share of the development value, it would be very surprising.
Earl Howe: I said "development potential". That is rather a different thing.
Lord Carter: "Hope value" has a value, and a substantial one. As I said, this illustrates the point that I made about the concern of the Government side for property rights and the concern of the Opposition side for personal rights.
There is also the possibility mentioned to me by my noble friend Lord Gallacher that the local authority might require the land. We have laboured the point enough. There is an issue here which needs further consideration. I certainly need to take advice outside the Chamber. This is a matter to which we shall return at Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 17 shall stand part of the Bill?
The Earl of Kinnoull: I wonder if I might briefly interrupt. Clause 17 is a fairly turgid clause. The Committee has done very well in not straying too far from the brief. My noble friend referred to compensation in regard to tenants' improvements and also said that that included tenant-right. I should like to make quite certain that there is no question that within a tenancy agreement neither party can contract out of tenant-right, as they cannot under existing legislation.
4.30 p.m.
Earl Howe: When we debated the matter of tenant-right I assured the noble Lord, Lord Gallacher, that the Bill provided for tenant-right to be. included in the tenancy agreement. As for contracting out, if the
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landlord contracted out of the need to deal with tenant-right at the end of the tenancy that would not be acceptable to most tenants. One supposes that that will be a serious sticking point in any negotiations between the parties. Quite clearly, it is essential that the tenant has the landlord's assurance that that matter will be dealt with in a certain fashion when the tenancy comes to an end.
Lord Carter: This is a classic example of the weakness of the Bill. The assumption is that the landlord and tenant will negotiate as equal partners. I give an example with which I know a lot of your Lordships will be familiar. In the past, institutional landlords have used the desire of a tenant to obtain a farm to change the terms of the tenancy. The tenant will be told, "If you want the farm, this is what you have to do." We always used to pay our rents six months in arrears. Most institutional landlords, because of the requirements of pension funds or whatever, unilaterally said that the condition of their tenancies was that rents would be paid quarterly, sometimes in advance. That is a classic case where the tenant will say, "I do not like it. It is not the custom in the country but I want the farm and so I will agree to it." The same will apply under this Bill, as it has under previous Acts of Parliament, if it is not prevented.
There is an assumption that the landlord and tenant will settle down as reasonable people and agree. Tenants will be very anxious to get these farm business tenancies. We know that demand exceeds supply. The landlord can say that the condition of the tenancy is that the tenant-right will not be included. If a tenant wants the farm that is the deal. The tenant will either have to agree to it or not take the farm.
Earl Howe: The noble Lord overlooks one very important point about this Bill compared with all other previous legislation. Given that a landlord has decided to let a holding, if he is faced with the prospect of a lifetime tenancy naturally he will call the shots on every other aspect of the tenancy that he can. What we now have is the prospect of a bargaining situation from the outset.
The question that will be asked—which has not be asked for a very long time—is how long the tenancy will be for. That is probably the first question that the parties will wish to agree upon, but it may not end there. That is probably a bargaining point that can be used to influence many other aspects of the tenancy. I do not believe that the noble Lord's pessimism is well founded. The bargaining situation between landlord and tenant will be completely transformed by the flexibility afforded by the Bill.
Lord Carter: The Minister has just made my case. The landlord will say, "It is a 10-year agreement with tenant-right; it is a 15-year agreement without. You choose." It is an open market with free bargaining and no statutory control. The landlord will say, "If you want a longer tenancy I will put some conditions on it." Perhaps the example of the tenant-right is not the best one. The commercial property market is at present a buyer's market. The tenant can call the shots. He can impose conditions under the contract. In the ordinary

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way, they will be unacceptable to the landlord but he has to accept them because he wants to let the office block, or whatever it is.
I believe that exactly the same will apply, but the other way round, in this market. For all sorts of reasons there will be a shortage of land to let. I accept that it is the tenant's judgment, whether or not it is misguided. But I believe that, because of the removal of the statutory protections, landlords will impose certain conditions and say, "If you want a longer tenancy you will agree to these conditions. If you want the tenant-right you can have it for 10 years; with no tenant-right, it will be 15 or 18 years."
Earl Howe: In the classic example that the noble Lord has given there are two buyers, not one. Each has an interest in securing a fair agreement. All sorts of matters will require the consent of both the parties. I do not believe that it is as simple as he portrays. I believe that the point I have made still stands. There will be a much healthier bargaining climate under this Bill. There will no longer be a one-sided disadvantage, as there has all too often been in the past.
Lord Cledwyn of Penrhos: Will the noble Earl agree that, whatever the advantages, the tenant will have lost something very important; namely, his security?
Earl Howe: He will at least have a tenancy, which is a lot better than the kind of short-term arrangements that are now being negotiated under Gladstone v.Bower or grazing-type agreements that certainly do not help tenants to establish thriving businesses and enable them to invest for the long term. This Bill will at least get the industry out of that rut. We know from indications provided in a recent survey by the RICS that much of the land that will come onto the market for letting will be available for 10 years or more.
Lord Stanley of Alderley: I believe that I started this hare in relation to the question of rent and scarcity—a point brought out by the noble Lord, Lord Carter. My noble friend will not be very pleased when I say that the noble Lord, Lord Carter, is right. Of course, as a tenant I will agree to practically anything. The tenant-right and everything else will go, but —this is where I will annoy the noble Lord, Lord Carter—if I wish to agree to it, so be it. Under the agreement that is now before your Lordships in the Bill, I believe that, on balance, the tenant will pay a higher rent and will sacrifice his soul to get it, but it is better to have that and land put on the market than to have the present situation where obviously the landlord will not let. I should like this question to go to sleep. We have aired the matter, and I believe that both of us know where we stand.
Lord Carter: The noble Lord, Lord Stanley, said that he would agree to anything. I know that the Whips, on the basis of past experience in this House, will agree with that.
Lord Monkswell: This afternoon reference has been made to different forms of tenancy; that is, the things that do not amount to a proper tenancy which it is hoped
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will come into a proper tenancy. It is interesting to those of us who are not intimately involved in agriculture to learn about these kinds of assets.
I make two other points. The type of landowner will be different. The Bill refers to landowners. Someone who is not closely involved in agriculture will think of a landowner as a country squire—someone who has a large acreage of land to let to a tenant farmer and who is intimately involved with its long-term future. We have to recognise that landowners are not necessarily of that ilk. Many of them are institutions and City firms with no love for the land and no interest in maintaining the environment to the benefit of the countryside.
Because of the horrendous market situation that will be engendered by the Bill, a lot of people will want tenancies and very little land will be available for them. It will drive up rents and the price of tenancies. What will be the knock-on effect of that? In this country and overseas we can see examples where increases in rents charged to tenant farmers have been so large and have put so much pressure on farmers that to eke out an existence they have been forced to rape and pillage the land. One thinks of the Oklahoma dust bowl in the 1930s. I wonder whether, in their ideological fervour for free market solutions to everything, the Government have thought through the implications for our countryside and for the land.
Lord Middleton: With great respect, the Oklahoma dust bowl is a long way from the amendment we are discussing.
The Earl of Kinnoull: We are addressing Clause 17 stand part. Coming back to tenant-right, I am a little unhappy. No doubt the industry has agreed this, but whereas the noble Lord, Lord Carter, said yesterday that he did not always agree with the industry, perhaps he is changing his mind today. Where there is an unwritten tenancy and where the Royal Institution of Chartered Surveyors gives guidelines or model clauses, will they address the question of tenant-right? I remind my noble friend that tenant-right has been fundamental in all previous legislation.
The Earl of Harrowby: I, too, would like to express my concern about the possibility of a tenant having to surrender tenant-right. I do not have the same optimism as my noble friend the Minister about the freedom that will be engendered in the bargaining position and the equality of the bargaining position. I do not think it will arise until the whole tax situation is fundamentally altered. I am concerned that a tenant can be inveigled or pressurised into losing his age old rights. I cannot believe that that is what the average landlord would want. He would not think it was right. I accept the point about institutional landlords. I ask my noble friend the Minister to give this matter further consideration.
Earl Howe: We have had a very interesting debate on this clause which, I must say, I was not expecting. I take on board all the points that have been made about tenant-right. We had a debate on that subject earlier on. My noble friend himself said that most landlords would be keen to see their tenants properly compensated for tenant-right. I am sure he is correct in saying that. The

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answer that the prospective tenant would give if he were refused the opportunity of compensation for tenant-right would be to walk away from negotiations. I contend that in most cases that will become a possibility because there will be a lot more land on the market to rent and there will be much greater choice available.
The noble Lord, Lord Monkswell, expressed his fears about the way the world is moving. He said that the type of landlord may turn out to be rather different in the future from how he has been in the past. There are already institutional landowners. Not all of them are faceless. Charities, foundations and the National Trust are, I am sure, good examples of very responsible landowners who like to see the land managed properly. Indeed, it is in their interests to do so because they are protecting their own asset.
I do not necessarily accept that the effect of the Bill will be to drive up rents. Views on that subject differ. If market forces operate, then increasing the supply of land for letting should, if anything, tend to bring rents down. We must remember that 75 per cent. of all new letting at the moment is currently done on short-term arrangements that are not subject to the 1986 Act rent formula. Therefore, one cannot necessarily make too many judgments from that. The scarcity factor should melt away, which will have a beneficial effect on rents as far as concerns the tenant.
I do not want to detain the Committee for too much longer. I have stated my view that I regard the future with optimism. I hope I am proved right.
Clause 17 agreed to.
Clause 18 [Conditions in relation to compensation for planning permission]:
[Amendment No. 60 not moved.]
Lord Gallacher Lord Gallacher moved Amendment No. 61:
Page 8, line 42, leave out paragraph (c).
The noble Lord said: Amendment No. 61 is in the form of a probe. In order that the probe can be comprehensive, the terms of the amendment are to leave out paragraph (c). The query turns on the definition of the word "completed" in this paragraph and also on why it is necessary to have it. For example, a development may be phased. Phases 1 and 2 may be completed—the leisure park and the miniature golf course—but not phase 3; the conversion, say, of a barn to a restaurant. Even a partially completed individual improvement may add some value to the tenancy and may be worthy of compensation. In addition, with no counter notice procedure to protect the tenant, the landlord may give the tenant notice before he has been able to complete the improvement in order to avoid the payment of compensation. Our fears in this respect may not be well founded because what I have just outlined may not be the intention. Indeed, it may not even happen. Nevertheless, we believe a possibility exists and the reason for the probe is to ascertain the Government's response to this possibility. I beg to move.
4.45 p.m.
Earl Howe: I am grateful to the noble Lord because he has enabled me to put my reply on the record, which
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I am sure will be helpful to him. Compensation for a planning permission as a separate item is only paid when the physical work has not been completed or the change of use has not been effected. Where the work has been completed the tenant is compensated for the value of the improvement, including any value due to the planning permission. That is made clear in Clause 20(4). If one were to carry this amendment through into the Bill it would lead to double counting.
The noble Lord asked about work in progress. That may or may not be an asset to the holding at the end of the term, an asset which a subsequent tenant would find of value. Clearly, that is a matter to be assessed when the tenancy comes to an end and the valuer does his work. It could, on the other hand, be deemed a liability in certain circumstances. I do not think one can necessarily generalise but the point of principle is, I hope, clear as regards the planning consent itself.
Lord Gallacher: I am grateful to the noble Earl for what he had to say about Amendment No. 61. I have always been wary about work in progress and valuations in balance sheets and I shall look at that in the context of this amendment. I am grateful for the noble Earl's reference to Clause 20(4), which I shall study together with his remarks. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 62 to 64 not moved.]
Clause 18 agreed to.
Lord Carter Lord Carter moved Amendment No. 65:
After Clause 18, insert the following new clause:
Consent not to be unreasonably withheld
(". In sections 17 and 18 above, "consent" shall be interpreted as meaning "consent not to be unreasonably withheld"").
The noble Lord said: We are all familiar with these words. The wording simply supplies a test against which refusal of consent by the landlord is to be measured. The wording is commonly used in tenancy and other agreements. It would not prevent recourse to arbitration but might make unreasonable refusal less likely and so would help to cut down the number of arbitrations. We know that the Minister is a very reasonable person. I cannot imagine that he will not accept this helpful, clarifying amendment. I beg to move.
Lord Middleton: When we were debating Amendment No. 59 I referred to the landlord's right of veto—in other words, he could refuse to give consent in a Clause 18 application by a tenant for planning permission. I gave reasons why I thought it was right that that veto should be kept. He has the veto because in Clause 18 if he does not give consent the tenant cannot refer it to arbitration. I explained why I thought it necessary for the landlord to keep that right. This amendment waters down that right and I am not happy with it.
Earl Howe: It is worth reminding ourselves of a central point at this stage. One of the main objectives of the Bill is to encourage landowners to let land. If we are to succeed in that they must have confidence that their interests will not be overlooked. We have to recognise

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that agricultural tenancies are not quite the same as commercial tenancies. That is a point which the noble Lord has used to his own advantage in our debates to date. In the agricultural sector many more landlords are likely to have a close personal interest in their land and the way it is managed and developed.
As regards the question which the amendment raises, there is a delicate balance to be struck. The noble Lord's amendment would mean that the landlord's consent could not be unreasonably withheld. As I understand it, that means that there would be a presumption in favour of the tenant making the improvement; the balance would be tipped in the tenant's favour. Instead of that, we have given the tenant the right to go to arbitration if the landlord refuses consent. An arbitrator will have to decide whether it is reasonable for the tenant to provide the improvement, having regard to the terms of the tenancy and any other relevant circumstances, including the circumstances of the landlord and the tenant. This is a much better approach where agricultural tenancies are concerned and all the main industry organisations agree that it represents a fair compromise between landlord's and tenant's interests. Rather than depart from the spirit of the industry agreement, I hope that the noble Lord, Lord Carter, will feel able to withdraw the amendment.
Lord Carter: It is very amusing to see noble Lords opposite twisting around on this matter. The noble Lord, Lord Middleton, put the point very clearly and we understand what he is saying; namely, that the landlord must keep the right of veto and anything which waters down that right is unacceptable. I was slightly amused by the words of the Minister to ensure that the landlord's rights will not be overlooked. Anyone who believes that the landlord's rights have the slightest chance of being overlooked is not reading the same Bill as I am. The noble Earl referred to the delicate balance between the landlord and tenant. That is not the real world which is being talked about.
The amendment is a very simple and, I hope, helpful proposal that consent is,
"not to be unreasonably withheld".
If it is not accepted, then consent, if the English language means anything, can be unreasonably withheld.
The noble Earl referred to the rights of arbitration. We all know what that costs and that the scales are definitely balanced in favour of the landlord. We have all advised tenants and said to them, "If you go to arbitration it will cost you £10,000. If you are lucky you will get perhaps £3 an acre on a.300-acre farm. That is knocked off the rent and that is £900 over three years. So do not go to arbitration". We all know how it works.
I really felt that by accepting this amendment the Government would be saying that they were prepared to show that the remark which was made to me was a little unfair; namely, that this is a landlord's Bill. But as the debate has developed I have begun to wonder whether that description of the Bill is in fact correct. We shall not spend any more time on it at the moment but, as we did yesterday, we are learning a great deal as the Bill proceeds. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 19 [Reference to arbitration of refusal or failure to give consent or of condition attached to consent]:
[Amendments Nos. 66 to 68 not moved.]
The Deputy Chairman (Lord Brougham and Vaux): If Amendment No. 69 is agreed to, I cannot call Amendment No. 70.
The Earl of Kinnoull The Earl of Kinnoull moved Amendment No. 69:
Page 9, line 31, leave out from ("may") to the end of line 34 and insert ("withold his approval for the proposed tenant's improvement or may approve it either unconditionally or subject to such conditions as he may think fit after considering the matters set out in subsection (4) above.").
The noble Earl said: I move this amendment in the absence of the noble Lord, Lord Northbourne. I am sorry that he is not here because he is very lucid on these technical points. He has asked me to move the amendment.
This is a very important clause—the reference to arbitration—as my noble friend has explained. When it comes to how the arbitrator will work, I understand that much of what has happened in the past as regards the 1986 Act has been imported into the Bill except for the fact that the arbitrator is limited in his flexibility. He can say either yes or no, but he cannot impose any conditions. It is a hindrance to good arbitration and a good result for both the landlord and tenant. I do not believe that I need explain it any further, but I am happy to do so if my noble friend so wishes. I beg to move.
Lord Carter: This is a helpful amendment because it enables us to discuss what I believe was in the mind of the Government; namely, a form of pendulum arbitration. Both sides will know that if they go to arbitration, as the noble Earl said when he moved the amendment, the arbitrator will say either yes or no. He will not do as he can now. Those of us who have been involved with arbitrations are familiar with the procedure. He will put certain conditions and suggest to the two sides that they think about some other way of approaching the problem. He will isolate the one area where he feels that his ruling is required and he will tell the parties to agree between themselves about other things.
A good deal of flexibility in arbitration has been deliberately removed by the Government. It is almost like a referendum where you say either yes or no. That may have been subconsciously in the mind of the Government when they were considering the matter. The Bill removes all the skill of arbitration in the sense that the arbitrator is given no flexibility at all to try to vary the situation, to see the weaknesses in one case or the other, and to advise either side as to which way they might go. I have been involved in arbitrations. I have experienced being sent out with the other side's professional in order to do a deal on one aspect while the arbitrator stays in the room with the others and debates the point.
There is a great deal of flexibility if you can afford to go to arbitration. But that is all being deliberately removed by the Government. They have explained why.

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It is because they believe that it will help restrict the number of applications for arbitration. It will be said, "You are taking a big risk and it is a winner-takes-all bet that you are on". It is rather like the National Lottery or something of that nature. When you go to arbitration you have to decide whether your case is strong enough for the arbitrator to say yes or no because he is not going to say maybe.
Earl Howe: This has been a very interesting short debate on the amendment introduced by my noble friend. I realise that the aim of the amendment is to give arbitrators greater flexibility when considering whether or not a tenant should be allowed to make an improvement for which he will be entitled to compensation. However, I have to say that I am not convinced that in this instance flexibility is desirable. Landlords may be nervous about the type of conditions which arbitrators might attach when giving consent. In any case, we would have to prohibit what might be the most obvious condition; namely, a reduced amount of compensation for the improvement. As many Members of the Committee are aware, one of the key provisions in the Bill is that a tenant should receive full compensation for improvements made with the landlord's, or an arbitrator's, consent.
I would like to suggest, as the noble Lord, Lord Carter, foreshadowed in his remarks, that if the parties know that the arbitrator is limited in what he can do, they will endeavour to reach agreement. Arbitration is, after all, a last resort. We believe that a single test of whether it is reasonable for the tenant to proceed with the improvement, either unconditionally or subject to the landlord's conditions, will encourage compromise between the parties and reduce the temptation to take up extreme positions and rely on the arbitrator to "split the difference", as it were. We have discussed this in detail with the industry and I am pleased to say that the main landlord and tenant organisations share the Government's view. In the light of that, I hope that my noble friend will agree to withdraw his amendment.
Lord Carter: Before the noble Earl decides what to do with the amendment, perhaps I may say that we have had a lot of discussion about the impecunious landlord; we now have the nervous landlord as well.
The Earl of Kinnoull: I am somewhat nervous about what to do because the noble Lord, Lord Northbourne, is not present and I feel that he had a good point. I am not privy to the discussions which the Government have had with the arbitrators, the Royal Institution of Chartered Surveyors and all those who know a great deal about the subject. Although I shall be happy to withdraw the amendment, I should like to feel that the matter may be reconsidered. I should also like to take advice from outside before we reach another stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 70 not moved.]
Clause 19 agreed to.
5 p.m.
Clause 20 [Amount of compensation for tenant's improvement not consisting of planning permission]:
The Earl of Kinnoull The Earl of Kinnoull moved Amendment No. 71:
Page 9, leave out line 45 and insert ("landlord's reversion").
The noble Earl said: In moving Amendment No. 71, I should like to speak also to Amendments Nos. 72 and 73. This is an important amendment as Clauses 20 and 21 deal with compensation.
The provisions relating to compensation for tenants' improvements are spelt out in Clause 20(1). The compensation is to be,
"an amount equal to the increase attributable to the improvement in the value of the holding at the termination of the tenancy as land comprised in a tenancy".
I understand that that compensation has been agreed by the industry, but I am nevertheless advised that it could prove to be extremely unfair because when a valuer sees a very specialised improvement, which is suitable for the tenant and his business but which may not be at all suitable for another tenant or, indeed, for the holding, the landlord will be subject to paying compensation for something that will be worthless to him in the future. I say that because the valuer will look at the improvement and say, "That improvement is worth £x per acre in addition to the existing rent". That will be a notional rented figure. The valuer will then take another notional figure, the year's purchase, and will come to a compensation figure. The valuer will not look at what I think he should look at, which is the question of the value of the improvement to the landlord's interest upon the termination of the tenancy.
That is why I have tabled this amendment which seeks to substitute the basis of the compensation to the "landlord's reversion". It is an important amendment. It is not just a landlord's amendment. It is intended to seek parity between the parties. In a way, it is a technical point about valuation. It endeavours to encourage the furtherance of the Bill because compensation for improvements is a very important feature of the Bill. I beg to move.
Lord Carter: I can see the point that the noble Earl is making. It is a fair point, but presumably the landlord will have given his consent to the improvement otherwise it would not be up for compensation. Having given his consent in the knowledge of what the improvement was likely to do to the farm, the landlord cannot really then turn round and say, "It isn't worth what I thought it was, so it isn't worth as much as the tenant thinks because of the increase in the value of the holding". As I have said, I can see the point that the noble Earl is making, but if the landlord has given his consent, does he not ultimately have to accept what the valuer says?
Earl Howe: I am grateful to my noble friend Lord Kinnoull for his explanation of the amendment. I am not persuaded that this amendment would set a more

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appropriate basis for compensation. Clauses 20 and 21 as drafted refer to the increase in the value of the holding as land comprised in a tenancy. This is based on the assumption that the holding is re-let to another tenant, which seems the most reasonable assumption. I have to confess that I have not had time to consider in detail precisely what effect the amendment would have, but I am advised that in practice it might have two effects. First, if the landlord was intending to use the land for non-agricultural purposes when the tenancy terminated, there is a risk that the tenant's improvements would be assessed as having no value to the landlord's reversion. The tenant would then get no compensation, which is clearly unacceptable. The second effect would be that in the case of compensation for planning permission, the landlord might be the loser. This is because the amendment would appear to require him to pay the full increase in the value of the landlord's reversion, instead of the increase due to planning permission for the specific improvement that the tenant was intending to make. This is not an easy issue, but I can say that we consulted the industry organisations, including the Central Association of Agricultural Valuers, on this specific point and none of them saw any difficulty with the wording that we used.
With regard to my noble friend's opening remarks, I think he was addressing a separate point when he tried to suggest that there might be circumstances in which a landlord found himself paying over the odds for improvements at the end of the tenancy. If my noble friend will allow me to do so, I should like to discuss that matter when we reach Amendment No. 72. Therefore, if he will forgive me, I shall not cover that very important point now although I believe that I can deal with it satisfactorily. I hope that my noble friend will feel sufficiently reassured to withdraw his amendment.
The Earl of Kinnoull: I am grateful to my noble friend, although I cannot say that I am reassured because the subject is quite technical. Therefore, I should like to take his answer away and to consult outside advisers. Perhaps I shall be able to meet my noble friend before the next stage of the Bill.
The noble Lord, Lord Carter, referred to the landlord giving consent. Despite the fact that the landlord has the material right not to give consent, the tenant can refer the matter to arbitration and the arbitrator may rule in his favour.
Lord Carter: Before the noble Earl sits down, if the tenant has gone to arbitration and the arbitrator has ruled in his favour, surely the noble Earl is not suggesting that the improvements should be down-valued. After all, although consent has been given via the arbitrator rather than directly, it has still been given and the landlord cannot really expect some change in the basis of the value.
The Earl of Kinnoull: It is perhaps easier if one describes a case. Growing crops such as cauliflowers or brussel sprouts can be intensive, and to maximise the crop value one has to erect certain buildings and to buy certain equipment. It could well be that both the tenant and the landlord see that as a good thing, but the tenant
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may, sadly, suddenly die and the landlord will be left with a massive operation for which he cannot find a subsequent tenant. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Kinnoull The Earl of Kinnoull moved Amendment No. 72:
Page 9, line 45, at end insert ("let to a tenant of average skill and competence in the agricultural systems commonly practiced on similar land in the district.").
The noble Earl said: I shall move the amendment briefly, because I believe that my noble friend wishes to make an important statement on the point. So that I do not misconstrue the purpose, I beg to move.
Lord Carter: We can only wait with bated breath to hear what the Minister is going to say.
Earl Howe: I am grateful to my noble friend for giving me the opportunity to speak to the amendment, which raises an important point.
I am sure we all agree that a landlord should not have to pay a large amount of compensation on an improvement which will be of no use to an incoming tenant. I am advised that that is already achieved under Clause 20(1) as drafted and that this amendment is therefore unnecessary. The amendment as drafted is in any case somewhat narrow because it refers only to the competence of the incoming tenant in matters of farming, whereas, of course, some of the improvements on a diversified agricultural holding will be non-agricultural.
It may help if I explain how Clause 20(1) will work in that respect. It requires the value of the improvement (and hence the compensation) to be based on the extent to which the improvement increases the value of the holding, on the assumption that the holding is relet. If an improvement were of a highly specialised nature there would be little or no demand for it and it would not increase the value of the holding to any great extent. Therefore it would not attract an over-large amount of compensation.
There is, of course, the additional safeguard that the landlord or an arbitrator—as the noble Lord, Lord Carter, pointed out on a previous amendment—must give consent to the improvement if the tenant is to be eligible for compensation. An arbitrator, who must have regard to the circumstances of the landlord as well as those of the tenant, is unlikely to consent to an improvement that would be of no use either to the landlord or to future tenants of merely average competence.
In the light of that explanation, I hope that my noble friend will agree to withdraw his amendment.
The Earl of Kinnoull: I thank my noble friend for the clarity of his reply and the wisdom of his words. I am happy to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 20 agreed to.
Clause 21 [Amount of compensation for planning permission]:
The Deputy Chairman: I must point out that Amendment No. 73 should read "leave out from the second ("the").
[Amendment No. 73 not moved.]
Clause 21 agreed to.
Lord Gallacher Lord Gallacher moved Amendment No. 74:
After Clause 21, insert the following new clause:
Compensation for damage by game or hunting
(".—(1) Where the tenant of a farm business tenancy has sustained damage to his crops—

(a) from any wild animals or birds the right to kill and take which is vested in the landlord or anyone (other than the tenant himself) claiming under the landlord, being animals or birds which the tenant does not have permission in writing to kill; or

(b) from any hunting activity where the landlord and not the tenant is able to give permission for hunting to take place across the land which is the subject of the tenancy—

he shall, if he complies with the requirements of subsection (2) below, be entitled to compensation from his landlord for the damage.
(2) The requirements of this subsection are that the tenant shall give his landlord—

(a) notice in writing within one month after the tenant became, or ought reasonably to have become, aware of the occurrence of the damage;

(b) a reasonable opportunity to inspect the damage—

(i) in the case of damage to a growing crop, before the crop is reaped, raised or consumed, and

(ii) in the case of a damage which has already been reaped or raised, before the crop is removed from the land; and

(c) notice in writing of the claim, together with full particulars, within one month of the year in respect of which the claim is made.

(3) For the purposes of subsection (2) above—

(a) seed once sown shall be treated as a growing crop whether or not it has germinated; and

(b) "year" means any period of 12 months ending in any year with 29 september or with such other date as may be agreed between the landlord and the tenant.

(4) The amount of compensation under this section shall in default of agreement made after the damage has been suffered be determined by arbitration under this Act.").
The noble Lord said: The amendment seeks to add a new clause to the Bill. The purpose of the clause is to provide circumstances in which there can be compensation to the tenant of a farm business tenancy if he has sustained damage to his crops by game or hunting. The clause, I believe and hope, is self-explanatory, but it may be for the convenience of the Committee if I mention one or two points contained in it which I believe justify its tabling and show that the conditions suggested for compensation and arbitration are such that the clause, taken as a whole, is reasonable.
First, as I said, the purpose of the clause is to compensate where damage has been sustained,
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"from any wild animals or birds the right to kill and take which is vested in the landlord or anyone (other than the tenant himself) claiming under the landlord, being animals or birds which the tenant does not have permission in writing to kill";
and, secondly,
"from any hunting activity where the landlord and not the tenant is able to give permission for hunting to take place across the land which is the subject of the tenancy".
In those circumstances, subject to compliance with subsection (2) of the clause, the tenant may be entitled to compensation from his landlord for damage. Subsection (2) specifies the conditions for qualifying for a damage payment; that is:
"notice in writing within one month after the tenant became, or ought reasonably to have become, aware of the occurrence of the damage;
"a reasonable opportunity to inspect the damage—

(i) in the case of damage to a growing crop, before the crop is reaped, raised or consumed, and

(ii) in the case of a damage which has already been reaped or raised, before the crop is removed from the land; and

(c) notice in writing of the claim, together with full particulars, within one month of the year in respect of which the claim is made".

Finally subsection (3) qualifies subsection (2) as follows:
"seed once sown shall be treated as a growing crop whether or not it has germinated".
The definition of a year is given under the paragraph (b).
Under subsection (4) it is provided that:
"The amount of compensation under this section shall in default of agreement made after the damage has been suffered be determined by arbitration under this Act".
We feel that the Bill omits that important aspect of relationships between a farm business tenant and his landlord, and that some attempt should be made during this stage of the Bill to discuss the matter. I hope that the new clause will enable the Committee to have that discussion. I beg to move.
5.15 p.m.
Lord Mountgarret: I hope that my noble friend will consider seriously accepting the amendment. It seems to be entirely fair. I believe that I am right in saying—no doubt I shall be corrected if I am wrong—that under the Agricultural Holdings Act 1948 tenants are entitled to compensation for game damage. It is right that there should be a similar provision in the Bill. If a tenant does not wish to make any claim for game damage, that is up to him. If the tenant is upset by the hounds and the hunt going over his land, it is a matter between the tenant and the landlord. If the landlord wants to see the tenant right on that, that is fine, otherwise the tenant may come to some arrangement with the hunt. As I say, it is only fair, and I hope that my noble friend will go some way towards accepting it, if not immediately, before the Bill leaves this place.
Earl Howe: I am grateful to the noble Lord, Lord Gallacher, and to my noble friend for their remarks. The new clause proposed by the noble Lord, Lord Gallacher, seeks to address what we all appreciate can be an unfortunate problem which a tenant of a landlord who has reserved the shooting rights to himself (or perhaps

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vested them in some third party) may from time to time suffer. In respect of game damage, the clause has been modelled closely on Section 20 of the 1986 Act, but it has been extended to deal also with any damage to crops caused by a local hunt.
The question we have to decide is whether the Bill should provide for such a situation or whether it should be for the tenancy agreement to do so. If the tenancy agreement provides for the tenant to be compensated by the landlord for game damage, Clause 28 will enable any dispute that arises to be referred to arbitration. Where the tenancy agreement provides an alternative dispute resolution procedure under Clause 29, either party may still have access to arbitration under Clause 28 if they prefer.
There is a separate problem with the amendment. Little benefit would be derived from the amendment where land under a diversified farm business tenancy was damaged by hunting activities. The clause deals only with damage to crops. It would not help resolve claims where other damage to a holding was sustained. The clause suffers from, shall we say, a lack of flexibility, and as the industry itself has already been prepared to accept that parties should make their own arrangements for dealing with these matters—an approach which I favour—I hope that the noble Lord will feel able to withdraw the amendment.
Lord Carter: The Minister referred to Clause 28. He said that under the terms of the tenancy, any dispute could be referred to arbitration. Subsection (1) refers also to "under any custom". Will he explain what that means? Will it help cover the point?
Earl Howe: I regret that while the noble Lord was asking his question my attention was occupied elsewhere. I should be grateful if he would ask me again.
Lord Carter: The phrase appears at page 13, line 9. The Minister referred to "the terms of the tenancy" but Clause 28(1) refers to:
"the terms of the tenancy or under any custom".
I presume that means the custom of the country. Would that provision apply to the situation that we have been discussing?
Earl Howe: I am grateful to the noble Lord for pointing out that part of the Bill. It had escaped my notice. I shall take advice and write to him about it.
Lord Gallacher: I am grateful to the noble Viscount, Lord Mountgarret, for his support. The Minister will not complain if I say that his attitude to the proposed new clause is somewhat lukewarm. I understand the reasons why he feels that way about the Bill.
He sought to assure me that what I am seeking in the new clause can be provided for in the tenancy agreement—and, indeed, it can. However, the tenancy agreement may involve hard bargaining between the parties. There may be rivals who wish to be parties to the agreement; in other words, the landlord has a choice. In those circumstances, the tenant whose agreement should include terms relating to damage by game or hunting could find himself the runner-up in the stakes
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of such a contested agreement. However, if provision appears on the face of the Bill, which is what we wish to see, the tenant's position is considerably strengthened in asking for that to be included in the agreement or in relying on the clause for the protection to which he feels entitled.
The Minister said that the drafting of the amendment was deficient in that it lacked flexibility as regards the buildings. If he had been more than lukewarm about the matter I should have been happy to take it away and include a provision about buildings. However, he has agreed to write to my noble friend regarding the reference made to another part of the Bill, which may or may not have a bearing on this aspect. Therefore, I shall seek the leave of the Committee to withdraw the amendment and indicate to the Minister that at a later stage we may feel disposed to return with a reference to buildings and a firmer intention to warm him up a little as regards his attitude to this clause. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clauses 22 to 27 agreed to.
Clause 28 [Resolution of disputes]:
Lord Gallacher Lord Gallacher moved Amendment No. 75:
Page 13, line 10, at end insert ("under the Arbitration Acts 1959 and 1979.").
The noble Lord said: The purpose of the amendment is to make it clear that the dispute system is to be under the Arbitration Acts and not under the agricultural code in the current agricultural holdings legislation. We accept that Section 31 of the Arbitration Act 1950 makes it unnecessary to include the statement. However, in view of the separate agricultural code of arbitration in Schedule 11 to the Agricultural Holdings Act 1986 and the dairy produce code of regulations, it is important to make it clear to the industry, which has been used to a different code, that it will no longer apply. I beg to move.
Earl Howe: I take the point that the amendment is meant to make it clear which legislation governs the arbitration procedures that are referred to in Clause 28. However, I am advised that it is not necessary to state explicitly that arbitration under the Bill—and this refers also to the arbitration envisaged in Clauses 10 and 19 and Part III of the Bill as well as Clause 28—means arbitration under the Arbitration Acts 1950 and 1979. Incidentally, I believe that there is a misprint in the Marshalled List; it refers to 1959 instead of 1950. The position is that the wording of Section 31 of the Arbitration Act 1950 makes such a reference unnecessary and also that other recent statutory provisions requiring arbitration do not contain any express reference to the 1950 Act. I hope that that explanation has reassured the noble Lord and that he will withdraw his amendment.
Lord Gallacher: I am grateful to the Minister for giving the answer that I had expected. We have achieved some limited purpose in that our comments will be recorded in Hansard, and the fact that the Arbitration Act 1950 is referred to in this and other legislation should suffice. In moving the amendment, we wished to

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put beyond doubt that this would be the new legislation as regards arbitration. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 28 agreed to.
Clause 29 [Cases where right to refer claim to arbitration under section 28 does not apply]:
Earl Howe Earl Howe moved Amendment No. 76:
Page 13, line 42, leave out ("and").
The noble Earl said: The need for this amendment arises because we seem to have omitted a small cog from the machinery for resolving disputes. Clause 28 gives either the landlord or the tenant the right to require that disputes relating to their rights and obligations shall be resolved by arbitration. Clause 29, however, allows the parties to adopt an alternative disputes resolution procedure if they prefer to do so, perhaps in order to save money on costs. Clause 29 also contains certain safeguards: the tenancy agreement must contain a provision for disputes to be resolved by a third party; the third party may not be appointed by the landlord or the tenant alone without the other's consent; and they must either have agreed jointly to refer the dispute to the third party, or one of them must give the other a written notice that he alone has done so. In this latter case, the recipient of the notice then has a period of four weeks within which, if he does not wish to go ahead with this procedure, he may instead invoke the arbitration procedure under Clause 28.
This amendment is needed to ensure that the arbitration procedure under Clause 28 continues to be available, notwithstanding that an attempt has been made to activate the alternative procedure envisaged by Clause 29 in a case where one of the parties wishes to terminate the alternative procedure within the four weeks allowed for him to do so. I beg to move.
On Question, amendment agreed to.
Earl Howe Earl Howe moved Amendment No. 77:
Page 13, line 44, at end insert ("and the other has not given a notice under section 28(2) of this Act in relation to the dispute before the end of that period.").
On Question, amendment agreed to.
Clause 29, as amended, agreed to.
Clause 30 agreed to.
Lord Gallacher Lord Gallacher moved Amendment No. 78:
After Clause 30, insert the following new clause:
Section 22. of the Solicitors Act 1974 not to apply
(". Subsection (1) of section 22 of the Solicitors Act 1974 shall not apply to any member of the Royal Institution of Chartered Surveyors drawing or preparing any instrument under this Act.").
The noble Lord said: The effect of the amendment would be to enable valuers and surveyors to prepare agreements for the letting of farm business tenancies of any length. I am advised that the Law of Property Act 1925 requires any lease for a fixed term of more than three years to be by deed. The effect of the Solicitors Act is to make it an offence for anyone other than a barrister or solicitor to prepare deeds.
At present, most agricultural tenancy agreements, which may now offer lifetime security, are prepared by agents who will no longer be able to prepare agreements for fixed terms of more than three years without committing an offence and exposing themselves to a fine. That adds an element of difficulty in cost to the preparation of farm business tenancies.
It is in the interests of the industry that as many agreements for the letting of farm business tenancies as possible are made in writing. The amendment removes one disincentive to that end by making it easier and cheaper to put agreements into writing since there will be no need to refer to lawyers the finalisation of leases for three years or longer.
Without the amendment, the requirement of the Solicitors Act may encourage the parties to use their agents to let on annual tenancies rather than taking a longer-term perspective than might otherwise have been intended. In particular, in regard to smaller parcels of land, the Act may encourage the parties to let without formalising the terms in writing at all, with all the uncertainty that may flow from that.
Agricultural lettings are a specialist subject with which qualified surveyors and valuers may have more familiarity and expertise than some solicitors and so may be more likely to avoid serious mistakes. I warm to that part of my brief. The amendment does nothing to prevent the current practice of referring agreements for complex situations to solicitors with specialist agricultural expertise but does allow for practical, experienced handling of conventional situations. I beg to move.
5.30 p.m.
The Earl of Kinnoull: I declare an interest and I warm to the noble Lord, Lord Gallacher, who moved an amendment yesterday evening which I felt was not in the interests of the Royal Institution of Chartered Surveyors. I am delighted that he has restored his reputation and I warmly support the amendment.
Earl Howe: As the law currently stands, farm business tenancies of less than three years, including tenancies from year to year, could be drawn up by anybody. Farm business tenancies for more than three years could be drawn up both by solicitors and, following the reform of the conveyancing market brought in by the Government in 1985, by licensed conveyancers. There is thus, as a result of these reforms, sufficient competition in the market for this type of service to ensure that landlords and tenants will be able to have their farm business tenancies drawn up at a reasonable cost.
In the case of the medium and longer term tenancies which we expect the Bill to encourage, the farm business tenancy agreement is a very important document for both sides. As with any other important business contract entered into by responsible businessmen, it is essential that the legal details are absolutely correct. There are certain legal prescriptions contained in the Bill which must be adhered to and, where parties have negotiated particular covenants, rights or obligations, it is in their own best interests that

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the formal tenancy agreement is legally watertight. In that respect there is a direct comparison with commercial business lettings.
I have no wish whatever to cast any aspersions on the widely recognised abilities of members of the RICS, who will have a very important role to play in advising parties during the process of negotiating a farm business tenancy. There is no question about that. But I think it right in the interests of both landlord and tenant that the formal instrument of agreement should be drawn up by a person with suitable qualifications and experience for that particular task.
While I appreciate the sentiments expressed by the noble Lord, I differ from him. I believe that this is a clear instance where legal expertise is warranted and, on reflection, I hope that he will agree.
Lord Hylton: I happen to be a chartered surveyor but I have never practised so I do not think that I have an interest in the matter. It seems to me that the noble Earl has quite failed to understand the point and the thrust of the amendment; namely, that, for a long time, chartered surveyors and valuers have been preparing normal farm tenancy agreements which, while in theory they last only one year, in practice last for a lifetime and in some cases may last for more than one generation. Therefore, they have plenty of adequate expertise to enable them to draw up agreements which may last for two years, three years, 10 years—a short or medium-term contract.
Moreover, they are experienced in very large lettings which may not be of the type envisaged in the Bill. I should have thought that chartered surveyors are perfectly competent and, in my view, it is not always necessary to have a solicitor devoting his legal knowledge to such matters.
Earl Howe: I am grateful to the noble Lord and I take note of what he has said, as he clearly has knowledge of those matters.
I merely wish to convey to the Committee my view that the drawing up of a farm business tenancy agreement presumes a high standard of legal knowledge, not merely relating to the contents of the Bill but a high standard of legal knowledge across the board. I believe that it would be right to ensure that the task of drawing up that agreement rests with someone who is fully at home with the law generally and not simply with property law.
As I understand it, members of the RICS are not able to draw up forms of tenancy other than very short ones. I am not sure why, in this instance, there should be an exception for longer term agreements. I shall reflect on what has been said in the debate but I shall need some convincing that my position is incorrect.
Lord Carter: If that is so, why is the RICS, rather than the Law Society, being asked to draw up the model tenancy agreements?
Earl Howe: It is certainly the province of the RICS to draw up the model agreements because those concern day-to-day matters with which they are familiar. My
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point is that a legal document in its full state is rather a different matter. I believe that the two points are separate.
Lord Carter: If the landlord and tenant agree to take off the shelf the model clauses which have been designed by the RICS, they must have a solicitor to tell them that it is legally OK; is that right?
Earl Howe: That is as we propose it, yes.
The Earl of Kinnoull: When my noble friend reconsiders this matter, I hope that he will consider other bodies which are equally well qualified, such as the CAAV and so on.
Lord Gallacher: I am grateful for the support that I received from the noble Earl, Lord Kinnoull, and from the noble Lord, Lord Hylton, on the amendment. I am indebted also to the Minister for saying that he is prepared to reflect on the matter and I hope that he may look rather more sympathetically at the thinking behind the amendment.
To the best of my knowledge, licensed conveyancers were introduced because of complaints about the costs of conveyancing in relation to housing. There were complaints that some solicitors were rather expensive in that area and that the work could be done quite well by a qualified body of people who specialise in such transactions.
At this stage I am not advocating that the remit of licensed conveyancers should be extended to this area which is being created by the Bill. It is true that some comparison with business lettings is valid but surely this is a completely new area. While I agree entirely that it is extremely important that in the document to be drafted, the legal details are totally correct. But in my experience, the authorisation of qualified surveyors to undertake such work will not diminish in any way the possibility of incorrectness and, indeed, their reputation stands extremely high in that regard, as was pointed out to me in no uncertain terms yesterday evening.
What worries me—and the Minister did not refer to it—is that, on this side of the Committee, we are desperately anxious that as many as possible of the agreements between landlord and tenant should be in writing. We are against anything which may act as a disincentive in that regard. The new clause may not be an incentive but it is at least an encouragement to tenant and landlord to put their agreement in writing. Indeed, it is for that purpose that the RICS is to publish, as my noble friend persuaded the Minister to admit, a code which will be very important, even to solicitors, in drawing up tenancy agreements of the kind which the Act will require.
Nevertheless, the Minister has promised to reflect on what has been said and we shall do the same. Perhaps, at a later stage of the Bill, we may ask the noble Earl for the outcome of his reflections. But, in the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clauses 31, 32 and 33 agreed to.
Clause 34 [Service of notices]:
Lord Gallacher Lord Gallacher moved Amendment No. 79:
Page 15, leave out lines 22 to 25 and insert ("in accordance with the Rules of the Supreme Court relating to service of documents in force at the time of the service").
The noble Lord said: The above amendment seeks to specify in the legislation the manner in which the service of documents is to be handled so far as concerns the Bill. Perhaps I may say at the outset that we are not claiming that we have here an amendment which is particularly perfect as regards its wording. However, we are of the opinion that Members of the Committee may be interested to note the peculiarity of having rules of service which relate only to farm business tenancies. We wonder whether it would be better, by and large, for there to be standard rules of service. The amendment would achieve just that aim.
There are problems with the clause as drafted; for example, what about faxes? My noble friend Lord Carter is an authority on faxes. In fact, I believe that, had he been given his title a few years later, he might have considered a change of name to Lord Fax. In the room that we share, the fax machine spills them out non-stop. When I am acting as my noble friend's underling, I have the responsibility of dealing with them, and the difficulty of not knowing what a fax machine is, let alone how to deal with such an outpouring of paper.
Nevertheless, we have taken the trouble to look up a document concerning the Supreme Court practice and its rules. In those rules, we believe that there are assurances regarding, first, how faxes are dealt with; and, secondly, the rules allow for first-class post. Both those items of information are contained in the rules, a copy of which I have with me.
The amendment is by way of an invitation to the Government to think again on the matter. It is to be hoped that, if they are not able to agree to what we are asking, they will be able to suggest to us an alternative means which may achieve the uniformity of procedures which the amendment seeks and, at the same time perhaps, bring the question of faxes into the Bill somewhere. However much I may deprecate them, faxes are a fact of life and likely to remain so. I beg to move.
Earl Howe: I am grateful to the noble Lord for speaking to the amendment in his customary clear way. I accept that the ideas proposed in the amendment would be helpful to the extent that they would allow for changes in the rules as regards the transmission of documents in the future, instead of prescribing specified delivery methods in the Bill. The Rules of the Supreme Court prescribe how service of a document may be effected for the purposes of court proceedings where the document is not required to be served personally. For example, they include rules governing transmission by fax, as mentioned by the noble Lord.
However, I understand that the rules are fairly complex and may not be easily accessible to, or understood by, the general public, including agricultural
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landlords and tenants. Indeed, under the current rules, service of a document by fax can only be effected by one solicitor upon another. I therefore have some reservations about whether the amendment would be the best way of achieving the desired flexibility towards accommodating new methods of delivery at some future time.
Having said that, I accept in principle that it may be desirable to provide more flexibility than Clause 34(2) has, as currently drafted. An alternative option to a reference to rules prescribed by some other body might be to set out the principles with which any delivery method should comply, rather than prescribing the precise methods which are permitted to be used. For example, we might consider allowing forms of postal delivery provided that confirmation of delivery can be obtained.
Clearly the question goes wider than just the service of notices for the purposes of the Bill and it is, therefore, appropriate that we should take time to give it proper consideration and consult more widely. I should like to invite the noble Lord to withdraw the amendment for the present, on the understanding that the Government will consider the issue and will initiate further debate on the amendment, or on an alternative proposal, at a later stage in our consideration of the Bill.
Lord Gallacher: I am grateful to the Minister for what he said and for his invitation to me to withdraw the amendment, which I readily agree to do. I was intrigued to be reminded that the Rules of the Supreme Court allow faxes only between solicitors. The previous amendment sought to ensure that only solicitors could undertake such very important legal work. Therefore, that in itself would not be an inhibition. Nevertheless, I do not wish to cavil or quarrel with the noble Earl about such points of detail.
I believe that the noble Earl has said enough to cause me to think that the Government will look at the matter in a constructive way and that they will do something about it, if not in the Bill then at some suitable time. I hope that that, plus the fact that we have had this brief discussion recorded in the Official Report, will be of some value in stimulating the interest of the farming profession in the matter. At the outset, I frankly admitted that we had an imperfectly worded amendment. That gives me additional cause to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 34 agreed to.
5.45 p.m.
Lord Carter Lord Carter moved Amendment No. 80:
After Clause 34, insert the following new clause:
("Agricultural Holdings Act 1986: Rights to apply for new tenancy, and good husbandry responsibilities
.—(1) The Agricultural Holdings Act 1986 shall be amended as follows.
(2) In section 36(3) (a), after the word "agricultural", where it first appears, there shall be inserted the words ", or any related ancillary,".
(3) In paragraph 9(2) of Schedule 3, for the words ("in pursuance of any provision of the contract of tenancy, or of any other agreement with the landlord, which indicates (in whatever terms)" there shall be substituted "in pursuance of any obligation imposed upon the tenant under any scheme for the protection or conservation of the environment whether under the national law or the law of the European Union where the scheme in question indicates".
(4) In paragraph 9(2) of Schedule 3, at the end there shall be added—
"(d) the set-aside of agricultural land.".").
The noble Lord said: In moving the above amendment, I have the first chance to accept the kind words of my noble friend Lord Gallacher, who compared me to a fax machine. If my noble friend means that the fax is quick, correct, thoroughly modern and of immense value to everyone who uses it, then I shall be entirely happy to accept the analogy.
The above is not the only amendment by which we shall be attempting to use the Bill to make some improvements to the Agricultural Holdings Act 1986. In fact, I made mention of that on Second Reading. Although the Government—and, indeed, a number of noble Lords opposite—have said that they wish to draw a line under the 1986 Act, I believe we can all agree that it will be around for some time yet. Many tenancies will be affected by it; for example, there are succession tenancies which will continue for some time. A number of practitioners have drawn our attention to deficiencies in the 1986 Act. The Government now have a chance to make such amendments by using the Bill to do so. I believe that that would be making good use of the legislation.
Therefore, we have drafted the proposed new clause, subsection (2) of which states that,
"after the word 'agricultural', where it first appears, there shall be inserted the words ', or any related ancillary'".
The purpose behind that subsection is that it is often difficult for successors to satisfy the principal source of livelihood test; namely, that the person concerned must have earned his principal source of livelihood from his agricultural work in five out of the past seven years. We know that successors usually do not succeed to holdings until they are in their 30s or 40s, by which time many will have families of their own, and agriculture has not been able to sustain the livelihood of two families. Thus, the close relatives—for example, sons or daughters—who would otherwise be fully eligible to succeed and who intend to farm have to supplement their incomes. That can take a variety of forms but it is usually agricultural or related to agriculture. Indeed, the one that we are all familiar with is contract farming for someone else or, perhaps, carrying out some haulage in the agricultural sector and similar activities.
We feel that the 1986 Act should be amended to reflect the reality of the situation and to ensure that those who are suitable and have succession rights can actually realise them. We would regard that as an improvement in the Act as it stands.
Subsection (3) of the amendment deals with environmental matters. Paragraphs 9(2) and 10(1) (d) of Schedule 3 to the 1986 Act make provision for conservation covenants to protect tenants from the consequences of a breach of the rules of good husbandry. However, the landlord must agree to the
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covenant either in the tenancy agreement or in a separate written agreement. We feel that tenants should not face such harsh consequences for inadvertent breaches of the rules of good husbandry simply because they have entered into set-aside. I think I am referring to the wrong subsection here. I am talking about subsection (4) which deals with set-aside. The rules of good husbandry are outdated and inconsistent with modern farming methods and in particular with environmental schemes. The rules of good husbandry, the covenants and set-aside are covered in subsection (4).
Subsection (3) also deals with conservation management, set-aside and environmentally sensitive areas. The management agreements which are reached under ESAs could in certain circumstances also fall foul of the rules of good husbandry which are set out in Section 11 of the Agriculture Act 1947. The rules provide that a tenant must maintain a reasonable standard of efficient production as respects the kind, quantity and quality of produce, and must maintain the agricultural unit in a condition to enable such a standard to be maintained in the future. No allowance is made in the rules for conservation management. However, a breach of the rules can give rise to an incontestable notice to quit under Case C of Schedule 3 to the 1986 Act, and also notice to remedy, which can be followed by notice to quit under Case D.
We feel that these proposed subsections are improvements. Perhaps the wording is not absolutely exact and correct but it is an improvement to the existing Act and would affect and help a number of people who will still be bound by the 1986 Act. I should tell the Minister that we shall be making a number of attempts to alter the situation. There is a later amendment down for Committee stage, and another at Report, which seek to use this Bill to achieve improvements to the 1986 Agricultural Holdings Act. I beg to move.
Lord Middleton: I understand what the noble Lord, Lord Carter, is trying to do. I am slightly worried both as regards the proposed subsection (2) and subsection (3) of the amendment. As the noble Lord, Lord Carter, has explained, Section 36 of the 1986 Act lays down the criteria for eligibility of a person who wants to take a succession tenancy on the death or retirement of a relative. Section 36(3) (a) in that Act, as the noble Lord, Lord Carter, has explained, lays down that the person who wants the succession must have worked for at least five years in farming on the holding. The wording is that his livelihood must be,
"derived from his agricultural work on the holding".
The noble Lord wants to insert—if I understood him correctly—after the word "agricultural" that his livelihood must now be derived,
"from his agricultural or any related ancillary work".
I am slightly worried that that widens the position. It is quite right that a landlord wants to have a tenant who has had at least five years experience of farming.
I suppose one could have a claimant for succession who has spent five years sitting behind a counter in a farm shop. I am not sure that that would be acceptable. Therefore I do have that worry as regards the proposed subsection (2) of the amendment. As the noble Lord has

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explained, the proposed subsection (3) of the amendment refers to paragraph 9 of Schedule 3 to the 1986 Act, and relates to the matters which can be ignored when there is an application for a certificate of bad husbandry. As the noble Lord has explained, where there has been a landlord's consent to carry out practices for the conservation of flora, fauna, buildings or general amenities, those practices can be ignored in assessing whether or not there is bad husbandry.
I believe that the proposed subsection (3) in the amendment has the effect of taking out this element of landlord's consent. I think that consent is necessary, for instance in a case where a tenant wants to take part in a countryside stewardship scheme which, however laudable, might have some effect on the holding. The landlord would certainly like to know about that and would like to be able to give consent, or not give consent, according to the merits of the particular scheme. I shall now describe an extreme case. Under the amendment a tenant could, without the landlord's consent, put down an entire farm to trees to obtain some grant from the European Community. I believe that would create difficulties. I have those worries.
Lord Carter: Before the Minister replies, I should say that I am not sure that on that final point the noble Lord, Lord Middleton, is quite correct, because the wording in the amendment states:
"in pursuance of any obligation imposed upon the tenant".
It is not a matter of anything that is done at the tenant's behest; it is an obligation imposed upon the tenant. The obvious example here is set-aside.
Lord Hylton: I wish to support what the noble Lord, Lord Middleton, said about the proposed subsection (2) in this amendment and the way in which it widens the section about livelihood in the 1986 Act. I believe it could widen it in ways that would be completely opposed to the interests of good estate management. I hope that the Government will resist it, at least on those grounds.
Lord Middleton: I wish to take up the point made by the noble Lord, Lord Carter. The amendment seeks to cut out the words in paragraph 9 of Schedule 3 to the 1986 Act, which state:
"in pursuance of any provision of the contract of tenancy, or of any other agreement with the landlord".
Those words would be cut out. That is what worries me.
Earl Howe: I have listened with great interest to the reasons of the noble Lord, Lord Carter, for wishing to make these amendments to the Agricultural Holdings Act 1986. Indeed I have also listened with care to my noble friend Lord Middleton. I have noted all the points that have been made and I do not doubt that the amendments have been drawn up with some care. Notwithstanding that, however, I hope that the noble Lord and the Committee will not mind if I reply very briefly and in general terms.
Throughout all the discussions leading up to the Bill, we have made it absolutely clear that the new legislation would not be retrospective and that we would not amend the 1986 Act. I am sure that every Member of the
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Committee could come forward with a list of desirable amendments; I myself would have quite a number of suggestions, but that is not the purpose of the current legislation. We wish to stick with the principle of making no changes that relate to existing tenancies, because that would be the start of a slippery slope. Without questioning the motives or merits of this particular amendment in any way, I think I can safely say that there are many Members of the Committee who would like to alter the provisions relating to succession but in an entirely different direction. In my view, the safest course is to leave well alone. I mean no discourtesy to the noble Lord in not responding to the amendment in detail, but these are matters which in principle we feel should not intrude into the Bill. I hope that the noble Lord will understand our position.
Lord Carter: I can certainly understand it but I do not agree with it. That seems to me an extraordinary statement. We all know from the practitioners what the situation is. For example, under the 1986 Act there was a provision—it is not contained in this amendment, but I refer to it as an example —to require certain regulations to be laid regarding the forms which are used in agricultural transactions. I believe that all those regulations have not yet been laid and the practitioners are having to use old fashioned and out of date forms just because the Government have not got round to improving the Act or to fulfilling their obligations under the Act.
This is a Bill which—as the Long Title states—can be used to improve the 1986 Act. We have checked this out. The Government are saying, "Even if you show us that it is badly drafted, that it is unjust, that it makes omissions and that it is bad law, we do not intend to make any changes to it". That seems to me extremely unfair to the large number of tenants who will spend the rest of their working lives bound by the 1986 Act. Possibly their sons or daughters or their grandsons or granddaughters will spend their working lifetimes bound by the 1986 Act. We do not accept that view and we shall press to change it. Where we are informed and advised by practitioners outside this House that there are weaknesses in the 1986 Act, we shall try to improve them.
On the related ancillary point I accept that the wording is perhaps too wide. The important point is whether we accept the principle. The example that I gave shows that succession is not working as it should because of the way the Act is drafted. If the Act is to be improved to meet the points that were made from the other side of the Chamber —which I accept—we have to decide whether it is the wording or the principle that is at fault. I have already dealt with the point raised by the noble Lord, Lord Middleton, about the obligation imposed upon the tenant.
The Minister and I have an excellent relationship, but for once I have to tell him that I do not find his last answer in the least satisfactory. It is not good government. If it can be clearly shown that an Act of Parliament which governs the livelihoods of large numbers of people includes weaknesses of drafting and an Agricultural Tenancies Bill is before Parliament providing an opportunity to put those right, it is not

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good enough to say "We are not going to do it. We are drawing a line". That attitude has overtones of a certain triumphalism which we used to see in the party opposite a few years ago. I thought that that had changed, but it seems that in this respect it has not. It is not good enough, and I can tell the Minister that we shall return to the issue. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 35 agreed to.
6 p.m.
Viscount Addison Viscount Addison moved Amendment No. 81:
After Clause 35, insert the following new clause:
("Conservation: codes of guidance
.—(1) The Ministers shall, from time to time, after discussions with such interested persons or bodies as they consider appropriate, prepare codes of guidance to local authorities, the Ministry of Defence, the Crown Estate and other Government Departments or public bodies which own or occupy agricultural holdings to which this Act applies, containing advice and information relating to the conservation of flora and fauna.
(2) In this section "the Ministers" means the Minister for Agriculture, Fisheries and Food and the Secretary of State for the Environment acting jointly.").
The noble Viscount said: The proposed new clause in Amendment No. 81 will require Ministers to issue a code of guidance to local authorities, the Crown Estate and government departments which own agricultural holdings.
The proposal is intended to ensure that advice and information is available to county councils and other public landlords to guide and encourage them to include specific management practices which are likely to benefit nature conservation when drawing up farm business tenancies under the Bill.
County councils in England and Wales own more than 360,000 acres, involving more than 5,400 tenants, on agricultural land much of which is of potential value for wildlife. Since modern farming practices driven by financial incentives have caused the decline of once common plants and animals it is essential that, where possible, opportunities are created to reverse the declines in wildlife.
Many county councils are already conscious of the need to include conservation practices in tenancy agreements. Indeed, the Association of County Councils together with the Association of District Councils support my proposed new clause. The provision of guidance encapsulated in the amendment will assist county councils in deciding the type of management practices which should be agreed upon with new farm business tenants.
Perhaps I may illustrate that with an example. The Committee will be aware that the use of pesticides and herbicides has resulted in the decline of wild flowers, including shepherd's needle, corn buttercup and corn marigold. Similarly, game birds, including grey partridge, have suffered enormous declines due to the lack of wild food, including leaf beetles, weevils and sawfly larvae, which have disappeared due to crop spraying. Research by the Game Conservancy has shown that avoiding the use of chemical sprays along
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field margins and headland creates a mini-habitat for invertebrates and wildlife higher up the food chain, particularly for birds.
The county councils could therefore include specific clauses in a farm business tenancy along the lines of the following: requiring tenants to trim hedges every other year and keep to a maximum height of 2 metres; not to spray within a metre of hedgerows or "beetle banks"; to create a six metre conservation headland at the edge of a crop.
Of course the code of guidance proposed in the new clause should not have to contain such detail, but the guidance needs to indicate the desirability of having specific conservation clauses written into tenancy agreements in order to reverse the declines in wildlife.
Similarly, the government guidance could include advice to county councils on the benefit of setting conservation objectives and targets for the life of a farm tenancy. That would encourage county councils to include specific clauses which provide, for example, that the length of hedgerow shall be increased by 20 per cent., or that unworked land in field corners should be planted with woodland trees or shrubs.
My proposed new clause indicates that the code of guidance should also apply to the Crown Estate, Ministry of Defence and other government departments which own agricultural holdings.
For completeness, the new clause includes the definition of "the Ministers" to mean the Minister for Agriculture, Fisheries and Food and the Secretary of State for the Environment acting jointly. I commend the clause to the Committee. I beg to move.
Lord Carter: I was very glad to add my name to the amendment. As the noble Viscount has moved it so clearly I can be brief.
Perhaps I should declare an interest as a tenant of the Ministry of Defence, which tends to carry out conservation obligations despite all the difficulties involved with military training.
The amendment contains an excellent suggestion for a code of guidance. If the public sector cannot give the lead on such matters, who can? I hope that the Minister will be able to accept the amendment.
Earl Howe: I am grateful to my noble friend for introducing the amendment. However, I confess that I am still a little unclear as to how the amendment relates to the Bill.
As I have mentioned in earlier debates, the Bill provides much greater opportunities for landlords to draw up tenancy agreements in which environmental aims are furthered. However, I am not sure that it is appropriate in this context to require the preparation of guidance containing general advice and information on conservation matters aimed only at public bodies. I should have thought that the furtherance of conservation objectives by private landlords was, if anything, even more important than by public landlords because of the greater area that they occupy.
More importantly, I am unclear as to what new advice or information the guidance is supposed to contain. I say that because guidance on environmental matters is not

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in short supply. For example, MAFF itself publishes separate codes of good agricultural practice for the protection of air, the protection of soil and the protection of water. It also produces numerous booklets on good upland management, straw and stubble burning, heather and grass burning, farm waste, nitrates, pesticides and various other conservation-related matters. All of those items are available free of charge to public bodies as well as to the general public. Therefore, for the moment I need a little more persuading that there is a gap in the guidance which we already issue that needs to be filled by imposing a requirement such as that envisaged in the amendment.
Of course, if it is the case that what is envisaged should take the form of some new obligations rather than advice then that would give rise to different questions about whether such obligations were appropriate and whether they could be applicable to all the cases in which they would apply. However, my understanding is that the amendment does not propose such obligations.
I should perhaps add that the Royal Institution of Chartered Surveyors has begun work on preparing guidance for general use by all in the agricultural industry on matters which may be covered by agricultural tenancy agreements. I hope and expect that such guidance would include a section on environmental matters, which may help to fill the need perceived by my noble friend.
I invite my noble friend to reflect on what I said and to consider what the objectives of any guidance would be and whether he therefore still believes it is necessary for it to be mentioned in the Bill.
I hope that my remarks have not been entirely negative. They are meant to be constructive, in response to the concerns that my noble friend expressed. I hope that he will feel reasonably content to withdraw the amendment.
Viscount Addison: I thank my noble friend for his reply. The intention is really more to stimulate advice rather than to be too objective.
Will my noble friend the Minister give his formal approval to the guidance being drawn up by the agricultural industry working party in the same way as ministerial approval was given to the NFU guidance on straw burning?
Earl Howe: We have yet to see it. I am sure that we shall wish to pass comment if there is some matter in the guidance which we believe should be amended. But, clearly, we have always said that any forms of guidance prepared by the industry bodies in a responsible fashion, as of course they will always do—I cite model clauses as another example—are matters the Government warmly welcome. I am sure that we shall be in a position to welcome the guidance when it emerges.
Lord Stanley of Alderley: Perhaps I may intervene. I have referred to guidance previously. Such information
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will give us guidance on what we should consider before we enter into a tenancy. Is there any chance of our seeing that guidance before the Bill leaves the House?
Earl Howe: My understanding is that the work is fairly far advanced. However, I believe that it will be touch and go as to whether we shall see the finished version before the end of January which is when the Bill is scheduled to leave this House. I believe that some publication should emerge relatively early in the spring.
Viscount Addison: I thank the Minister for his reply. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 36 [Interpretation]:
The Deputy Chairman (Baroness Serota): In calling Amendment No. 82, I should point out to the Committee that if this amendment is agreed to, I cannot call Amendments Nos. 83 or 84.
Lord Carter Lord Carter moved Amendment No. 82:
Page 17, line 9, leave out from ("includes") to end of line 14 and insert ("the breeding and keeping of animals and the growing and harvesting of plants to gain income from those animals or plants, their products and derivatives and associated environmental benefits and includes fallow or other set-aside arrangements and any activity coming within the scope of the Common Agricultural Policy of the European Union, and 'agricultural' shall be construed accordingly.".
The noble Lord said: In moving the amendment, I shall also speak to Amendments Nos. 83 to 86. The amendments are all in connection with the definition of agriculture. The definition which appears in Clause 36 is the one with which we are all familiar. It arose in the 1947 Act and has been used continually in Acts of Parliament concerning agriculture ever since. The department more or less admits that every time an Act of Parliament involves agriculture, it ducks away from the chance to introduce a new, more modern definition.
The chance now arises in this Bill. We admit immediately that if we were to change the definition in this Bill it would apply only to farm business tenancies. But at least it would provide a lead so that as other agricultural Bills were produced over time we could use the more updated definition.
We know from our discussions yesterday that the new farm business tenancies do not have to meet the agricultural conditions in the Bill. Despite that, we shall still seek to persuade the Government to adopt a more up-to-date definition of agriculture. The obvious omission from the existing definition in the Bill is arable cropping. I do not know off the top of my head how many acres are involved in arable cropping in this country. The figure runs into several millions—perhaps 9 million or 10 million. But that aspect is omitted from the definition of "agriculture". We can all relax. There is no need to worry about osier land because that is referred to in the definition. I simply illustrate the absurdity.
We were told yesterday that horse grazing is agricultural but horse keeping is not. While the horses are grazing they come within the definition of "agriculture" but if one puts out feed for them or saddles

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them up, it is a non-agricultural activity. That is daft. It is time we had a look at the definition to see whether we can improve it.
The existing definition comes from the 1947 Act. We know that this Bill intends to establish the tenancy system for the indefinite future. Perhaps that is not as indefinite as some Members of the Committee might like to think. But it is time that the definition was revised to take account of the major changes that are under way or which may take place. I cite one example. The farming of sheep for medical products seems to lie outside the express examples which are given of agricultural use in present law. Energy crops such as miscanthus are not obviously included. Does willow for biomass have to be considered as an osier bed to fit within the definition of agriculture?
The approach taken in the amendment is to define "agriculture" from first principles rather than to revise the present list. The amendment makes clear that agriculture is a commercial activity that is based on animals and plants although that may be a means of delivering environmental objectives.
I suspect that the Government will argue that it is important to maintain a stable definition consistent with those used in planning, rating and other areas. However, the proposed definition can be used only in this Bill on farm business tenancies. It is important to recognise the evolution of the industry and not permanently to defer the issue. In any event, the Government have themselves slightly altered the definition by deleting the last phrase of the present definition of livestock,
"or the carrying on in relation to land of any agricultural activity".
There is the problem of set-aside. It is not covered by the definition. We have been told that we should ask the Minister whether he regards fish farming as "agriculture". I have a long brief from the Agricultural Law Association which I shall not read to the Committee. It helpfully points out the four areas at which we should be looking. I say immediately that I am entirely happy for the Government to take the matter away and return with their own version. The amendment is a genuine probe to see whether we can improve the definition as we go through the Bill.
The four areas that the Agricultural Law Association believes should be considered in any redefinition refer to new activities in agriculture. I have mentioned some. Others appear in other amendments in the group. Clarification is sought of the grey areas which we all know exist. I have referred to horse grazing and horse keeping. The problem of diversification of agriculture has been referred to a number of times. The Minister has stated that one of the objectives of the Bill is to encourage the diversification of agricultural activities. That is not caught by the present definition. Above all, there is the simplification of the definition.
It may be easier to move away from the definition we have put forward to simpler definitions of principles. I understand the problems of the Government. The parliamentary draftsman always says, "If you have a list, you will leave something out". For that reason we have not moved from the definition since 1947. That does not seem to be an improvement. There is scope for
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improvement and for bringing up to date the definition with which we are all familiar. In that spirit, with the intention of helping the Government and the industry to have a more modern definition, I beg to move.
6.15 p.m.
The Earl of Kinnoull: It may be for the convenience of the Committee if I speak to Amendments Nos. 83 to 86 which stand in my name. The noble Lord, Lord Carter, put the matter clearly. We are looking for a modern definition of "agriculture" in the Bill. I had hoped that after 82 amendments—my noble friend has accepted only one amendment in his name—that the three amendments in my name might have been accepted. However, I was discouraged when I read the notes on clauses because they state what I suspect my noble friend may say, namely, that the definition—the noble Lord, Lord Carter, says that it comes from the Agriculture Act 1947 and the 1986 Act —is a non-exhaustive definition. I am not sure what that means. However, it is stated that any amendment might call into question the meaning of the term "agriculture" wherever it is used in statute law. It is a fairly depressing thought that we can never alter or modernise the word "agriculture" in a new Bill which we hope will involve many new entrants into farming.
My amendments concentrate on areas of what I term non-agricultural uses which are coming more and more into play in agriculture. Amendment No. 83 refers to,
"the growing of crops for the production of fibres, fuel or for other industrial purposes".
Amendment No. 84 refers to,
"leisure purposes and environmental preservation and enhancement according to national policies".
Amendment No. 86 refers to "transport or leisure purposes".
I shall not go into great detail. I say only that with regard to the amendment in the name of the noble Lord, Lord Carter, I am not happy with the suggestion of linking the amendment with the common agricultural policy of the European Union. That policy may well change.
Earl Howe: I am not unsympathetic towards the aims of the amendment as so ably explained by the noble Lord, Lord Carter. I accept that even the most hallowed definition of anything can benefit from occasional clarification or updating. My remarks which follow will be relevant also to the amendments tabled by my noble friend Lord Kinnoull.
There are unfortunately two main problems with the amendments. First, Clause 36 sets out the definition of agriculture for the purpose of this Bill only. It is not within the scope of this clause or, I submit, of the Bill, to amend the definition of agriculture in all the other myriad places where it appears on the statute book. In any case, to seek to do so would raise many and complex issues which would require a great deal of time to consider and debate properly. That is not to say that I would not enjoy a debate of that kind, but, that being so, we could only amend the definition for the purposes of this Bill. We would then create a situation where one definition of agriculture applied for the purposes of the

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Bill while another definition applied for all other statutory purposes. That seems to me a recipe for confusion rather than clarification.
My second objection is this. It is a lesser objection, but even so I shall explain it. Not all the proposed additions which the noble Lord included would fall appropriately within the definition of agriculture. To take the example of set-aside land, there was a provision under the five-year set-aside scheme (though not under the current Arable Area Payments Scheme) for land to be set aside to a non-agricultural use. Some farmers converted land to golf courses, for example, under that scheme. In my view, it would be wrong to redefine agriculture so that those golf courses came within the definition but other golf courses obviously did not. Nor is the growing of plants to gain income a concept that is obviously agricultural, since it would embrace all commercial forestry, for example.
The draftsman who drew up this definition of agriculture, which I believe dates from the Agriculture Act 1947, had the wisdom and foresight to make it an inclusive definition. That is, it does not rule out activities as being agricultural simply because they are not mentioned. For that reason, the definition is a flexible one and can adapt to changing circumstances. Just as I do not imagine that there was ever any doubt that arable land—which the noble Lord cited as an example—was agricultural, despite not being mentioned, so it seems equally certain that land left fallow—whether as part of a traditional rotation or under a set-aside scheme—would also qualify. I am not saying that the present definition could never be improved upon, but merely that I see no pressing need to do so at this time and for this Bill only.
The Bill allows considerably more scope than the present legislation for tenants to diversify their activities into non-agricultural areas without the nature of the tenancy being called into question. It is partly for that reason as well that I see no additional need to extend the definition of agriculture, particularly if it would lead to a discrepancy between this Bill and other legislation as to what was and what was not agricultural.
I am sorry that I have sounded so negative, especially as I am not unsympathetic to what the noble Lord is trying to achieve, but I hope that once again he will be not unsympathetic to the arguments that I have put forward.
Lord Carter: I am extremely unsympathetic, but not in the least surprised. I expected that to be the answer that the Minister would give and I said that we realised that, even if it is not in this Bill, we must start somewhere. We must change the definition and I suppose it could be achieved in all the relevant Acts by a miscellaneous provisions Act, that might be a route to use. I believe that we all agree that it is silly that we have a definition of agriculture which includes seed growing and excludes the 9 million acres of cereals and 1 million acres of oil seed rape that we grow. However, so be it.
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It seems to me that the Minister's answer is like the remark of St. Augustine. He said that he was prepared to accept chastity, "but not yet". This comes in that category. We might try again, I know that the draftsmen always say the same thing and we are always given the same answer, it has been tried with other Bills. We have a definition for a modern industry which is out of date; we all accept that, but the Government seem to be content with it. It is a pity, I wish that we could convince them.
We might attempt to return with an amendment at Report stage which is simple in terms of principle. It might serve as guidance in other later Bills. However, obviously we shall get no further today and so I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 83 to 88 not moved.]
Clause 36 agreed to.
Clauses 37 to 39 agreed to.
[Amendments Nos. 89 and 90 not moved.]
Schedule [Consequential amendments]:
Lord Carter Lord Carter moved Amendment No. 91:
Page 19, line 37, leave out paragraph 6
The noble Lord said: The amendment's effect is, in the interests of the industry's flexibility, to put farm business tenancies on the same footing as business tenancies as regards the ability to assign leases. We have already touched on the point, but it is worth returning to it.
In farm lettings against assignment there has traditionally been a bias. The more commercial approach of the farm business tenancy calls for that to be challenged, while the emergence of more fixed term tenancies makes it an essential flexibility to overcome the problems which can arise as a result of being locked into a fixed term lease. It is in line with the modernisation and increased commercialisation which the Government wish to see in the farm business tenancy. The landowner has the option of selling his interest. The amendment is designed to encourage a more open attitude towards assignment as a cultural change in land management. It does not give the tenant an automatic right to assign.
A practical example of a situation where assignment could be useful is where a tenant dies or becomes incapable of farming halfway through a fixed term lease and has no one who can carry on. He can be held to that lease until its expiry. Some ability to assign gives a solution to the problem. Other examples are: attracting specialist skills into a diversification or ensuring its future when successors in the farming business are no longer interested; or enabling a tenant who is making his way up the farming ladder to win a new farm in the knowledge that he can assign his interest in his current farm and so avoid overstretching his resources.
The underlying legal situation is that tenancies are assignable unless stated otherwise. Almost all written agricultural tenancies include that prohibition. Then there is the question that I think I asked on an amendment yesterday and I am not sure that the Minister answered me: does an unwritten agreement

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under this Bill which is caught by the farm business tenancy have the same common law effect if it becomes assignable? I am aware that unwritten tenancies under the existing law are assignable and when the tenancy is reduced to writing that is almost invariably removed. Is the situation the same with an unwritten farm business tenancy? There is the implied right to assign which would be lost, presumably, if the tenancy were reduced to writing. It is an interesting legal point and it would be helpful if the Minister could deal with it.
The relevance of Section 19 of the Landlord and Tenant Act 1927 in this context is that, where an agreement states that a lease may not be assigned without consent, that consent shall not be unreasonably withheld. We had that point earlier today. Accordingly, it is not seen as appropriate to carry forward that exclusion from the Landlord and Tenant Act 1927 and it is not seen as a proper consequential amendment.
What we are really saying with the amendment is that, if we are to have—and some of us have argued against it—all the factors of the farm business tenancy, making it become much more like a commercial tenancy agreement, then we should have the same rights in that agreement as already exist in the normal business tenancy. I beg to move.
The Earl of Kinnoull: If one were to pursue this amendment—I hope that that is not the intention—can the noble Lord, Lord Carter, say what protection the landlord would have against the tenant assigning to someone not qualified to farm?
Lord Carter: The consent of the landlord is required on the understanding that the consent should not be unreasonably withheld. It would be entirely reasonable to withhold it if it were clear that the person to whom the tenancy was being assigned was an unsatisfactory tenant.
6.30 p.m.
Earl Howe: I am grateful to the noble Lord for introducing what is a rather technical amendment in his customary clear fashion. We considered earlier today the question of landlord's consent for tenant's improvements. The arguments which I used then apply equally to landlord's consent to assignment and change of user where no structural alteration to the premises is involved. In the latter case, because a farm business tenancy will usually comprise more land than it does buildings, significant changes of user can take place without structural alterations. Such changes might have a significant effect on the landlord's interest.
As the noble Lord mentioned, the question was raised yesterday of what the position is on the tenant's right to assign a tenancy held under an oral agreement, and I undertook to write to the noble Lord. However, it may be convenient if I answer the point now. The tenant has the right to assign the tenancy if the tenancy agreement does not contain a provision which prevents him from doing so. Since oral agreements by their nature are unlikely to include—or at least to be shown to include—such a provision, the tenant will normally have the right to assign them. The important point, however, is that where a tenancy agreement does contain such a
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provision, it should be allowed to have effect and not be overridden. That is why the Agricultural Holdings Act 1986 and the Bill which we are considering today both disapply Section 19 of the Landlord and Tenant Act 1927 in relation to agricultural tenancies.
We must give landlords the confidence to let land and the best way of doing that is by ensuring that their interests are not overlooked. That is not the same as creating a bias in favour of landlords, as the noble Lord sought to suggest. To remove their control over whether or not the lease is assigned, which is what this amendment would do, would give rise to understandable concerns and would deter letting. That is the central point. I therefore hope that the noble Lord will not press his amendment.
Lord Carter: I am not surprised by the answer. We have had a useful discussion. It is very interesting to have it confirmed that oral agreements under the Bill relating to farm business tenancies will have in them the implied right to assign. That will increase interest in the possibility of unwritten agreements, which might not be what the Government want or indeed what any of us wants. As a tenant, I would be only too keen to enter an oral agreement if I had the right to assign it. I am not a lawyer but I believe that the Government cannot override this as it is part of common law. It is an interesting admission. It will be looked on with interest and may well increase the attraction of unwritten agreements under the Bill which I suspect will make for neither good order nor good practice. Obviously, this is a question on which I shall have to take advice. I shall read what the Minister said with great interest. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Carter Lord Carter moved Amendment No. 92:
Page 27, line 15, leave out paragraph 26.
The noble Lord said: In moving this amendment I shall also speak to Amendments Nos. 93 and 94. These amendments are very simple in that they employ the usual device in seeking to leave out a paragraph to enable the Minister to put clearly on the record what particular paragraphs mean. I believe it will help us to understand the degree of protection or otherwise which the Government are prepared to give to the occupants of farm houses—the tenants—as a result of the operation of the Bill. We merely ask for the paragraphs to be left out as a probe to give the Minister the chance to tell us how much or how little protection the Government are giving to farm tenants under the Bill in the occupation of their residence. I beg to move.
Earl Howe: I hope that I can be of assistance to the Committee. The Rent Act 1977 deals with protected tenancies of dwelling houses. The position is that houses comprised in an agricultural holding are not included in the definition of a protected tenancy and are outside the scope of the Act. As the Act has now been replaced by the Housing Act 1988, in the case of most tenancies entered into on or after 15th January 1989 the chances of a farm business tenancy coming within its scope are pretty slim though I accept that it is possible. However, as I made clear when we discussed Amendment No. 13

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yesterday, dealing with residential farm business tenancies, we do not want to discourage landowners from letting houses.
Where Part III of the Protection from Eviction Act 1977 applies, if a tenancy of a dwelling-house comes to an end but the occupier continues to reside in the house, the owner must use court proceedings to recover possession. As a farm business tenancy may comprise a very large business as well as the house, it is reasonable that landowners should, as a last resort, be able to make use of common law rights of entry where appropriate.
Finally, Section 11 of the Landlord and Tenant Act 1985 deals with repairing obligations of landlords in short leases of dwelling-houses. As I explained yesterday, we would expect parties to a farm business tenancy to make their own arrangements for repairs which would apply to the whole holding.
We do not want special provisions in respect of houses. I should also like to point out that none of these provisions applies in relation to tenancies covered by the Agricultural Holdings Act 1986. I hope that that point in itself will commend what I have said to the noble Lord as he seems keen to follow the precedent of the 1986 Act. I would urge him to do so in this particular case and I hope that he will be content with the explanation that I have given.
Lord Carter: I am grateful to the Minister. I shall certainly wish to read the explanation and I shall of course withdraw the amendment. Perhaps the Minister can confirm the point that none of this changes the situation which was drawn to the attention of the Committee yesterday by my noble friend Lord Gallacher. My noble friend said that at the end of the tenancy the farmer will have less protection in his house than will the farm workers on that same farm. It is a situation to which we shall certainly wish to return at a later stage of the Bill. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 93 and 94 not moved.]
The Deputy Chairman: In calling Amendment No. 95, I should explain to the Committee that there is a mistake in the Marshalled List. A section of an earlier amendment has been wrongly included. Sub-paragraphs (2), (3) and (4) are incorrectly included and should be deleted.
Lord Carter Lord Carter moved Amendment No. 95:
Page 28, line 27, at end insert:
("The Agricultural Holdings Act 1986 (c.5)
1. In paragraph 6 of Schedule 6 to the Agricultural Holdings Act 1986 (occupation to be disregarded for the purposes of occupancy condition) there shall be added to the end of sub-paragraph (1)—
", or

(g) under a farm business tenancy within the meaning of the Agricultural Tenancies Act 1995 granted for less than five years.

The noble Lord said: Perhaps I may make it absolutely clear that the mistake was not in the drafting amendment. Apparently it was due to a computer glitch somewhere in the Public Bill Office which somehow
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lifted sub-paragraphs (2), (3) and (4) from a previous page and deposited them at the end of Amendment No. 95. To make it clear to the Committee, Amendment No. 95 ends with the word "years" at the end of sub-paragraph (g). The paragraphs listed below have nothing to do with it.
I can deal with the amendment fairly briefly. Again, it is an attempt to amend the Agricultural Holdings Act 1986. I hope that the Minister will not give me the same answer he gave earlier. The succession procedures under the Agricultural Holdings Act 1986 depend upon the applicant passing a number of tests, one of which relates to the scale of his present business. In assessing this, the present law disregards all land that is held under Gladstone v.Bower tenancies for up to two years and short lets approved by the Ministry of Agriculture which cannot be for more than five years.
The purpose of the amendment is to carry forward the present practical position so that, for example, someone with 100 acres held under a Gladstone v.Bower tenancy this year would not lose his opportunity to gain succession by holding the same 100 acres next year on an 18-month farm business tenancy under the terms of the Bill. We have had the industry agreement referred to a number of times. This amendment has been suggested by the NFU. One of the obvious uses of the farm business tenancy (I have already referred to it a number of times) is to regularise the number of cases—the situation with share fanning, with contract farming and with Gladstone v.Bower arrangements. There seems to be a flaw which, were it not picked up and corrected, would mean that the incentive to switch from a Gladstone v.Bower tenancy to a farm business tenancy could be reduced. I beg to move.
Earl Howe: I cannot help wondering whether the amendment, as printed, is the product of a fax. My fax machine tends at intervals to spill out unsolicited garbage in large quantities. I would therefore not wish to associate myself wholly with the comparison that the noble Lord's noble friend—
Lord Carter: So that is the argument the noble Earl uses when he is debating the problem!
Earl Howe: I hope not. I am grateful for the noble Lord's explanation of the purpose of this amendment. There appears to be a case for allowing short farm business tenancies to be excluded when determining whether or not a farmer already occupies a commercial unit of agricultural land. I shall consider this point further. I hope that the noble Lord will be content to withdraw the amendment on the basis of that assurance.
Lord Carter: That is a U-turn within half an hour! The noble Earl said earlier in relation to another amendment that the Government would not consider any changes to the Agricultural Holdings Act 1986, but when we produce an amendment that is sensible the Government are prepared to accept it. There will be many other examples of that at later stages of the Bill. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule agreed to.
House resumed: Bill reported with amendments.

Milk Development Council Order 1994
6.42 p.m.
Earl Howe Earl Howe rose to move, That the draft order laid before the House on 30th November be approved [2nd Report from the Joint Committee].
The noble Earl said: My Lords, it is right that I should declare a personal interest as a milk producer.
The draft order is presented in accordance with the requirements of the Industrial Organisation and Development Act 1947. Its purpose is to establish a milk development council for Great Britain, the primary function of which will be to commission research and development in dairying. The order will empower the council to raise a levy for this purpose on sales of milk by farmers.
Before going into the details of the order, I should like to explain to your Lordships a little of the background. I emphasise at the outset that there have been full consultations with all interested parties as required under the 1947 Act. The draft order takes account of the views expressed.
In July 1993 the former Minister of Agriculture received proposals for a milk development council from the NFU. A compulsory levy was preferred because it was thought it would ensure that there would be no discrimination between milk producers and would provide greater certainty and continuity of funds. My right honourable friend conducted a poll of milk producers in England and Wales in April 1994 with a view to finding out whether they would support the establishment of a development council under the Industrial Organisation and Development Act 1947. A parallel poll was conducted in Scotland. There was no request from farmers' representatives in Northern Ireland for the development council to be extended to the Province. Interested organisations were consulted about the establishment of the development council at the same time that milk producers were being polled. The majority of organisations consulted were in favour and producers gave their overwhelming support. The response rate to the postal ballot of producers was 66 per cent. and 73 per cent. of those who voted favoured the establishment of a development council. In the light of the support from all sides of the industry, my right honourable friend and the Secretaries of State for Scotland and for Wales decided that a milk development council should be established.
Noble Lords will recall that provisions relating to agricultural development councils were included in the Agriculture Act 1993, the legislation which, among other things, ended the milk marketing schemes in Great Britain. When the legislation was passing through the House, I explained to your Lordships that the National Farmers Union was advocating the establishment of a milk development council.
Your Lordships will wish to note that Article 2 of the draft order restricts the activities of the development council to Great Britain. Article 2 also restricts the definition of "milk" to cows' milk. Goats' milk and sheep's milk will not be subject to the levy and it is not
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envisaged that the development council will undertake any work in this area. Article 2(2) ensures that producer processors are required to pay the levy.
The functions of the council are dealt with in Article 3 and Schedule 1. The broad range of functions listed in Schedule 1 will enable the council to set its own agenda and continue some of the functions previously undertaken by the milk marketing boards in Great Britain. It will, for example, be able to cover such areas as the funding of R&D, livestock improvement, human nutritional guidance, the preparation of industry statistics, the provision of market information and the management of health, hygiene and other crisis issues which are not company or brand specific.
Article 4 specifies the number of members to be appointed and requires all appointments to be made by Ministers. Under the 1947 Act, a development council must comprise people capable of representing the interests of producers, people capable of representing the interests of employees, and independent members with no financial or industrial interests that might affect them in the discharge of their duties. The Act provides that members with special knowledge of milk distribution and marketing may also be appointed. It is the intention of Ministers to appoint the full complement of six producer representatives, two employee representatives, two independent members (one of whom will be the chairman, as required by the 1947 Act) and one member with specialist knowledge of milk distribution and marketing. We feel it is important that producer representatives are in the majority on the council since it is milk producers who will provide the council's levy income.
We have not accepted the NFU's suggestion that the producer representatives should be active milk producers. That would rule out talented people whose active involvement in milk production may have diminished—for example, as a result of handing over to a son or daughter the responsibility for day-to-day management of the farm—but who are well qualified to represent the interests of dairy farmers. It is envisaged that the member with specialist knowledge of milk distribution and marketing should also be able to represent the views of first-hand purchasers of milk in their role as intermediary levy collectors for the council.
Article 5 introduces Schedule 2, which sets out the council's rules of procedure. Members will be appointed for a term not exceeding four years. The general practice will be for appointments lasting three years, but some flexibility is desirable.
Articles 6 and 7 set out the arrangements for the registration of producers. As required by the 1947 Act, anyone may inspect the register or obtain a copy of the entries upon payment of a fee. Producers will be required to register with the council within 120 days of the order coming into force, unless they have been informed by the council that they are already registered.
Article 8 provides the council with powers to require returns and information from farmers relating to their activities in milk production, having first obtained ministerial consent.
Article 9 provides for the council to raise a charge on the sale of milk by farmers to meet its expenses. As envisaged in the explanatory note, which accompanied the polling forms sent to all milk producers in Great Britain, the council will be empowered to impose a levy not exceeding 0.05 pence per litre. It also provides for purchasers to act as intermediaries in the collection of the producer levy. In that context, it is envisaged that an agency agreement would be drawn up which would make clear the obligations placed on the individual parties. In signing an agency agreement purchasers would agree to collect the producer levy (by making a deduction from the producer's monthly payment cheque) but would not be obliged to pursue producers who subsequently decided that they did not want to pay. In such cases the purchaser would be obliged to notify the council, which would then have to pursue the producers concerned.
Article 9(6) reflects the wishes of both milk producers and purchasers that the levy should commence on the first day of the month after which the order comes into force. This was considered desirable from an administrative point of view. Article 10 contains standard provisions permitting the council to borrow money and create reserves. Article 11 provides for returns of sales to assist with levy collection. Article 12 deals with offences against the order.
The council will have an important task to perform, and in its first few months will be faced with a number of issues. As well as having to decide which areas of work to support, it will have to decide on its administrative arrangements. While decisions on these matters are, within the legislative framework, entirely for the council, my department is ready to provide it with any assistance that it can. We wish the new Milk Development Council well, and I am happy to commend the draft order to your Lordships.
Moved, That the draft order laid before the House on 30th November be approved [2nd Report from the Joint Committee]. —(Earl Howe.)
Lord Carter: My Lords, the House will be grateful to the Minister for explaining the Milk Development Council Order so clearly. Like him, I should declare an interest as a registered milk producer and a potential levy payer. I certainly support, and my party supports, the idea of the Milk Development Council. I have long felt that the development council route was one that we should have followed in agriculture much more than we have. It is a good way of collecting the money that is needed for producers to carry out research and development and other activities. I am glad that the Minister has confirmed that producers will be in the majority and that they will have six out of 11 members of the new council, as the council will be funded entirely from the levy that is collected from producers. The trade will not be contributing.
The council is welcome. Formerly, the expenditure was in effect raised with a compulsory levy by the Milk Marketing Board. The Minister will remember that when we were discussing the Agriculture Act 1993 I said that I hoped there would be a Milk Development
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Council. I also hoped that there would be as small a gap as possible between the vesting day of the new milk system and the setting up of the Milk Development Council. As it happens, because—if I may use a phrase that we were using yesterday regarding the effluxion of time—the vesting day was delayed from April to 1st November, there will be a smaller gap, but we hope that the Milk Development Council can start as early as possible in the new year. It has substantial support from producers.
I wish the Minister to confirm one or two points. He is aware of them because I informed him that I would be raising them. Will he confirm for Hansard—he was kind enough to do so in writing—that the Milk Development Council will take responsibility for the valuable work of the animal data centre, which is not mentioned in the order? This gives me a chance to pay a tribute to its first chairman, Mr. John Moffitt, who has done an outstanding job in setting it up. It is intended that 0.01 of the 0.05 pence will be devoted to the animal data centre. I believe that it is not expressly mentioned in the order because the Government quite understandably quoted the criteria for the functions rather than specific areas of activity. I hope the noble Earl can confirm that the Government support the work of the ADC and that they fully expect the Milk Development Council to use a proportion of its levy funds to fund the ADC.
Perhaps I may ask why the Government have set out the seven functions of the council but have omitted the eighth function which was suggested by the National Farmers' Union. It concerns human nutritional guidance, issues and crisis management, education, and livestock improvement. The human nutritional guidance work was done by the old National Dairy Council. Do the Government feel that these areas can be sufficiently covered in the seven functions which they have given the council? Is that why they have left out the eighth function suggested by the NFU and the industry bodies?
My next point is important. What will happen if an agent collects money from producers, has the money in his bank for a month, and then goes bankrupt? Is the MDC a preferential creditor in that situation?
I should be glad to have the Minister's confirmation that the development council will have responsibility for pursuing producers who do not pay their levy. In the discussion on previous development council orders setting up the development council, it was suggested that the agents would not be able to pursue the producer because they were acting as agents. At that time it seemed that the development council could not pursue the non-levy payer either. But it seems that in this case the problem has been overcome, which is very welcome.
With those few comments I am glad to confirm the support of this side of the House for the new council.
Earl Howe: My Lords, I am grateful to the noble Lord for his welcome for the order. There is recognition across the industry that the order addresses issues of fundamental importance for the milk sector. Research and development are essential for the future wellbeing of the industry. I am confident that the Milk Development Council will play an important role in that

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area. The Government will also continue to contribute considerably to the funding of R&D in the milk sector—more than £3.6 million for 1995–96 and a similar amount in the following year.
The noble Lord referred to the future of the animal data centre and to the importance of it being fully supported. The broad range of functions listed in Schedule 1 to the draft order would permit the Milk Development Council to engage in activities such as livestock improvement and genetic evaluation work. As I said during the Committee stage of the Agriculture Bill just over two years ago, it would certainly be possible for the Milk Development Council to operate in co-operation with the animal data centre. In the end that would be a matter for the council itself to decide under the terms of the 1947 Act. It is not specifically mentioned but the powers are there.
The noble Lord asked why one of the proposed functions of the MDC had been dropped from the list in Schedule 1 to the draft order. A very early draft of the order listed eight functions in Schedule 1. One of the functions was dropped prior to the draft order being sent out to consultation because it would have permitted the MDC to engage in advertising and promotional activity, functions to which the industry had not previously given its support. I understand that the National Dairy Council would be able to do this if that is what sectors of the industry wished to happen.
The noble Lord asked what would happen if the agent collecting the levy from producers went bankrupt. Matters such as that would be covered by civil law. In such situations it would be unlikely that the MDC would be a preferential creditor.
It is important to repeat my earlier assurance that Ministers will appoint the full complement of six producer representatives so that the producer view is in the majority on the council. I am pleased that the noble Lord has welcomed the order. I commend it to the House.
On Question, Motion agreed to.

World Trade Organisation (Immunities and Privileges) Order 1994
6.57 p.m.
Barones Chalker of Wallasey Barones Chalker of Wallasey rose to move, That the draft order laid before the House on 1st December be approved [2nd Report from the Joint Committee].
The noble Baroness said: My Lords, the Uruguay Round of multilateral trade negotiations which took place within the framework of the General Agreement on Tariffs and Trade between 1986 and 1993 was formally concluded at Marrakesh on 15th April this year. The GATT provides a framework of agreed multilateral rules for world trade and the Uruguay Round marks an important step forward in the liberalisation of such trade. The legal vehicle for bringing the results of the round into force is the agreement establishing the World Trade Organisation—Cm 2571.
The WTO will provide an institutional structure for the operation of the various trade agreements covered by the agreement establishing the World Trade Organisation. It will provide a framework for the accession of new members, for the settlement of disputes, and for the amendment of various trade agreements and for other decisions and waivers. The secretariat will comprise the director-general and some 400 officials and will be located in Geneva.
Specifically, this debate is about the privileges and immunities accorded under the draft order which need to be conferred in order for Her Majesty's Government to fulfil their obligations under Article VIII of the Agreement Establishing the WTO (Cm 2571). This article provides that the WTO shall be accorded by each of its members such legal capacity and privileges and immunities as are necessary for the exercise of its functions. Privileges and immunities are also to be accorded to officials of the WTO and the representatives of members. In both respects these are to be similar to those provided for in the Convention on the Privileges and Immunities of the Specialised Agencies of the United Nations 1947.
However, as the World Trade Organisation will be located in Geneva, many of the privileges and immunities set out in the draft order in council will never need to be relied upon by the WTO, its officials and representatives of members. The World Trade Organisation is in practice likely only to claim refunds of VAT on goods and services purchased in the United Kingdom for the official purposes of the organisation. We will need only to accord the relevant privileges and immunities to its officials and representatives of members if they attend any WTO meetings or conferences which may be held in the United Kingdom. I would like to emphasise to the House that the privileges and immunities provided for in the order are granted in accordance with the limitations imposed by the International Organisations Act 1968, as amended, under whose provisions the order is made.
The Joint Committee on Statutory Instruments considered this draft instrument and had no comments. I commend the order to the House.
Moved, that the draft order laid before the House on 1st December be approved [2nd Report from the Joint Committee]. —(Baroness Chalker of Wallasey.)
Lord Graham of Edmonton: My Lords, first, let me say directly to the Minister that my noble friend Lord Richard wishes me to convey his apologies because he intended to be here but has been inadvertently drawn somewhere else. If he had been here I am sure that he would have wanted to say immediately that this side of the House and, I believe the whole House, warmly appreciates the manner in which the Minister has explained to us what I believe will be seen in practice as a very significant step towards helping the nations of the world to trade on a more equal basis.
Substantially this legislation replaces GATT and that which flowed from it. We have listened to the function of this House being carried out in order to endorse the legalities which flow from the legislation. If we replace the GATT arrangements which came into operation in

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1948 and which lasted a substantial number of years—that is to say, 47 years—it may be that we are looking here at a provision which will be in existence in the year 2040. That is not something that is easy to contemplate. We know that GATT has been enlarged and changed enormously in the countries which it now covers, including China and Russia and 123 other nations.
We are giving approval tonight to something which is vital to ensure that the world is a better place with all that can flow from trade. I particularly like the desire to ensure greater transparency and consultation in trade policy matters at national, regional and international levels. Surely this country must be a beneficiary in such matters. I especially like the proposals for information sharing under the World Trade Organisation.
I am delighted that the Minister made some reference to the importance of the consumer organisations who have a role to play. I believe that they have assisted in the policy formulation in these matters.
As far as we are concerned, the Government's intention is real as regards the specific arrangements for increasing public awareness and involvement in trade matters. I can well imagine that before the hiatus which occurred between the European Community and particularly America in the past two years, not many people would have understood what GATT was about. The Minister has tonight made it abundantly clear that the international immunities and privileges which will flow from the World Trade Organisation are certainly well understood. We on these Benches give this order a very warm welcome.
Barones Chalker of Wallasey: My Lords, I am very grateful to the noble Lord for that welcome.
On Question, Motion agreed to.

European Communities (Definition of Treaties) (Agreement Establishing the World Trade Organisation) Order 1994
7.5 p.m.
Barones Chalker of Wallasey Barones Chalker of Wallasey rose to move, That the draft order laid before the House on 1st December be approved [2nd Report from the Joint Committee].
The noble Baroness said: My Lords, it is proposed that this draft order should be made under Section 1(3) of the European Communities Act 1972. This provides that a treaty entered into by the United Kingdom after 22nd January 1972 shall not be regarded as a Community treaty unless it is specified as such by order in council. The draft order specifies the WTO agreement as a Community treaty from the time the agreement is in force for the United Kingdom. The principal effect of declaring the agreement to be a Community treaty is to bring into play the provisions of Section 2 of the Act which provides for the implementation of treaties specified as Community treaties.
There is nothing strange about this at all. It is very much a legal matter of just making sure that we are completely in tune with the Community treaties. I
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understand that the Joint Committee on Statutory Instruments considered this draft instrument and had no comments. I commend the order to the House.
Moved, That the draft order laid before the House on 1st December be approved [2nd Report from the Joint Committee]. —(Baroness Chalker of Wallasey.)
Lord Graham of Edmonton: My Lords, the House is indebted to the Minister for being clear, precise and speaking very briefly. We on these Benches endorse what she has said.
Lord Rea: My Lords, perhaps the noble Baroness will correct me if I am wrong, but I do not believe that either House has had an opportunity to debate the actual setting up and accountability of this new organisation which will oversee GATT. Can the noble Baroness say whether an opportunity to do that will arise or is it too late? Has it all been done? Whether that is so or not, can she say how Parliament can or will be informed of the deliberations of the World Trade Organisation and how accountable our representative in that organisation will be to Parliament? Will that be through the Foreign and Commonwealth Office or through the DTI? I shall be grateful for a few words from the noble Baroness on that topic.
Barones Chalker of Wallasey: My Lords, I understand that the other place debated the Uruguay Round Agreement on 14th June of this year. I can tell the noble Lord that the Foreign and Commonwealth Office, together with the DTI, obviously has responsibility for representing our interests at the World Trade Organisation in Geneva. I can further tell the noble Lord that this order before us tonight does not do anything other than what I have explained. There is no inwardness and no secretiveness. I sincerely hope that, after a long and difficult debate, we have secured the completion of the Uruguay Round and opened trading which will do so much to help all nations of the world and that that will now be very much the order of the day. I hope that the World Trade Organisation will not have to chase up too many people who fail to be open traders.
Lord Kennet: My Lords, the noble Baroness did not actually answer my noble friend's question about whether there will be a reporting arrangement to Parliament through the Foreign and Commonwealth Office from our representative in the new organisation. It will be interesting to know that. Do the Government intend or hope to do anything, even if it is only a hope?
Barones Chalker of Wallasey: My Lords, there is no reason why there could not be a regular report if that was judged to be right. There is an annual reporting system by all representatives of international bodies. That is not a secret matter. We have not been required or asked before to have regular debates on these matters, but I shall bring the noble Lord's remarks to the attention of the Lord Privy Seal and the business managers. I do not think that noble Lords will find a

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great need to debate this although there may be occasional questions on it, which I shall be only too glad to answer.
Lord Kennet: My Lords, I am much obliged.
On Question, Motion agreed to.

Toxoplasmosis in Pregnancy
7.9 p.m.
Barones Robson of Kiddington Barones Robson of Kiddington rose to ask Her Majesty's Government whether, in the light of medical opinion that it is necessary, they will establish a large-scale, multi-centre study into toxoplasmosis in pregnancy.
The noble Baroness said: My Lords, in tabling this Unstarred Question, I want to refer to the Government's document, The Health of the Nation, in which they state:
"The strategic role of the Department of Health is … to monitor and assess the health of the nation and take the action necessary … to improve and protect health".
I think that everyone would agree that the best way to start to improve and protect the health of the nation is to ensure that, as far as is humanly possible, every baby born in this country is a healthy baby.
Toxoplasmosis in pregnancy is a clear example of how the Department of Health might implement the role that it has set itself. Toxoplasmosis is a common infection. It is caused by a parasite living in soil, on unwashed fruit and vegetables and in infected cat faeces. The infection is usually mild, giving flu-like symptoms which can often go unnoticed. An amazing statistic is that 70 per cent. of women in France are immune against toxoplasmosis because they have had it earlier in life, whereas only 30 per cent. of women in Britain are immune. I do not know whether that has something to do with how we handle soil and wash vegetables. I do not think that anyone knows the reason, but it is an interesting fact. The statistic proves that the danger is greater for pregnant women in this country than for those in France.
When a pregnant woman catches the infection, she may pass it to her unborn child, who may suffer from blindness, hydrocephalus and brain damage. A large number of the babies will have no symptoms at birth, but they will need to be clearly and closely monitored for six to nine months. Some may develop blindness as late as in their teens. Estimates of the scale of the problem in the UK broadly agree that two women per thousand will contract toxoplasmosis for the first time in pregnancy. With an average of 700,000 births each year, that means that 14,000 pregnant women will have new toxoplasma infections each year. The research indicates that 40 per cent. will pass the infection to their foetus. That could amount to as many as 600 babies per year.
However, it is known that toxoplasmosis in pregnancy is preventable, testable and treatable. Pregnant women should be routinely made aware of how to avoid the infection. Work on that has been carried out largely by the Toxoplasmosis Trust in this country. It has distributed over 1 million leaflets in the past five years, trying to inform women what to avoid
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when pregnant. Blood tests will identify the toxoplasmosis infection and could be included in routine ante-natal care.
Spiramycin is the orthodox treatment that is used to prevent the transmission of toxoplasmosis from an infected mother to her foetus. It has been used and studied in France and Austria, where the incidence of congenital toxoplasmosis has dropped dramatically. In Austria, for example, following treatment, the incidence of affected babies has fallen from between five and seven per 1,000 births to as low as one in 10,000 births. Surely such a reduction is worth achieving.
What action is necessary in this country? I believe that it is for the Department of Health to regularise the situation on toxoplasmosis in pregnancy. A number of steps are appropriate. In the short term, all pregnant women should be informed about toxoplasmosis and how to avoid it. Such a crucial task cannot be left to a small charity to undertake. As I have said, that charity has done a magnificent job, but it is up to the Department of Health to see that that information is given to pregnant mothers.
I also believe that the Department of Health should bring together all the relevant professional groups to discuss clinical guidelines. That would at least standardise the treatment of pregnant women who are identified as being infected with toxoplasmosis. One of the problems is that there is no standard system for dealing with the infection across the different centres. Some centres are very good and provide very good treatment; others are not so good. We cannot afford to allow mothers who unfortunately happen to be infected to have their babies in centres that do not provide the best service.
The most important role for the Department of Health is to obtain epidemiological information, as proposed by the Royal College of Obstetricians and Gynaecologists in its working group in 1992. It emphasised the need for further research. It is not alone in that, because in 1991 the Select Committee on Health also stated that more research was required. We recommend that the Government should commission the appropriate epidemiological research to establish the incidence of toxoplasmosis. The problem is that real information on the number of pregnant women who contract the disease and infect their babies is clearly lacking. It is inappropriate to take a decision for or against screening without that information. I hope that the noble Baroness realises that I am not asking for a national screening programme. We would not dream of asking for that until all the relevant information is available on which we can base a decision about screening.
Over the past five years, numerous requests have been made for that crucial research to be undertaken. I believe that in October this year the Toxoplasmosis Trust wrote to the noble Baroness, Lady Cumberlege. I am not aware of whether it has received a reply or whether the Government are prepared to undertake that very important research programme. Such research needs to be carried out on a multi-centre basis, covering the country. Various small research programmes have taken place but, because they are small and do not cover large

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enough areas, they have come up with many different answers. That is why it is important that we have a national multi-centre research programme.
I urge the Government to undertake that research as a matter of urgency. We all want all babies to be born healthy. To me, the results of this infection are frightening because it can manifest itself so much later in life. I hope that the Government will accede to this request.
7.20 p.m.
Lord Rea: My Lords, the Unstarred Question asked by the noble Baroness deals with a parasitic disease of which few of us will have heard, and, yet, surprisingly, as she pointed out, many of us may have acquired it. Our immune system will have dealt with it with no more than minor, flu-like symptoms. The organism is a single-celled protozoan (or, strictly speaking, sporozoan). It is in the same group as some tropical parasitic diseases. It affects animals as well as man, so technically speaking it is a zoonosis. Domestic cats are known to harbour the organism, as are some farm animals, sheep in particular.
I am pleased that the noble Baroness, Lady Trumpington, is to answer the debate because she has had experience as a Minister in the Ministry of Agriculture, Fisheries and Food and the Department of Health. I am sure that she was chosen to answer the Question for that reason.
While adults, if infected, can suffer mild and occasionally prolonged glandular fever-like symptoms, the disease can, as the noble Baroness pointed out, cause much more severe damage to the unborn foetus if the organism crosses the placental barrier in pregnancy. It is newly acquired infections by mothers during, or shortly before, pregnancy, that concern us.
As the noble Baroness said, the rate of infection of pregnant women by the organism is about two per thousand (0.2 per cent.); that is, 1,200 to 1,400 (not thousands) per annum in the country. In 40 per cent. of those cases, according to several studies, the foetus also acquires the infection. It crosses the placental barrier and leads to some 500 to 600 affected foetuses. It is thought that about 10 per cent. of those (50 to 60 or so) are harmed seriously by the infection. Some are infected seriously with blindness and brain damage.
During a professional lifetime, I can remember treating only one adult case of toxoplasmosis. I had one sad infant case, nearly 40 years ago now. The child had hydrocephalous and blindness due to choroido retinitis, which fits the bill of toxoplasmosis. That child did not survive long. That diagnosis was not established, but it sounds exactly like the type of problem that arises, not commonly but enough to cause concern in this country. Most doctors will not have met a known case of toxoplasmosis during a whole professional lifetime. However, the infection is not so rare that it never gets into the news. The publication Rolling Stone on 24th March 1971 reported:
"Roy Harper, popular British singer and guitarist, almost had to delay a tour of Britain when he caught a rare (in humans) flu-like virus"—
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That is wrong; it was not a virus—
"called toxoplasmosis while giving mouth-to-mouth resuscitation to a pregnant sheep".
The disease is rare but as perinatal and infant mortality rates from all other causes decrease, further progress in reducing the risk to babies depends upon rooting out rare causes of death and disability so that they can be identified and eliminated. In most cases, that means prevented rather than cured, because treatment is too late.
In France, again as the noble Baroness said, there is the same percentage of new infections in pregnancy, but a much higher prevalence in the country as a whole. In France, all mothers are screened when they book for pregnancy and again later in pregnancy. All women in France have to have a toxoplasmosis tests before they can obtain a marriage licence. Several other European countries routinely screen all pregnant women for toxoplasmosis. The noble Baroness mentioned Austria, but Finland and Denmark do so also, and I gather that Germany is planning to do so.
I have not seen the details of the multi-centre research programme mentioned in the Question, but it would seem to fall properly within the province of direct Department of Health-funded research through the Public Health Laboratory Service. Its reference laboratories are equipped properly to do the accurate Sabin-Feldman dye test which identifies the infection. It has the expertise. Blood is taken routinely from pregnant women during pregnancy. It is merely a question of sending it to the correct laboratory.
Unfortunately, with a fairly rare disease, large numbers of blood samples have to be examined to detect significant differences in rates which may vary around the country. For instance, 100,000 samples would be needed to detect 200 cases. That is probably the number needed to show any statistical significance. However, there are cheaper, less sensitive screening methods than the dye test. For instance, there is a skin test which might be used initially to screen for possible infected women, which would reduce the cost of the whole exercise.
It is not appropriate to discuss research methodology across the Floor of the House. But it is appropriate that the risks to the next generation of a disease which is known to cause blindness and mental retardation, and which is largely preventable but not so easily curable, should be known as precisely as possible. As the noble Baroness said, we are not asking for a full-scale screening programme, as in France, to be initiated without further consideration. We are asking that the Government should allow the evidence to be collected upon which to base a balanced decision as to whether we should start having a routine toxoplasmosis screening policy in pregnancy. Surely that is a reasonable request.
7.26 p.m.
Barones Trumpington: My Lords, I am grateful to the noble Baroness, Lady Robson, for giving us the opportunity to explain the Government's policy on toxoplasmosis and our position on research, as well as for her forbearance in allowing me to take the place of

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my noble friend Lady Cumberlege. As the noble Baroness said, and as the noble Lord, Lord Rea, detailed, toxoplasmosis is a very unpleasant, albeit rare, disease in babies. As a government we must aim to prevent people, particularly pregnant women, from catching it.
The noble Baroness, Lady Robson, asks whether a large-scale study of toxoplasmosis in pregnancy should be established. It is our aim that centrally commissioned research should result in real improvements in services, and in improvements in the health of the population. For that reason, priorities for the whole of our research programme are reviewed regularly according to criteria, which include the extent and seriousness of the condition and the contribution which research can make into developing health policy.
We recognise that the birth of a child affected seriously by congenital toxoplasmosis is a tragedy for the child and for the family involved; but looking at it in terms of the epidemiological data, congenital toxoplasmosis is not a frequent problem. I should like to add to the knowledge of the noble Lord, Lord Rea: the number of babies born each year who are damaged by the disease probably lies between 15 and 50. A research study is currently under way based at the Institute of Child Health, and covering a number of regions. It is investigating the extent of long-term eye damage associated with congenital toxoplasmosis.
In 1992, a Royal College of Obstetricians and Gynaecologists multidisciplinary working group reviewed the case for prenatal screening for toxoplasmosis infection at our request. The group concluded that a national screening programme would not be appropriate because of the possibility that it might cause more harm than benefit.
The main reasons for its advice are, first, that there is uncertainty about the effectiveness of the treatment; secondly, that the currently available tests are not sufficiently sensitive and specific; thirdly, that, in order to detect infections occurring during pregnancy, testing would need to be repeated at regular intervals because women may become infected without having any symptoms; and, fourthly, but perhaps most worryingly, that there is a risk of unnecessary terminations.
The key issues are, therefore, reliability of testing and safety and effectiveness of treatment. A study of the epidemiology of toxoplasmosis in pregnancy may allow us to make more precise estimates of prevalence. However, it would not necessarily alter current conclusions on the balance of risk and benefit of a national screening programme or on the appropriate management of toxoplasmosis in pregnancy.
The report of the RCOG working party, which was published in 1992, included up-to-date information on management. The department funded distribution of the document, which was sent to all obstetricians. Recently, there have also been helpful review articles in journals such as the British Medical Journal. These will help doctors to keep up to date.
The noble Baroness, Lady Robson, asked for standard guidelines to be instigated by the Department of Health. It is not for the department to produce medical guidelines; that is the role of the relevant professional
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bodies, including the Royal Colleges. The department will consider commending to the health authorities clinical guidelines from professional bodies.
The main agency through which the Government support bio-medical and clinical research is the Medical Research Council. The noble Baroness will be well aware that the MRC receives its grant-in-aid from the Office of Public Service and Science under the Chancellor of the Duchy of Lancaster. It is an independent body which decides what research to support.
As regards toxoplasmosis, the MRC is currently funding two major studies. One is aimed at improving diagnosis in adults and the other at development of a vaccine. In addition to this MRC-funded work, universities and medical schools which are supported by public funding may also be funding research into toxoplasmosis. The MRC is always willing to consider scientifically sound proposals for research in competition with other proposals.
The Department of Health is not currently funding any research into toxoplasmosis. The department funds research through its centrally commissioned programme. As I explained earlier, research is funded according to agreed priorities, to inform policy and healthcare decisions. In addition, the NHS has a needs-led research and development programme, which identifies R&D needs in particular areas. The advisory group in mother and child health consulted a wide range of interested organisations, including the Toxoplasmosis Trust, to identify broad areas where research is needed. Priorities for R&D relating to mother and child health will be announced and the report will be widely disseminated in the New Year.
Barones Robson of Kiddington: My Lords, I was not asking for research into how to treat toxoplasmosis; I was asking for a study of the incidence all over the country. That is quite different.
Barones Trumpington: My Lords, I am aware of what was asked for; I am merely putting forward a different aspect. I answered the noble Baroness's point by saying that it is not the role of the Department of Health to produce such guidelines; it is for the professional bodies. Perhaps I may continue because I have more encouraging news.
The most important challenge is to prevent toxoplasmosis infection, in particular in pregnant women. Although research is in hand, there is no short-term prospect of a vaccine and so our priority is to inform women of the simple measures that they can take when they are pregnant in order to protect themselves from toxoplasmosis. I am pleased to see the noble Baroness nodding in agreement.
Toxoplasmosis is preventable and there can be no substitute for hammering home the basic message of good old-fashioned hygiene. Handwashing is vital before and after food preparation and handling raw meat. Everyone, in particular pregnant women or those trying to conceive, should be aware that meat must be thoroughly cooked before consumption and that fruit

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and vegetables should be thoroughly washed. This applies especially to home grown vegetables if cats live in the neighbourhood.
Attempts to reduce the incidence of toxoplasmosis have concentrated on health education measures, in particular among pregnant women, and the Government have taken positive steps in this area. The department produces a leaflet called, While you are Pregnant—safe eating and how to avoid infection from food and animals, which contains information on avoiding toxoplasmosis. The Health Education Authority produces its pregnancy book, which also contains information on toxoplasmosis and which is provided to
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women when they first attend antenatal clinics. The Institute of Child Health is co-ordinating a multicentre European study on infection risk factors, which will further inform the advice given to pregnant women. We also greatly appreciate the achievements of the Toxoplasmosis Trust in educating the public in prevention; and the department provides core funding to assist the Toxoplasmosis Trust in its work. This amounted to £15,000 in 1994–95.
I hope that the noble Baroness and the noble Lord will understand from what I have said that the Government not only take the condition seriously but are actively supporting measures to fight it.
House adjourned twenty-two minutes before eight o'clock.

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