Sitting of 28 January 1994

Preamble
The House met at half-past Nine o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
PRAYERS

  Privilege
  9.34 am
  Mr. John Austin-Walker: On a point of order, Madam Speaker. I have raised this matter with your office and I am grateful for the advice that I received. I appreciate that you are not able to deal with a question of privilege on the Floor of the House, but I seek your guidance on a related matter.
  I sought guidance from the Clerks, and I appreciate that there is another remedy regarding statements made in the House on Wednesday by the hon. Member for Billericay (Mrs. Gorman), and I have sought that redress by means of early-day motion 477. I seek your guidance on whether a question of privilege is relevant in reporting the proceedings of the House.
  I understand that the Select Committee on Procedure, in Session 1988–89, indicated that, in reporting the proceedings of the House outside, defence against an action for defamation
  "will not extend to the reporting of a selected passage, if the selection can be shown to have been made with intent to injure."
  I seek your guidance, Madam Speaker, on whether outside repetition of the inaccurate allegations by the hon. Member for Billericay would be privileged.
  Madam Speaker: I am sure that the hon. Gentleman appreciates that it is impossible for me to give legal advice across the Floor of the House. I appreciate the way in which he has put his point of order. He knows that he cannot resuscitate an earlier debate by means of a point of order and, as he rightly says, he has expressed his views by means of early-day motion 477. If he will allow me to look at what he has said this morning, I will be in touch with him.

Orders of the Day

  Bank of England (Amendment) Bill
  [Relevant document: First Report from the Treasury and Civil Service Committee on the Role of the Bank of England (House of Commons Paper 98–1 of Session 1993–94]
  Order for Second Reading read.
  9.36 am
  Mr. Nicholas Budgen: I beg to move, That the Bill be now read a Second time.
  I am sure that those who follow the proceedings of the House would take the view that the Bill appears to be a narrow and technical measure, perhaps concerned only with the uninteresting and arcane workings of the Bank of England. However, I hope that consideration of the Bill will be based on the belief that monetary policy is important, not just to the Bank of England but to every citizen.
  It is an irony that, while we rightly deal in detail and at length with the technicalities of taxation policy and look at the way in which, for the sake of argument, the increase in taxation on fuel may be mitigated by compensation schemes, the enormous importance of interest rates to our fellow citizens is not often debated in the House. Certainly it is not subject to detailed parliamentary control.
  Perhaps we could think for a moment about the effect of interest rates upon an ordinary family. In recent weeks, much has been made about the increase in taxation that will occur in April. It is said that the average family will suffer an increase in taxation of about £9 a week. Of course that is a serious increase in taxation, but it is one which most families will, with difficulty, be able to contain, perhaps by doing a bit of extra overtime, perhaps by denying themselves some of the luxuries of life. I do not wish to underestimate the strain of that extra taxation, but it is an imposition which is considered in detail by the House.
  Monetary policy may have a much greater effect on individual citizens. For instance, we know that, because interest rates have decreased to 5·5 per cent. from their high point of 15 per cent., the mortgage interest payments of an average family with an average mortgage may have dropped by as much as £170 per month. That has been an amazing relief.
  On the other hand, when interest rates increased from 7 to 15 per cent., the person who had the average mortgage found, first, that he almost certainly was suffering negative equity in his house and he could not move, and, secondly, that the most important payment that he made every month had about doubled. When that happened, it was not a question of having two or three pints of beer fewer a week or doing a bit of extra overtime; he found that he simply could not meet the payments, and unless he could persuade his clearing bank to lend him a bit more money or to get the building society to roll over the interest for a bit longer, he was in real trouble.
  Therefore, monetary policy matters. It matters for every citizen. Even if he lives, for the sake of argument, in a council house, he probably has a young son who is buying a house on mortgage, or a cousin who is struggling with a small business and finding that the small business is being hit by higher interest rates. It is odd, is it not, that the procedures of the House were built up at a time when we

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  were preoccupied with the desire to prevent the monarch from raising taxation without our permission, and yet now the Executive is able to control monetary policy—which I would argue is at least as important to citizens—without our having much control or influence on the way in which it is operated? As a result of the ups and downs of monetary policy in the past 20 or 30 years, there has been increasing interest in finding a better system for creating stability in monetary policy.
  The proposals that I make in the Bill are very slight. They do not seek to put the control of monetary policy on a permanent or revolutionary footing. They proceed from a very Tory attitude about the fallibility of individual wisdom; the uncertainty that even apparently wise men have got it right and a belief that it is better to take one tiny, moderate step in the right direction than to take a large number of steps, most of which may be in the wrong direction. The detailed proposals are very modest indeed.
  Hon. Members must know that in 1946 the Bank of England was nationalised. That measure was supported by all sections of the House of Commons at the time. Many people, such as Mr. Macmillan and Robert Boothby, felt that during the 1930s the Bank of England had imposed on the country too stringent a monetary policy, and that the independent Bank of England had made the slump deeper and more ferocious than it might otherwise have been. They hoped in the post-war settlement to gain political control over the Bank. That view was, of course, much supported by the Labour party, which felt that there had been a banker's ramp in the 1930s.
  One of the more important parts of the Bank of England Act 1946 was section 4, which gave the Treasury the general power to give directions to the Bank of England. My Bill, by clause 1, amends the 1946 Act to provide that subsection (1) of section 4 shall cease to have effect; but in its place is clause 2, by which the primary objective of the amendment Bill will be to impose upon the Bank the duty
  "to formulate and implement monetary policy directed to the economic objective of achieving and maintaining stability in the general level of prices."
  To that end, by clause 3,
  "The Treasury shall, after consultation with the Governor, set policy targets for the carrying out by the Bank of its primary objective."
  That means that if, for the sake of argument, there is general inflation of 11 per cent., it will not be suggested by the policy targets that it is possible to achieve sound money within a year—it is not politically possible and socially possible to do so. Of course it would be perfectly possible economically. If there were a general interest rate of 25 per cent., no doubt one could achieve price stability in six months or a year, but the social and economic consequences of that squeeze would be horrifying. The targets would, therefore, be agreed between the Governor of the Bank, taking into account its statutory obligation to achieve stability in the general level of prices, and the Chancellor of the Exchequer.
  Then, by clause 3, once that policy objective had been agreed, the policy would be recorded in writing. The details of the policy would be tabled at the first meeting of the court of directors of the Bank, and then published in the
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  London Gazette. It would mean that everyone could follow the objectives and the way in which the objectives were implemented.
  However, of course, that would not be enough in a parliamentary democracy, and it is laid down by clause 4 that the individual responsible for the implementation of the monetary policy shall be the Governor. He would be personally responsible for the agreement and then carrying out the agreement, but—and that "but" is important—by clause 5 there is an override. It acknowledges that, wherever monetary policy is agreed and implemented, there may be more important considerations than the mere attainment of price stability. We saw how the apparently independent Bundesbank was overridden by its political masters. The monetary terms of the settlement made at the time of the reunification of Germany were not at first to the Bundesbank's liking. The independent Bundesbank was told that it would have to grin and bear it. The politicians decided, quite rightly, that the temporary maintenance of price stability was less important than a generous settlement on reunification.
  Mr. Bernard Jenkin: They will pay for it.
  Mr. Budgen: And they will pay for it.
  Sir Peter Tapsell: We paid for it.
  Mr. Budgen: That is a different point. There was no reason for us to have paid for it, in my opinion. I shall deal with that issue later. I am merely explaining the details of the Bill and do not wish, for the moment, to reopen old wounds.
  Mr. Iain Duncan Smith: Why not?
  Mr. Budgen: I am hoping to reopen old wounds later. At this very moment, I am trying to be helpful and moderate—[HON. MEMBERS: "Very unusual."]—which, as my hon. Friends say, is very unusual.
  Under clause 5, the Treasury may, from time to time, lay down a statutory instrument to direct the Bank of England
  "to formulate and implement monetary policy for any economic objective"
  other than that of price stability. It is an override power which takes account of the argument for public accountability. It deals with the legitimate argument about whether in our democracy, with a sovereign Parliament, we should have something approaching an independent or autonomous central bank.
  I now advance the general arguments for granting the Bill a Second Reading.
  Mr. Malcolm Chisholm: Before the hon. Gentleman proceeds, will he clarify clause 5? I may have missed some details when he went through it, but my query goes to the heart of his argument. Is his suggestion identical to that of the Treasury Select Committee's report, which talks of the power being used temporarily and in exceptional circumstances? It is important that hon. Members know to what extent it is envisaged that such an override power would be used.
  Mr. Budgen: Clause 5 is based on the Select Committee's recommendations. It is true that the Committee talks of a temporary override, but, as the hon. Gentleman will know, in politics, things that are supposed to be temporary turn out to be quite well established—

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  income tax or, for example, rent control in the 1914–18 war. Under the Bill, the Government would state that the overrride was temporary and, under clause 5, they would have to return to the House every six months to obtain the powers for that override.
  Ms Diane Abbot rose—
  Mr. Budgen: I shall of course give way to the hon. Lady in a moment.
  If the Government wished to do so, they could ask for the powers every six months. For the sake of argument, let us suppose that a Government had been elected with the open promise to create hyper inflation. In such circumstances, they could obtain the necessary powers every six months. As with all measures in our constitution, there is no element of entrenchment in the Bill. Even if the House agreed to my proposals, an incoming Government who wanted to go for growth and get the economy moving —and accepted the consequent advantages and disadvantages—could amend the Bill.
  Ms Abbot: I have listened with interest to the masterful way in which the hon. Gentleman deploys his argument. Will he clarify the way in which the override would work? If any Government told Parliament that they were, in effect, going to let inflation rip, would not their currency drop like a stone?
  Mr. Budgen: That is true. The currency would, or might, drop like stone. At any rate, the object of the proposals is to achieve openness and ensure that, if a Government say they are going to do one thing, they cannot give directives to the Bank that do something quite different.
  We have had two periods of serious inflation in the past 20 years—between 1972 and 1974 and between 1986 and 1988. In both periods, when interest rates were too low they had an advantageous effect on the retail prices index in the short term and enabled the Government of the day to say that they were adamant about trying to control inflation, while creating the monetary conditions that ensured that within 18 months or two years the underlying rate of inflation would pick up substantially. The proposals would not prevent a Government from giving instructions to the Bank to let inflation rip, but if the Government do so, they must do so openly and everyone must understand the consequences.
  The Financial Secretary to the Treasury (Mr. Stephen Dorrell): If my reading of the Bill is correct, I think that my hon. Friend might be understating the extent to which the Bill would entrench the—to my mind—entirely laudable objective of maintaining price stability. Clause 5 would allow the Treasury to introduce two orders of the type that he describes, but neither may last more than six months. The Treasury would not be allowed to introduce more than two orders within the space of 13 months. Therefore, as I understand it, the Bill would provide that there would be at least one month in any 13 when the overriding objective of clause 2 would not be suspended by the Treasury. It is not something I criticise, but it is important that my hon. Friend deals with that issue.
  Mr. Budgen: If it is obvious that after the expiry of the month the Government will return to the previous policy, I do not think that the month represents a very large break.
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  I was using the word "entrenchment" in a technical sense. I meant that, because we have no written constitution, we could abolish the provision of the Act—if the Bill becomes an Act—without there being an extra-constitutional impediment to that abolition. I meant that my proposals were different from the entrenched position of, for example, the Bundesbank in a written constitution. That is the sense in which I used the word, and I am sorry if I did not define it properly.
  Discussion of the details will, I hope, emphasise the fact that the Bill takes fully into account the necessity for parliamentary accountability in our system. Those of us who support the Bill believe that it would assist the House by providing openness and giving the House the opportunity to criticise what the Executive are doing. It is only by knowledge and by openness that the House has the opportunity to bring its criticism to bear.
  For example, during the battle between Lady Thatcher and Lord Lawson, as they are now known, about what occurred and what went wrong in the middle to late 1980s, Lady Thatcher said that when Lord Lawson began the policy of shadowing the deutschmark she, as Prime Minister, did not know that it was being done. She said in her memoirs that she found out only as a result of following the exchange rate policy chronicled in the columns of the financial press.
  Whatever the reason for that may have been, if the Prime Minister of the day was not fully informed of the interaction between exchange rate policy and monetary police, how much less was the House of Commons informed? Therefore, I hope that the proposals in the Bill will lead to greater openness in the Treasury and between the Government and Parliament.
  Mr. A. J. Beith: Is not openness at least as important from the point of view of subsequently knowing whether people were informed or not as not allowing them to pretend that they did not know when they did? Is not the account that the hon. Gentleman gives difficult to square with Lord Lawson's comment, which appears in the corrigendum to the second Treasury and Civil Service Select Committee report? He says of himself and Lady Thatcher:
  "Although we had some fairly robust exchanges on a large number of occasions, because she did not like interest rates going up as a general rule, there were only two occasions during the whole of my time as Chancellor in which in the event I did not have my way and interest rates did not go up."
  That does not suggest that Lady Thatcher did not know.
  Mr. Budgen: I am not here to stir up ill will over that controversy. One can only say that both proponents will be able to make their case more effectively in future. Previously there was never an open instruction from the Treasury to the Bank of England and, inevitably, there was a good deal of mystery about what was going on. As to the extent to which the mystery was shared between the First Lord of the Treasury and the Chancellor, we shall never really know, but I hope that I was arguing effectively that monetary policy affects every citizen in a most important way. It is extraordinary that we argue in detail about the minutiae of taxation policy while we have no influence whatever over present monetary policy.
  I should like to emphasise the importance of ministerial responsibility in our system. Not only is the Executive accountable to a sovereign Parliament, but individual Ministers are personally and collectively responsible and

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  there is nothing in the Bill that undermines the personal responsibility of the Chancellor of the Exchequer for monetary policy. If the override provisions of clause 5 need to be brought into effect, it is clear that the House of Commons will be able to tell the Chancellor of the Exchequer that, regardless of the monetary policy being pursued in response to agreed targets, there are perfectly satisfactory powers under section 5 of the Bank of England (Amendment) Act which will enable him to override those policy targets to produce the monetary conditions appropriate for the state of the economy.
  As I explained, I hope that this is a not a revolutionary measure and that there is nothing exciting or interesting in it. I hope that it builds, in a modest fashion, on the practices that have already been adopted between the Bank and the Treasury since the great release of 16 September 1992. The Bank of England now publishes a quarterly inflation report. That may seem to be a relatively unimportant change, but the quarterly bulletin in the past was the subject of most detailed negotiation beween the Bank of England and the Treasury. It was the daily duty of countless persons, each with double firsts in classics, to pore over the exact meaning of particular words so that when a warning was given it could be in language that appeared adequately to rebuke the Government and would send a small message to the market without deeply disturbing it. That was an intellectual game which was thought to be of the greatest importance and certainly employed many of our finest brains for many weeks, months and even years.
  Freedom has now been granted to that activity. The inflation report is now drawn up and published by the Bank of England without the preliminary surveillance of the Treasury. It is important to consider the content of the report. It deals with recent price developments, with monetary and fiscal policy, with demand and output, with the labour market, with price dynamics and with prospects for inflation, which are important. Therefore, if the Government were setting too lax monetary targets, which would result in an increase in inflation, the prospects for inflation would have to be set out in the Bank's assessment of the consequences of that too-lax monetary policy. That is an important innovation, since and perhaps as a direct result of, the splendid activities of the speculators on 16 September 1992.
  Mr. Alistair Darling: Does the hon. Gentleman agree that the test of the credibility of the Bank of England's quarterly report will not come until the Bank feels it necessary to fire an overt warning shot over the Government's bows? Suppose that, by the end of this Parliament, the inflation target of 2·5 per cent. that the Chancellor has set himself is not being reached. Does the hon. Gentleman think that the Bank will have the courage, perhaps just before an election, to fire a warning shot? Might it not resort instead to a form of words not dissimilar from that to which the hon. Gentleman has referred?
  Mr. Budgen: I agree that that is a risk. All constitutional changes that occur in a country that has an unwritten constitution take a little time to bed down. It is very proper that we should move slowly and steadily and by incremental steps, and we may realise the direction in which those incremental steps are taking us only with the value of hindsight. In Stuart times, the judiciary emerged
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  as an independent force. With the advantage of hindsight, it is easy to look back on the various incidents and say that they were all moving in the same direction, but it probably did not appear to people at the time that that was what was happening. Practices get slowly embedded. They get noticed and perhaps applauded; then the chattering classes say that they are a good thing; then, later, the man in the pub may take a transitory interest in them.
  It is possible that, at some later stage, pressure will be put on the Bank of England to modify the judgments that it publishes in its quarterly inflation report, and no doubt some consideration will be given by the Bank to the modification of that report, just as in Stuart times some judges no doubt regarded themselves as no more than the handmaiden of the Executive and from time to time did not support the independence of the judiciary. But that will not stop the general trend, which I suggest will lead to more stable monetary policy.
  Mr. David Willetts: Surely the real dilemma is a dilemma within the Bank. If it produces an unfavourable inflation report, its prospects of successfully conducting gilt sales at favourable prices will be jeopardised. That is one reason why many who argue in favour of giving the Bank of England an independent role in monetary policy have suggested that the role of selling Government debt should be taken away from it. Can my hon. Friend explain why that proposal is not in his Bill?
  Mr. Budgen: My Bill is based on the recommendations of the Treasury Select Committee and on the belief that one small step in the right direction is better than a great number of steps in the wrong direction. Many people will say that this is in any case far too large a matter to be dealt with in a private Member's Bill. [HON. MEMBERS: "Hear, hear."' Some of my hon. Friends have strong views about that. A great many subsidiary issues—for example, the Bank's role in supervising other banks and selling Government debt—may come to the House for consideration in future, but I do not think that it would be necessary or wise for my Bill to deal with those secondary problems. I say that even though I agree that once the Bank becomes more distant—I think that that is a better way of describing it—from the Treasury, many of those issues will arise.
  I have dealt with the importance of the quarterly bulletin and its inflation report. A second change has occurred recently—a change in the way in which the Bank implements agreed changes in interest rates. As the House knows, the custom that has grown up is for the Governor of the Bank of England and the Chancellor to meet monthly. In the past, that was often the point at which the Chancellor announced any agreed change in interest rates. A new practice has arisen, however. Now, when there is agreement to change the current rates of interest, the Bank decides when it will announce the change and it has a month in which to do so.
  That is important in relation to the Bank's function in managing Government debt, to which my hon. Friend the Member for Havant (Mr. Willetts) referred. If the Chancellor of the day finds that the Government are in a bit of difficulty and there is general pressure to lower interest rates, he may say, "Okay, Governor. We have agreed to lower interest rates by 1 per cent. Whoopee. Let us get it

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  announced as quickly as possible." That may prove very expensive in relation to the sale of Government debt. It may lead to great difficulties in managing the gilts market.
  I have referred to two steps in the direction that I hope the House will take by giving the Bill a Second Reading. We ought not to dismiss the growing interest in the country at large in some form of independent or autonomous central bank. Every week brings a new high-powered report suggesting the advantages of such a bank. Most of those reports are based upon the academic interest in fancy foreign institutions, which, it is wrongly believed, can be easily grafted on to our constitution. I should be the last person to say to those who were previously unthinking supporters of the exchange rate mechanism, "Here is another splendid foreign institution. If we get on the bandwagon, there will be a major change for the better in the management of our monetary policy." But those honourable academics who give up much of their spare time to produce influential pamphlets do it because they see that monetary policy has created so much instability in the past 20 years, and perhaps because they do not recognise the overwhelming necessity in our constitution of both ministerial responsibility and parliamentary accountability.
  The right hon. Member for Berwick-upon-Tweed (Mr. Beith) referred to the report of the Treasury Select Committee. The Bill is based—I hope accurately—on that Committee's recommendations. It is important to remember that that Committee represents all sections of opinion in the House.
  I see the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) in her place. She is a distinguished and vigorous member of that Committee. Hers was the only voice dissenting from our report. She will speak most eloquently for herself I am sure, but I think that she feared that the Committee's recommendations would lead to a British Bundesbank. The hon. Lady nods in agreement, and I certainly do not wish to misrepresent her position. It is true that there are some members of the Treasury Select Committee who would like to see a British Bundesbank, but the last thing in the world that I want is a British Bundesbank.
  The proposals that I support are designed to create openness and accountability, but not as a preliminary to a free-standing independent British central bank or, even worse, to a European central bank.
  Mr. Alan Duncan: Does my hon. Friend agree that the key to the parallel between the ERM and the gold standard before the war is that it was a Government decision to enter that particular form under the then Chancellor of the Exchequer, Winston Churchill, and it was the Bank which operated within those constraints? The Bank was subsequently criticised for having a too stringent monetary policy. The pre-war decisions and problems about which many people criticise the Bank were set by a political decision of the Government. They were not caused by the Bank and, when they were eased, the situation changed very quickly.
  Mr. Budgen: When the Bank was independent in the 1930s, it had all the faults of the accumulated tradition of being the spokesman for the City interests. It was a very powerful pressure institution. It did not have its present characteristic of being a servant, albeit a very superior servant, of the Treasury. Therefore, it is not surprising that
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  some politicians agreed with Keynes that Winston Churchill was an outstandingly disastrous Chancellor of the Exchequer. However, they also said that people should consider the rotten advice that the Bank gave to Winston Churchill and the way he, as a very powerful politician, gave way to that even more powerful vested interest. We can understand why, in 1946, many Keynesian Tories felt that the influence of the Bank had been harmful in accentuating the depression in the 1930s.
  I want to conclude with two arguments to show why the Bill should receive a Second Reading. If the Bill goes into Committee, I will welcome all suggestions for its improvement. The last thing I want to do is to suggest that the Treasury Select Committee or any other small partial body has a unique wisdom in producing legislation. Indeed, most of the legislation that is bashed through this place in a hurry is disastrous.
  In relation to monetary policy, I do not want my Bill to be an example of the wisdom of the Dangerous Dogs Act 1991. If the Bill enters Committee, all suggestions for its improvement, modification and even its scaling down will be considered very carefully. However, I suggest that the Government should allow the Bill to go into Committee for two reasons.
  First, if the economy picks up as we all hope it will—and there has been a major relaxation of monetary policy since 16 September 1992, so we are entitled to hope and believe that the economy has picked up and will pick up further—the consumer will save less, spend more and be less inclined to buy Government debt. That means that the deficit of about £1 billion a week will be increasingly funded by foreign holders of sterling, most of whom come from countries that have independent central banks. They will find it very difficult to understand how a Government can say to them on the one hand, "Please lend us £1 billion a week" and on the other, "The last thing we want is a system of more open relations between ourselves and our subordinate, the Bank of England."
  Secondly, if the Bill goes into Committee, it will give the Government a splendid opportunity to explain their present thinking about the Maastricht treaty and the move towards a European central bank. I know that the Government will grasp that opportunity. It is interesting to remind ourselves that the Government's position on that matter is still based on their very clear expressions revealed in the Conservative party manifesto issued before the last general election.
  I have detained the House for a long time and I do not wish to continue for much longer—
  Mr. Michael SpicerShame.
  Mr. Budgen: Well, if my hon. Friend wishes me to continue, I will remind the House of the clear expression of principle set out in the Conservative party manifesto. It states:
  "But the treaty goes on to say that monetary union will come about automatically in 1999, for all who meet the conditions. We did not want to exclude ourselves from membership; but we could not accept such an automatic commitment. By the end of this decade the EC's membership will have changed; the economic performance of many of its members may have changed. We cannot tell who the members of such a union might be.
  We therefore secured the freedom to make a proper judgment on events. We are as free to join if we, wish as any other member. We would have to meet the same conditions—no more, no less.

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  We will play our full part in the discussions of the monetary institutions Europe may create in the 1990s. But we are not obliged to join in a single currently if we do not want to."
  I hestitate to repeat this and I hope that I will not be criticised in private.
  Madam Deputy Speaker (Dame Janet Fookes): Order. The hon. Gentleman would be well advised to hesitate. I need to know that his comments relate directly to the terms of the Bill.
  Mr. Budgen: Indeed they do. The proposals in the Maastricht treaty are, first, for a half-way house to a European central bank and, secondly, by stage 3, the possibility of our joining a system in which there is a single European central bank. That is directly relevant to our consideration of the role of the Bank of England, which is our domestic central bank.
  I draw the attention of the House to that section in the Conservative party manifesto because the Government, very properly, have argued against the very limited proposals in my Bill on two grounds. On 16 December, my right hon. and learned Friend the Chancellor of the Exchequer said:
  "We should consider it with care, also taking into account such matters as parliamentary accountability for an increasingly more autonomous Bank of England."—[Official Report, 16 December 1993; Vol. 234, column 1257.]
  On an earlier occasion, when the Prime Minister was Chancellor of the Exchequer, he said that he was against any form of independence for the Bank of England because
  "the man or woman responsible for monetary policy should be available to the House of Commons to answer for his or her policies."—[Official Report, 5 July 1990; vol. 175, column 1110.]
  Each of those arguments is important and compelling.
  I hope that I have persuaded the House that those two general principles should not defeat this very modest measure. But when we apply those two principles to the European Monetary Institute and to the European central bank, we see how extraordinary it is that the Government agreed to the proposals for stage 2 and left open the possibility that we might join stage 3. It is quite obvious that stages 2 and 3 are completely inconsistent with the two arguments of principle that were so properly brought forward by the Government in considering the Bill.
  Much has changed in Europe in recent months. We have had the great freedom that has resuscitated our economy and given hope to our people since 16 September 1992. The unfortunate peoples of Europe suffered a terrible setback during the first weekend of 1993, when their exchange rate mechanism was blown out of the water and has been left but a broken shell waiting only to sink. We need an opportunity for the Government to restate their position. We want to know whether, once again, we are to be subordinated to the Bundesbank, and whether, once again, we are to go back into the exchange rate mechanism. We want a bit of openness between the House and the Government.
  This is a narrow, consensus Bill based upon, as legislation should be, agreement of a very narrow, carefully defined nature between persons of very different views. It allows the Government, not of course to say, "Sorry for the ERM"—that would be too much—but to explain their changed position.
  Mr. Michael Spicer: And to say "Thank you".
  Mr. Budgen: As my hon. Friend reminds me, let us say "Thank you" to the Opposition for their support of the Government over the Maastricht treaty. It would not have been possible for the Government to maintain us within the ERM, to thrust the Maastricht treaty down the throats of the British people, but for the unswerving support of the Opposition parties. It was selfless. Whenever the Government were in difficulty, we always knew that the Opposition would be there. Their support for the social chapter and for the single currency was unswerving. It was the most splendid demonstration of gallant principle that we have seen for a long time.
  Perhaps the Government will now look for an opportunity to explain their thinking. We should accept the closure motion, which I am sure will be necessary at the end of the debate, and we should give the Government an opportunity to explain themselves not only to the House but to the British people.
  10.32 am
  Mr. A. J. Beith: When the hon. Member for Wolverhampton, South-West (Mr Budgen) waxes so eloquently about the green pastures which he believes we have entered since we left the exchange rate mechanism, he is inclined to forget that our time in it was actually the source of the degree of control of inflation that we have been enjoying in recent months and that, therefore, there are two sides to the story.
  Indeed, one of the significant points about the Bill is that it is designed to provide another means of building a bulwark against inflation, which we might need not in the immediate circumstances but in foreseeable circumstances, especially if, by that time, we are still not within any other sort of constraint that effectively links monetary policy to keeping prices stable.
  It must be unusual for the hon. Member who has the second slot in the private Member's Bill ballot to be such an enthusiastic supporter of the first Bill in the ballot and quite so keen even for it to be considered in Committee, although, for my own reasons, I hope for only brief Committee proceedings on this nevertheless important Bill. I have energy conservation matters that I know the Government will want to discuss in detail in Committee, and which the same Committee will have to consider as soon as it has disposed of the necessary work on this Bill.
  At least the Liberal Democrats cannot be accused of advocating an independent central bank in response to fashion—unless, that is, we are the setters of fashion, which we like to believe we are, because we put that proposal in election manifesto commitments when it was the preserve of only a few. It has taken a spate of ex-Chancellors to give the concept some respectability, which it did not previously enjoy, and dispassionate and careful analysis in a Treasury Select Committee convinced some hon. Members who might initially have been sceptics that we should make moves in that direction.
  Our commitment arises, first, from the belief that stable prices should be part of the general framework for economic management. Secondly, we believe that such stability is more likely to be achieved if we have an institution that conducts monetary policy with that sole or primary objective. Thirdly, we believe that such a system would make for greater accountability for monetary policy; at the moment, monetary policy is divided between the Chancellor and the Bank.

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  Fourthly, we believe that the experience of the present system, which was acknowledged by the Bank during questioning by the Select. Committee, is that Chancellors will be influenced in at least the timing of interest rate decisions by such political events as party conferences, hostile debates coming up in the House of Commons, and so on.
  Fifthly, we believe that markets are well aware of that fact and will exact an interest rate premium in proportion to their fears about the reliability of anti-inflation policy, so that rates are sometimes higher than they would be if those fears could be removed or reduced.
  The evidence that interest rate decisions have been determined by possible events is now in the open. It was the former Chancellor, the right hon. Member for Kingston upon Thames (Mr. Lamont) who said:
  "While my right hon. Friend the Prime Minister and I have been in general agreement on interest rate policy, I do not believe that even the timing of interest rate changes should ever be affected by political considerations. Interest rate changes should never be used to offset some unfavourable political event. To do so undermines the credibility of policy and the credibility of the Chancellor."—[Official Report, 9 June 1993; Vol. 226, c. 284.]
  Why did he say that? That was not said in an abstract theatre; it was not in an Institute of Economic Affairs pamphlet; it was not in an Adam Smith Institute tract that those words occurred. They occurred in the resignation personal statement of a Chancellor who was reflecting on what had gone wrong while he had been in that position and how much of that was other people's fault rather than his own. He said those things in order to indicate that they happened.
  In order to get that statement verified, I put it to the present Governor, who was deputy Governor of the Bank at the time, Mr. Eddie George. I asked:
  "Does your experience confirm that such a warning was necessary?"
  Mr. George said:
  "I think I have to say yes … It is undoubtedly true that there are times when the short-run tactics are adjusted to take account of events which are actually not a lot to do with a monetary policy. In any single incident, in my experience, that can be damaging for a little while. … Provided actually it was not an unreasonable thing to do in a strategic sense, that does not last for very long, but it has a corrosive influence over time. People tend to think that these decisions are made on that basis."
  What clearer evidence could we have than that? The Chancellor warns that interest rate decisions should not be taken on that basis. The man who was deputy Governor at that time and who is now in charge of the Bank said, "Yes, that is a danger, it does happen, at least in respect of timing, and, because people know that it happens, that fear affects market perceptions about anti-inflation policy." We could not have a better tested case of the dangers.
  Of course, the terminology of all that is confusing. Hardly anyone As attempting to introduce into this country a totally independent institution carrying out all the present functions of the Bank on a totally autonomous basis. Nor is it conceivable that we could devise a British clone of the Bundesbank or the "Fed". The term "independent central bank" has become shorthand for various models in which the central bank has allocated to it the operation of monetary policy in pursuit of declared objectives and is then held to account for its effectiveness in carrying out those objectives.
  The consensus in the Select Committee was that the remit should be price stability, but that targets, which could take account of other objectives, should be publicly set by the Government, with parliamentary approval. It is
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  arguable that any qualifications of the price stability objective and any use of target mechanisms and "overrides" risks losing a significant part of the increased market confidence and the reliability of the policy. At least the process is explicit and open, and that in itself is a considerable improvement on what we have now. One can imagine that the Government might have some difficulty in winning the political argument for what the Bank thought were weak targets.
  If one brings that debate into the open, it becomes much more difficult for the Government to let inflation rip by surreptitious methods or by subterfuge. The slight difference of view over how far one should go has been reflected in the amendments that were tabled in the Committee. I was glad that the Committee accepted a raft of amendments of mine which were supported by the hon. Member for Milton Keynes, South-West (Mr. Legg). Those amendments were then sub-amended in various ways. It was a complicated process, but it arrived at a decision between people of varied points of view but with a shared belief that what we needed was a more open process in which the Bank has a declared objective of stability which is open to some public modification. That is what most people are talking about when they use the shorthand of "independent central bank".
  None of that will affect directly the other functions of the central bank. Those include bank supervision, serving as the banker to the Government and safeguarding the health of the banking system. Those in themselves do not require changes in accountability, though there are arguments in favour of hiving off banking supervision to a different institution, a change which people might think necessary.
  It has been pointed out that there is a possible danger from the Bank's role as the banker of the Government to its independence in running monetary policy. What will be certainly required by a change to greater autonomy in monetary policy will be a change in the internal structure of the Bank, with a clearly distinct monetary committee. The basis for that requires further discussion, as the Committee acknowledged.
  The process is easier to see in federal countries. I know that that term causes some embarrassment to Governments, but many countries run their affairs on a federal basis quite happily. In federal countries, it is easier to see how an element of independence may be drawn from the federal components of a country in forming the monetary committee of one's bank. Despite my support, and that of my party, for a federal system within the United Kingdom, let alone Europe, I do not wish to rely on potential developments, but rather to look for ways of getting the job done here and now. We have to look for ways of making the monetary committee of the Bank an appropriate one for carrying out those tasks.
  Let us get rid of two myths. First, in delegating monetary responsibilities to the central bank, Parliament certainly would not be throwing away accountability. Where is the parliamentary accountability now? Even with greater openness, we do not know whether the Chancellor is acting on or rejecting the Bank's advice.
  Shared responsibility is the death of accountability. We can see that theme running through all of the stories about accountability in every kind of field, whether it is central banking or arms to Iraq. If several people are responsible, they can all say, "It was not me, it was him … he didn't tell me … he sent me the memo, but I did not fully

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  appreciate its contents." When responsibility is divided, it becomes diffused, and one gets less effective accountability.
  Mr. Dorrell: I entirely agree with the right hon. Gentleman that shared responsibility means that the exercise of power is unaccountable. That is quite right, but the right hon. Gentleman is wrong in describing our present arrangements as "shared responsibility". It is clear that responsibility for the conduct of monetary policy lies with the Chancellor of the Exchequer. The Chancellor's accountability to the House is the accountability mechanism at present. The problem with what is proposed in the Bill precisely involves the issue to which the hon. Gentleman has referred—responsibility would become more diffused than it is at the moment.
  Mr. Beith: Up to a point, that is true. The former Chancellor, Lord Lawson, made that point to the Committee in his usual modest way. He said that the policy was that when he believed interest rates should go up, they went up, and when he believed they should go down, they went down. He subsequently qualified that by revealing that, on two occasions, Baroness Thatcher did not let him have his way, but, generally, that was how it was to be.
  What the Bank is saying at any one time is crucial to the matter. We do not want to know whether interest rates went up or down, because we know that the Chancellor made the decision. We want to know when he made the decision, and whether the Bank told him to do that, or to do something else. If we do not know that at the time, clearly we cannot understand the nature of the decision and we cannot have a public debate about it. Obviously, that would be destructive to the market perception of what is going on.
  We cannot have bankers issuing press releases saying that they are on their way to tell the Chancellor that interest rates should go up, and then the Chancellor does not put the rates up. One can imagine the consequences of that. It is much better to have responsibility lying where the advice comes from. We would then know that, whatever happens, the decision is being taken by the institution that has been charged with working out what the effect will be on price stability. The institution can subsequently be held to account for how far it has achieved price stability by the methods.
  There is always the hint that the Chancellor may or may not be acting with the support of the Bank. Under the system that is proposed in the Bill, the Chancellor is answerable to Parliament for the more specific responsibility of setting a target or, for that matter, for whether he is using an override if he chooses to do so. The Bank's carrying out of its duty can be questioned in a Select Committee and debated on the Floor of the House. I believe that it is a myth that, under the proposals, there would be less accountability than there is now. I believe that there would be more, and I have no doubt on that at all.
  The second myth is that unemployment would be kept lower if the Government had direct disposal of the instrument of monetary policy. That means that the value of money would be destroyed to meet short-term crises, with the result that property investment and reckless borrowing became more attractive than saving and industrial investment. We have been through all that in the recent experience of the country. That is the route to
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  long-term unemployment and to failure. In the short term, price stability targets can assist by taking account of the need to move at an unmanageable speed to price stability. Big external shocks to the system could justify an override, or a change in the target.
  Nobody is suggesting that a system be devised in which it is impossible for monetary policy to take account of something dramatic; for example, the oil shock which hit the world economy. Some of those who like to regard themselves as latter-day Keynesians seem to assume that Keynes would, for precisely those reasons, have no truck with the use of monetary policy. That is quite false. Keynes is recorded by Chamberlain, for example, as arguing for a very long and continuing hike in interest rates in 1920. Even as his views evolved during the later crisis, Keynes never lost a degree of commitment to the use of monetary policy to maintain price stability. He had an overriding concern with the management of demand, but that did not make him someone who would advocate lax monetary policy in the face of raging inflation. It is a total abuse of Keynes when some, including the hon. Member for Dagenham (Mr. Gould), appear to suggest that Keynes might have favoured an extremely lax monetary policy when faced with severe inflation.
  Under the proposed system, fiscal policy could not be operated at total war with monetary policy, so both the Government and the Bank will have to take the economic circumstances and each other's decisions into account. Stable money is just one of the building blocks for a stronger economy. An autonomous, but accountable, central bank with responsibility for the conduct of monetary policy is a big step towards stable prices. For much, but not all, of the time, that should enable lower interest rates because of greater market credibility. That is not a panacea for other economic problems, but it leaves the Government free to tackle the problems within a more stable framework.
  The hon. Member for Wolverhampton, South-West is well known for his rigorous critique of Britain's participation in anything European. He pointed out that, for many people who take his view, there would be attractions in having an independent central bank in this country, rather than our being involved in a European central bank. I take a different view. I believe in the great merits of a single currency. We can secure the economic conditions to make it feasible, and I believe that it is an appropriate and necessary component of a single market. It would be of great advantage to British industry if it could operate in one market with one currency, and I should like to see that come about.
  However, we need that to come about by a different mechanism from the ERM—the ERM is a draughty waiting room in which to stay for a long time. Experience has demonstrated that the final stage of entry into a single currency needs to be a shorter one. We cannot operate a single currency as a nearly-single currency for any length of time, unless there is a commitment from all participants to safeguard each other's currencies. Without that determination, the currencies can be picked off one by one. A change of route will be essential if we are to get a single currency. That is a safe bet, whether one is in favour of a European single currency or opposed to it. The one thing that the two sides of the argument seem to have in common is the determination to build a non-inflationary economy for this country.

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  Whether we do that as an island, strongly separated from what is happening in the rest of Europe, as some believe is possible—I do not—or as a full participant in Europe, we need to have monetary policy primarily dedicated to price stability. That is what the mechanism in the Bill can do. It can do it on a basis that gives greater openness and accountability. It would be far clearer and more understandable than our present system.
  10.49 am
  Sir Peter Tapsell: Many types of Bill come before the House: Government Bills, private Bills, personal Bills, hybrid Bills, attainder Bills—rather underused nowadays, especially in the case of Treasury Ministers—and private Member's Bills. When I first heard that my hon. Friend the Member for Wolverharnpton, South-West (Mr. Budgen) intended to produce this Bill, knowing his well-known opposition to the Maastricht treaty, with its great emphasis on the establishment of, first, an independent. British national central bank as a stepping stone to a still more independent European central bank, I assumed that we would be presented with a new category of Bill—a sardonic Bill.
  Now that I have read my hon. Friend's article in The Times yesterday, heard him on the "Today" programme this morning arid listened to his admirable speech, I realise that the Bill is not a sardonic Bill but a probing Bill, rather like a probing amendment. With his characteristic modesty, my hon. Friend described the Bill as a very narrow and technical measure. But my feeling is that it represents the riot so thin end of what would prove to be a very thick wedge.
  It seems to me inconceivable that any such change in the status and powers of the Bank of England could be brought about by anything other than a major and most important Government Bill. Nevertheless, it is extremely helpful that my hon. Friend has given us the opportunity in the Bill, which I hope will not reach the statute book, to have a valuable discussion of the principles and issues that the Bill raises.
  In his article in The Times yesterday, my hon. Friend referred to something that my right hon. and learned Friend the Chancellor of the Exchequer was reported as saying in the Select Committee report. He said that the idea of an independent central bank, a more independent central bank, or a central bank with power to look after at least monetary affairs, had become fashionable. My hon. Friend queried in his article what the word "fashionable" meant. I should have thought that it was fairly clear what it meant. Lord Healey made the same point to the Select Committee. He described the idea of an independent central bank as a gimmick. He said that it was an apologia to be used by failed Chancellors to shuffle off their responsibility onto the Bank of England.
  Lord Healey went one better. At an early stage of his Chancellorship, he shuffled off responsibility for both monetary and fiscal affairs on to the International Monetary Fund. I am bound to say that if one starts moving responsibility away from the Chancellor of the Exchequer, one should make sure to move his fiscal responsibilities along with his monetary responsibilities. I shall return to that point later.
  The question of passing fashions in economic affairs is a real one. One thinks of prices and incomes policies, control of the money supply, medium-term financial
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  targets, the shadowing of the deutschmark, joining the exchange rate mechanism and then the attempt to establish a single European currency. They are all fashions which have come and gone. They have all been extremely disruptive and damaging to the management of the British economy. I have not the slightest doubt that the idea of transferring monetary power to the Bank of England falls happily into that category.
  All those economic panaceas are designed primarily to achieve price stability. No one doubts that price stability is a highly desirable objective. It has been an objective of all Governments since the Stuarts, who set up the Bank of England and to whom my hon. Friend the Member for Wolverhampton, South-West referred. Most Governments, starting conspicuously with the Stuarts, have failed to produce price stability. Even during the long period in which Britain was on the gold standard and had an independent central bank, the price of wheat and the purchasing power of wages often fluctuated greatly. That shows that price stability is an infinitely complex problem which is not susceptible to any simple or single solution.
  The fact is that stable prices, even when achieved, are a necessary, but not sufficient, element in the pursuit of steady industrial growth and general prosperity. Many different factors affect price levels. A successful economic policy requires a wide variety of interconnecting financial and economic policies constantly in need of modification in relation to each other.
  I argue that to hive off control of monetary policy and interest rate movements to a so-called independent central bank would reduce our ability to co-ordinate fiscal and monetary policy. The Bundesbank is often cited as an example of an admirable independent central bank. No one denies that it has done a good job in Germany or that it enjoys enormous prestige due to Germany's experiences of appalling inflation in the early 1920s. However, in the past three years, Germany has demonstrated the great disadvantages of placing power and responsibility for monetary affairs and fiscal affairs in separate hands.
  Ever since the reunification of Germany, to which my hon. Friend the Member for Wolverhampton, South-West referred, the Germans have run a far too lax fiscal policy, combined, partly as a consequence, with a far too strict monetary policy. That has caused tremendous problems within Germany and throughout Europe. It was, of course, the reason why the exchange rate mechanism impinged so harshly on Britain and continues to impinge harshly on France.
  In my judgment, to give special separate monetary powers to the Bank of England would tend to produce exactly the same results for Britain. My basic technical criticism of all moves towards an independent Bank of England, particularly in monetary affairs, is the disadvantage of separating monetary policy from fiscal policy. The act and the art of balancing monetary and fiscal policy produces good economic performance.
  Any fool can create stable prices or falling prices by plunging the country into slump conditions. That is precisely what the independent Bank of England under Montagu Norman did during the 1920s by its obsession with the gold standard and maintaining sterling at an overpriced parity against the United States dollar. Montagu Norman, the Governor of the day, took the view that the consequent unemployment was no responsibility of his.

  541
  That was a matter for the Ministers, whom he so despised, to grapple with. It was for them to shoulder the blame. His diaries make that absolutely clear.
  By the same token, one may be certain that, while the modern Bank of England is happy to be given an inflation target—I understand that my hon. Friend the Member for Wolverhampton, South-West is now the hero of the Bank of England hierarchy—it would be horrified if, at the same time, it were given an unemployment target or a growth target. Indeed, senior people in the Bank of England—I do not talk to quite such senior people in the Bank of England as my hon. Friend does—have indicated to me that they would not be prepared to accept any such contract about unemployment or growth. I use the word "contract" in the New Zealand context.
  I was honoured earlier this week to receive a letter from my hon. Friend the Financial Secretary to the Treasury, dated 25 January, which started-by reminding me that tax and spending should not be separated from one another and must be viewed together.
  I am grateful to my hon. Friend for reminding me of that very important fundamental economic and financial fact. I suggest that the same argument applies to fiscal and monetary policy. That is the crux of the problem. The 1944 White Paper on employment, produced by all the political parties, is, in my view, still the best modern state document on economic policy. I recommend it to any right hon. or hon. Member who has not recently read it; it makes excellent reading, partly because, in addition to being exceedingly wise men, Keynes and Beveridge had the rare capacity in public servants of being able to write good English.
  The White Paper laid down four objectives. It did not just try to pick out monetary arguments alone. It laid down the four objectives of post-war economic policy of trying simultaneously to achieve stable prices, high levels of employment, a healthy balance of payments and an expanding economy. Surely those are the objectives which every Government of whatever political persuasion should pursue in this country.
  Only briefly, from 1952–54, under the Chancellorship of Rab Butler, at the time when I first joined the Conservative research department, of which he was also then chairman—we used to see a lot of him personally when he was Chancellor—have those objectives been achieved simultaneously in Britain in the post-war period. There was a considerable element of luck about that, because of the ending of the Korean war and the tremendous shift in the balance of payments and terms of trade in our favour. Nevertheless, it happened under Rab. I often heard him talk in private about the great difficulty when juggling with the economy of keeping all four balls in the air at the same time without dropping one. Harold Macmillan used to say the same thing. Those four balls need to be juggled with. It is no good thinking that one can just toss one of them across to the Bank of England and leave the politicians to play with the other three.
  If the Bill became law, it would, by tossing away one of those balls, make the management of our economy more, not less, difficult, because it would separate monetary from fiscal policy.
  Mr. Nigel Forman: On my hon. Friend's key point about the inadvisability, from
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  his point of view, of separating monetary and fiscal policy, will he care to comment on the current reality, rather than that which pertained in the early 1950s? With the exception of Britain and Japan, no other leading member of the OECD now shares his view that it is necessary institutionally to concentrate monetary and fiscal policy, and the prime responsibility for those policies, in one institution, whether it be Government or bank.
  Sir Peter Tapsell: My hon. Friend dismissed Japan, which, until recently, has been the most successful country, economically speaking. In a few moments, I will quote Mr. Paul Volcker on the American experience. As to Europe, because of the dominance of the Bundesbank, there has been a fashion to allow the central banks much more power to control this, but that has recently had disastrous results. One has only to look at the economies of western Europe. Spain now has an unemployment rate of 22 per cent. France, my in-laws tell me—I have a French wife—is on the brink of revolution.
  Despite the popularity of Mr. Balladur personally, the French people are desperately unhappy with the present economic situation. That is partly because the central banks of western Europe have been allowed to have too much power, and the Ministers, for a variety of reasons, partly perhaps through a lack of understanding of economics, have been pursuing a far too deflationary policy which is causing widespread unemployment through western Europe, and may, in due course, cause political instability.
  Mr. Budgen: May I take up with my hon. Friend his point about the role of the Government in agreeing these targets? Of course, under clause 2, it is the duty of the Bank to attempt to achieve and maintain price stability. When the agreement is reached, the Chancellor comes to the decision with his knowledge of employment considerations, fiscal policies and all the rest, and brings into the agreement all those points that my hon. Friend makes about the three other balls. If, at a later stage, he finds that his consideration of the three other balls was not sufficiently taken into account in the agreement, there is the override power.
  I hope that my hon. Friend will not be too much taken by the arguments of those who want an independent central bank. We considered an independent central bank in the Treasury Select Committee. Some of us were initially attracted towards that and the New Zealand model. But when we came to agree to the final recommendations, we abandoned that. This is a much more modest proposal.
  Sir Peter Tapsell: It is a much more modest proposal, but it is, in fact, a stalking horse for a much less modest proposal, if I may use a term familiar to my hon. Friend. It is undoubtedly the case that the great majority of the people outside the House and in the City of London—Lord Roll's committee produced an extremely distinguished report on the subject recently—are the same people who were so enthusiastic for Britain to join the ERM, who argued that we should stay in it and rejoin it, are in favour of the Maastricht treaty, want us to go for a single European currency and want us to have a single, independent European central bank.
  My hon. Friend is being wholly naive, which is a rare quality in him, if he believes that this modest measure is not regarded outside the House as something that will take us down the federalist path. That is my judgment.
  Mr. Jenkin: I am most grateful to my hon. Friend for giving way. On the point about the four objectives of the 1944 White Paper, and maintaining those in balance, can he point to a period when we have ever allowed an unchecked rise in inflation? Has that ever assisted in the achievement of the other three objectives?
  I point out to my hon. Friend that, during the period to which he refers, under the former Chancellor, Rab Butler, we were in a fixed exchange rate system, secured to a very solid and dependable anchor—the United States—during the 1950s. We are now in a period of floating exchange rates and, therefore, are dealing with more variables. Therefore, there is a stronger need for an anchor on one of those four policy objectives.
  Sir Peter Tapsell: I certainly do not advocate inflationary policies, and I accept what my hon. Friend says; there has never been a period when, by running a lax monetary policy and allowing prices to rise, we have in any way safeguarded the other three areas of economic activity. Of course not. As I have said, stable prices are a necessary, but not sufficient, basis on which to establish success in the other three spheres.
  I have not yet replied to the question of my hon. Friend the Member for Wolverhampton, South-West about the override. It is cloud cuckoo land to believe in an override, where the Chancellor of the Exchequer or, in some other countries, the Minister of Finance, can suddenly publicly announce that he has had a flaming row with his central bank and that the Government are going to take emergency powers to override the bank. The Governor of the day would resign, the gilt market would collapse, there would be a run on sterling, the Opposition would table a motion of censure and I would vote against the Government.
  One need only read the history of flaming rows between Prime Ministers, Chancellors of the Exchequer and Governors of the Bank of England in the first 46 years of the century to discover that the one thing that they were determined not to do was to let the market know what was happening. No doubt the Mr. Soroses of the day would have a pretty good inkling of what was happening. One should not institutionalise an arrangement whereby the Treasury of a country will have public rows with its central bank.
  As one of my hon. Friends has already said, there would not just be a problem with the tremendous increased cost of funding the borrowing requirement; it is also important to consider the wider political, financial and economic repercussions of a public dispute between the Prime Minister of the day, the Chancellor of the day and the Governor of their central bank. Those repercussions are so horrendous as to be unacceptable.
  Dr. Jeremy Bray: If the hon. Gentleman shifts his scenario to black Wednesday, does he really think that it would happen quite in the way that he has described? Surely the Governor of the Bank of England would say, "For Christ's sake take this shambles off my hands. Something must be done and it obviously affects your parish. Over to you." That is the reality of the situation.
  Sir Peter Tapsell: From all accounts, although we have not yet had frank accounts of what happened on 15 and 16 September 1992, there was a panic. We do not know who said what to whom. The world realised that there was a
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  financial crisis in Britain, set off by the president of the Bundesbank, Mr. Schlesinger, who gave an extremely unwise press conference a few days before.
  There is nothing new about such crises, because a similar situation arose when we went off the gold standard in June 1931. As it happened, Montagu Norman was on a Cunard liner in the middle of the Atlantic. When all the experts at the Bank of England decided that they had to go off the gold standard they told poor Mr. Philip Snowden, the Labour Chancellor—no one had ever told him before that that could be done and he had not thought of it for himself. They wanted to know how to get that news to Governor Norman, in the middle of the Atlantic, without anyone knowing. They spent a lot of time concocting a telegram and eventually Mr. Cockayne, the deputy Governor of the Bank of England, sent a cable which read, "Old lady goes off on Monday."
  Montagu Norman was sitting in a deck chair on the promenade deck of the liner when that telegram was handed to him. He had spent the whole of his central banking career trying to keep Britain on the gold standard, having ensured that it was put on it in the first place. He read the message and assumed that it referred to a change in the holiday plans of his mother.
  That incident shows that the crisis of September 1992 had honourable predecessors in our history. Nothing very much changes in the practicality of the management of economic and financial affairs whether the Bank of England is nationalised or independent.
  Most changes in interest rates in this country have, in practice, been driven by external factors, not by domestic ones. They are usually connected with the exchange rate of sterling, which will remain a Government responsibility under the proposals of the Bill. So far as I know, there have seldom been serious differences of opinion between the Treasury and the Bank of England about interest rate policy, despite what the right hon. Member for Berwick-upon-Tweed (Mr. Beith) said. Arguments have arisen about the timing of an announcement, but the main arguments have been between No. 10 and No. 11 Downing street. That has happened under all Governments.
  The most serious blunder in monetary policy since an independent central bank persuaded Churchill to return to the gold standard at the wrong dollar parity in 1925 was our decision, strongly urged by the Bank of England at the time, to join the exchange rate mechanism in 1990. To join it at all was a mistake, to join it at the wrong parity to the deutschmark was a blunder and to remain within it throughout the first nine months of 1992 was a folly, as I said at the time. Nevertheless, that policy, as far as we know, was fully supported by the Bank of England and by the leaders of the Labour and Liberal parties. They had urged the Government to join the exchange rate mechanism for a long time before we did so in the autumn of 1990.
  My hon. Friend the member for Wolverhampton, South-West warned against that decision at every stage of the proceedings. He was much wiser—
  Mr. Richard Shepherd: He voted against it.
  Sir Peter Tapsell: I only spoke against it. I did not have the courage to vote against it. I have only fairly recently got into the habit of voting against my Government. I learnt at the feet of the master. However, my hon. Friend was right

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  when the Treasury officials and the Bank of England were wrong. Even Baroness Thatcher was converted and we joined the exchange rate mechanism.
  If we had to choose an expert to run the monetary authority, we should not choose the Bank of England but my hon. Friend the Member for Wolverhampton, South-West, because he has a much better track record on such matters than most of the rest of us. He knows that I had a good deal of sympathy with his arguments throughout those years, as I said in public from time to time.
  Short-term interest rate movements and fluctuations in the sterling exchange rate impinge much more directly on the political scene in Britain than they do in Germany or the United States. All the attempts to bring in bits of foreign countries to Britain are rather like heart transplants —they are extremely difficult operations which tend, in the course of time, to go wrong. The United Kingdom is a unique country. We cannot look at New Zealand, Germany or the United States and decide that we rather like a bit of their arrangements. We cannot plant that down in the British context in the hope that it will work.
  I shared the views of Michael Foot and Enoch Powell, who were against the establishment of Select Committees, if I may say that in this gathering, because I thought that that was an attempt to introduce an American system into our way of life. It did have the result of emptying the Chamber of the House, as Michael Foot had predicted.
  Our system is different. I have enormous admiration for Mr. Paul Volcker, who was chairman of the Fed for 10 years. In an recent lecture on the centenary of the Bank of Italy, he said:
  "Economically large nations, relatively less exposed to foreign trade than the closely knit economies of Western Europe, may be less concerned about what the pursuit of an independent monetary policy does to their exchange rates."
  That is undoubtedly true, because sterling and the exchange rate have largely determined the level of interest rates, not the other way round. Almost all the crises about interest rates that I can recall have resulted either from sterling being under pressure or because it was thought to be getting too strong.
  Neither Germany nor the United States has a close link between its short-term interest rates and its exchange rates. Nor is there a close link, as there is in this country, between their short-term interest rates and the home-owning millions and home-buying millions. I remind my hon. Friends that those people are crucial to the future of the Conservative party. They are potentially, and have traditionally been, loyal Conservative voters and I am not keen to hand them over to the tender mercies of the Bank of England.
  Mr. Budgen: A new social and economic factor is the rise in self-employment. Most self-employed people are borrowing their money short term from the clearing banks, and will be very much affected by interest rate changes.
  Sir Peter Tapsell: That is absolutely true. Home owners and small businesses in this country are tremendously concerned with short-term interest rates—probably much more, in a political sense, than those in any other country. Also, we export much greater proportion of gross domestic product than other countries, even Japan.
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  In America, the foreign exchange aspect hardly affects domestic politics. When the Americans had a huge double deficit under President Reagan, of which we heard so much—and of which I was rather an admirer—they had no difficulty in financing it, through vast sales of US Treasury bills to the Japanese. We have never been able to do that when we have been in a similar position; we have always had to raise interest rates to a high level to protect ourselves. Analogies with foreign countries are often irrelevant to the British position.
  Mr. Forman: Is not the volatility of interest rates—particularly short-term interest rates—most damaging to a country such as ours, which has something of a housing fetish? It also damages small and medium-sized business men, who depend on short-term money. Does not the record show that such volatility is reduced when monetary policy is the sole responsibility of a more or less autonomous central bank? Given a record—under this or any other Government—of abrupt interest rate movements, we must surely favour a more autonomous banking institution.
  Sir Peter Tapsell: I do not know whether than can be said with any certainty. I agree that interest rate volatility has been one of the banes of economic management in this country, but I do not think that it would necessarily be much reduced if responsibility for interest rates were transferred to the Bank of England, which would still have to face crises as they came along.
  In the German crisis over reunification in recent years, the central bank tried to counterbalance the expansion and slackening of fiscal policy with an excessively stiff monetary policy. There is no historical proof that interest rates would be less volatile if they were controlled by the Bank of England; they must reflect the balance of payments, among other factors.
  Britain, as I have explained, is different, because of the importance of our exports, our exchange rate problem and our house mortgage position. Moreover, the Bank of England is different from other central banks: that is often overlooked. I described the ways in which it was different at great length in one of our Maastricht debates, on 24 March 1993, so I shall not fully cover that ground again. It is a fact, however, that the Bank of England has an entirely different range of responsibilities from most other central banks—a much wider range.
  For instance, neither the Fed nor the Bundesbank has supervisory responsibilities. They would have had nothing to do with BCCI or Johnson Matthey. There may well be a strong case for removing the Bank of England's supervisory responsibilities; but that is a different argument, and I shall not go into it now.
  In comparing the Bank of England with other central banks, we must remember that we are not comparing like with like. The Bank of England is responsible not only for banking supervision, but for the management of the Government's borrowing requirement, the operation of the foreign exchange portfolio and what used to be one of its most important functions—exchange control. In many other countries, those four responsibilities would be carried out by organisations other than the central bank.
  The enormous range of the Bank's responsibilities has been one of its great strengths. That is why it has had its finger on the pulse of the City and the international markets, and why—despite the embarrassment that its

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  supervision role has caused it in recent years—it wishes to retain that role. The Bank of England does not think that it can know all the detail of everything that goes on in financial markets unless it can supervise the banks.
  The Bank of England is more or less unique in that regard. The proposition that an independent central bank need only focus on its role in monetary policy does not apply to it. Conversely, giving the Bank freedom in that one role but not in the rest of its wide range of roles would produce an administrative dog's breakfast. It reminds me of my later days in stockbroking, when Chinese walls were introduced. It was almost impossible to speak to some of one's colleagues; a separate lift had to be installed in my firm, so that we would not meet any of the chaps in the corporate finance department. I do not think that such moves are administratively sensible, apart from other considerations.
  Monetary policy is only one of the many instruments of policy that have a bearing on inflation. If beating inflation is so important—and I agree that it is—and if politicians cannot be trusted to give it the priority that it deserves, logically we should take out of their hands not only monetary policy, but a range of other policies, starting with fiscal policy. I take the opposite, traditional view, however. It is said that war is too important to be left to the generals; I believe that national prosperity is too important to be left to the bankers. That is what makes all these panaceas and gimmicks so fundamentally undemocratic, however much effort is made to disguise the truth by means of artificial and inevitably ineffectual devices to achieve occasional accountability.
  One reason for the present level of support for a more independent central bank is the idea that monetary policy is different from other policies. It is seen as a simple technical operation with a single clear-cut objective, and with well-understood and reliable techniques of operation. Let me tell my hon. Friend the Member for Wolverhampton, South-West, who has been a passionate monetarist over the years and with whom I used to clash in the early 1980s, that that is a delusion. It is the same delusion which led to excessive reliance on monetarism in the early days of the present Conservative Government and the latter days of Lord Healey's Chancellorship.
  I frequently used to point out to Keith Joseph, Enoch Powell and Margaret Thatcher at that time—both in public and in private—that, while control of the money supply was an important instrument of economic management, it was exceedingly difficult even to measure the money supply, and virtually impossible to control it with any accuracy. Over many years, the Government have tried all the Ms, from M0 to M6, in an effort to prove me wrong; and they have failed. We hear very much less now about all these wretched Ms.
  Historically, when high inflation has existed in the United Kingdom, it has not been only, or even mainly, the result of lax monetary policy—except, briefly under the Chancellorship of Lord Lawson; and that mainly reflected his mistaken exchange rate policy rather than his interest rate policy. Nor have I ever heard it suggested that interest rate policy has ever been conducted for long on terms of which the Bank of England disapproved, or that interest rates would have been significantly higher or lower in the past 15 years if the Bank had enjoyed monetary independence over that period—although, admittedly, the
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  Bank was a good deal more sceptical about monetarism in the early 1980s under Lord Richardson's governorship than were the politicians, rightly in my view.
  The idealised picture of monetary policy that exists in some quarters extends further to the notion of the supposed infallibility of the men who would practise it within an independent central bank. In the same lecture to the Bank of Italy's centenary meeting, Mr. Paul Volcker also said:
  "There are those who look upon monetary policy as a kind of abstract process conducted by a kind of special priesthood imbued with concepts about the money supply and inflation but somewhat removed from contact with the real world."
  That is a good satirical description of the view of some convinced monetarists on the subject.
  One does not have to look into a crystal ball when one can read the book to see what happened when the Bank of England made all those monetary decisions. People sometimes forget that we had an independent central bank until quite recently. When I first started writing essays at school about the money supply we had an independent central bank—it was not nationalised until 1946. The "special priesthood", to use Paul Volcker's mocking phrase, was epitomised by the two Governors who dominated the Bank of England for most of the preceding years of this century: Lords Cunliffe and Norman.
  Andrew Boyle, generally regarded as the best biographer of Montagu Norman, wrote on page 122 of his biography, which I have with me:
  "Cunliffe proved himself a turbulent, mischief-making force to the end."
  Montagu Norman described Cunliffe in his diary as a "dangerous and insane colleague". Cunliffe said:
  "The idea of Montagu Norman as Governor simply terrifies me".
  Those were the men who ran the independent Bank of England for virtually the first half of this century and made such an appalling mess of the British economy. They helped to bring Hitler to power and brought Mosley marching down Threadneedle street with his blackshirts. Now, some of my idealistic hon. Friends want to give back those powers to that source. That seems to be an incredible misreading of British history. Those were the special priests who ran the Bank of England.
  Mr. Duncan Smith: I am listening attentively to my hon. Friend. The process of joining the gold standard, maintaining our membership of it and subsequently coming out of it was the result of a political decision. It was the Chancellor who took the decision, and many people around him advised him not to do it, although I accept that the Bank was not one of them. The decision to enter the gold standard was, therefore, a political decision, much like the recent political decision to enter the ERM. Does my hon. Friend agree that it is not altogether true that the so-called independent Bank of England was wholly responsible for those problems prior to the war? It was implementing a political policy.
  Sir Peter Tapsell: Yes, but it was Montagu Norman who persuaded Winston Churchill to do that. In his old age, Winston Churchill told me that it was the biggest mistake of his political career—bigger even than that over the Dardanelles. He said that he had always regretted that, but the technical experts—Montagu Norman, the banking establishment and the City of London—unanimously advised him to do it.
  Such unanimity has now prompted the Select Committee to recommend that we transfer monetary

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  powers to the bank of England. We must be extremely cautious about that, as the historical omens have not been good.
  It was not only Winston Churchill who had problems with the Bank of England. Andrew Bonar Law as Chancellor of the Exchequer found Lord Cunliffe intolerable. Bonar Law wrote to Lloyd George, then Prime Minister, accusing the Governor of
  "an act of extraordinary disrespect towards the British Government and as I think a direct insult to me."
  Churchill, as Chancellor, found Montagu Norman, as Governor, almost as intolerable as Bonar Law had found Cunliffe. The Governors were utterly contemptuous of their Chancellors. If we were to recreate the independent Bank of England in the far more political and democratised atmosphere of contemporary Britain, those tensions would certainly return, probably in heightened form.
  We must guard against the danger of the exceptionally agreeable character of the present Governor of the Bank of England misleading us into building permanent institutional arrangements that will one day be operated by much less emollient people. If I want sound advice on monetary policy I go to Sir Alan Walters. My experience of him over the past 10 years has shown me that, on monetary matters, he is nearly always right. He has enabled me to make quite a lot of money for myself by operating in foreign exchange markets following conversations with him—not when he was in office, as it were—on what was about to happen, when everyone else disagreed with him.
  If one wanted an expert on monetary affairs with a good track record, and did not choose my hon. Friend the Member for Wolverhampton, South-West, one would appoint Sir Alan Walters to run monetary affairs. However, much as I admire and like Sir Alan Walters, I would not appoint him as Governor of the Bank of England. Such appointments have to be made on an institutional, not a personal, basis.
  Tensions do not simply arise between independent governors and Chancellors; they arise directly between independent Governors and the public and the press. As Andrew Boyle says in his book on the life of Montagu Norman, by 1931 the Governor was "execrated" by everyone outside the top echelons of the City of London. His monetary policy, and that of his close friend and colleague Dr. Schacht, the governor of the Reichsbank, had been seen to be an absolute disaster for years.
  Now, with the much more intrusive tabloid press and the immensely sophisticated corps of financial journalists, which did not exist in the 1920s and 1930s, a Governor of the Bank of England who was responsible for a highly contentious monetarist policy, in difficult times of rising interest rates and rising unemployment, would attract an astonishing degree of personal opprobrium. The Sun newspaper would take a keen interest in the private lives of even the most staid clerks in the Bank of England. I do not think that those working in the Bank of England have any concept of what they would be letting themselves in for if they accepted responsibility for monetarist policy.
  Mr. Barry Legg: I fear that my hon. Friend may be contradicting a point that he made earlier, when he argued that the Bill would put monetary policy in a different compartment and seal it off from other aspects of monetary policy. My hon. Friend is
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  now saying that a Governor of the Bank of England with the incremental increase in powers suggested in the Bill would be subject to the pressures and consensus that exist in society in general.
  Sir Peter Tapsell: He would be subject to pressures, but not parliamentary discipline. He would certainly attract all the unpopularity that we politicians rightly attract when we get economic policy wrong. But the Chancellor of the Exchequer can be dismissed by the House of Commons if we lose confidence in him. The Prime Minister of the day can dismiss him, as we have frequently seen. But the Governor of the Bank of England is virtually irremovable from office. I do not think that that contradicts anything that I said earlier.
  Mr. Legg: My hon. Friend earlier referred to the many mishaps in monetary policy that have occurred over a considerable period. Can he name one Chancellor of the Exchequer who has been dismissed by the House because of his incompetence in dealing with monetary policy?
  Sir Peter Tapsell: I believe that the dismissal of the previous Chancellor of the Exchequer, my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont), occurred because many people in the House felt that he had not made a success of monetary policy. Selwyn Lloyd was dismissed by Harold Macmillan because many of us had lost confidence in Selwyn Lloyd's monetary policy—that is exactly what happens. Irrespective of whether it should have happened, the fact is that it can happen. It would be made much more difficult if an independent Governor of an independent bank were running these matters. He would attract enormous personal opprobrium and Threadneedle street would become very much like Rupert Murdoch's Wapping. The Bank of England would not like that.
  In practice, the Bank has escaped virtually unscathed from the recent ERM crisis because of its consitutional position. I welcome that, because, of all the nationalisation measures put on the statute book by the Labour Government following the 1945 general election, the first and least controversial and the most successful was the one nationalising the Bank—the Act which my hon. Friend the Member for Wolverhampton, South-West now wishes to amend.
  Winston Churchill had five years of unhappy experience as Chancellor of the Exchequer in the 1920s dealing with an independent central bank. On 16 August 1945, as leader of the Conservative Opposition, he made his first speech in the House after the 1945 defeat. It was one of his greatest speeches and what he said in it about the Balkans could be said today. It was the speech in which he first mentioned the iron curtain. He did not, as is often claimed, first mention it at Fulton, Missouri in 1946. In the course of that great speech on the Loyal Address, Winston Churchill said:
  "The national ownership of the Bank of England does not in my opinion raise any matter of principle.—[Official Report, 16 August 1945; Vol. 413, c. 94.]
  Oliver Stanley, speaking later on Second Reading, as the Tory Front-Bench spokesman on finance—another great lost leader of the Tory party—did not make any severe criticism of the proposed nationalisation of the Bank.

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  It has always been accepted by the more numerate Conservatives—I use a neutral phrase—that the 1946 Act that nationalised the Bank of England is a good basis on which to operate our economic affairs.
  Mr. Forman: Many of the earlier arguments in my hon. Friend's magisterial speech were devoted to excoriating the power of fashion in economic doctrine, but he has just given a vivid example of that same point. It was fashionable in the post-war consensus to approve of nationalisation, but the world has moved on and it is time to denationalise this institution and give it greater independence.
  Sir Peter Tapsell: My hon. Friend is not quite right. It was not fashionable in the Conservative party to favour nationalisation. We bitterly opposed every nationalisation measure in the 1945 Parliament, except the one for the Bank of England. That was because Hugh Dalton, the Labour Chancellor, on moving the Second Reading of the 1946 Bank of England Bill, said:
  "We do not intend any day-to-day interference by the Government or the Treasury with the ordinary work of the Bank. On the contrary, we intend to leave that ordinary daily work, much of it of great importance, with confidence to the Directors and to their efficient and well-trained staff."—[Official Report, 29 October 1945; Vol. 415, c. 44.]
  The post-war Labour Government were as good as their word. All Governments have supported Hugh Dalton's concept of how the Act should operate.
  In the English way, much has depended on the personalities involved. My experience of the City, which stretches over 35 years, has been that attempts at codification, of which this Bill would be another, are usually counterproductive. The Governor's eyebrows were a great deal more efficient than sterling M3 or the Securities and Investments Board. Strong Governors such as Lord Cromer and Lord Richardson may have shown more independence than some other Governors, but, in practice, the Bank has never been, over a wide range of its responsibilities, either the Treasury's poodle or just its City office.
  The Bank has performed its many roles with efficiency and distinction. At a time when many of our national institutions are under attack by cynics, as the Chief Secretary to the Treasury pointed out in his admirable lecture a fortnight ago, the Bank of England, along with the armed services, is still a part of our national life which is greatly respected. In addition, the Bank is immensely admired throughout the world. Those who attend, as I have attended, almost every IMF meeting in the past 30 years, will know that, in private, all the central bank governors speak with enormous respect of the Bank of England. Of all the central banks, it is the one which is most admired.
  As a good Tory, I am instinctively reluctant to tamper with the roots of healthy trees, a point of view that I would have expected my hon. Friend the Member for Wolverhampton, South-West to share. My hon. Friend has performed a service by giving us the opportunity to debate these matters, but, for the practical, historical and philosophic reasons that I have given, I hope that elected Members of Parliament who are temporarily appointed to ministerial positions in the Treasury and fully answerable day by day to the House, will continue to conduct the monetary, as well as the fiscal, policies of our great trading nation.
  11.44 pm
  Dr. Jeremy Bray: The nature of the debate has changed somewhat from that of Second Reading of a private Member's Bill to a general review of the evolution of monetary policy during this century. I should like to return to the Bill and I commend the initiative of the hon. Member for Wolverhampton, South-West (Mr. Budgen) in airing what has become a fashionable idea.
  The hon. Gentleman's initiative appears to be part of a concerted campaign. We have had reports from the Select Committee on the Treasury and Civil Service and from the CEPR under the chairmanship of the noble Lord Roll of Ipsden, and a new Governor of the Bank of England has been appointed. All that has led to an opening up of ideas and the running of this hare.
  Both the Select Committee and the Roll committee started work last spring in the aftermath of Britain's withdrawal from the exchange rate mechanism in September 1992. Their work was reinforced by the difficulties of France and other countries in July 1993. That wrecked the Maastricht timetable and postponed the prospects of early monetary union in Europe.
  In that situation, the Chancellor, robbed of his nominal peg of an exchange rate target, having long since abandoned money supply targets, had to find another nominal peg by which to control inflation. he took the ultimate one, inflation itself, and adopted the target of 1 to 4 per cent. per annum as a practical, operational objective of current economic policy.
  Previously, that had been dismissed as impossible because there is so much else that affects inflation. To bolster the credibility of that peg, the Chancellor invited the Bank of England to produce what it said would be an independent report on inflation. The first inflation report was issued in February 1993 and gave the Bank's view of the inflation process. It still makes good reading. The Bank argued that inflation is a monetary phenomenon, and that in the long run, monetary policy determines the rate of inflation. It argued that there was no necessary long run causality from costs to prices but that both reflect underlying real and monetary shocks. In other words, it has shifted its ground. Real shocks affect prices—affect inflation. But in the short run, it argues, the dymanics of the inflation process mean that changes in costs are a leading indicator of changes in prices. In other words, money may cause the increases in prices, but we will see the changes in costs first. Therefore the inflation report contains a consideration of the costs of imports, of the exchange rate, of commodity prices, of unit labour costs, of business margins and of indirect taxation.
  Having dealt with such a wide background to the whole economy, the Bank reverts to saying:
  "Monetary conditions are the principal determinant of inflation in the long run."
  It makes
  "an analysis of monetary and fiscal policy. The former [monetary policies] relates to short-term developments in monetary conditions and the latter"
  —that is fiscal policy—relates
  "to expectations of future monetary conditions in the medium term."
  In other words, it is not monetary policy that is creating the medium-term prospects of inflation; it is fiscal policy that is creating those medium-term conditions.

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  So the Bank considers in its inflation report monetary policy instruments, interest rates and monetary aggregates, but then it continues to consider fiscal policy. It argues that the rate at which inflationary pressures respond to the monetary stance depend on demand and supply conditions in product and labour markets. So it considers business and consumer optimism surveys, debt, capacity utilisation, unemployment and inflation expectations. Initially, therefore, the Bank, in its outline of inflation, said that it was examining virtually the whole economy.
  It is true that initially, in February 1993, there was fleeting reference only to competitiveness and to the balance of payments, but that increased in August to November once the Bank became a little more confident about what was happening in the balance of payments, because we had the black hole of no trade figures early in 1993. There is still no mention of total factor productivity and of endogenous growth, but one may be sure that it will not be long before the Bank climbs on to those bandwagons.
  Effectively, the Bank is mapping out a picture of the entire economy in the context of its so-called independent inflation report. I do not argue with the pattern of its exposition. It is a straightforward and fairly eclectic view of the inflationary processes, but it is no basis for the assignment of the instrument of monetary policy simply to control inflation. There is no attempt to justify that in the Bank's inflation report.
  Further, in its background argument, the Bank has published no research that I can find—not in the reviews at least—during the past year which has any bearing on that. There is a bit of work on something called VAR—vector autoregressive estimates of forecasts—but that is a "black box" method for checking on the forecasts made by more economic and less handle-turning methods, and there is an exercise in the assessment of divisia measures of money.
  The hon. Member for East Lindsey (Sir P. Tapsell) referred to the sorry history of the Members. The current fashion is that no particular Member will do. One tries different averages of all the Members and one searches for an average of all the Members which behaves as one expects it to behave. That was considered recently by the Bank of England, but nothing here considers the actual ways, given one's objectives, in which one sets instruments. The Bank in its own internal research is not equipped to do that. It is narrowly defined, a fairly technical thing—given these objectives, how does one adjust the instruments to achieve what one wants?
  The Treasury can do it. The Treasury has been doing it for years, but the Bank has never equipped itself to do it. Further, the economist in the Bank of England—Brian Henry—who has the best published track-record of work in that field has latterly been posted to Washington. As far as I can see, the Bank has no one who is expert in that area at all. The talk in the inflation report, in technical economic terms, is just so much waffle.
  I am sorry that the Treasury Committee does not get round to examining those things in the way in which we used to in the early days of that Committee. As a founder member, I well remember the efforts that we made to get at the underlying economic argument. Unfortunately, little attention is paid to that in the report on which the Bill is based.
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  Inflation is affected by just about everything and by all the instruments used by the Government in their economic policy. Those instruments affect just about everything else, so technically to assign one instrument to one objective is bound to produce an inferior solution. Let us consider the practical situation on black Wednesday. Given the stance on fiscal and monetary policy, the notion that the Bank could control the exchange rate was not on. In such circumstances, there is not a public row between the Treasury and the Bank.
  To reminisce, I was Parliamentary Private Secretary to George Brown in 1964 and during the first sterling crisis I witnessed the half-hourly telephone calls between George Brown and the Bank of England, stating that so many hundreds of millions of pounds had gone. George Brown made frantic and hectoring calls to Dr. Blessing in the Bundesbank. That is not the image that the public have of what happens during a sterling crisis, but there is no public row. The damage is done in the months and years beforehand in which the conditions are created that make such a situation inevitable in today's speculative financial markets.
  Where do we go from here? The Roll committee is a different animal from the Treasury and Civil Service Select Committee. Incidentally, Eric Roll is not inexperienced in the handling of fashionable ideas. He was the permanent secretary to the Department of Economic Affairs when George Brown produced the national plan before later going on to other things in the City. Realising that one could not build a case on the assignment argument of using monetary policy to stabilise inflation, the Roll panel appealed to credibility.
  Before black Wednesday, we were told that interest rates would be higher if we devalued because of the loss of credibility. Had I known that the ex-Chancellor was going to be here today, I would have dug up the speeches that he made at the time assuring us that that would be the practical effect, that we should have higher interest rates if we abandoned the exchange rate mechanism.
  Of course, the real problem was that before black Wednesday the policy stance had ceased to be credible in the financial markets because the markets had ceased to believe that a Government would continue paying the cost, in jobs, growth and output, that resulted from our trying to maintain the exchange rate. The real economy made the monetary stance incredible.
  Credibility has nothing to do with the degree of masochism with which one is prepared to take the slings and arrows of outrageous financial conditions; it is about one's ability, in the political reality, to continue to do what one says that one is doing. The Government ceased to be credible. It was not simply a matter of commitment to a financial target. One can scarcely restore one's credibility, in real or political terms, by assigning the instrument of monetary policy to the particular target of inflation and parcelling it up to hand to the Bank of England.
  The metaphor of juggling balls is confusing and misleading because it suggests short-termism and that there is something clever in what one does this week and next week and what one did the week before.
  It is not that kind of game. If they are balls that are being juggled, they are huge balls of dough, which flump around and cannot be pushed down the corridor, but, nevertheless, roll and sweep people out of the way. Such vast, amorphous tides in the economy need to be anticipated and sensed in the months and years ahead.

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  The Treasury and Civil Service Select Committee and the Roll panel sought to tackle that problem by correcting the economic argument and by altering the political accountability of the Bank of England. That was to be achieved by appearances before the Treasury Committee, by debates in the House, by approval of orders, and by an emergency override for the Treasury. I am a supporter of Select Committees. I was a founder member of the Treasury Select Committee and was a member of other Committees before and have been since. The Bill, or an amendment to a Government Bill, presents a more realistic picture of the real powers and the ways in which they are exercised. Select Committees cannot act as an executive override with present concepts of parliamentary accountability.
  A recent example of a Committee that came nearest to moving in that direction was the Select Committee on Industry which discussed the coal crisis. It produced a well-argued and practical report which appeared to have the support of Government Members, and there was some indication of dissatisfaction on the Government Back Benches. Potentially, that Select Committee report could have shaped Government policy, but political pressures overrode it. One can wager that we shall see in future that the Whips' office will be at it to ensure that future appointments to the Industry Select Committee do not include those subversive Tory Members who might undermine the Government's ultimate control over that Select Committee. That was what happened in the Treasury Commitee in 1983. It was overruled by the Whips' Office and never allowed to exercise its degree of independence. At the time, we had Kenneth Baker, Terence Higgins and a number of others who—
  Madam Deputy Speaker: Order. May I remind the hon. Gentleman that Members are not referred to by their names but by their constituencies.
  Dr. Bray: I beg your pardon, Madam Deputy Speaker. I was unforgivably lapsing into informality.
  Select Committees cannot possibly act as a short-term check on executive mistakes in the way in which the Bill outlines. Clearly, the Bill argues for the assignment of instruments to enable the Bank of England to formulate and to implement monetary policy and to stabilise prices, and for the Treasury to set inflation bands and have a temporary override and to direct the Bank to aim monetary policy at other objectives if things come unstuck.
  I give half a cheer to the hon. Member for Wolverhampton, South-West for raising the issue, but I am afraid it comes nowhere near the right diagnosis or answer. I encourage the Treasury Committee to look further.
  There is a void in the economic and financial objectives of the Government. Simply having an inflation target of 1 to 4 per cent. is not an operational guide, because inflation is such a long-term phenomenon. Hon. Members on both sides of the House are committed to low inflation, but we are also committed to the other objectives of growth, managing the balance of payments and restraints on public borrowing
  There was an operational framework in the Maastricht treaty to which hon. Members on both sides of the House were committed. It did not encompass growth and it did not deal with the balance of payments in the same way as it dealt with borrowing requirements, the debt-income ratio
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  and the rate of inflation. Nevertheless, it was a set of objectives which was achievable within the field that it tackled.
  The difference within the parties related not to the reasonableness or desirability of those objectives or to the process of convergence in Europe in a common move towards the achievement of greater stability in underlying conditions. The difference within the parties related to the whether it was appropriate to abandon elements of sovereignty and our ultimate control of the exchange rate.
  The Maastricht framework is still on the statute book —a commitment to the outline of European policy. It may not appear very relevant in the short term, but nothing stays still for very long in the world's economy and, sooner or later, we shall have to get back to the formulation of reasonable objectives. I believe that the framework set out in the Maastricht treaty is one to which we shall return. We shall be forced to do so and we shall find ourselves able to do so because we have had a bit of a fright. The political effects of that are only just being realised by Conservative Members, who express incomprehension at the fact that their party is being fabled the party of economic irresponsibility by comparison with the Labour party. Perhaps we have both changed.
  At the moment, people differ not on the objectives but on the technical question of how we can shape our economic policy in pursuit of those objectives. It is at this time of doctrinal uncertainty about the underlying shape of policies that Select Committees can play their most useful role in analysing the problems and pointing the way ahead. The Treasury Select Committee did that in its 1981 report on monetary policy, which pointed out that one cannot ignore the exchange rate. The Government followed that advice.
  The steps that the House can take are perhaps best illustrated by an amendment that I moved to the Industry Act 1975, which required the publication of forecasts, access to models and so on. The amendment, as originally moved, required the Government to set out their priorities. Once Governments have described their priorities, we can proceed to the technical task of finding the instruments that will be most likely to achieve those objectives. That is the kind of work that the Treasury and the Treasury Select Committee can do now, but which the Bank has abandoned.
  I hope that the Bill will get no further than Second Reading. The debate on it has been useful but I hope that the public debate will now shift from the gimmick of the concept of the independence of the bank to address the much more important question of how objectives of economic policy should be formulated and how instruments of economic policy should be directed at achieving them.
  Mr. Max Madden: On a point of order of which I have given you brief prior notice, Madam Deputy Speaker. I wish to draw to the attention of the House the killing in Bosnia of a British aid worker, Mr. Paul Goodall, and the injury of two other British aid workers. As we express our sympathy to Mr. Goodall's relatives and friends, I am sure that the British public will want us to ask what the Government propose to do to ensure that all aid workers and United Nations personnel in Bosnia, including British forces, are protected. With that in mind, would it be possible for the Government to make a statement later today? If not, can we be assured that a

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  statement will be made by the Foreign Secretary on Monday to provide information about the background to this tragic incident and to tell us what action is to be taken in the matters to which I have referred?
  Madam Deputy Speaker: As the hon. Gentleman will know, it is not for the Chair to call for statements from Ministers. I have had no indication that a Minister wishes to make a statement to the House today. However, there are Ministers on the Treasury Bench and I have no doubt that they will have heard what the hon. Member for Bradford, West (Mr. Madden) has said.
  12.10 pm
  Mr. Michael Spicer: I shall be very brief because several of my hon. Friends wish to speak and because my hon. Friend the Member for East Lindsey (Sir P. Tapsell) has made most of the points that I wanted to make.
  My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) presented his Bill very eloquently. I particularly enjoyed the dying phrases of his speech when he pointed out some of the paradoxes that might be thought to exist between the Government's defence of responsible Ministers—in this case, Ministers responsible for the monetary policy of this country—reporting to Parliament and the decrease in that responsibility through the foundation of the organisations of the EMI and the progress that that has made through the Maastricht treaty.
  My hon. Friend the Member for Wolverhampton, South-West made a clear, precise and pleasing presentation. However, he was disingenuous. The idea that the Bill does not give greater autonomy to the Bank of England is disingenuous. The Bill starts by saying that it is a Bill to
  "Amend the Bank of England Act 1946 so as to remove the general powers of the Treasury to give directions to the Governor of the Bank".
  My hon. Friend made it clear in an intervention that, for some time, he has had it in mind, for various reasons, to give greater autonomy to the Bank. Quite properly, the Bill should be seen from that perspective on both sides of the argument.
  At one point, my hon. Friend the Member for Wolverhampton, South-West said that the Bill was all about openness. However, I see it in rather a different light. I believe that the Bill removes openness, but I will return to that point later.
  I have two arguments against the Bill. I want first to focus briefly on the European dimension. It is not wrong to do that, because if the Bill received a Second Reading and there were further moves towards an autonomous Bank of England, it would be that much more difficult to argue against this country finally joining a single European monetary organisation run by a single central bank of which we would be part.
  I do not want to re-run the Maastricht argument, but there is a specific point which I should like to draw to the attention of the House in respect of a single European monetary policy, which would be made easier if we had a single central bank in this country. It relates to a point made by my hon. Friend the Member for East Lindsey. He said that there is a relationship between fiscal policy and
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  monetary policy. Nowhere is that clearer than if we conceive of a single European monetary policy run by a single central bank.
  If we had such a single monetary policy, there would be a single pricing policy throughout Europe. As there would not be a single wages policy throughout Europe, within the framework of Maastricht, the cohesion fund and so on, there would be the increasing introduction of compensatory fiscal policies. For instance, Greece, which had Greek wages but German prices, would be compensated for the very unsatisfactory position in which that would put Greek wage earners, so a massive fiscal undertaking would inevitably follow.
  We cannot distinguish or compartmentalise monetary policy, vital though it is. My hon. Friend the Member for Wolverhampton, South-West used the word "important", not "exclusive". That point is highlighted by the European dimension in which a separate central bank would lead us.
  Even if I am wrong, surely it is plausible that central banks, particularly those that become autonomous, operate as a co-operative. The inevitable result of a co-operative of autonomous central banks is that they focus on a common and fixed exchange rate between their various currencies. The excuse that they use—they certainly used it during the ERM period—is keeping inflation under control. I think that a quiet life is at the centre of the policies that automatically occur when central bankers get together—that is, fixing the exchange rate between their various economies. Even if I am wrong in suggesting that the Bill would make it easier to move to a single currency for this country, a more autonomous central bank, working together with other central banks, is likely to lead us straight back into managed and fixed exchange rates.
  Mr. Duncan: Will my hon. Friend consider the other side of the Bill and answer a question that I should like to hear teased out? On one side there is the argument about independence and the question whether there is such a thing. I accept that, to a degree, that matter is ambivalent and not necessarily provable. However, the key point about the Bill is the accountability aspect, which, whatever happens to the idea of independence, is vital and might answer some of the charges about what happened in the run-up to the ERM and subsequently exercising policy within that. I refer to accountability to this Chamber.
  Mr. Spicer: That is my second point, and I am grateful to my hon. Friend for leading me to it, now that I have dealt with my European worries.
  I now refer to the second important issue—accountability. The independence that my hon. Friend the Member for Wolverhampton, South-West offers would lead to the Bank of England becoming a quango in spades. We must examine the Public Accounts Committee's report on quangos. I have great sympathy with that report. The Bill contains the concept of autonomous operational responsibilities. All hon. Members have written to a Minister on certain matters, for example the Child Support Agency, and received an answer saying, "I am not responsible for day-to-day management. Operational responsibilities have been passed elsewhere"—let us say to the chairman of the Legal Aid Board. I just happen to have had a lot of correspondence with him recently.
  If one writes to the chairman of the Legal Aid Board or to the CSA board director, he will say that he is responsible for the day-to-day running, but that he is working within

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  parameters and policies that have been laid down by Ministers and that he cannot answer your question in that respect. The tone of that letter would be different from that which one would get from a Minister. If a Minister is rude to an hon. Member, he can ask rude questions back to the Minister on the Floor of the House.
  The right hon. Member for Berwick-upon-Tweed (Mr. Beith) said that we have a lack of responsibility in the case of the Bank of England. However, his claim that by setting up greater autonomy, we would get more responsibility is the reverse of the case. There are so many examples of organisations that have been set up and given something called "operational responsibility". Those organisations must work within parameters that are not their responsibility. We do not get proper answers, and no one is apparently accountable.
  I am concerned with the idea that somehow one can hive off something called "operational responsibility", but leave behind apparently the responsibility for setting parameters. That way lies the muddle that we are getting into. I am all in favour of privatising as much as possible, but, ultimately, one leaves the Government with, certain responsibilities. The major responsibility that one leaves an autonomous Government is that of managing the economy.
  Mr. Duncan Smith: I want to make the point again that this place has, in a sense, been a spectator of so much of what has happened with regard to the setting of interest rates during the past four or five years. In reality, the House would have wanted to have much more say in that. Perhaps if we had had more say, some of the ERM arguments would have been exploded earlier. Does the Bill contain an essence of that, and does my hon. Friend agree that it is a salvageable element, whatever else he may feel about the Bill?
  Mr. Spicer: I accept that there is a party structure and a whipping arrangement within Parliament which makes it difficult for individual hon. Members to get across views that are off-centre. I accept that that is the way in which we manage things The history of the two-party structure sometimes makes it difficult for individual hon. Members to hold Ministers directly accountable for their policies.
  It may well be the case that, because of that, Parliament was not effective in holding Ministers properly accountable during what I would see as the debacle leading up to the ERM period, and our exit from it. I do not think that that is an argument in favour of hiving policies off to a great extent, or hiding them behind the closed doors of the Bank of England. I think that it was our fault collectively, although there were individuals who fought against the ERM policy. There is the structure within Parliament of forcing a uniform view, and I accept that entirely.
  The question is whether we will obtain greater insight into policy by hiving off large chunks of it to the Bank of England. In my view, we are totally capable of holding government to its collective responsibility, because we have the means.
  My hon. Friend the Member for Wolverhampton, South-West has done a great job in exposing an issue that has been lying dormant in many of our discussions for several years. My hon. Friend and others are right in believing that there is a fashion for saying that all our problems would be resolved by hiving off fiscal and
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  monetary decisions to the Bank of England. I disagree with that view. I am glad that the matter has been brought out into the open by my hon. Friend and that we have had an opportunity to discuss it in the way that we have.
  12.24 pm
  Ms Diane Abbott: The Bill is best understood as a paving Bill for the independence of the Bank of England. It is for that reason that its deviser is a hero in Threadneedle street. It is to the value of increased independence and autonomy for the Bank of England that I propose to address my few remarks this morning.
  I listened with some wonder to the hon. Member for Wolverhampton, South-West (Mr. Budgen) speaking in the unfamiliar persona of a man who is both meek and mild. I wondered whether this could be the savage disciple of Enoch Powell, the lion of Maastricht that the House has come to know so well. We were presented this morning with a mere humble handmaiden of the Governor of the Bank of England, Eddie George.
  I put it to the House that both the conclusions of my colleagues on the Treasury Select Committee and the underlying premise of the Bill are based on certain false assumptions. Let me state first and foremost why the issue of monetary policy is so important. One might imagine from the poor attendance in the Chamber this morning and from the looks of puzzlement of some of the members of public in the Strangers' Gallery that monetary policy was a mere arid, technical matter. One might wonder why there should be such feeling, concern and focus on the issue among practical politicians.
  Monetary policy is not an arid, technical matter. It is a crucial matter for industry, for which interest rates are vital, and for home owners, who are particularly important in Britain, with its high proportion of home owners. I can do no better than quote some of the evidence on monetary policy given to the Select Committee by an ex-Treasury knight, Sir Douglas Wass. He said:
  "making decisions on monetary policy involves judgments about social welfare and the allocation of costs and benefits on a large scale between different sections of the population—judgments of a kind that we all recognise as essentially political."
  The fact that decisions on monetary policy are essentially political led me to dissent from the view expressed in the Treasury Select Committee report and leads me to oppose the Bill.
  Monetary policy is not an arid, technical matter which a few bankers in a back room can deal with quietly. It is a matter at the centre of the political debate in Britain. The first fallacy that underlies the conclusions of my colleagues on the Treasury Select Committee and which underlies the Bill is the notion that there is some automatic causal relationship between an independent central bank and a strong economy and low inflation.
  My colleagues on the Treasury Select Committee were so enthusiastic, gently nudged by Mr. Eddie George, to scramble on the bandwagon of independence that they did not take the trouble to read and listen to the evidence brought before the Committee. The conclusion of our own Clerk was that there was
  "no conclusive evidence of a causal relationship between the status of the central bank and inflation performance."
  That is what the evidence says, as opposed to what fashionable commentators and the chattering classes now try to nudge the House towards.

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  The truth is that the bandwagon of independence as the answer to the long-term economic decline in Britain is centrally based on the West German experience. Until recently, Japan had one of the most successful economies in the world. It does not have an independent bank. The argument that I put to my colleagues and that I put to the House is that one cannot extrapolate from the West German experience to make a watertight model that proves that purely from the creation of an independent central bank will flow the benefits of low inflation and growth that we saw in West Germany.
  Mr. Ken Livingstone: Will my hon. Friend give way?
  Ms Abbott: I am sorry, but I should like to make some progress.
  The point is important because the balance of argument rests on a single pinpoint, the West German experience. I believe that one cannot, academically or intellectually, extrapolate from the West German experience and argue, as my colleagues seem to think one can, that there is a direct causal relationship between having an independent central bank and having West German standards of economic growth, and thus a West German-type strong economy.
  Mr. Livingstone: The most recent example of a country moving towards having an independent central bank is, of course, Russia. Does my hon. Friend agree that that has not been a particularly good indicator of an independent central bank helping to reduce inflation?
  Ms Abbott: I should think that the Russian experience is that not only is an independent central bank not the ideal weapon for fighting inflation, but it is not necessarily something that brings about great social cohesion and stability.
  If there is no academic basis for believing that an independent central bank automatically brings low inflation and a strong economuy, what is the overwhelming attraction of it to hon. Members on both sides of the House? I believe that it would allow politicians to shuffle off the responsibility for interest rate levels that might well be democratically unacceptable to the population as a whole.
  During our inquiries leading to the production of the report, the Treasury Select Committee was fortunate enough to meet Mr. Camdessus, the current president of the International Monetary Fund and an ex-governor of the Bank of France. In that knowing French manner, Mr. Camdessus put it to us that we as politicians should see the attraction of an independent central bank, because it would allow politicians to avoid the unpleasant political and democratic consequences of interest rates that are too high.
  Although I understand the cynical argument for not allowing people to express their anger at high interest rates by directing it at politicians, who then say "Well, it is not us; it is the Governor of the Bank of England", I cannot see how anybody could argue that that would lead to an increase in democracy and accountability. Politicians and commentators who argue for an independent central bank are arguing for a monetary policy that is characterised by the slogan, "Not me, guy. Go and see Eddie George".
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  Another argument for the Bill, apart from what I believe to be the totally false argument about a causal relationship between an independent central bank and low inflation, and apart from the rather cynical argument that politicians do not like to bring forward, and that is behind much of the debate on the subject, is the notion of accountability. As someone who sat thorugh almost all the evidence-taking sessions, has read the Bill and is familiar with the report, let me say that the notion that, either in the recommendations of the Treasury Select Committee or in the Bill, there is any real advance towards accountability is wholly fraudulent.
  What in the Bill and the report does that increased accountability boil down to? There is the much-vaunted override, which is referred to in clause 5 of the Bill. Many hon. Members have far longer experience of politics than I have and have been in and out of government, but I put it to the House that the override in clause 5 and in the Treasury Select Committee report is, in practice, wholly unusable; it could not be used in that form. It would become a weapon that was too dangerous to detonate. There is an element of fraud in hon. Members talking blithely about democratic override, which could not, as they know perfectly well—we discussed it among ourselves in Committee—in practice, be used.
  In terms of accountability, another great gain that we are told that the Bill and the Treasury Select Committee recommendations encompass is the notion of greater openness. We saw the hon. Member for Wolverhampton, South-West standing before us, in his unaccustomed meek and mild guise, fluting sweetly about greater openness, as though greater openness in Government has ever been any particular concern of his.
  Let us look at the greater openness that the Select Committee's recommendations and the Bill are supposed to amount to. It amounts to debating parliamentary orders. How many hon. Members here have stayed up recently to debate them? Such orders are notorious, because they are debated in the middle of the night by a handful of hon. Members. That is a wholly ineffective method of rendering any institution or policy accountable. Little time is given to debate those orders and few hon. Members take part in the debates.
  We have heard a lot about how the Governor will come before the Treasury Select Committee to give evidence and account for himself. I would welcome yet another opportunity to hear Mr. Eddie George rumble on in his amiable and affable fashion. But where does the accountability lie in the Governor appearing before the Select Committee when it does not have the right to hire or fire or even to approve the appointment of the Governor? It has no direct control over policy. It would be charming to hear Eddie George rumble on in his inimitable, affable fashion, and his comments might be interesting to read, but that would not add one jot or tittle to effective, practical political control over monetary policy.
  Mr. Duncan Smith: Surely the argument about parliamentary orders is not whether they are debated late in the evening by a certain number of hon. Members, because the blame for that lies with politicians. The opportunity to debate exists, and if we do not make use of it, it is our fault. Surely the argument should be that not enough time is allocated for the debates and that more is required.
  Ms. Abbott: I accept that point, but I repeat that the proposals in the Bill and the Select Committee recommendations, which their supporters tout in evidence of the hugely enhanced means of accountability that will result, are token gestures. They will not give politicians, and, more importantly, the people any further direct control over monetary policy, which is so important to their lives, their jobs and their ability to pay their mortgages.
  There is no academic or economic argument to suggest that there is a direct relationship between an independent central bank and inflation. The Bill will not result in any huge improvement in the methods of accountability, so why are so many hon. Members scrambling on to the independent bandwagon, as the hon. Member for Wolverhampton, South-West has suggested? In part, they are victims of fashion. I can do no better than quote from "General Theory of Employment, Interest and Money" by Keynes, who said:
  "Practical men, who believe themselves to be quite exempt from any intellectual infuences, are usually the slaves of some defunct economist".
  If there was ever an example of that Keynesian theory, it is the current fashion in the press and in the House to talk about independence as some solution to what I suspect is the long-term economic decline of the British economy.
  The problem with the Select Committee recommendations and the Bill, and the reason why I believe that the hon. Member for Wolverhampton, South-West and some of his colleagues have latched on to the proposals with such alacrity, is that they would institutionalise monetarist policies and the monetarist emphasis on low inflation above every other consideration.
  Mr. Duncan Smith: There we have it.
  Ms Abbott: Yes. It would institutionalise monetarism in our political processes. That is why enthusiasm has been displayed by such xenophobes as the hon. Member for Wolverhampton, South-West for what is, essentially, a foreign notion. That is why I am still amazed that my colleagues could find it in themselves to sign the Select Committee report.
  One of the problems that politicians often encounter is that it is sometimes difficult to interest the wider public and the popular press in issues which, although they are vital, seem very boring. Monetary policy is a case in point. I can only repeat what has been said throughout today's debate: the issue is too imporant to be left to bankers.
  Let me quote again from a Treasury knight, Sir Douglas Wass. According to him,
  "It is not the job of central bankers to judge how far it is right to go on damaging the standard of living of some members of the community or destroying the jobs of others, in order to bring inflation on to some particular path".
  That, essentially, is the reason for my opposition to the Bill, and that is why I would not sign the Select Committee report.
  All hon. Members should take the trouble to read not just the report but the evidence presented to the Committee, which will reveal that some of the fashionable theories about independence that are being touted by politicians of all parties have no basis in fact. The notion of independence will join five-year-plans, little Neddy, monetary targets and the ERM: it will be seen as one of the series of failed nostrums for the underlying cause of the economy's failures.
  I believe that any move towards greater independence and autonomy for the Bank of England in regard to
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  monetary policy would be anti-democratic. It would not be defensible in any economic or academic terms. No doubt both the Select Committee report and the Bill have brought a smile to the faces of Mr. Eddie George and his colleagues in Threadneedle street; but it is not too late for hon. Members to consider the fundamental issues of democracy that underlie this debate on democracy.
  12.41 pm
  Mr. Quentin Davies: I congratulate my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) on winning the ballot, and on choosing to frame his Bill around such an important issue. I thank him for doing me the honour of asking me to sponsor the Bill; I do so with great pleasure.
  I agreed strongly with at least one thing said by the hon. Member for Hackney, North and Stoke Newington (Ms Abbott). This is not merely a technical issue; it is a matter of major national importance. The future of the pound, and the monetary framework in which we are to lead our national lives, are issues essential to the achievement of our economic ambitions—and, indeed, to the maintaining of national self-confidence.
  It would be a great shame—and, to some extent, a dereliction of parliamentary responsibility—for us not to take the opportunity presented by my hon. Friend the Member for Wolverhampton, South-West to debate this Bill, not only at this stage but in Committee. That will encourage the public who sent us here to consider the matter, absorb the arguments, send us representations and continue to discuss an issue which—whatever happens this afternoon—will not go away.
  For two reasons, the Bill is especially pertinent now. First, we have brought recorded inflation down to the lowest level for 30 years—the lowest level achieved in the adult lifetime of many hon. Members who are present today. That is thanks to decisions made by Ministers and, in large measure, to the decision to join the ERM. The great question is whether we can sustain that achievement. Can we prevent inflation from roaring ahead again? Have we cured definitively, or merely suppressed temporarily, the besetting British disease of inflation? Inflation was at the heart of our relative post-war economic decline; it was also one of the major sources of the lack of national self-confidence from which the country has suffered for too long.
  What can we do to lock in that achievement of low inflation—to prevent inflation, and inflationary expectations, from emerging again? If there is an institutional measure to be conceived that is likely to produce that result, it is the one proposed in the Bill.
  The second reason why it is pertinent for us to discuss the subject now is the international context. Only a few years ago it was exceptional for any country to have granted a central bank independence in the conduct of monetary policy. Until recently, the only examples were Switzerland, Germany and, to a slightly qualified degree, the United States. But it has now become the norm in the western world.
  I am not suggesting for a moment that we in the House should be influenced by fashion. We should not consider making institutional changes, let alone any as important as the one that we are discussing today, merely because that appears to be the fashionable thing to do in the world. If we

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  believe that the fashion is misconceived, we should not follow it. But it would be thoroughly irresponsible not to take account of what is going on in the world.
  There is competition among the different currencies in the world. International investors have a wide choice of convertible currencies in which to hold their assets. We want them to be keener to hold their assets in sterling than in other currencies, as that will mean, over time, that there are lower real interest rates in sterling than in other currencies. We must ensure that investors believe that the chance of the devaluation of sterling against other currencies, over time, is small, and the chance of revaluation is correspondingly high. We must improve our monetary credibility.
  Many other countries have acted in a way that they consider will increase their monetary credibility. Some of them are neighbouring countries in the European Union such as Holland and France, as well as those hoping to join the European Union such as Sweden. Other countries on the other side of the world that have nothing to do with the European Union, such as New Zealand, have also taken interesting steps in the same direction. We must be concerned that we may not only not enjoy a competitive advantage, but actually have a competitive disadvantage if it appears to potential holders of sterling that the parity of sterling and the extent of growth of the monetary supply in this country are still at the behest of political pressures to a greater degree than in other countries. Those are two reasons for considering the subject today and for being grateful to my hon. Friend the Member for Wolverhampton, South-West for giving us the opportunity to do so.
  Something remarkable has happened in the House. In the Treasury Select Committee, on which I have the honour to serve, we achieved a remarkable consensus between the three parties represented, with the sole exception of the hon. Member for Hackney, North and Stoke Newington, as she conceded.
  There are differences of emphasis between us, and differences in some of our recommendations on the future shape of the Bank of England. But we were agreed on four essential points. The first subject of agreement was the importance of price stability and the need to prevent inflation from re-emerging in this country. It is clearly set out in paragraph 73 in the Select Committee's report. It states:
  "the maintenance of price stability should be the primary objective of monetary policy."
  There are many other such statements. We would not have obtained the consensus of the three parties on that subject, certainly not in that sense, a few short years ago.
  Secondly, there was general consensus that there are strong theoretical grounds for believing that the greater the degree of independence of the institution responsible for the conduct of monetary policy from party political and electoral pressures, the greater the integrity with which that monetary policy will be pursued, and the greater will be its constancy and credibility and therefore its effectiveness in achieving and maintaining price stability.
  Thirdly, there was general acceptance of the great weight of empirical evidence that in practice there is a strong and postive correlation between the degree of independence of monetary institutions and inflation. That is so clear that the country that has given the greatest
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  independence to its central bank, Switzerland, is top of the league for monetary performance measured by price stability since the second world war. Second in that league is the Federal Republic of Germany. The United States is somewhat lower, but we know that the federal reserve system is slightly more at risk of being influenced by political pressures.
  Only one country stands out from the general trend on the graph: that is Japan, but it is a special case because for 40 years until last year the Government of Japan was in the hands of a single political party, the Liberal Democrats. That party was committed to sound monetary principles, but it was never at serious risk of losing power, and for that reason monetary policy was not subject to the short-term electoral pressures that prevail in other democracies. Until the past few months the key power plays in Japanese politics were within and between factions in the ruling party rather than between parties. That goes a long way to explain that sole exception. It is unusual in economic affairs to have such a clear empirical relationship between an institutional framework and measurable economic outcome. That was the third important matter on which the Committee agreed.
  Fourthly, the Committee agreed that the Bank of England is more than capable, by virtue of its world reputation and the proven confidence of the people who run it, from the Governor and the court to the various departments, of playing just as effective a role as an independent central bank as the role currently played by the Bundesbank and the Swiss national bank. There is therefore little reason not to capitalise on those talents and on the Bank's reputation and allow it to do for us what those other institutions have successfully done in their respective countries. There was considerable consensus on this important issue.
  There was agreement in the Committee between all three parties, with only one person dissenting on these points which perhaps amount to 85 per cent. of the argument. But, of course, beyond that there are divergencies. I diverge on one or two matters in the Bill. My hon. Friend the Member for Wolverhampton, South-West has generously said that if the Bill goes to Committee he will be prepared to look at those matters. Perhaps I may anticipate some of the arguments which I hope will be heard at greater length in that Committee. For reasons that I fully understand, my hon. Friend sets out the possibility of a parliamentary override of the monetary policy being pursued by an independent Bank of England. I understand the strong reasons for democratic accountability and the sovereignty of Parliament that will cause many hon. Members to agree with my hon. Friend.
  I think that that is misconceived, and the reason goes to the heart of the argument about democratic accountability, which my hon. Friend the Member for East Lindsey, (Sir P. Tapsell) developed this morning at some length. The reason is this. I believe that it is inappropriate for a non-elected agency to determine the complex moral and political trade-offs between different policy objectives, which can only, in a democracy, be debated openly and be determined by a representative body such as the House of Commons.
  But that is not to say that it is not thoroughly reasonable for us to decide democratically that we wish to endow ourselves with a better chance and better mechanisms of achieving price stability and therefore that we shall give to an institution, the Bank of England, a specific and single

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  technical task—to achieve price stability. That is a democratic decision. We are saying to the Bank, "We would like you to produce a monetary framework in which businesses, Government, employers, employed, savers and consumers can plan their affairs and operate—a framework of stability."
  That is a framework which would replicate the objectivity of the monetary system that we enjoyed for three generations before 1914, in the heyday of the gold standard. At that time, the supply of money in the world was not determined by politicians' choices. It was determined by an entirely objective fact—an exogenous fact, as economists would like to call it, no doubt—which was the supply of gold in the world. That was a fairly arbitrary factor, and there was always a danger that, as did occur, if someone found more gold in the Yukon or elsewhere, prices throughout the world would increase as a result.
  I am not for a moment suggesting that we should return to the gold standard, but the degree of objectivity that the gold standard provided before 1914, which assured a stable monetary environment, was a framework in which the human race enjoyed a level of growth rates, of output, of employment, of prosperity and of international trade, which was unprecedented.
  My hon. Friend the Member for East Lindsey dwelt a lot on the 1930s, 1940s and 1950s, but if he had looked a little further back he might have found himself inspired, rather than put off, by examples of greater monetary stability.
  Another aspect of my hon. Friend's Bill may be misconceived. That is the suggestion that Parliament should quantify price stability and should state that a specific price index has to be targeted. That is a dangerous principle because there never has been agreement between experts or even non-experts as to what index is the best reflection of inflation, and the Bank of England continually produces a series of new indices which, it believes, better reflect inflationary conditions.
  No one believes very much these days in the retail prices index—RPI. We have been focused for some time now on RPI X, which excludes mortgage interest. The Bank of England has now suggested that we should watch a third index, RPI Y, which excludes mortgage interest and indirect taxes. No doubt, as the months and years go by, a plethora of alternative indices will be proposed. Therefore, any monetary policy that is expressed in terms of hitting a particular target in a particular index will always be open to question. People will ask whether the appropriate index is being used, because they will say that inflation is much greater than that index would indicate because other indices show a very different result. If Parliament continually changes the indices that it is targeting, that in itself will undermine the policy's stability and credibility.
  It is far better that Parliament establishes that an independent Bank of England has a responsibility to maintain price stability. It is then up to the Bank to defend its achievement of that objective—to defend it in the markets, to public opinion, to the House, to the Treasury and to the Treasury Select Committee or to any other Select Committee to which the Bank will, from time to time, have to give an account of itself under the Bill.
  Mr. Legg: My hon. Friend is saying that Parliament should be involved in setting the targets and indices, but that does not accord with the Bill. Under clause 3, it is the
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  Treasury which, after consultation with the Governor of the Bank of England, will set policy targets for the Bank's carrying out of its primary objective.
  Mr. Davies: I take my hon. Friend's point, but, of course, I am not assuming that we make the Treasury independent of Parliament. The assumption behind my remarks was that Treasury Ministers would still be subject to the House and that whoever happened to be Chancellor of the Exchequer would have to have the House's support and confidence. I am personally very attached to that principle as, I am sure, is my hon. Friend. I do not think that any conflict will arise.
  If the targets were defined by the Treasury or by Parliament, there would be a problem deciding how frequently they were to be restated. The Bill is rather coy in this respect and simply states:
  "Policy targets may be set for the term of office of the Governor, or for specified periods during the term of office of the Governor, or for both".
  So the targets can be set for any length of time. As we know, there are long time lags between adjustments of monetary policy and the outcome in terms of retail, consumer or even producer prices indices. There can be time lags of one, two, three or even more years in certain circumstances, so it would be absurd if the targets were reset at too short intervals. For example, if a target were reset annually it would be reset long before anyone could know how effective the one set the previous year had been because it would be too early to judge the outcome. If a target were set for a much longer period, there would be a greater chance of spanning a general election and Parliament would then be fully entitled to reconsider it.
  That leads me directly to the issue of the parliamentary overrides. There would be a great deal of speculation in the markets about whether Parliament would override or perhaps change the target. I think that both options would be regarded as equivalent dangers. Many people will believe—cynically but perhaps correctly—that if given the chance to fiddle the targets or to introduce an override, politicians would not be able to resist the temptation so the credibility of policy would be undermined and one of the purposes of giving the Bank greater independence would be negated.
  If we want to give the Bank greater independence, we must resist the temptation to reduce that independence subsequently in practice, or we shall undoubtedly negate a large part of the purpose in which we are engaged.
  The only way to ensure that monetary policy is seen as being thoroughly and definitively emancipated from short-term political pressures is to give the Bank of England an entirely independent status. Of course, nobody can overturn the sovereignty of Parliament and, as my hon. Friend the Member for Wolverhampton, South-West is proposing to alter the Bank of England Act 1946, so future Parliaments will be able to alter the Act that may emerge from his Bill. No one would wish to deny future Parliaments that possibility, but that would be an explicit strategic decision, which would be difficult for a political party to take, unless it had promised to do so in its manifesto and it would require a Bill to go through all its stages. It could not be a mere order, which, as the hon. Member for Hackney, North and Stoke Newington said, could be easily slipped through the House without a full appreciation of its risks, dangers and costs.
  There are two points that need to be dealt with in that context. One issue was raised by my hon. Friend the

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  Member for East Lindsey while talking about the need to co-ordinate fiscal and monetary policy. I am sorry that he is not in the Chamber now, but I enjoyed his speech and his anecdotes about conversations with some of the great figures of the past were fascinating. However, his economic theory had a nostalgic flavour. He was honest enough to say that he considered that the distillation of economic wisdom was the 1944 White Paper on unemployment. He was clearly attached to the formalisation of much of that thinking, which was achieved by Phillips in the 1950s with the famous Phillips curve. My hon. Friend clearly believed that there was a long-term trade-off between monetary rigour and price stability on one side, and employment on the other.
  That view is not generally shared today either in financial markets or in academic circles. If one takes the view that my hon. Friend does, that Government should be pursuing different objectives, low inflation, employment, balance of payments and so forth, one is pursuing potentially contradictory policies. Perhaps it is not an accident that Governments who have tried to target different variables believing them to be contradictory have ended up by achieving none of them. That has been the sad story of British Governments since the 1940s—
  Mr. Deputy Speaker (Mr. Michael Morris): Order. I am having difficulty in relating the hon. Gentleman's speech to the specifics of the Bill. Will the hon. Gentleman analyse the Bill and not analyse somebody else's speech on a policy which is outside the Bill?
  Mr. Davies: I clearly fell into the trap of supposing that because another hon. Member had raised an issue, that issue was considered relevant to the debate.
  The separation of fiscal and monetary policy is clearly an issue raised by the Bill and the kind of objection that my hon. Friend the Member for East Lindsey made was easy to anticipate in the debate. I shall pursue another issue raised by my hon. Friend. If the Bank of England is given the monetary independence sought by my hon. Friend the Member for Wolverhampton, South-West, should it lose any of its existing responsibilities?
  The Bank's two main responsibilities are its supervisory responsibility and its responsibility for the management of the public debt. I do not believe—and the Select Committee made it clear in its report that it did not believe —that the Bank should lose its supervisory responsibility. There is a theoretical conflict between the Bank's supervisory responsibility—the responsibility to maintain the integrity of the banking system—and its responsibility for monetary policy. If there were a systemic crisis and a threat to the liquidity of banks, the Bank might be forced to increase the money supply and relax monetary policy which, on general economic grounds, it might not wish to do. I do not think that that conflict can be avoided. It seems to me that one and the same institution should know where the danger signals lie—and be able to pick them up as quickly as possible if the banks are running into trouble —and should be responsible for taking the monetary measures required to deal with that problem if the need arises.
  The same does not apply to the Bank's role of handling the Government's debt—or their cash, if they ever have any. There is a much more fundamental contradiction in
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  respect of that role. I cannot conceive of such a case arising in the foreseeable future, but a Government who were heavily overborrowed and had some difficulty in funding their debt might put considerable pressure on the institution acting as its agent in the financial markets—which would have a fiduciary responsibility to get the Government debt away on the best possible terms—to reduce interest rates. The Bank might feel pressurised to do that to help its particular, rather important client, the Government. In those circumstances, there would be a fundamental conflict of interest, which would be extremely disturbing. If the Bank were given independent responsibility for monetary policy, the Treasury should therefore have to make its own arrangements—internal or by sub-contracting or otherwise—for the management of the public debt in future.
  1.12 pm
  Mr. Alistair Darling: I will not follow the hon. Member for Stamford and Spalding (Mr. Davies). He made his case at some length and it is not necessary for me to dwell on it, except to say that I do not share his view that the Bill is purely a technical measure. We are addressing complex issues and it is not simply a matter of making a technical decision that one aspect of what is currently the responsibility of the Government should be given over to a reformed Bank of England.
  Mr. Quentin Davies: Will the hon. Gentleman give way?
  Mr. Darling: With respect, no. The hon. Gentleman spoke for quite long enough.
  Reform of the Bank of England is necessary whether or not we proceed to the third stage of monetary union. The Opposition have a number of proposals to make, and some criticisms of the Bill. In my view, the Bill does not address five crucial points. The first concerns the governance of the Bank of England itself. We believe that the existing court needs to be replaced by a new monetary policy board that would both reflect the interests of the financial world and manufacturing industry and ensure that there was proper representation from the different nations and regions of the United Kingdom. If—and it is a big "if'—we grant greater autonomy to the Bank of England, its decision-making process must adequately reflect the competing and different pressures in the economy and a wider range of interests must be represented on the governing body than at present. That change is necessary now, whether or not the Bill makes any further progress. The Bill has nothing to say about that and, for that reason alone, it ought to fail.
  Secondly, there is the important question of what is meant by independence. An examination of central banks throughout the world reveals that there is no clear pattern—indeed, the word "independence" is overused. Some banks that are considered to be independent are more so in practice than in law, and much depends on their reputation and track record. The German Bundesbank is independent by statute, but has shown itself to be open to persuasion by politicians; yet its reputation remains largely intact. As the hon. Member for Wolverhampton, South-West (Mr. Budgen), the promoter of the Bill, said, the 1:1 conversion rate on the unification of Germany was determined by political factors and opposed by the Bundesbank in principle, although the bank acquiesced in the event. In that case, it could be argued that, because the

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  question was essentially to do with exchange rates—for which Ministers are responsible in Germany—rather than with monetary policy—for which the Bundesbank is responsible—that is not a criticism which can be levelled against the fact that the Bundesbank is an independent central bank.
  However, that episode illustrates the inherent tension between exchange rate policy and a policy on inflation. On the other hand, the United States Fed is less independent in legal terms, but it has a high degree of credibility—at least at the moment. Its governing body is appointed by the President, who is a political creature.
  Many central banks are said to be independent, but have Ministers sitting on their boards. Canada and Spain are examples of that. They cannot really be said to be independent if the people who can ultimately take away their power are on the board providing the appropriate nod or wink. There is provision in many cases for the Government to override a central bank. New Zealand is a prime example of that and that is the model which the Bill largely seeks to follow.
  It is arguable that if there is an override, there cannot be independence. However, I accept that it is the perception of what is likely to happen that is important, rather than what could happen in theory. Put simply, the argument for an independent central bank is that the public trust bankers more than they trust politicians. It is a question of credibility.
  It is said that politicians tend to manipulate interest rates to win elections. The right hon. Member for Kingston upon Thames (Mr. Lamont), who was in the Chamber for a short while this morning, was good enough to admit in his resignation speech that this Government did manipulate interest rates for political purposes. Despite the protestations of the present Chancellor, I do not believe that the Government will be able to resist the temptation to use whatever mechanisms they can to try to manipulate victory at the next general election, given the linkage between our interest rates, short-term rates and mortgage rates.
  It is argued that bankers, who, it is said, take a long-term view, would be more likely to conduct their interest rate policies to secure price stability. Proponents of that style of independence argue that bankers do not have political views. That seems to be a matter of academic theory rather than practical experience. However, it illustrates the point that if the Bank is to have greater autonomy—and in any event—the membership of the court or monetary policy board must have a far wider membership base than at present. It is not so much the constituencies from which the members come that matters, but their calibre. It is important to have a far greater range of experience than is presently the case.
  Independence is an inappropriate term. We should be talking about the appropriate mechanism employed by the Government to operate their monetary policies. Changing institutions does not change the economic culture of a country. The fear of high inflation in Germany, born of the German experience of the 1920s, is the reason why the Bundesbank is probably still trusted more than German politicians. There is no guarantee that an independent central bank in Britain would remove an inflationary tendency. The performance of Mr. Viktor Gerashchenko is a startling example of that.
  Reference has been made to the Bank's quarterly report which is a very welcome institution. We will watch with
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  interest to see what it says in future. In an intervention on the hon. Member for Wolverhampton, South-West, I said that it would be interesting to see what happens if the Government do not reach their inflation target of 2.5 per cent. by the end of this Parliament. Some have unkindly said that the inflation rate will be closer to 3 per cent. and perhaps higher.
  Will the Bank fire a warning shot? We and others will watch with interest to see whether it does. The test of credibility will be whether the Governor is prepared to say bluntly that he thinks there is a problem and does not resort to the form of words so familiar in this country in order to avoid a conflict, or apparent conflict, between the Governor and the Chancellor at what might be a sensitive time.
  Interest rates are not the only thing that influence inflationary pressure. The Bill, with its notion of a contract —at least that is what I assume clause 3 means—recognises that other factors apply. Nearly every central bank in the world can be influenced by its Government, either through the appropriate representation on the board or through specific overriding provisions.
  I assume that article 107 of the Maastricht treaty was drawn up with that point in mind. It is explicit and states that banks cannot "seek or take instructions" from the Community or national Governments. There are many ways around "seek or take instructions" which would achieve the purpose that many Governments now wish to achieve. They can influence their banks indirectly rather than directly.
  Section 4 of the Bank of England Act 1946 is overt. It is quite clear. If we remove it, that would not exclude the appropriate nod or wink in the right club or golf course. The Bill proposes the substitution of a contract, which is another way round the problem.
  The Centre for Economic Policy Research report, which has been referred to, chaired by Lord Roll, recognised the problem, which is why it proposed a limited power of override and a very narrow remit. The New Zealand model, in the terms of the Bill, envisages a contract which can be varied. Over the next few years, it will be interesting to see the experience of the New Zealand Government.
  I am not condemning that solution out of hand. I am simply saying that the Bank cannot be independent and not independent at the same time. As I have said, independence is the wrong concept. Putting the Bank on a proper footing might be a more appropriate manner of dealing with the problem.
  There is another important point, and that is the override. The override provisions are rather like having a nuclear bomb—one can use it in theory, but in practice one knows that one never can. Once it became known, and it would become known very quickly, that the Governor proposed to override the Bank, the consequences on the currency would be catastrophic, which might be helpful in negotiations between the Governor and the principal Finance Minister, but only as long as the Governor thought that the ultimate deterrent would be used.
  In theory, we have that situation now. If it were thought that the Governor would resign, the Government would be in substantial difficulties, as would our currency. There is no accountability in that way unless we can use it and we are prepared to use the mechanisms provided for.
  There is no doubt that there is a stateable case for a reformed central bank in the United Kingdom. There is something in the credibility argument, whether we like it or not. It is a counter-inflationary force locked into the

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  system, although it has to be said that there is no evidence that a central bank's independence is a necessary condition for achieving low inflation rates. However, from examination, it is clear that there appears to be a premium, although we do not know exactly how much it is. Of course, there is the argument about causation, having regard to the political and economic culture that prevails in countries with independent central banks.
  The third criticism of the Bill arises from accountability, which is crucial. The hon. Member for Worcestershire, South (Mr. Spicer) mentioned the growth of quangos in the United Kingdom. Perhaps today, only 24 hours after publication of the report of the Public Accounts Committee, which provided such a resounding condemnation of what is happening in quangos that the Government have set up, we should not skip over that matter.
  Indeed, the Chief Secretary to the Treasury and the Financial Secretary, who appear to have given up their economic policy and are now given to discussing matters of moral philosophy, might reflect on the fact that quangos, which are now responsible for much Government administration, are not accountable to the House. If one cannot sack someone, he or she is not accountable, to put it crudely. We cannot be satisfied with handing power to the Bank of England in any form unless we address accountability. I do not think that accountability would be met by the sight of the Governor of the Bank of England being doorstepped by the tabloid press every time he put up interest rates. He might be accountable to the press, but he certainly would not be accountable to the House.
  Let us acknowledge that the Bank of England is not accountable to Parliament now in practice, although it clearly is in law, at least in constitutional theory. As the right hon. Member for Berwick-upon-Tweed (Mr. Beith) said, many successful independent central banks throughout the world are part of a general constitutional settlement which we do not have. The United States Fed is part of the United States constitutional structure, and the Bundesbank in Germany is in a similar position. Both countries have written constitutions which we do not have. Nomination to the central bank council for the Bundesbank rests ultimately with the Bundesrat, which represents the German Lander, which is part of the in-built checks and balances on the federal Government. We have nothing like that in this country.
  In theory, the Chancellor answers to this House, usually after the event. In practice, Ministers will do everything that they can not to answer a question. It was interesting to hear the Chief Secretary this morning trying to sidle out of the commitment that he and his party gave on tax cuts. He is now almost suggesting that they said nothing of the sort. There is a tendency for Ministers to say that, no matter what the policy is, it was nothing to do with them and they knew nothing about it—it is somebody else. The Bill would provide a convenient scapegoat if the need arose.
  Of course, the Treasury Select Committee can embark on some cross-examination, but it has a roving role—it is not just to supervise the Bank of England. That point was made by my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott). How many times have Select Committee reports been debated in the House? If
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  any autonomy is to be given to the Bank in this matter, it is absolutely essential to have greater accountability. The Bill has nothing to say about that matter, as far as I can see.
  Fourthly, what about the Bank's terms of reference, which are absolutely crucial? Again, there appear to be two models. The Bill proposes a narrow objective of maintaining stability in the general level of prices, although there is clause 5 to which I shall return.
  Other central banks are also instructed with regard to the aims and objectives of the general economic policy of their country. The Bundesbank is charged with supporting the general economic policy of the federal Government. The terms of reference of the United States Federal bank contain an injunction to promote effectively the goal of maximum employment. The New Zealand model—that is a solution designed for New Zealand and, as hon. Members have said, we should be wary of importing other countries' models and hoping that they will work here—has the concept of a contract. That is an odd concept, although I would not dismiss it out of hand.
  The terms of reference are crucial because they raise the question of economic philosophy. That was touched on by Sir Brian Hopkin and Sir Douglas Wass, who pointed out that monetary policy was only one of many instruments that have a bearing on inflation. Government borrowing, taxation, competition policy and pay all have their part, as they said in an article in the Financial Times on 22 January. I think that the hon. Member for Lindsey, East (Sir P. Tapsell) might have been quoting from that article in his speech. The article continued:
  "if meeting inflation is so important and the politicians cannot be trusted to give it the priority it deserves, logically we should take out of their hands not only monetary policy but a range of other policies as well."
  Clause 5 seems to hint that a broader consideration would be possible. It is not clear exactly what is in mind, but, in any event, as has been conceded, it is an exceptional step. Indeed, it is doubtful whether it could ever be used because its consequences could intervene before it could be used. If politicians, as it is said, are tempted to manipulate interest rates to win elections, why should not the same politicians manipulate fiscal policy? That could be done at the same time as they are telling downright untruths about what they intend to do. We have some recent experience of that in this country.
  It is difficult to see how the Government and the Bank could pursue objectives which could be quite different from time to time, such as the competing demands of the price of money and perhaps the need to keep the exchange rate down. There is an inherent conflict there which needs to be addressed.
  Finally, there is the question of regulation, which cannot be ignored. The Bill does not deal with that, and it should do. We believe that the time has come to give responsibility for the supervision and regulation of the banking system to a separate body.
  I do not accept the conclusions reached by the hon. Member for Stamford and Spalding or by the Select Committee. While the steps taken by the Bank of England which are contained in the memorandum submitted in the appendix to the Treasury reports are welcome, I do not believe that they go far enough. I also do not believe that a review of the Bank of England's functions and constitutions can be conducted in isolation from its regulatory functions. The collapse of confidence in the

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  regulatory system in the financial services industry means that a review is long overdue, although the Government have not got around to accepting that yet.
  The increasingly blurred distinction between banks and building societies which want to become banks; insurance companies and banks that want to become insurance companies; and other people operating in the field mean that the time has come to embark on a thorough review of the whole regulatory system.
  Mr. John Watts: The hon. Gentleman will know that the Treasury Select Committee is about to embark on a wide-ranging inquiry into financial services regulation. That will encompass all the matters to which the hon. Gentleman has referred, and, once again, will address the question whether the supervision of the banking system should remain a Bank of England function. In the report that is before the House today, the Committee made it clear that it would be reverting to that question in the context of wider financial services regulation.
  Mr. Darling: I am grateful to the Chairman of the Select Committee for his brief commercial. I am well aware of the review on which his Committee is about to embark and, as the hon. Gentleman will know as he attends most of these debates, that is a theme that we have been pressing for the past 18 months.
  It is most unfortunate that, while the Opposition would like an examination conducted and while the Committee has agreed to do that, so far the Government have not shown much interest in the matter. Perhaps the Chancellor has not got round to reading some of the difficulties which are now arising. There are concerns that are shared by hon. Members of all parties, as a recent debate on insider dealing showed. It is a matter, not just for the Select Committee, but for the Government. There are undoubtedly substantial problems in the regulatory system which the Government need to address.
  We are continuing our examination of the constitution of the Bank. For that reason and in the light of the criticisms that I have made, we shall not support the Bill. Hon. Members who have spoken in the debate so far have referred to the cause of an independent central bank as fashionable. I do not know whether it is fashionable or not, but I am certain that we should not rush into something until we have considered all the consequences and taken the opportunity to examine the problems that exist with the Bank of England now, let alone any that may arise in the future.
  1.29 pm
  The Financial Secretary to the Treasury (Mr. Stephen Dorrell): I begin by welcoming the statement that my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) put in clause 2 of his Bill of the primary objective of monetary policy as he would see it in the context of the reformed Bank of England that he wishes to create. That is a fundamental about which there is much greater agreement in the House than previously and certainly fundamental agreement between my hon. Friend and the Government.
  It must surely be the lesson of our history as well as the lesson that should be drawn from the experience of other countries, that there is no trade-off between growth and price stability. Price stability is what creates the circumstances for maximising economic growth. It is the
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  most benign environment that one can create in terms of monetary policy for the creation of wealth. So I whole-heartedly welcome the commitment in my hon. Friend's Bill to that primary objective.
  The primary objectives of monetary policy are much less a matter of argument now within the House and outside than previously. It would be surprising if they were still the subject of argument in the way that they were. We must surely be assumed to have a responsibility to learn the lessons of our experience.
  In the past 20 years, three times we have seen inflation rise to levels at which the Government had to take action to bring it down. We have seen three times in that 20-year period the damage that is done to the wealth-creation process and the social fabric by the process of bringing inflation under control. So to those people who say that the Government should pay more attention to social and economic damage caused by recession, I say amen, but please understand why recessions happen and the most important proximate cause of our most recent experience of recession—the failure of Governments to deliver price stability and good monetary discipline.
  Ms Abbott: On that point, I draw the attention of the Minister to a recent academic study in the Cambridge Journal of Economics by Stanners which ended with the conclusion:
  "No evidence has been found to support the notion that a low rate of inflation has in the past and in various countries been associated with improved growth rate".
  Mr. Dorrell: I cite two bits of evidence to the hon. Lady. The first is the evidence of experience. The experience of low-inflation countries has been better growth than that of their low-inflation comparators. The second is the evidence of analysis. It is not difficult to understand why it is easier to run a business wealth creation process against a background of monetary certainty that allows long-term planning and allows time for investments to repay the investors. It is easier to do that against a background of price stability than against a background of the short-term planning horizons that are imposed by the stop-go economic cycle.
  I simply do not accept the hon. Lady's proposition. The evidence of both experience and analysis supports the assertion that price stability is the best circumstance that monetary policy can create for the generation of wealth. Of course it is true, as my hon. Friend the Member for East Lindsey (Sir P. Tapsell) said, that price stability is necessary but not sufficient. Other aspects of economic policy are important to the process of wealth creation. They are not immediately relevant to my hon. Friend's Bill. As I do not intend to speak for very long, I do not propose to talk about them.
  For the purposes of the debate, it is common ground at least among everyone other than the hon. Member for Hackney, North and Stoke Newington (Ms Abbott), that price stability is a shared objective. The question is how best to deliver the objective of price stability in our society.
  In introducing the Bill, my hon. Friend the Member for Wolverhampton, South-West was at pains to argue that it represented a modest incremental development of existing institutions. He stressed that it was not an attempt to introduce a new and foreign idea—a fancy foreign scheme for managing monetary policy—but an inch-by-inch development of an existing institution. I want to come back to that point, because I do not believe that the Bill is

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  accurately characterised in those terms. Before I do, let us be clear that, however modest or immodest the development envisaged in the Bill, it is clearly in an identifiable direction: of something called independence. It has been qualified that it is towards a more independent monetary policy institution and a more independent central bank.
  As many hon. Members have said, these are familiar and perhaps even fashionable arguments. They have been deployed and, indeed, accepted by Governments in New Zealand relatively recently, and the new Government of France. They have been advanced in the House, most notably in recent years by former Chancellors of the Exchequer, who have sought to learn from their experience about how monetary policy could be better managed. The hon. Member for Edinburgh, Central (Mr. Darling)—I think that I quote him correctly—said that he thought that there was something in the direction of institutional development on monetary policy towards greater independence. The arguments can broadly be summarised: it frees the conduct of monetary policy from day-to-day political interference. As the hon. Member for Edinburgh, Central put it, price stability is better delivered by bankers than by politicians. The depoliticisation of monetary policy is one of the strands of the argument that is put in favour of a more independent central bank; the other is the argument of experience—that if one looks at the experience of other countries, one concludes that a more independent institution tends to be more successful at delivering the objective of price stability.
  As I have said, those are familiar arguments. I think, however, that even if the Bill is only a modest development in that direction, it is important for us to consider briefly the strength of the argument in favour of going down that road. It is, of course, as one or two of my hon. friends have pointed out, not open to Government to argue that it is inconceivable for us to proceed down the road towards greater independence. As my hon. Friend the Member for Wolverhampton, South-West said, the Maastricht treaty allowed the possibility that we might see more independent conduct of monetary policy.
  I do not propose to get involved in arguments about the Maastricht treaty, but when I arrived in the House this morning and saw my hon. Friends taking their places, I did have a great sense of déjà vu. There is no hour of the day in which I have not been in the company of my hon. Friends, who sat in similar places in the Chamber, engaged in the debate about the treaty. I do not propose to go back over that ground this afternoon. I simply want to observe that it is clearly not open to the Government to say that it is inconceivable that we should have a more independent institution conducting monetary policy. Furthermore, that is true, in the context not only of the Maastricht debate, but of the changes that the Government have made in the conduct of monetary policy since 16 September 1992.
  The publication of a report on inflation prospects by the Bank of England—it is entirely the responsibility of the Bank of England, and is not something agreed with the Treasury—is a small step in the direction of greater independence for the Bank of England on monetary policy. The decision announced in the autumn of last year by my right hon. and learned Friend the current Chancellor of the Exchequer—that, henceforth, the Bank of England would
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  be responsible for the timing of interest rate changes—is a further step in the direction of greater independence for the Bank of England. The position currently is clear. I think that that answers the point made by the right hon. Member for Berwick-upon-Tweed (Mr. Beith), that one must be clear about who is responsible if the accountability mechanism is to work. Where that responsibility currently lies is clear, because the Chancellor is responsible for fixing the level of interest rates and the Bank of England is responsible for managing the announcement of any change in those rates.
  Mr. Beith: The hon. Gentleman's explanation might be misunderstood, because one might assume that the Bank acts as a press officer for the Chancellor. Surely the hon. Gentleman would like to add that the Bank is expected to give advice to the Chancellor about whether interest rates should go up or down and by how much.
  Mr. Dorrell: I accept that the Bank gives advice to my right hon. and learned Friend on that subject, but it is not the only source of advice on monetary policy.
  When the right hon. Member for Berwick-upon-Tweed reads his speech in Hansard, he might pause for a second, because I do not believe that the doctrine that he included in it lies at the root of parliamentary democracy. He suggested that responsibility should lie with the party that gives advice. That is a very strange constitutional doctrine and it is not one which I would espouse. According to his argument, responsibility should always lie with civil servants, because we receive advice on monetary policy from those working at the Treasury, as well as advice from the Bank. I stand firmly by the description of responsibility which I gave—the Chancellor fixes the level of the interest rates and the Bank is responsible for the management of the changes to them.
  Mr. Jenkin: Does my hon. Friend agree that if the Bank of England gave primacy to domestic monetary targets in its policy-setting agenda and the Government chose to give primacy to other targets, such as the exchange rate, that would lead to real conflict between the Treasury and the Bank of England?
  Mr. Dorrell: It is undeniably true that if one institution looks at one set of indicators to govern monetary policy and another institution looks at another set, it is possible that they will come to different conclusions. The important point is that monetary policy in Britain today is conducted on the basis that the Government are responsible for setting out clearly the parameters of monetary policy. That is the responsibility of my right hon. and learned Friend the Chancellor, because he is responsible for fixing the rate of interest and the Bank is responsible for managing changes in that rate.
  It is not part of my argument that it is inconceivable to move in the direction of greater independence, but, since we are considering a Bill which pushes us a long way down that path, we should also remember that arguments exist that should apply pressure to the brake on that process as well as to the accelerator.
  I entirely agree with my hon. Friend the Member for East Lindsey and others who have emphasised that it would be dangerous for us to allow ourselves to believe that any institution responsible for managing monetary

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  policy, or any set of institutional arrangements, are panaceas, which by themselves guarantee the delivery of price stability.
  Few difficult political problems lend themselves to an institutional solution alone. As my hon. Friend the Member for Stamford and Spalding (Mr. Davies) pointed out, the Japanese experience of price stability has been extremely good, despite the fact that its central bank is clearly subservient to the Ministry of Finance. I seldom agree with the hon. Member for Brent, East (Mr. Livingstone) about anything to do with economic policy, but he was right to say that one of the problems for Russia is the independence of its central bank. It is clear that institutional change is seldom a panacea.
  When my hon. Friend considers his Bill, which would create new institutions to manage the day-to-day aspects of Government business, he must accept that it is important to ensure that those institutions are accepted not just in different parts of the House, but by the country, as legitimate in terms of the exercise of the power that they would be given. Institutional legitimacy, surely, is an important criterion in the testing of any such changes. [HON. MEMBERS: "Hear, hear."] Before my hon. Friends become too excited, let me draw an important distinction between the doctrine that institutions must earn legitimacy —which I whole-heartedly espouse—and the doctrine advanced in similar circumstances roughly 12 months ago, which states that independent central banks are in a sense inconsistent with democracy. I do not accept that argument.
  It would be absurd to argue that Switzerland, Germany and the United States are not democracies; clearly they are. The difference between our arrangements and theirs is this: they have a separate set of arrangements for the conduct of monetary policy that have become legitimate—to which their populations have become accustomed, and which are accepted in their societies. It is not a question of which set of arrangements is more democratic; it is a question of which set of arrangements is accepted, having earned legitimacy following a period of experience.
  Mr. Darling: The Financial Secretary appears to be doing the relatively easy job that I did earlier—that is, criticising the Bill. What is his feeling on the principle? Do the Government support moves towards an independent central bank? I detect a distinct lack of enthusiasm on the Financial Secretary's part, and I assume that he is speaking for the Government rather than for himself.
  Mr. Dorrell: I certainly seek to speak for the Government. The Government's view on the principle was set out by my right hon. and learned Friend the Chancellor when he described himself as an agnostic on the subject; but neither of us is an agnostic when it comes to the proposition that any change must be justified. It must be shown that the change that is recommended would lead to an improvement in the performance of the institution, and to acceptance of that institution in the House and outside.
  Mr. Forman: May I clarify that important point of policy? The implication is that the Government could be persuaded of the wisdom of establishing a more autonomous central bank on a new statutory basis.
  Mr. Dorrell: I do not think that we envisage that happening in the foreseeable future. When I was asked about the principle, I said that I thought we were agnostic.
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  Surely, rather than becoming involved in a long argument about what new arrangements may be established, we should ask ourselves what, if anything, is wrong with the existing institutions, and how they can be improved. That strikes me as a more informative and interesting way of dealing with institutional change. It is better than starting with a blank sheet of paper, and asking how we would manage monetary policy if we were setting up a new polity.
  Mr. Budgen: May I remind my hon. Friend that the Chancellor did not talk about democracy when he last spoke about the matter, on 16 December? He said then:
  "I have an open mind on the subject, although people try to guess my opinion. I have a feeling that the Select Committee's proposal is becoming rather a fashionable cause. We should consider it with care, also taking into account such matters as parliamentary accountability for an increasingly more autonomous Bank of England."—[Official Report, 16 December 1993; Vol. 234, c. 1257.]
  There was no talk of democracy, whatever that may mean in a constitution with a sovereign Parliament; the Chancellor is worried about accountability. How could a central bank in Europe be accountable to this place?
  Mr. Dorrell: As my hon. Friend well knows, my right hon. and learned Friend the Chancellor was referring to possible developments in response to the Select Committee report in a domestic monetary context. He was not talking about any move in the European context. As I have said, we have debated that subject many times, and I do not wish to return to it today; it is not germane to my hon. Friend's Bill.
  Before we proceed to change arrangements on the conduct of monetary policy, we have to ask the difficult question: would the institution be accepted as legitimate in the House and outside when it made unpopular decisions, which those responsible for monetary policy occasionally have to make? Monetary policy, as we have all agreed, is a vital part of economic policy. I said that I accepted the importance of price stability as a vital precondition to economic success. If we are to deliver price stability, the institution in charge of monetary policy has to be able to take unpopular decisions and to have them accepted in the House and outside.
  To put it in plain English, how would people outside the House regard what they perceived to be as an independent central bank putting up interest rates? In particular, how would they regard it if, when the issue was challenged in this place, the answer given was, "That's not a matter for me, but for Eddie"? That would not be accepted as a legitimate answer to that question, either in the House or outside. On that basis, it is important to remember the restriction on the pace at which we should allow ourselves to proceed in developing independent monetary policy institutions. It should remind us of the importance of going slowly—it is on that subject that I want to return to the Bill.
  The question that the House should ask itself is whether my hon. Friend is right to characterise his Bill as a modest move in the direction of central bank independence. I think that he is understating the substantial change that would be introduced by his Bill. His argument that the Bill involves only a modest change is based on the argument, set out in his article in The Times yesterday that under his proposal
  "the Chancellor remains the minister responsible for monetary policy."
  That would be true only if the House were to accept a regime where the Chancellor sets objectives under the

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  terms of clause 3, which involves policy targets. A regime that requires the Chancellor to set those policy targets allows him to answer the full range of monetary policy questions that might be posed either here or outside. It implies that the only political interest in monetary policy is in the objectives of monetary policy, rather than in the day-to-day judgments that are inherent in converting those objectives into actual interest rates and monetary policy decisions. My hon. Friend's argument is that the Government define inflation targets and the Bank interprets those monetary policy targets into a given level of interest rates.
  According to the doctrine of the right hon. Member for Berwick-upon-Tweed, the Government are responsible for those targets. The Bank, in my hon. Friend's model, is responsible for the judgments in interpreting those targets into interest rates and is an independent entity which is not responsible to the House for those judgments. I do not accept the assumption that underlies the Bill, which is that there is no political interest or, indeed, scope for political argument about the judgments necessary to interpret an inflation target into interest rates. That is not the correct interpretation. There is plenty of scope for different people, believing that they share the same commitment to the same inflation objective, to come to different judgments about how that inflation objective should be converted into, primarily, interest rates and other monetary policy instruments given a particular set of circumstances. The importance of that question was underestimated by my hon. Friend when he presented his Bill.
  My hon. Friend says, "Oh well, do not worry about it because clause 5 allows the Government, if they do not like what the bank is doing, to move the goalposts." With respect to my hon. Friend, it is not as simple as that. Even if the Government move the goalposts under the terms of clause 5, the Bill still fixes them in terms of inflation objectives rather than specific interest rates. Even after the Government had secured the consent of the House, clause 5 would allow the goalposts to be moved. Clause 5 allows scope for different judgments about how the inflation objective is converted into interest rates.
  My hon. Friend the Member for East Lindsey is right to stress that a statutory instrument calling for monetary policy to be changed contrary to the public advice of the Governor of the Bank of England, would lead to all kinds of financial stresses in the market. As more than one hon. Member has said, it would be a nuclear deterrent.
  The Government do not support the Bill in its present form, because its key provisions would not solve the problems that are inherent in trying to answer the questions that my hon. Friend has set himself. The Bill is a bigger step towards an independent central bank than he has suggested, but it is not part of our case that we have clearly decided that greater independence for the Bank is either impossible or undesirable.
  I have agreed with several of the views expressed by my hon. Friend the Member for East Lindsey, but I do not agree with his view that it is necessary for fiscal and monetary policy to be the responsibility of the same institution. It is technically possible to resolve the problems, but whether we want to do so is a different question; and if we do, how fast do we want to make the necessary changes?
  Mr. Duncan Smith: My hon. Friend says that the Government do not necessarily rule out greater independence, but have not the Government ruled it in? Their recent changes mean that they have already started on the route towards greater autonomy. Surely the question is how far the Government are prepared to go.
  Mr. Dorrell: I said that this is a process on which the Government have already gently embarked, but that the way in which we intend to proceed is by starting with what we have and asking how it can be improved, not by starting with a clean sheet of paper and asking how it might be done in a perfect world. We always bear in mind the important constraint that whatever emerges from the process must be accepted as legitimate here and outside. In plain English, when interest rates go up, the arrangements must be such that people do not say that the Government are trying to get out from under or that the institutions are in some sense illegitimate.
  My hon. Friend is to be congratulated on what he has described as a probing Bill. It deals with an interesting subject and has presented the House with a valuable opportunity to debate the issues. However, I cannot commend the Bill in its present form.
  1.57 pm
  Mr. Ken Livingstone: If the Bill were to become law it would be one of the most pernicious attacks on the people of this country in many decades. That is because the Bill recommits the Tory party, which clearly sees the next election hoving into view, to fundamentalist Thatcherism and monetarism. The legislation would inevitably mean permanent, institutionalised higher unemployment throughout the length and breadth of this country. That is because it would reassert the primacy of price stability over every other social and economic objective.
  The disaster of the past 15 years of politicians assuming that a couple of lines of economic theory could be turned into a religious creed to which everthing else was subordinated, shows that some Conservative Members have learnt nothing from the lost opportunity of the past decade and a half. Therefore, I am surprised that the Government Whips have instructed their Back Benchers to ensure that the Bill is talked out.
  The reality is clearly spelt out in the Bill's introduction, which in a sense tries to capture the flavour of what is behind the measure and its attempt to win support in the city. The Bill's objectives are,
  "to remove the general power of the Treasury to give directions to the Governor of the Bank; to establish price stability as the primary objective of the Bank and to provide for policy targets for the carrying out of this objective;".
  All the City interests, whose interests have dominated the past 15 years of Conservative Government, would be delighted for that to be enshrined in law, but what would it mean in practice?
  We are asked to trust the bankers. I have nothing against bankers as a group. I am certain that they would make good neighbours if they lived next door. They probably would not play their reggae music in the middle of the night or kick one's cat, but what is distinguishing about bankers that makes their judgment any better than that of any other group in society? Is it simply the failure of successive Governments to regenerate the British economy and move us into the realms of the average modern European economy, with the levels of social and economic provision

  583
  that others are able to afford, and the failure of British Governments to achieve that during the past 40 years, that leads some people to cast about desperately for some new institution or group—in this case bankers—who can be given power so that they will be able to create what successive British Governments have failed to create?
  It would be much better to analyse why British economic policy has failed during the past 40 years—of course, I do not include the post-war Attlee Government in that record of failure—rather than to thrash around, not considering policy but seeking some new institution that can do it all for us.
  I do not think that bankers are impartial. All the history, in this country and other countries, suggests that bankers, as a group, are characterised overwhelmingly by a cautious and narrow approach to their sector of responsibility. Occasionally, there is a slightly more radical or progressive banker, but overwhelmingly it is a cautious little group and, frankly, they do not balance the competing interests of society, and that is not their job.
  The job of bankers is primarily to try to maximise the return on the money that has been entrusted to them. Increasingly in Britain that has been perceived as a short-term role. They have not taken on board any national responsibility and our law enshrines that they cannot do that. They simply have to think in terms of the quickest possible return for the investors to whom they are responsible and accountable.
  Let us consider the idea that is creeping forward of the independent central bank. I was amazed to hear the Financial Secretary speak about the Government's open mind. A treaty has just passed through the House which commits us to making the Bank independent. They have signed the thing. Now I am not surprised that people are backing off, in the tatters of the Maastricht treaty, but night after night we witnessed the Government Whips dragooning Conservative Members through the Lobbies to win support for a treaty which, by law, forced the British Government to denationalise the Bank of England. It is rubbish for the Government to say, "We are giving the matter some thought" or, "We are open-minded" or, "a bit agnostic" when they have spent virtually the whole of this Parliament so far trying to carry into law a treaty that forced them to create an independent central bank.
  No doubt the prime force is that Members of the House consider other nations that have had more successful economic policies and say, "There is an independent central bank element to their success. If we could have an independent central bank we could be the same."
  My hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) pointed out the success of Japan. Japan consistently ran very high inflation until it established the basis of its growth. The Japanese central bank is independent. There is a much more collective form of policy-making and task-setting in terms of Japanese political leadership.
  Increasingly, though, people have tended to point to the Bundesbank or the Federal Reserve bank in the United States. The example of the Federal Reserve in the United States should be a warning to Opposition Members. If one considers recent history, the Federal bank in the United States became truly independent during the Truman presidency. Before that, right up to Roosevelt's time, the bank did pretty much as it was told by the President. It was only when the cost of funding the Korean war became so inordinate that the American Government could no longer
  584
  obtain funding from the markets for the cost of the deficit that was built up by the Korean war, that suddenly the balance of power shifted and the Federal Reserve bank started to assert some independence, on which it has built since.
  People on the left of the political spectrum should consider recent history. When President Carter was faced with a severe and persistent recession and wished to relax the Federal Reserve's policy and reduce interest rates, the bank's board of governors refused to co-operate. Jimmy Carter went into an election that he was doomed to lose because of the economic constraints. A decade later, George Bush was equally stuck with a long and persistent recession but the Federal Reserve was happy to cut interest rates in the most manic way. It clearly did everything possible to ensure the re-election of a Republican President. I am not surprised that a group of bankers in any society is going to be broadly sympathetic to parties of the right, and the case I have just cited is the clearest demonstration of that in recent times.
  The Bill is the first step towards the creation of an independent central bank. If we were to create such a bank, how would it be governed? The Opposition parties would demand to be able to nominate a proportion of the members of the bank's governing body. That would be very different from the current situation. We read in the newspapers that Lady Thatcher had appointed Robin Leigh-Pemberton as Governor of the Bank of England and no one else had a say.
  The reality of Lady Thatcher's premiership was good, clear accountability: Robin Leigh-Pemberton was appointed because he would do what he was told. He was completely and utterly a creature of the Government or, to be precise, of the Tory party. In the run-up to the 1992 general election, he virtually gave a free party political election broadcast for the Tories, telling the people that the recession was over. I did not object when Mrs. Thatcher appointed Robin Leigh-Pemberton. She wished to appoint as Governor someone who was clearly her creature and it was her right to do so because, at the end of the day, if the Bank got the policy wrong she would lose her job. That is what political accountability is all about.
  I believe that Governments try to do far too much. Many of the things for which Governments have responsibility should be devolved to regional parliaments and local authorities. We all agree that Parliament and the Government should be responsible for foreign policy and for defence, but how can anyone deny that macroeconomic policy should be the preserve of the Government and Parliament of the day? I am all in favour of more transparency in how such decisions are taken, but, rather than have the Bank present a banal report every few months on what it is doing, it would aid accountability and transparency on questions of how interest rate policy was evolving if the Chancellor came to the House when the Bank wished to change the interest rates. Why should not the proposed new rates be announced to the House? We could then debate the issue and all hon. Members could have some influence.
  I do not know why I have driven from the Chamber the Front-Bench spokesmen of both parties. I wonder whether a coalition Government is even now being formed because of the horrifyng prospect of what I am saying. This is one of those rare times when I am in complete agreement with my party's Front-Bench spokesman, and such occasions

  585
  give me great pleasure. Like many of the best pleasures in life, it is becoming increasingly infrequent as the years roll by.
  We should be aware of what the Bill would mean for the people whom we represent. There is not the slightest doubt that it would be bad news. I was delighted to find that my reminding the House of what happened in Russia pleased the Financial Secretary. The truth is—[Interruption.] I do not know what is going on, but I am beginning to wonder whether I might be in a state of dishevelment.
  We have only to consider what is happening in Russia today to realise the problems arising from split accountability for the management of the economy. The governor of the central bank there is pursuing a policy that is completely at variance with the elected President's economic policy, and it has been disastrous.
  It is all very well for the Bill to say that the Government of the day could, in effect, issue an edict that will run for six months, but what would be the impact on the money market while that was being debated in Parliament? What would it cost the British Government in a possible drain on the pound if it were known that, while the independent Bank of England was favouring one policy, the Government of the day were having a public debate and a vote in the Chamber one or two or three days hence to impose a policy to which the Bank was opposed? It would mean a collapse in confidence.
  That is the pernicious sting in the tail of the Bill. While it gives the illusion of accountability, it transfers power. How many Governments would have the nerve to run the risk of one, two or three days of a haemorrhaging of resources from Britain, as the international money markets panicked at seeing the central bank and the Government locked into disagreement and conflict? That would be a disaster. I want to see greater accountability on the Floor of the House—that means clarifying how political accountability works.
  I had a vivid example of such accountability when I was leader of the Greater London council. As elected council members, we inherited a transport arrangement with an appointed London Transport Executive, which had responsibility for the day-to-day running of the transport system. Often we were in agreement and often we were not. When the first Labour administration after the new arrangements took office in 1973, there were horrendous rows, conflicts and sackings. It always seemed as if there was no reason for an elected council and a full-time executive of London Transport to run London transport. There was a tremendous overlap in that capacity and there was confusion and dissent. Londoners were the losers in the end because of that blurred accountability.
  I was impressed by a book that I read about 30 years ago —an autobiography by senator William Norris, who was the senator for Nebraska in the first half of the century. His theory was that it was in the interests of voters to have the clearest lines of political accountability. He campaigned and eventually won a change in the Nebraska state constitution to abolish its system of a Nebraska house of representatives and a Nebraska senate and introduced a unicameral legislature. That meant that if something was not going right, everyone could see where the political responsibility lay.
  586
  I have not the slightest interest in taking even one step towards an independent central bank, which will lead to a blurring of accountability and a blurring of where blame lies. As my hon. Friend the Member for Edinburgh, Central (Mr. Darling) has said—it may have been said by a Government Member; the parties are rather close on that issue—it would be no valid excuse to say to people "Go and see Eddie". Imagine a difficult financial position, with mounting unemployment and 100,000 or more workers marching up to Trafalgar square demanding action, and someone from the Government of the day says "Don't blame me you have to go and see the Bank of England", It is an absolute travesty.
  The House is filled with 651 people who, in the main, have drooled over the idea of becoming a Member of Parliament. In some cases, they have lusted for political power since they were little boys and girls and were photographed outside No. 10 Downing street. They devoted their lives to getting here because they wanted political power. They arrive in the House and decide to give the key decision to the bankers. Why not go off and become a banker in that case? I did not come here to say, "That is a difficult decision. Let some other poor sod take it". I am happy to take those difficult decisions. Part of the problem is that there are too many bankers on the Conservative Benches.
  I shall wind up so that another hon. Member may make a brief speech before the Division. I want to outline why the British economy has failed and why the aims of the Bill will not work. The British economy has not failed because it has suffered too much inflation. Inflation has not helped and the economy would have been a lot better if the British rate of inflation had been closer to that of Germany. The economy has not failed because British workers have earned too much money, as they have been almost the poorest paid workers in northern Europe. It has certainly not failed because successive Governments have almost got things right but lost their nerve.
  The underlying cause of our economic problems is lack of investment. When the Government came to power, they made a great song and dance about the state of the motor industry, comparing the productivity of Japanese workers in the motor industry with those of their British counterparts. But, for every £1,000-worth of equipment with which British workers in the motor industry were working, Japanese workers had £11,000-worth of equipment at their disposal—a ratio of more than 10:1.
  The reason why British Governments have failed to turn round the British economy and replicate the success of Japan or Germany is that we have under-invested in Britain. Through the 1950s, 1960s, 1970s and 1980s, British investment limped along at about 14 or 15 per cent., whereas German investment often stood at 25 per cent. and Japanese investment at 33 per cent. Nothing in the Bill will lead to an extra pound of investment in the British economy.
  Mr. Forman: Does not the hon. Gentleman realise that the climate for investment over that long period would have been much better had we had lower inflation and less volatile interest rates, and that both would have been helped by the existence of a more autonomous central bank on a new statutory basis?
  Mr. Livingstone: I ask the hon. Gentleman to examine the success stories. Japan has not had low inflation until

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  recently. It established its economic predominance, often with massive deficits and high inflation, by creating the right climate of opinion. It made itself into a nation that was going somewhere—which was growing and investing. It is largely a matter of psychology. We have created a different climate of opinion: we are a nation obsessed by what is happening in the City of London which sits and watches bankers clawing their 0·5 per cent. off the value of someone else's productive labour. The best and brightest minds come out of our universities and go into the City —into stockbroking and accountancy—rather than into industry, engineering and scientific research. We must change that climate of opinion, and no independent central bank will do it.
  If the Bill became law, the message would go out that Britain's financial interests had reinforced their predominance over industry in the British economy. That is why this is a pernicious Bill. I find it amazing that an hon. Member who has earned a lot of respect and who, with good humour, has spent much of the past 18 months trying to prevent the British people from being enslaved by a European cartel of bankers is now happy to truss up his constituents and deliver them bound hand and foot into the power of British bankers. I do not like bankers, whether they are British bankers or foreign bankers, because bankers are not interested in the sort of people I was sent here to represent.
  2.13 pm
  Lady Olga Maitland: I never imagined that I would admit to the House that I agreed with the spirit—if not with the content—of a speech made by the hon. Member for Brent, East (Mr. Livingstone). Clearly, pigs sometimes fly.
  I welcome this important debate and congratulate my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) It is appropriate that he should have introduced the Bill to give us the chance to discuss a very important issue which has been rattling around for years. The opportunity that my hon. Friend has given us to debate the issues is both timely and welcome.
  My hon. Friend described his Bill as a tiny step. I would put it in a different way. My hon. Friend the Member for East Lindsey (Sir P. Tapsell) described the Bill as a lever. Could it not also be regarded as a big step for mankind, but not always to everyone's advantage?
  I note that the Treasury Committee, of which my hon. Friend the Member for Wolverhampton, South-West is a member, admitted that it had no intention of seeking an independent Bank of England, and my hon. Friend emphasised that in his speech. I think that we would all agree that the issue goes wider than the Bill. Should we set the Old Lady free? Perhaps, but perhaps not just yet. I agree with my hon. Friend the Minister that we should examine the existing institution and consider how it could be improved.
  It is not unreasonable to liberalise the ties between the Treasury and the Bank. I believe that accountability is important and that transparency is vital. However, it is a matter of degree. We all agree that it must be a priority to keep inflation down, and for good. Perhaps the best way to look at the effect is to consider how the lives of our constituents would be affected.
  My constituents in Sutton are very concerned about the cost of living. Their lives could be shattered if things go
  588
  wrong. They do not want shocks or sudden price rises which can throw a family budget, particularly if mortgage payments are tight. Pensioners do not want to see their hard-earned savings swallowed up by a rampant rise in the cost of living. Small business men do not want to see resources gobbled up. They all want steady, sustainable growth.
  For all that, I do not believe that we should be fearful of examining new ideas which ultimately make for better and perhaps more accountable systems and which need not cause a revolution. That did not happen in 1946 when the Bank of England was nationalised. According to the Bank's official history, that aroused little interest among historians and caused precious little public debate or controversy.
  The Bank's history may already have been evolving into the brave new post-war world. Nationalisation may have occurred as a legacy of wartime controls and was given a push by the radical socialist Government, free of any parliamentary constraints. The argument then was that nationalisation was simply a move to regulate existing procedures and that, despite the change in ownership, the Bank would maintain independence in day-to-day management of banking operations.
  Even when the Bank was in private hands, the practical relationship between the Bank and the Treasury was complex, with the Treasury generally having the last word. The Bank's directors would consult the Chancellor before deciding on changes in bank rates, even though such changes were formally not undertaken until the directors held their Thursday meeting.
  The relationship between the Bank and the Treasury today is, of necessity, something of a delicate quadrille. In the 1960s, the earlier consensus was replaced by a suspicion of the Bank by a Labour Government who disliked criticism of their tax policies and spending plans.
  The balance tilted the other way in the 1980s and reached its high-water point of Treasury domination of the Bank. The former Chancellor of the Exchequer, Nigel Lawson, was quoted in The Economist in 1990 as saying in 1987
  "I make the decisions and the Bank carries them out."
  A turnabout in mood, which surprised commentators, came when Lord Lawson, when giving evidence to the Treasury Select Committee in an investigation into the independent role of the Bank of England, said:
  "I became convinced in my own mind that it would be a better institutional arrangement for the battle against inflation … It was not because I was suddenly struck with the feeling that central bankers were supermen … it was simply that I felt as an institutional arrangement it would work better."
  Those who work in the Bank may be flattered to be called supermen. However, I do not sense any arrogance judging from the evidence given by the Governor, Eddie George, to the Treasury Select Committee. He did not give the impression of empire building. If that was in his heart, he did not let it be known. He was quite clear when he said that there has to be
  "an accountability mechanism. And it has to be effective."
  He added that the Bank's euphemism for independence is
  "statutory accountability, precisely to try to remind ourselves all the time of the point and to try to get rid of this idea that independence, which is the popular name for the debate, is about a lot of appointed bureaucrats exercising … powers."
  He favoured a mandate from Parliament, giving price stability as the objective.

  589
  On accountability, it is interesting that the Select Committee report noted that the Prime Minister, commenting on the then Chancellor's support for an independent central bank, said:
  "The very real concern that I have always faced is one that I believe is spread widely across the House: the need for accountability to Parliament for decisions on monetary policy matters. Were a way to be found to get the benefits of an independent central bank without the loss of parliamentary accountability, my views would be very close to those of my right hon. Friend."
  Are we ready for the Old Lady to cut the apron strings? Is that necessary? Evolution means that it is common sense to operate on a more open basis. Why not allow the public, the press and Parliament to know what the Government's monetary policy is and the extent to which the Bank is given freedom to achieve the Government's stated objectives? It is welcome news that Mr. Pennant-Rea, the deputy Governor, a former journalist and editor of The Economist, will take personal control of the Bank's relationship with the public, Parliament and the press.
  Would a lurch to total independence turn into a perfect world? Some say that we should look overseas to Germany and Switzerland—America even—which have good or excellent inflation records. Are we so certain that autonomy means low inflation, or are there other factors? Could it be the management style? After all, the independent Bank of New Zealand brought inflation down, but, at the same time, that country went into recession. Is independence such a conclusive indicator of low inflation? Analysis of the world's leading economies shows that there is hardly any evidence that real growth rates or unemployment performance were superior in countries with more independently constituted banks. The flip side, as pointed out by Edward Balls in the Financial Times in 1991 is that
  "Countries where the fear of inflation is greatest may be those that give the most independence to a central bank thus denying governments the ability to use monetary policy to stabilise the economic cycle which may actually lead to more variable output and higher unemployment."
  Surely what count are the decision makers. Clearly, it is more desirable that the Government should take responsibility, if not the rap, if things go wrong. At least we should know how and why they have gone wrong. By the same token, we could give them a good cheer for getting things right. Ultimately, the buck stops with the Government. They decide and co-ordinate tax and
  590
  monetary policies and report to Parliament. An independent bank would make things very tough, because politicians would be held responsible for an organisation—the bank—over which they had no control in certain respects.
  I am not always in total agreement with Lord Healey, but, on this occasion, I have to support him. He gave evidence to the Treasury Select Committee. The report states:
  "the transfer of responsibility for monetary policy to the Bank is essentially a 'gimmick', supported by previous Chancellors of the Exchequer as a way of putting 'major responsibility. onto somebody else'. In this view, the successful conduct of monetary policy 'depends on individuals".
  I must support him on that matter.
  That is not to say that times have not moved on sufficiently for greater openess. It is already happening and it will develop even more. We can see that the relationship between my right hon. and learned Friend the Chancellor and the Governor of the Bank of England is running along very nicely. There is almost the mutual patting of heads—so much so that my right hon. and learned Friend announced that, in future, when decisions on interest rates had been taken, he would leave it to the Governor to decide when to move.
  But a word of warning. On 7 January last year, Anatole Kaletsky warned that we cannot always rely on independence as an aspirin for future ills. He told us to beware
  "of the search for a single 'silver bullet' to deal with all of our economic problems; the eagerness to replicate off-the-peg foreign models; the disregard of practical experience in examining the claims made for theoretical miracle cures."
  He is not alone in his remarks. Indeed, analysts in the City are not overwhelmed by the notion, and many see no merit in change.
  Mr. Neil MacKinnon, chief economist at Citibank, said in the 10 June edition of the Financial Times:
  "In the late 1980s everyone thought that ERM entry would be the answer to inflation. I think it is rather depressing that we are again looking for a holy grail. In the end it boils down to whether we have the right policies or not, and an independent central bank isn't going to change that."
  That view was echoed in the same article by Mr. Kevin Gardiner, the United Kingdom economist at S. G. Warburgs who said: "I am not sure that an institutional change—
  Mr. Deputy Speaker: Order.
  It being half-past Two o'clock, the debate stood adjourned.

Remaining Private Members' Bills
  MERCHANT SHIPPING (AMENDMENT) BILL
  Bill read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).
  CONSCIENTIOUS OBJECTION (PUBLIC EXPENDITURE) BILL
  Mr. Deputy Speaker: Not moved.

  BUSINESS OF THE HOUSE
  Ordered,
  That, notwithstanding the provisions of Standing Order No. 14 (Exempted business), the Speaker shall—

  (1) at the sitting on Wednesday 2nd February

  (a) not later than Seven o'clock put the Questions necessary to dispose of proceedings on the Motions in the name of Mr. William Waldegrave relating to Scientific Research; and

  (b) put the Question necessary to dispose of proceedings on the Motion in the name of Mr. Secretary Lilley relating to Child Support not later than three hours after their commencement; and the said Motion may be proceeded with after the expiry of the time for opposed business; and

  (2) at the sitting on Thursday 3rd February, not later than Ten o'clock put the Questions necessary to dispose of proceedings on the Motions in the name of Mr. Secretary Gummer relating to Local Government Finance; and those Questions may be decided after the expiry of the time for opposed business.—[Mr. Andrew Mitchell.]

  Health Care (Greenwich)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Andrew Mitchell.]
  2.31 pm
  Mr. Nick Raynsford: I am pleased to have this opportunity to raise a matter of the utmost concern to my constituents—the present state of the NHS in Greenwich. I am also pleased that my hon. Friend the Member for Woolwich (Mr. Austin-Walker) is present this afternoon, as he has a long-standing interest in the subject. He will, if he is successful in catching your eye, Mr. Deputy Speaker, have a valuable contribution to make to the debate.
  There is widespread concern in Greenwich about the NHS. In particular, there is concern about the impact of the Government's so-called reforms and the performance of the Greenwich healthcare NHS trust since it was set up fewer than 10 months ago. Over the past three to four months, a substantial number of cases have been brought to my attention by individuals who tell me that the standard of health care that they or their relatives have received has been far below the standards that they have a right to expect.
  The most highly publicised case involved 83-year-old Elsie Westron, who was lost for four hours after being admitted to Greenwich district hospital on 1 September. When she was eventually located, she was found to have died. The circumstances leading up to her death were described by the coroner as
  "an appalling catalogue of disasters".
  Elsie Westron's case shocked not just Greenwich, but the whole nation. Responding to the concerns that had been voiced, the junior Minister for health, the hon. Member for Bolton, West (Mr. Sackville), expressed regrets, but claimed that it was a single, isolated incident. I am afraid that he was wrong. A month later, a 93-year-old woman named Mrs Edmonds was left waiting for 10 hours in the accident and emergency department of the same hospital for an X-ray after being admitted following her involvement in a vehicle accident. The chairman of the healthcare trust, in responding to my letters about the incident, referred to it as "a totally unacceptable delay'. I agree.
  Long waits and delays are not just a problem in the accident and emergency department. At the same time, I was having to take up with the chairman of the healthcare trust cases involving patients who had been admitted to the Brook hospital for elective cardiac and neurosurgery. The patients found that their operations were cancelled not just on one occasion, but on several because of the lack of qualified staff.
  Responding to a complaint lodged in one of those cases, the chief executive of the trust wrote
  "to apologise for the distress the cancellations must have caused … regrettably, in the case of your wife's surgery, we have not achieved the level of quality we would wish."
  Many other similar disturbing cases have been brought to my attention, but it is not only patients and their relatives who have been voicing their concern. I have received a steady stream of complaints from nursing staff, GPs and hospital consultants about the increasingly severe pressures under which they work. Nurses complain of chronic staff shortages and the replacement of qualified

  593
  nurses by auxiliaries. GPs complain about the hours they spend trying to get patients admitted to the two local hospitals, where beds are in increasingly scarce supply.
  One GP wrote to me:
  "it has been absolutely clear to every doctor working in London that any reduction in the number of hospital beds would cause great problems. It seems that that situation is now upon us."
  Consultants complain about long-established and effective working procedures being undermined by the closure of hospital wards and the cancellation of operating theatre sessions prompted solely by financial constraints. One wrote not only to me but to the Secretary of State to complain that for the first time in 14 years working as a consultant gynaecologist in Greenwich he had had to establish a waiting list.
  No impartial observer of the health service in Greenwich could conclude other than that health care in Greenwich faces a crisis. That crisis is not of the making of the medical, nursing or auxiliary staff. In my experience, the overwhelming majority are exceptionally hardworking, highly motivated, dedicated people desperately trying to do their best in increasingly difficult circumstances. Not surprisingly, they feel a growing anxiety at the poor public image that Greenwich health care is attracting. They long to be able to provide the high-quality service that they came into the profession to deliver. That they are unable to do so to the extent that they would wish is a tragedy not just for them but for the people of Greenwich who depend on them. The blame for that lies squarely with the Government, who are savagely cutting the funds available for health care in Greenwich, and with the healthcare trust, which has spectacularly failed to live up to the promises that it made when trust status was sought.
  Those promises are not dim and distant pledges made many years ago. The trust has been in existence for only 10 months. The prospectus that it issued is only 18 months old. In that document, the trust promised
  "to treat each user of the service with respect and dignity at all times".
  That pledge must have a hollow ring to the relatives of Elsie Westron.
  The trust pledged:
  "to deliver services of excellence to users whose needs will always come first."
  That is now revealed to be far from the reality to all those whose operations have been cancelled or delayed as a result of staff shortages, ward closures and the creation of waiting lists.
  The trust pledged:
  "to develop on the Brook hospital site an elective resource centre, an integral part of which will be the regional specialty cardio-thoracic services."
  That pledge contrasts sadly with the current position. The Brook hospital is to be closed and the regional specialty cardio-thoracic and neuroscience units are to be lost altogether from the district.
  The trust pledged:
  "Greenwich District Hospital would be upgraded to become the main Acute General Hospital for the district, with a major accident and emergency department, supported by the full range of the necessary specialities and modern high technology support services."
  Now the trust proposes to close Greenwich district hospital.
  The trust pledged that its first objective was
  594
  "to secure by contract the current service activity".
  Its second objective was to
  "identify opportunities to improve the quality of service to our local population".
  The third was
  "to seek to identify those areas where we can build on and expand our service to patients from outside the district."
  Instead, we are now told that ward closures, staff cuts, operating list cancellations and hospital closures are inevitable because the trust is failing to attract sufficient contract activity to sustain its existing resources. Neighbouring areas are increasingly withdrawing their residents from the Greenwich hospitals. In other words, the service is being killed by the market.
  I could, but will not, go on at great length cataloguing the broken promises and failures. The picture is already, sadly, too clear. However, I shall quote one last passage from the trust's prospectus. It said:
  "An essential objective of the Trust is to ensure that it is very closely associated with its community … The Trust will encourage and respond to users' views".
  That was always a somewhat questionable claim, because the overwhelming majority of local people opposed the setting up of the trust in the first place. Sadly, the experience of the past nine months has confirmed that the trust neither encourages, nor responds to, the views and aspirations of the local community. On the contrary, it is seen as remote and unresponsive. It has forfeited the confidence of the local people.
  The point was well put by one local resident writing about the experience that he had when trying to obtain a response from the trust on the delays experienced by a relative awaiting treatment. He wrote:
  "I have been trying to reach an administrator at your hospital so that I can be furnished with an explanation. However, no-one seems willing to speak to me … I have discovered that the NHS Trust is packed with tiers of bureaucrats all of whom are said to be at meetings and none of whom appear to want to be accountable."
  The consultant wrote:
  "My observations on the organisation would be that there is panic, ignorance of the clinicians' own management expertise within their departments, and extravagance in virtually every aspect except where direct patient care is concerned."
  That is sadly an all-too-familiar story, echoing the comments in the report of the Public Accounts Committee published yesterday, which catalogue the baleful influence of unelected, unaccountable quangos, whose cry is now heard throughout the land. The Government cannot pretend that they are unaware of this sad state of affairs; nor can they simply pass the buck. Most of the evidence that I have outlined has already been submitted to Ministers as well as to the healthcare trust. Instead of acting on it, the Government offer only feeble excuses.
  We are told not to worry about the threatened closure of the Brook and the Greenwich district hospital, because the trust proposes to acquire the Queen Elizabeth military hospital. I believe that it is right for the NHS to acquire the QEMH, but not as a substitute for two existing hospitals, whose combined capacity is more than twice that currently available at the QEMH. On present plans, the move to the QEMH means yet further reductions in the number of beds available, at a time when it is patently clear that the existing capacity is seriously overstretched.
  We are told by Ministers—I refer to a letter dated 8 December 1993 from the Parliamentary Under-Secretary of State—that
  "there is clearly overprovision of acute services at this time."

  595
  That is an astonishing statement. I remain fascinated to know where the Minister gets his information from, not least because, in answer to a parliamentary question from me about the availability of acute beds in Greater London, he replied just a week later to say that that information was not available centrally. Had the Minister taken the trouble to ask about the local situation, he would not have made his rash and wholly spurious claim about a surplus of capacity. The reality is exactly the opposite, as hospitals, beds and staff are all severely overstretched by a demand that is clearly causing the system to burst at the seams.
  The other excuse that we get from Ministers is that resources have been transferred into primary care. I, for one, welcome the long-overdue recognition of the need to improve primary care provision in London. The extra funds coming in consequence of Tomlinson are welcome, but, as yet, they have not created any new capacity. It will be some years before the network of primary health care centres will have been developed to a point at which it might be possible to reduce some of the demands on local hospitals.
  As I outlined, however, the cuts are already biting deeply into our hospital services, and it will simply not do for Ministers to plead future improvements in primary care as a justification for cuts being made today which seriously damage the quality of patient care in Greenwich. The Government cannot justify washing their hands of the disastrous consequences of their actions. They are responsible for the financial cuts and ward closures. They are responsible for the damage caused by the workings of the internal market. They are responsible for the actions of the health care trust which they brought into existence and whose members they appointed.
  Nothing less than a full public inquiry into the slate of the NHS in Greenwich will suffice if public confidence is to be restored. I hope, therefore, that the Minister will belatedly recognise that the Government have a responsibility, that they cannot continue to pass the buck and that they must act now to set up an inquiry and ensure that adequate funds are made available locally if we are to avoid a further tragic decline in the standards of health care in Greenwich.
  2.43 pm
  Mr. John Austin-Walker: I am grateful to my hon. Friend the Member for Greenwich (Mr. Raynsford) and to the Minister for allowing me to intervene briefly in the debate. The problem in Greenwich, as my hon. Friend pointed out, is not only the incompetence of those who are responsible for managing the health care trust but the total unaccountability of the structure. I think that the rot began to set in with the management changes that the Government introduced in 1990, which removed from the local health authority any semblance of local accountability. Local authority nominees were removed from the health authority, but those members had not only an interest in and lived in the area, but had a deep knowledge of local health authorities.
  In the health debate last week, the hon. Member for Chislehurst (Mr. Sims) said that the new arrangements were locally accountable. I do not know to whom they are accountable locally, because I was replaced on the health authority by a company director from his constituency. That man is a computer company specialist. On his appointment, he said that he knew nothing about the NHS,
  596
  that he was a friend of the director of finance and the chair of the health authority and that he assumed that was why he had been appointed. He also pointed out that all his staff were members of BUPA and that he would be too, if only he had remembered to fill in the form.
  The other person who replaced the local authority representative on the health authority was Mr. Hewitson, who runs a double glazing company in Bromley—a far cry from Greenwich and Woolwich. We have not seen much improvement in patient care in the Greenwich health district, but no doubt the windows have improved.
  We have recorded a catalogue of disasters, including £8 million invested in the hospital information services system, HISS, which was supposed to deliver an internal management system. The health authority still appears to be totally unable to send out invoices for bills that are due.
  My hon. Friend and I have repeatedly called for the dismissal of the chief executive of the trust. If the Government were looking for a job for him, perhaps MI6 might be appropriate, or perhaps he could become an adviser on secrecy to the Cabinet, because the trust, like the health authority before it, is run in complete secrecy.
  Is that trust accountable to local people? We asked the chief executive about the trust's proposals to sell off part of the Brook hospital site to Sainsbury. We were told that no such negotiations had taken place. A week later, the truth was revealed and we learnt that an agreement had been reached with Sainsbury.
  I asked the chief executive about discussions between the health authority, the trust and the Ministry of Defence concerning the Queen Elizabeth military hospital. I was told that no such discussions had been held, but the MOD confirmed that they were taking place.
  The trust is dictating terms to a weak health authority which even occupies premises owned by the trust. My hon. Friend referred to the pledges made in the hurried attempt to draw up the trust. There was no public health input into those discussions. The Greenwich health authority drew up a commissioning strategy without any independent public health advice. It was done in such a hurry that no agreement was reached on a strategy for acute services: in fact, that strategy has not yet been published.
  I wrote to the Secretary of State to ask her to defer the decision on the creation of the trust until an acute service strategy was agreed. No delay occurred and we found that the chair and chief executive of the health authority took up those posts in the new trust.
  Whenever my hon. Friend and I describe the mishaps that have occurred and describe the frustration felt by the medical, nursing and ancillary staff, we are accused of undermining the morale of staff at the local hospitals. We are merely reflecting the views of the medical staff and nurses who tell us that morale is at rock bottom and express their frustration at the fact that they are unable to provide the standard of care that they believe that the people of Greenwich and Woolwich deserve.
  I am still waiting for an answer about the purchase of the multi-resonance image scanner, at a cost of £500,000. The Minister has passed the buck back to the district health authority and it has passed it to the trust, which, in turn has passed it to the regional health authority. In the end, I have received letters from the company that supplied the equipment to say that there is nothing wrong with it. Why did the trust and the regional health authority spend £500,000 on an MRI scanner in May of last year, which has

  597
  not yet scanned a single patient? Each year, £116,000 is being paid to the private sector to provide that scanning service.
  No doubt, the Minister will say that the scanner is an isolated example, just like the catalogue of isolated examples that my hon. Friend cited. An inquiry is needed and the buck stops with the Government.
  2.48 pm
  The Parliamentary Under-Secretary of State for Health (Mr. John Bowis): I am delighted to respond to the hon. Members for Greenwich (Mr. Raynsford) and for Woolwich (Mr. Austin-Walker) and to have the opportunity to discuss health care in Greenwich. The debate enables us to look at some of the problems raised by the hon. Members, and also to consider the real progress that has been made in the provision of health care in the health authority and local authority area of Greenwich. It also gives me the opportunity to acknowledge the plans that have been agreed or are being considered for the future delivery of health care.
  Important developments in primary and secondary care have been envisaged for the health service in south-east London, including, as has been mentioned, the possible transfer of the Queen Elizabeth military hospital at Woolwich into NHS ownership. Family health services in Greenwich have benefited from extra funding as a result of the Government's London initiative zone.
  Having visited Greenwich recently at the invitation of its local council, and having met the leaders and senior officers of that council, I am impressed by the fact that they generally see Tomlinson and "Making London Better" as a real opportunity for Greenwich and the development of its health care, particularly at primary-care level. They are working on some innovative projects; I was particularly pleased to see their "family and carers" support work and centres. My right hon. Friend the Secretary of State was recently able to see something of the imaginative work that is being done in regard to mental health. What impressed me above all was the way in which the various agencies are working together—social services, health authority and trusts, police and probation services, the voluntary and private sectors and, of course, the users and carers themselves. I should have thought that that in itself would cause both hon. Members to salute a great deal of the work on health care in their respective constituencies, and to praise the dedication of health and care workers in primary and hospital and community care.
  The hon. Member for Greenwich mentioned staff morale. This week, people working in those hospitals have telephoned me, questioning whether some of his outspoken comments are doing anything for staff morale and telling me that staff at all levels are anxious to get on with the job. They are not being helped by some of the hon. Gentleman's comments.
  I am pleased to say that Greenwich district health authority has been working closely with the Greenwich and Bexley family health services authority. That work has been helped by the setting up two years ago of the Bexley and Greenwich commissioning agency, which has brought the two authorities together with Bexley district health
  598
  authority. As was recently announced, the two DHAs will merge in April. I am sure that the new authority will remain sensitive to the needs of Greenwich residents.
  Both the commissioning agency and the Greenwich healthcare NHS trust support a proposal to transfer hospital services to the Queen Elizabeth military hospital, Woolwich, which is, of course, just across the road from the Brook. That proposal would involve bringing accident services and acute in-patient services together at the Queen Elizabeth hospital. Under that proposal, the Memorial hospital at Shooters hill would provide out-patient and residential care, and Greenwich district hospital would continue to provide out-patient clinics.
  Negotiations are continuing with the Ministry of Defence, which has announced that it will leave the hospital in 1998, and I am pleased to say that good progress has already been made. The commissioning agency consulted on its acute strategy, and the trust has announced its proposals; however, any change of use at the Brook or Greenwich district hospitals would require public consultation.
  I know that there has been concern about some of the services provided at the Brook hospital. The neurosciences and cardiac speciality reviews recommended that those regional specialties be transferred to larger teaching units in south-east London. My right hon. Friend is still considering the advice that she has received, and hopes to be able to make an announcement soon.
  It is entirely appropriate that the trust is planning hospital services to meet the requirements of those who are purchasing services on behalf of patients, and the recommendations of the specialty reviews. For their part, the Government are committed to ensuring that Londoners have access to appropriate, high-quality and cost-effective patient care.
  The hon. Gentleman also referred to individual cases—one in particular—in which something has allegedly gone wrong, or services have fallen below the standards that we, health authorities, trusts, GPs and patients expect. Those are rightly subject to inquiry when appropriate, and the trust has committed itself to put right any failings identified by such inquiries.
  Equally important is the development of primary care in Greenwich and Bexley. Greenwich, Woolwich and Thamesmead are within the London initiative zone set up as part of the Government's response to the Tomlinson report. The Government believe that family health services in Greenwich should achieve the standards of excellence that are common elsewhere in the country. To that end, the funding of projects totalling £22 million spread over six years is planned, with £3·1 million this year for Greenwich and Thamesmead and £4·2 million for 1994–95.
  That funding will enable primary care centres to be established in each designated locality. The services planned for those centres include consultants out-patient clinics, pathology and investigative services, physiotherapy, chiropody, counselling and psychiatric services, and minor injury facilities. Work on the acquisition of the first centre will begin next month.
  The family health services authority is contributing funding for practice managers to ensure that each practice has sufficient management skills available. A GP forum has been set up in each locality to determine priorities, identify and assess needs and discuss the commissioning agency's agenda. The FHSA is providing locum cover for

  599
  GPs in each forum to enable them to attend meetings with local providers and commissioners. Similar arrangements have been established for community pharmacists.
  A series of locality-based seminars on community care are under way, designed to facilitate joint working between GPs, community health services and social services. The FHSA is seeking to improve the quality of prescribing through postgraduate education and the development of disease management guidelines. A health promotion programme based on pharmacies is being established. Pharmacists will soon be able to use referral forms to pass information to GPs.
  From the beginning of this year, physiotherapists have been attached in five locations for approximately four sessions a week to assess the effectiveness of general practice-based physiotherapy. Evaluation will focus on the impact that service has on secondary referrals and the benefits that it achieves in terms of outcome. Similarly, counsellors have been funded sessionally in west Greenwich arid Plumstead common to establish the effectiveness of attaching such services to general practice. The scheme started in June 1993; it will be extended to Plumstead High street soon.
  An equal opportunities post is planned. The post holder will work with commissioners, providers and others to develop an advocacy role for local ethnic minority populations. While new contracts for sessional interpreting services are being finalised, the Greenwich interpreting service is providing services for GPs in London initiative zone localities.
  The existing scheme whereby social workers are attached to GP practices is being extended to five more practices. In the longer term, the intention is to provide one-stop health and social care based in primary care centres to include all levels of community care assessment and care management. Since September last year, a primary care charter development officer has been working with local practitioners to facilitate the development of local charters relevant to the needs of service users and providers.
  Developments in primary care services will see local residents provided with health care delivered in the most appropriate setting. That recognises that referral to hospital-based services should occur only when necessary.
  Greenwich healthcare NHS trust incorporates both acute and community services, and I acknowledge the significant achievements of the trust's integrated child health service—the ICHS. Since that leading service was inaugurated in 1992 it has encompassed a wide range of services, including neonatal, special care baby unit, acute paediatrics, school health, family planning, immunisation and vaccination, services and the establishment of a home care team and community paediatric nursing. The specialist clinical and nursing teams are supported by speech and language therapy and child dental professionals.
  For children with severe learning disabilities, the ICHS has opened a sensory room at the Wensley close facility which provides stimulation for the children using state-of-the-art high technology equipment, and a child development centre is planned. Concurrent child mental health and paediatric out-patient clinics allow the joint investigation of psychosomatic disorders. Furthermore, the
  600
  ICHS is a pilot site for the Audit Commission's well child project "Promoting the well being of children and young people".
  Already the subject of widespread national and international interest and a recent feature in the Health Service Journal, the ICHS will host a national conference at the Queen Elizabeth conference centre later this year to discuss the issues of integration of acute and community child health services.
  Greenwich residents come from a wide range of social and economic backgrounds. The total integration of child health services facilities dialogue and close working with social and educational services, demonstrates a clear commitment to the devlopment of healthy alliances.
  On the management of the Greenwich healthcare NHS trust, the appointment of senior nursing professionals as service managers for medical, surgical, trauma and orthopaedics, anaesthetics, obstetrics and gynaecology, radiology, pathology, neurosciences and cardiothoracic services allied to the development of clinical directorates means that those closest to patient care and service delivery are fully involved in the management of the trust. Those service managers lead multi-disciplined, patient-focused teams, which through individual and team-performance objectives, ensure that the planning for, and delivery of, patient care is the priority. In addition, rehabilitation and therapy services across the trust are managed by the senior occupational therapist, ensuring a fully integrated and seamless service for acute and community patients.
  Retention and staff turnover difficulties have been brought about by some of the uncertainties surrounding the future of cardiothoracic and neurosciences. The trust has run a successful campaign to recruit intensive therapy unit nurses, with the result that 15 appointments have already been made at the Brook hospital to staff fully six ITU beds.
  The trust also provides a comprehensive staff and management development programme, and encourages the pursuit of professional and health care management qualifications. Furthermore, the recent removal of the operations director post and the subsequent reporting of the clinical directors to the chief executive will further integrate clinicians into the management process.
  Those steps demonstrate the trust's commitment to the development of an organisation able to respond to the changing pattern of health care within Greenwich. The trust is working hard to achieve greater internal efficiency, meet its statutory financial responsibilities and present a case for further transitional funding. I share the concern expressed by the hon. Member for Woolwich about the commissioning of the MRI scanner, but, following the trust's inquiries into the matter, we will ensure that any procedural shortfalls are addressed. I understand that a meeting is to be held shortly.
  The trust had a complex agenda in which progress on long-term issues and short-term pressures has had to be balanced. Nevertheless, I believe that the trust has been approaching those issues in a determined manner—
  The motion having been made at half-past Two o'clock and having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at Three o'clock.

LORD CHANCELLOR'S DEPARTMENT

  Magistrates Court Clerks
  Mr. Barry Jones
  To ask the Parliamentary Secretary, Lord Chancellor's Department if he will make a statement concerning fixed-term contracts and performance-related pay for magistrates court clerks.

  Mr. John M. Taylor
  Fixed-term contracts and performance-related pay have a role to play in the effective provision of all public services, including the magistrates courts service. A number of magistrates courts committees have already chosen to introduce fixed-term contracts.

NATIONAL HERITAGE

  Paintings and Photographs
  Mr. Boyes
  To ask the Secretary of State for National Heritage what consideration he has given to buying or borrowing photographs for the walls of his office; and if he will make a statement.

  Mr. Brooke
  Most of the works of art in my office are on loan from the Government art collection, which includes 190 photographs. I considered, but did not select, a photograph from the collection's reserve to hang in my office.

  Mr. Boyes
  To ask the Secretary of State for National Heritage how many paintings and/or photographs there are on the walls of his office.

  Mr. Brooke
  I have six paintings on loan from the Government art collection in my office, and one engraving of my own.

  Royal Parks
  Mr. Peter Atkinson
  To ask the Secretary of State for National Heritage what plans there are to hold major events in the Royal Parks in the future.

  Mr. Sproat
  The Royal Parks are a very important part of the capital. Londoners and visitors alike draw huge benefit from them. Summer entertainment for the public has long been a key part of this success and forms part of the character and the tradition of all the Royal Parks. The Royal Parks will soon be unveiling its largest-ever programme of summer entertainment. To complement this, I intend to encourage medium to large-scale events that would add to the public's enjoyment of the Royal Parks, while not detracting from their unique character. The chief executive of the Royal Parks would be pleased to heat from anyone who has innovative ideas or proposals.
  404

  Sport
  Mr. Channon
  To ask the Secretary of State for National Heritage what proposals he has for changes in the structures for sport at United Kingdom and home country levels.

  Mr. Brooke
  [holding answer 27 January 1994]: I hope to be able to announce proposals for the organisation of sport at United Kingdom level and in England by Easter. The structure of sport in Scotland, Wales and Northern Ireland is the responsibility of the appropriate Secretaries of State.

  Proscribed Organisations (Broadcasts)
  Mr. Vaz
  To ask the Secretary of State for National Heritage what consideration he has given to the ban on broadcasting the voices of members of proscribed organisations following the Irish Government's decision not to continue to impose a ban.

  Mr. Brooke
  Broadcasting in the Republic of Ireland is a matter for the Irish Government. A review of the broadcasting restrictions in the United Kingdom is in progress.

EMPLOYMENT

  Labour Statistics
  Mr. Leighton
  To ask the Secretary of State for Employment what is the number of those aged(a) 16 to 18 years, (b) 18 and 19 years and (c) 16 to 24 years unemployed in the London borough of Newham; what percentages they are of the cohort; how many people under the age of 25 years in the London borough of Newham have never worked; and what percentage of those aged 16 years in the London borough of Newham (i) stayed on at school, (ii) went into jobs or (iii) went into youth training.

  Miss Widdecombe
  In October 1993 unadjusted claimant unemployment in the London borough of Newham stood at 259 16 to 18-year-olds, 575 18 and 19-year-olds and 2,252 16 to 24-year-olds.

  This represents the extent of the available information.

  Mr. Steinberg
  To ask the Secretary of State for Employment what is his estimate of the most recent residence-based unemployment rates for each appropriate area of Durham constituency, giving the figures overall and broken down for male and female; what is the change in the number of unemployed claimants in Durham for the same month in each of the last six years; and what has been the percentage change since 1979.

  Miss Widdecombe
  Information on residence-based unemployment rates are available from the labour force survey, LFS, and are based on the internationally standard International Labour Organisation definition. At present, these are not available below the level of standard region except for training and enterprise councils, TECs, and local enterprise companies. The residence-based ILO unemployment rate for the County Durham TEC area in summer—June to August—1993, was 7 per cent. for all persons and 16·2 per cent. for men, not seasonally adjusted. The LFS sample size was not large enough to provide equivalent rates for women.
  405
  Data on the numbers of unemployed claimants in the Durham local authority district are on the unadjusted basis and are not available prior to 1983. Those data are given for December of each year.

  Date

  Number of unemployed claimants

  1983

  4,248

  1988

  3,215

  1989

  2,571

  1990

  2,764

  1991

  3,238

  1992

  3,590

  1993

  3,467

  Apprenticeships
  Mr. Ron Davies
  To ask the Secretary of State for Employment what are his objectives for the modern apprenticeships scheme.

  Miss Widdecombe
  My right hon. Friend the Secretary of State has made it clear that modern apprenticeships will

  Training and enterprise council budgets and outturn London region

  £ million

  AZTEC

  CENTEC

  CILNTEC

  LETEC

  NLTEC

  NWLTEC

  SOLOTEC

  STTEC

  WLTEC

  RORUNEA

  Region

  1991–92 Budget

  Block 1

  4·5

  3·9

  3·6

  12·6

  3·3

  2·3

  9·9

  7·0

  4·5

  —

  51·6

  Block 2

  3·3

  3·8

  2·6

  10·1

  3·9

  1·7

  4·3

  8·6

  2·3

  0·3

  40·9

  Block 3

  1·6

  2·7

  1·5

  2·7

  1·7

  0·9

  1·8

  3·1

  1·3

  —

  17·3

  Block 4

  0·7

  1·1

  0·8

  1·3

  0·8

  0·3

  1·4

  1·6

  0·9

  —

  8·9

  Block 5

  1·0

  1·2

  0·6

  2·0

  0·7

  0·6

  1·5

  1·8

  0·8

  —

  10·2

  Total

  11·1

  12·7

  9·1

  28·7

  10·4

  5·8

  18·9

  22·1

  9·8

  0·3

  128·9

  1991–92 Outturn

  Block 1

  4·2

  3·4

  3·1

  11·5

  2·5

  2·3

  8·5

  7·6

  4·2

  —

  47·3

  Block 2

  2·2

  3·5

  2·0

  8·2

  3·6

  2·1

  3·6

  8·6

  2·1

  0·1

  36·2

  Block 3

  1·5

  2·7

  1·5

  2·5

  1·8

  1·0

  1·7

  3·0

  1·4

  —

  17·0

  Block 4

  0·4

  0·7

  0·4

  0·9

  0·2

  0·2

  1·0

  0·6

  0·2

  —

  4·6

  Block 5

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  Total

  8·4

  10·3

  7·0

  23·1

  8·1

  5·6

  14·9

  19·9

  7·9

  0·1

  105·1

  1992–93 Budget

  Block 1

  5·2

  8·1

  8·9

  16·1

  6·3

  4·3

  11·2

  12·4

  9·3

  —

  81·6

  Block 2

  3·3

  8·4

  7·4

  13·0

  7·5

  3·5

  4·2

  12·9

  3·8

  —

  64·1

  Block 3

  1·7

  4·3

  2·8

  2·8

  2·4

  1·3

  2·0

  3·4

  1·9

  —

  22·6

  Block 4

  0·5

  0·7

  0·9

  0·8

  0·9

  0·3

  0·8

  1·4

  1·1

  —

  7·6

  Block 5

  1·2

  2·8

  2·2

  3·3

  2·0

  1·3

  2·0

  2·8

  1·9

  —

  19·6

  Total

  11·9

  24·3

  22·3

  36·0

  19·1

  10·8

  20·2

  32·8

  18·0

  —

  195·6

  1992–93 Outturn

  Block 1

  4·6

  7·2

  8·0

  15·1

  5·9

  4·2

  11·1

  10·0

  8·6

  —

  74·7

  Block 2

  3·1

  7·3

  7·0

  11·0

  7·3

  3·4

  3·7

  11·6

  3·5

  —

  57·9

  Block 3

  1·6

  4·3

  2·6

  2·7

  2·4

  1·3

  1·9

  3·2

  1·9

  —

  22·0

  Block 4

  0·6

  0·7

  0·9

  0·8

  0·9

  0·4

  0·6

  1·4

  0·8

  —

  7·1

  Block 5

  1·1

  2·7

  2·1

  3·1

  1·9

  1·2

  1·8

  2·6

  1·8

  —

  18·3

  Total

  11·0

  22·2

  20·6

  32·8

  18·5

  10·6

  19·1

  28·8

  16·6

  —

  180·1

  1993–94 Budget

  Block 1

  5·4

  8·3

  9·6

  17·7

  6·1

  4·8

  10·6

  15·0

  10·2

  —

  87·6

  Block 2

  3·4

  8·6

  7·2

  12·5

  6·8

  3·5

  4·3

  13·4

  4·0

  —

  63·7

  Block 3

  1·3

  2·9

  2·1

  2·0

  2·1

  1·1

  2·3

  2·8

  1·3

  —

  17·8

  Block 4

  0·5

  0·8

  0·8

  0·7

  0·5

  0·5

  0·8

  0·8

  1·2

  —

  6·7

  Learning for Work

  0·2

  0·4

  0·2

  0·4

  0·2

  0·2

  0·3

  0·5

  0·3

  —

  2·6

  TEC Challenge

  1·2

  0·0

  0·3

  0·0

  0·0

  0·0

  0·0

  0·0

  0·0

  —

  1·5

  Skills Choice

  0·4

  0·0

  0·0

  0·0

  0·0

  0·0

  0·0

  0·0

  0·0

  —

  0·4

  Open Learning Credits

  0·0

  0·2

  0·0

  0·0

  0·0

  0·0

  0·0

  0·0

  0·0

  —

  0·2

  406
  improve our economic competitiveness by increasing the number of young people qualifying to the key technician and supervisor levels. When the scheme is fully operational, it is envisaged that up to 150,000 young people in England will be in modern apprentice training at any one time. The Government want modern apprentice ships to increase to over 40,000 the number of young people reaching national vocational qualification level 3 through training in England each year—roughly tripling the current number.

  Training and Enterprise Councils
  Mr. Austin-Walker
  To ask the Secretary of State for Employment if he will provide a table showing, for each TEC in Greater London, the amount of funding(a) allocated and (b) paid under each block of expenditure for 1991–92 and 1992–93 and the amounts allocated for 1993–94.

  Miss Widdecombe
  The table shows the amount of funding allocated and paid under each block of expenditure for training and enterprise councils in the Greater London area for the period 1991–92, 1992–93 and 1993–94.
  407

  AZTEC

  CENTEC

  CILNTEC

  LETEC

  NLTEC

  NWLTEC

  SOLOTEC

  STTEC

  WLTEC

  RORUNEA

  Region

  Out of school childcare

  0·1

  0·0

  0·0

  0·1

  0·1

  0·0

  0·0

  0·1

  0·0

  —

  0·3

  Block 5

  1·3

  2·7

  2·2

  3·3

  2·0

  1·3

  2·2

  3·2

  1·9

  —

  20·1

  Total

  13·6

  23·9

  22·6

  36·7

  17·7

  11·4

  20·4

  35·8

  18·9

  —

  201·0

  1. The following TECs became operational during the financial year 1991–92 and for these TECs the relevant part-year figures are given:

  Operational From:

  South Thames TEC—27 May 1991

  West London TEC—19 August 1991

  Central London TEC—16 September 1991

  North London TEC—16 September 1991

  North West London TEC—16 September 1991

  City and Inner London North TEC—14 October 1991

  2. Block 1 of the tables includes youth training including youth credits, WRFE, education business partnerships, careers libraries, careers partnerships, teacher placement services and Compacts.

  3. Block 2, for 1991–92 and 1992–93 includes employment training, employment action and higher technology national training. In 1993–94 these programmes were merged into a new programme called training for work.

  4. In 1991–92 the London regional office of the Employment Department ran employment action for two TEC areas—North-West London and West London.

  5. Block 3 relates to business enterprise support.

  6. In 1991–92 and 1992–93 block 4 included the local initiative fund and national development projects. In 1993–94 block 4 includes the local initiative fund, gateway to learning and access to assessment. Gateway to learning and access to assessment were previously run as national development projects.

  7. Block 5 relates to the management fee paid to TECs. The spend data are not available for.

  8. All spend data are taken from the TEC invoice.

  9. Budget data are taken from TEC planning tables. For 1993–94, budget data include additions and virements made up to 24 January 1994. They are therefore likely to be marginally different than the original budgets agreed with TECs at the beginning of the contract year.

  Key to Table 1:

  Training and Enterprise Councils (TECs)

  AZTEC—TEC for Kingston, Merton and Wandsworth

  CENTEC—Central London TEC

  CILNTEC—City and Inner London North TEC

  LETEC—London East TEC

  NLTEC—North London TEC

  NWLTEC—North West London TEC

  SOLOTEC—South London TEC

  STTEC—South Thames TEC

  WLTEC—West London TEC

  RO Run EA—Employment Department London regional office run employment action—see footnote 4.

  Youth Employment
  Mr. Boyes
  To ask the Secretary of State for Employment how many jobs are at present available for youth employment in(a) the Houghton and Washington constituency and (b) the city of Sunderland; and if he will make a statement.

  Miss Widdecombe
  The Employment Department does not carry a breakdown of vacancy figures by their suitability for different age groups. Listed in the table are the total number of unfilled vacancies in the jobcentres of Houghton, Washington and Sunderland for December 1993. Nationally, jobcentre vacancies account for about a third of all vacancies in the economy as a whole.
  408

  Jobcentre

  Vacancy

  Houghton-le-Spring

  52

  Washington

  149

  Sunderland

  284

PRIME MINISTER

  Charterline Pilot Scheme
  Mr. Flynn
  To ask the Prime Minister what representations he has received(a) in favour of and (b) against the Charterline pilot scheme.

  The Prime Minister
  I have received numerous representations on charter issues.

  Advisory Panel on Environmental Policy
  Mr. Llew Smith
  To ask the Prime Minister what criteria he used in choosing the members of his advisory panel on environmental policy announced on 25 January.

  The Prime Minister
  The members of the panel have been chosen for their wide-ranging knowledge and practical experience in matters relevant to protection of the environment and economic development.

  Sustainable Development Strategy
  Mr. Llew Smith
  To ask the Prime Minister what discussions he has had with his Cabinet colleagues prior to drafting his foreword to the report on the sustainable development strategy for the United Kingdom regarding the content of the report.

  The Prime Minister
  I have had full discussions with my ministerial colleagues about the content of the United Kingdom strategy for sustainable development.

  Ministerial Visits
  Mr. Salmond
  To ask the Prime Minister how many visits the Prime Minister has made to Scotland since he took office; and if he will list the dates of these visits and locations visited.

  The Prime Minister
  Since I took office I have made 13 visits to various locations in Scotland.

TRADE AND INDUSTRY

  Electricity Supplies
  Mr. Austin Mitchell
  To ask the President of the Board of Trade what is his policy on the proposal for a reduction in voltage of electricity supplies; and what powers he has to stop it being introduced in the United Kingdom.

  Mr. Eggar
  All EC countries are changing their low voltage supply systems to a nominal voltage of 230/400
  409
  volts to provide voltage harmonisation throughout the EC. My policy is to endorse this standardisation following extensive consultation.

  This will remove a perceived barrier to trade and so further the objectives of the single market. Consumers will have greater choice and flexibility in the purchase and use of electrical applicances. The Secretary of State will be using his powers under the Electricity Act 1989 to amend the Electricity Supply Regulations 1988 in order to effect this standardisation in the United Kingdom.

  Mr. Austin Mitchell
  To ask the President of the Board of Trade what savings will be made on consumer costs of electricity supply from France when the agreed reduction in voltage comes into effect.

  Mr. Eggar
  The change in voltage to a standardised nominal low voltage of 230/400 volts throughout the EC has no relevance to the cost of electricity supplies to or from France over the sub-sea cables. The electricity exchanged with France is done at extremely high voltage direct current and the costs associated with those arrangements are not a function of consumer voltages and will not be affected by the proposed standardisation.

  Mr. Austin Mitchell
  To ask the President of the Board of Trade what consultation took place with(a) industry, (b) domestic users and (c) the electricity supply industry before the reduction in voltage was accepted.

  Mr. Eggar
  Consultations took place with 36 different organisations representing the United Kingdom electricity companies, equipment manufacturers and consumers.

  Mr. Austin Mitchell
  To ask the President of the Board of Trade what increased costs will attend consumer costs of electricity supplies from the United Kingdom and France when the agreed reduction in voltage comes into effect.

  Mr. Eggar
  I do not expect that consumers of electricity will face any increases in the cost of their electricity as a result of standardisation.

  Mr. Austin Mitchell
  To ask the President of the Board of Trade what compensation will be paid to industrial users of electricity who have purchased heating equipment appropriate to their factory size and are now required to buy extra equipment to heat the same space after the reduction in voltage.

  Mr. Eggar
  It is not intended to pay compensation to industrial users of electricity in respect of the purchasing of additional heating equipment. The performance of some electrical appliances will be reduced in making the change to 230 volts from 240, but the effect will be minimal and will be offset by the wider benefits to consumers of standardisation.

  Mr. Austin Mitchell
  To ask the President of the Board of Trade when the reduction in voltage in electricity supplies agreed with the European Community comes into effect.

  Mr. Eggar
  The change from a nominal supply voltage of 240 to 230 volts will come into effect on 1 January 1995. An amendment to the Electricity Supply Regulations 1988 will be needed to take effect from the same date.

  Mr. Austin Mitchell
  To ask the President of the Board of Trade what reasons underlay his decision to agree to 410
  reduce the voltage on electricity supplies from 400 volts to 280 volts and from 240 volts to 230 volts for domestic purposes.

  Mr. Eggar
  In 1988, the European Committee for Electrotechnical Standardisation proposed the harmonisation of the existing low voltage supplies in the EC countries. In Great Britain the majority of the manufacturers consulted were strongly in favour of a move to 230 volts in order to avoid confusion within the Community, while providing the considerable advantages of single product ranges and certifying procedures for the Community as a whole.

  This move is seen as a means of optimising designs leading to simpler production procedures, and uniformity of safety standards as well as reducing barriers to trade.

  Mr. Austin Mitchell
  To ask the President of the Board of Trade what estimates he has made of the increase in hypothermia consequent on the reduced output of heating equipment because of the reduction in voltage.

  Mr. Eggar
  The effect on output of electrical heating equipment in making the change to a nominal voltage of 230 volts in accordance with the time scales and tolerances required for EC voltage harmonisation will be insignificant and is therefore not a relevant consideration in the incidence of hypothermia.

  Insurance Market
  Sir Thomas Arnold
  To ask the President of the Board of Trade what assessment he has made as to the solvency of the Lloyd's insurance market; and if he will make a statement.

  Mr. Neil Hamilton
  The solvency of the Lloyd's insurance market remains as described in my answer to my hon. Friend on 9 December,Official Report, column 346.

  Coal Industry
  Mr. Tipping
  To ask the President of the Board of Trade what estimate he has made of the amount of financial subsidy he will make available to British Coal to settle extra sales of coal on top of the main contracts with the generators in the current financial year as outlined in "Prospects for Coal"; how many tonnes of extra sales this involved; and if he will make a statement.

  Mr. Eggar
  The amount of subsidy paid will depend on how successful British Coal and the private sector are at securing additional sales. Details of the total amount of subsidy paid will be made available to Parliament in the normal way.

  Dr. Hampson
  To ask the President of the Board of Trade what is the proposed timetable for the sale of Coal Products Ltd. by British Coal; and if he will make a statement.

  Mr. Eggar
  The future of Coal Products Ltd. is a matter for British Coal.

  Shipbuilding Intervention Fund
  Mr. Coe
  To ask the President of the Board of Trade what is his Department's policy on the level of shipbuilding intervention funding during 1994.
  411
  Mr. Sainsbury
  Following a decision of the European Commission, notified to member states on 21 December 1993, I have decided that the United Kingdom's maximum level of support for large ships from 1 January 1994 should continue to be 9 per cent. This is inclusive of shipbuilder's relief at 2 per cent.

  I have similarly decided that maximum support for small ships from 1 January 1994 should continue to be 4·5 per cent, inclusive of the shipbuilder's relief of 2 per cent.

  These levels are at the maximum permitted by the EC shipbuilding regime. They are subject to review in the light of the outcome of the current OECD negotiations on an agreement on shipbuilding subsidies.

  Structural Funds
  Mr. Streeter
  To ask the President of the Board of Trade if he is yet able to inform the House of the final outcome of the negotiations with the European Communities on the designation under the structural funds of objective 2 and 5(b) areas.

  Mr. Sainsbury
  [pursuant to his reply, 13 January 1994, Official Report, columns 252–54]: The Commission has now announced that it has decided to make no changes to the initial list of areas it announced on 21 December. I have placed a copy of the final list, which includes details where appropriate at ward level, in the Library of the House. It will appear in the Official Journal in due course.

  The Commission has also announced that the indicative allocation to the United Kingdom for objective 2 for the period 1994–1996 is 2,142 million ecu.

  I hope to be able to provide the final objective 5(b) list in the near future when it has been finally decided by the Commission.

NORTHERN IRELAND

  Eel Fisheries
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland if he will list the location of each eel fishery in Northern Ireland together with the rateable value of each and the body to which the rates are paid.

  Mr. Tim Smith
  Responsibility for the subject in question has been delegated to the Rate Collection Agency under its chief executive, Mr. D. W. Gallagher. I have asked him to arrange for a reply to be given.

  Assistance paid to farmers in upland areas of England (Uplands defined as less-favoured areas)

  1987

  1988

  1989

  1990

  1991

  1992

  1993

  Environmentally sensitive areas6

  1,146

  2,470

  2,615

  2,653

  2,716

  4,120

  8,194

  Capital grants4

  9,900

  9,500

  11,100

  10,900

  10,700

  8,500

  4,100

  Hill livestock compensatory allowance scheme (HLCAs)

  28,439

  29,007

  30,045

  32,503

  37,237

  38,374

  233,126

  Sheep annual premium scheme (SAPs)3

  n/a

  n/a

  n/a

  n/a

  57,491

  92,724

  92,049

  Farm woodland scheme1

  n/a

  n/a

  14

  20

  32

  38

  45

  Farm woodland premium scheme1

  n/a

  n/a

  n/a

  n/a

  n/a

  n/a

  34

  Five year set aside5

  n/a

  n/a

  255

  350

  600

  700

  460

  Pilot beef and sheep extensification scheme5

  n/a

  n/a

  n/a

  n/a

  100

  100

  100

  Beef special premium scheme8

  n/a

  n/a

  n/a

  n/a

  n/a

  n/a

  n/a

  Beef variable premium scheme8

  n/a

  n/a

  n/a

  n/a

  n/a

  n/a

  n/a

  Suckler cow premium scheme7

  n/a

  n/a

  n/a

  12,040

  14,487

  15,612

  n/a

  Sheep variable premium scheme8

  n/a

  n/a

  n/a

  n/a

  n/a

  n/a

  n/a

  1 Farm woodland premium scheme succeeded farm woodland scheme on 1 April 1992.

  2 January to October.

  412
  Letter from D. W. Gallagher to Mr. William Ross, dated 26 January 1994:

  You recently asked a Parliamentary Question about the locations and rateable values of eel fisheries in Northern Ireland. As I am responsible for the Rate Collection Agency (RCA), the body to which the rates are paid, the Secretary of State for Northern Ireland has asked me to reply.

  There are three entries in the Valuation List relating to eel fisheries, all of which refer to Toome Eel Fishery (NI) Ltd., but which fall into three separate districts.

  Under Article 17 of the Rates (Northern Ireland) Order 1977, Eel and Salmon Fisheries are currently derated by 60 per cent. which in effect means that rates are chargeable on only 40 per cent. of the Net Annual Value. This is outlined in the table below—

  Address

  Net annual value £

  RV on which rates are chargeable £

  District council area

  Toome Eel Fishery (NI) Ltd.

  Toome Eel Fishery (PT)

  4,800

  1,920

  Ballymoney

  Portna & Movanagher

  Toome Eel Fishery (NI) Ltd.

  Toome Eel Fishery (PT)

  12,500

  5,000

  Magherafelt

  Portna & Toome

  Toome Eel Fishery (NI) Ltd.

  500

  200

  Coleraine

  Toome Eel Fishery (PT)

  Movanagher

  Should you require any further information please do not hesitate to contact me.

AGRICULTURE, FISHERIES AND FOOD

  Upland Areas (Assistance)
  Mr. David Nicholson
  To ask the Minister of Agriculture, Fisheries and Food if she will list the total value of all assistance to agriculture in the upland areas of England in each year since 1987, including environmental assistance, capital grants and sheep and livestock subsidies.

  Mr. Jack
  The information is set out in the table. For the purposes of this exercise "upland areas" are defined as less-favoured areas.
  413
  3 Under the sheep annual premium scheme, SAPs, premium is payable to farmers in both uplands and lowlands areas. It is not possible to ascertain how much of the premium expenditure for years prior to 1991 went to farmers in upland areas, as the less-favoured area—LFA supplement was not introduced until the 1991 scheme. The figures for the sheep annual premium scheme relate to payments for that year's scheme. Payments are staged and extend into the following year.

  4 The various schemes under which grant has been paid are: agriculture and horticulture development scheme, farm and horticulture development scheme, agriculture and horticulture development scheme, agriculture improvement scheme, farm diversification scheme, farm and conservation grant scheme.

  5 Estimated expenditure

  6 Includes, Pennine Dales, Clun, North Peak, Exmoor, Lake District, Southwest Peak, West Penwith ESAs. Payments relate to the cost of agreements made on the basis of applications submitted in the year shown.

  7 For 1987, 1988, 1989 and 1993 assistance given to upland areas is not separately identifiable.

  8 No differentiation is made under these schemes between upland/lowland producers.

  n/a = Not available.

  Consultants
  Dr. Wright
  To ask the Minister of Agriculture, Fisheries and Food on which occasions since 1979 her Department has employed the services of external consultants; and if she will give details of the purposes for which they were employed and the cost of employing them.

  Mr. Jack
  The annual costs of external consultants employed by the Department—excluding agencies—since 1984–85 are set out. The precise number of contracts, details of the purposes for which they were employed and data for earlier years can be provided only at disproportionate cost.

  Financial year

  Expenditure (£)

  1984–85

  127,110

  1985–86

  1174,724

  1986–87

  1135,279

  1987–88

  144,015

  1988–89

  1,174,114

  1989–90

  2,972,150

  1990–91

  4,495,793

  1991–92

  5,374,284

  1992–93

  7,010,814

  1 Excludes computer consultants.

  Wool Marketing Scheme
  Sir David Steel
  To ask the Minister of Agriculture, Fisheries and Food if she will make a statement on the future of the British wool marketing scheme.

  Mr. Jack
  The Government believe that the British wool marketing scheme continues to operate in the interests of producers, consumers and the industry and consequently are not planning to abolish it. The British Wool Marketing Board is currently considering amendments to the operation of scheme following the ending of the wool guarantee. These amendments will have to be approved by producers before the Government can arrange for their enactment in secondary legislation.

  Arable Area Payments
  Mr. Anthony Coombs
  To ask the Minister of Agriculture, Fisheries and Food what were the numbers of applications and the area applied for under the arable area payments scheme in England in 1993; how the total area applied for compares with the regional base area; and whether there are any plans for changes in the regional base area for 1994.
  414
  Mrs. Gillian Shephard
  Over 46,000 applications covering over 3·5 million hectares were received. Details of the applications and a comparison with the base area are set out.

  We are asking the Commission to establish a separate base area for maize, excluding sweetcorn, in England in 1994. This would mean that arable producers would not be penalised by the recent and continuing expansion in production of forage maize for silage by livestock producers. Should maize production exceed the base area, maize producers would be subject to an in-year reduction in arable area payments and additional uncompensated set-aside the following year, if they wished to continue to claim under the main scheme.

  The changes to the rules on base area I negotiated at the December Agriculture Council mean that maize producers would be penalised only if both the regional maize base area and the total of the regional base areas for both maize and for other crops were exceeded.

  Arable area payments are, of course intended to compensate farmers for the reductions in cereal prices agreed as part of common agricultural policy reform. Producers of forage maize for silage have not suffered from the reductions. Indeed, as livestock producers, they have benefited as cereals are a major input into feed. Many will also be in receipt of livestock subsidies.

  Further changes to the base area will need to include linseed, which comes fully into the arable area payments scheme in 1994, and to exclude vining peas, which are no longer eligible for aid. The expected base area figures are shown in the table:

  Number

  Numbers of applications

  Main scheme

  27,248

  Simplified scheme

  19,006

  Total

  46,254

  Area applied for—ha

  MAIN SCHEME:

  3,361,589

  Cereals and sweetcorn

  2,173,529

  of which: maize

  34,804

  Oilseeds

  316,170

  Proteins

  220,853

  of which: vining peas

  29,782

  Linseed

  152,990

  Set-aside

  498,046

  of which: growing non-food crops

  49,870

  SIMPLIFIED SCHEME:

  225,857

  Cereals

  220,565

  of which: maize

  19,553

  Oilseeds

  1,844

  Proteins

  3,449

  of which: Vining peas

  214

  415

  Number

  GRAND TOTAL

  3,587,446

  Comparison with Base Area (ha)

  Number

  Area applied for under Arable Area Payments Scheme (excluding vining peas and linseed)

  3,404,460

  Area in five-year set-aside

  106,897

  Eligible crops claimed as forage area

  91,159

  of which: maize

  15,026

  TOTAL

  3,602,516

  Base area

  3,742,422

  Base area less total

  139,906

  Proposed Revised Base Area (hectares) (Subject to Commission approval)

  Number

  Maize

  33,226

  Other crops

  3,761,366

  Total

  3,794,592

  Flash Floods
  Mr. Barry Field
  To ask the Minister of Agriculture, Fisheries and Food what advice her department gives to farmers to avoid soil erosion in flash floods.

  Mrs. Shephard
  My Department published the code of good agricultural practice for the protection of soil in December last year.

  The code provides practical guidance to help farmers and growers avoid causing long-term damage to the soil and specifically deals with techniques to combat soil erosion caused by water.

  Copies of the soil code have been placed in the Library of the House.

DUCHY OF LANCASTER

  Technology Foresight
  Dr. Moonie
  To ask the Chancellor of the Duchy of Lancaster how many technology foresight panels he expects to appoint; what industrial or technological sectors they will cover; what their timetable is for reporting to the technology foresight steering group; and when he expects their final report to be published.

  Mr. Waldegrave
  The foresight steering group, chaired by the chief scientific adviser, is meeting on 11 February to decide its advice to me on these issues. I will make an announcement soon after that about how the technology foresight programme will be taken forward during 1994.

  Research and Development
  Dr. Moonie
  To ask the Chancellor of the Duchy of Lancaster what is the timetable for the completion and publication of the 1994 forward look and annual review of Government-funded research and development.
  416
  Mr. Waldegrave
  The 1994 forward look of Government-funded science and technology will be published in April. Statistical tables previously produced in the annual review of Government-funded research and development will continue to be published in the form of a statistical supplement to the new forward look.

EDUCATION

  Education Support and Training Grants
  Mr. Vaz
  To ask the Secretary of State for Education what total amount of funding has been made available over the last year under the grants for education support and training.

  Mr. Forth
  The 1993–94 grants for education support and training GEST programme supports local education authority expenditure of £320·2 million. Central Government grant is in most cases paid at the rate of 60 per cent. of this expenditure.

  Mr. Vaz
  To ask the Secretary of State for Education if he will itemise the expenditure on the administration of grants for education support and training, including printing, advertising and stationery costs as well as worker expenses(a) over the last year and (b) since the scheme was developed.

  Mr. Forth
  The information requested is not collected centrally.

  Voluntary-aided Schools (Capital Grants)
  Mr. Pawsey
  To ask the Secretary of State for Education (1) what amount and percentage of underspending or overspending has occurred on capital grants to voluntary-aided schools for building work in each of the last three completed financial years; whether his Department has reviewed the reasons for any marked or persistent underspending; and whether there are reasons to expect either underspending or overspending to be reported for 1993–94;

  (2) what amount and percentage of underspending or overspending has occurred on capital grants to voluntary-aided schools for repair work in each of the last three completed financial years; whether his Department has reviewed the reasons for any marked or persistent underspending; and whether there are reasons to expect either underspending or overspending to be reported for 1993–94.

  Mr. Forth
  Details of aided school capital and repair grant estimates, final outturn and percentage under-overspend from 1990–91 to 1992–93 are as follows:

  Year

  Estimate £ million

  Outturn £ million

  Percentage under/ overspend

  Repairs

  1990–91

  35·0

  41·8

  19 overspend

  1991–92

  47·5

  49·1

  3 overspend

  1992–93

  55·0

  36·8

  33 underspend

  Capital

  1990–91

  71·0

  64·0

  10 underspend

  1991–92

  84·2

  63·9

  24 underspend

  1992–93

  96·6

  81·3

  16 underspend

  417
  The overall outturn for both programmes for 1990–91 and the two previous years was broadly in balance with the estimate. The main reasons for the recent underspend on the capital programme appear to be attributable to the economic recession, in particular the inability of some governing bodies to fund their 15 per cent. contribution, lower than estimated tender costs and delays caused by contractor liquidations.

  The Department is revising its approval, monitoring and in-year reallocation procedures. Expenditure in 1993–94 so far suggests a small overspend on the capital progamme balanced by a corresponding underspend on repairs. However, the predictive value of expenditure so far is limited because a very high proportion of claims are usually submitted in the last two months of the financial year.

  School Transport (Accidents)
  Mr. Gordon Prentice
  To ask the Secretary of State for Education what measures he intends to bring forward to help prevent or mitigate accidents involving school transport.

  Mr. Forth
  Advice on this matter is available in the 1991 report from the Royal Society for the Prevention of Accidents, endorsed by this Department and distributed to all local education authorities and schools. We are keeping relevant issues under review, in close collaboration with the Department of Transport, which also has relevant responsibilities, but have no immediate proposals for further action.

  Further Education Funding Council
  Mrs. Ann Taylor
  To ask the Secretary of State for Education, pursuant to his answer of 18 January,Official Report, columns 545–48, if he will publish further details of the preparatory costs incurred in the establishment of the Further Education Funding Council.

  Mr. Boswell
  The information is follows:

  £ million

  Running costs

  4·0

  Consultancies

  1·8

  Payments to assist colleges' preparation for independence

  18·6

  Total

  24·4

HEALTH

  Junior Doctors
  Ms. Primarolo
  To ask the Secretary of State for Health what plans she has to provide guidelines for accommodation for junior doctors.

  Dr. Mawhinney
  Advice on living conditions for junior doctors was issued as part of the new deal guidance in June 1991, copies of which are available in the Library. I have asked the national health service to treat improvements in this area as a priority. We have no plans to issue further guidance.
  418

  Health Service Employees
  Mr. Spellar
  To ask the Secretary of State for Health what disciplinary measures are available against health service employees responsible for making unauthorised payments.

  Dr. Mawhinney
  Disciplinary procedures for health service staff employed on national terms and conditions of service are governed by section 40 of the General Whitley Council handbook, a copy of which is available in the Library. This provides a framework within which employing authorities determine local disciplinary procedures. Under the 1990 National Health Service and Community Care Act, NHS trusts have the freedom to establish their own disciplinary procedures.

  The question of whether or not to take disciplinary action, and its severity, is entirely a matter for each health employer.

  Departmental Cars
  Mr. Blunkett
  To ask the Secretary of State for Health (1) what guidelines are applied to the use of official cars for personal purposes by Department of Health staff or Ministers; and who originate these guidelines;

  (2) what arrangements exist within her Department for reimbursement by Ministers of the cost of private use of official cars.

  Mr. Sackville
  Official cars may not be used for personal purposes except during the working week when the effect is a saving of time for use on official duties or for security reasons.

  Mental Health
  Ms Jowell
  To ask the Secretary of State for Health how many districts have a 24-hour, seven-day crisis intervention service provided by experienced mental health workers.

  Mr. Bowis
  All district health authorities are required to have psychiatrists approved under section 12 of the Mental Health Act 1983 available and similarly all local authorities are required to have approved social workers. Dedicated crisis intervention services are in place where assessed needs suggest this is a cost-effective way of providing services.

  Ms Jowell
  To ask the Secretary of State for Health what proportion of staff in mental health units are trained to provide(a) case management, (b) community crisis intervention, (c) home-based care and (d) normalised day care.

  Mr. Bowis
  Mental health staff are expected to be able to work in a variety of service settings and to provide a range of services to patients. It is a matter for local health authorities to decide on training strategies.

  Hospital Hostel Beds
  Ms Jowell
  To ask the Secretary of State for Health how many districts have hospital hostel beds.

  Mr. Bowis
  We encourage the provision of hospital hostels where they are appropriate for local needs but we do not record their provision centrally.
  419

  Respite Beds
  Ms Jowell
  To ask the Secretary of State for Health how many districts provide crisis diversion and respite beds in the community or in the hospital.

  Mr. Bowis
  Health authorities do not usually earmark beds. It is more efficient to use them in a flexible way.

  NHS Private Beds
  Ms Primarolo
  To ask the Secretary of State for Health (1) what plans she has to collect and publish data on private beds in the NHS in the years after 1990–91;

  (2) how many individual NHS/pay bed units there were in each region including special health authorities in each of the last five years; and how many pay beds there were in these units in each of those regions in each of the last five years;

  (3) how many authorised pay beds there were in 1991–92 in (a) special health authorities, (b) in each region and (c) in England as a whole.

  Mr. Sackville
  Trusts do not "authorise" pay beds and therefore we no longer collect authorised pay bed numbers. Private patient income is recorded in the summarised accounts of health authorities and trusts. This information is used to monitor the extent of private patient activity.

  GP Fundholders
  Ms Primarolo
  To ask the Secretary of State for Health what is the time scale for producing finally audited figures on fundholding expenditure for 1992–93.

  Dr. Mawhinney
  Arrangements for audit are made locally. It is for family health services authorities and the Audit Commission to agree the timetable for completing the audit of general practitioner fundholder accounts.

  GP Fundholding
  Mr. Nicholas Winterton
  To ask the Secretary of State for Health (1) how many non-fund-holding practices operating in the area covered by the Macclesfield constituency have declared an interest in becoming fundholding;

  (2) how many (a) fundholding and (b) non-fundholding general practitioner practices operate in the area covered by the Macclesfield parliamentary constituency.

  Dr. Mawhinney
  Regional health authorities are responsible for managing the general practitioner fundholding scheme in their areas. Nationally, 25 per cent. of the population is covered by GP fundholders. In Mersey region, this is 35 per cent. Information by constituency is not available and could be determined only at disproportionate cost.

  Child Minding
  Mr. Wilshire
  To ask the Secretary of State for Health if she will set up an investigation into the adequacy of current child minding regulations and the competence of Surrey county council's social services department following the verdict in the case of Thomas Harrison v. Surrey county council and Mrs. Christine Walton; and if she will make a statement.

  Mr. Bowis
  The events in this case took place in 1989, and the Children Act 1989, which came into force in 420
  October 1991, contains updated and effective provisions which enable local authorities to regulate childminders, so that children are protected from harm. I understand that Surrey county council has now reorganised its registration service, and has asked the area child protection committee to conduct a multi-agency review into all the circumstances surrounding the case to ensure that all the lessons have been learned. The Department's social services inspectorate is monitoring this.

  Hospitals
  Mr. Blunkett
  To ask the Secretary of State for Health how many hospitals there were in England in(a) 1992 and (b)

  Mr. Sackville
  The available information is shown in the table. Prior to April 1991, a count of the number of individual units supplying activity data provided an estimate of the number of hospitals. The creation of trusts and directly managed units means that from 1991–92 this information is no longer held centrally.

  Number of providers submitting data for 1991–92 and 1992–93

  1991–92

  1992–93

  Directly managed units

  389

  278

  NHS trusts

  53

  141

  Special health authorities

  8

  8

  Total

  450

  427

  Note: The count includes all providers who submitted data for wards open day and night, 24 hours, and/or wards open in the day only.

  Birth Defects
  Mr. Mandelson
  To ask the Secretary of State for Health (1) what information is currently available about the environmental pollution or other causes which might provide an explanation of the incidence of babies being born with deformed or missing hands;

  (2) what resources she has made available to local health authorities or to the Medical Research Council, or both, in their examination of babies born with deformed or missing hands;

  (3) if she will order a full Government investigation into the incidence of babies being born with deformed or missing hands in coastal areas; and if she will make a statement.

  Mr. Sackville
  Limb deformities which have occurred in babies born in coastal areas have been the subject of preliminary local investigation. Local inquiries of this kind form part of the public health functions of the health authorities concerned, which are funded as a matter of course. There is no evidence to suggest that the incidence of limb defects in these places is any higher than might occur by chance. Nor is there any information to suggest that environmental pollution might be the cause. Clinicians in Hampshire have been in touch informally with officers of the Medical Research Council's epidemiology unit at Southampton. Any further developments will be monitored closely.

  Mr. Boyes
  To ask the Secretary of State for Health if she will institute an investigation into the problem of children being born with one hand only; if she will institute
  421
  an investigation into the problems of children with any other generalised deformities of the body; and if she will make a statement.

  Mr. Sackville
  A national system for monitoring and detecting any increase in the prevalence of congenital malformations co-ordinated by the Office of Population Censuses and Surveys has been in place for the last 30 years. We are aware of particular local investigations which are taking place into the reasons for limb deformities. It would be inappropriate to speculate further until these have been completed.

  Form AG3
  Dr. Spink
  To ask the Secretary of State for Health what plans she has to simplify form AG3, with regard to sight tests, glasses and contact lenses; and if she will make a statement.

  Dr. Mawhinney
  The style and content of form AG3 are kept under review and changes to improve effectiveness and clarity are made whenever it is feasible to do so.

  Public Bodies
  Mr. Kilfoyle
  To ask the Secretary of State for Health who are the members currently appointed to the Pharmacists Review Body.

  Dr. Mawhinney
  The Pharmacists Review Panel is chaired by Mr. J. Keir QC, a former joint secretary of Unilever plc. Its members are Mr. W. G. K. Carter CBE, partner, Price Waterhouse and Co.; Mr. J. F. H. Pease-Watkin, former personnel director, Bowater Corporation; and Mr. J. R. Sargent CBE, former group economic adviser, Midland bank.

  Vicky Rimmer
  Mr. Blunkett
  To ask the Secretary of State for Health what information has been sought by officials of her Department from doctors treating Vicky Rimmer at the Walton hospital in Liverpool.

  Mr. Sackville
  It is not our practice to make such inquiries. The treatment of individual patients is a matter for their clinicians.

  Creutzfeldt-Jakob Disease
  Mr. Blunkett
  To ask the Secretary of State for Health (1) what scientific research is being funded by her Department into possible links between Creutzfeldt-Jakob disease and bovine spongiform encephalopathy;

  (2) whether she will establish an independent inquiry into possible links between Creutzfeldt-Jakob disease and BSE.

  Mr. Sackville
  Doctors are asked to report every suspected case of Creutzfeldt-Jakob disease, (CJD), to the national Creutzfeldt-Jakob disease surveillance unit in Edinburgh, funded jointly by the Department and the Scottish Office. The unit is headed by Dr. Robert Will, consultant neurologist at Edinburgh's Western general hospital. The circumstances of each case are recorded fully and in particular all cases are examined for possible sources of transmission and any occupational factor. The 422
  unit was established in 1990 and provided reports in 1992 and 1993, copies of which are readily available to the medical and scientific community and are available in the Library.

  The Government are already advised by the independent spongiform encephalopathy advisory committee, chaired by Dr. David Tyrrell FRS, which considers issues relating to spongiform encephalopathies—including CJD and bovine spongiform encephalopathy.

  In the circumstances that every case of the very rare disease, CJD, is being fully monitored, that the medical and scientific community is alert to the need to learn more about the causes of CJD, and that the Government have in place an expert committee to give advice, it is not easy to see what would be added by holding an inquiry.

  In response to recent media reports, the Chief Medical Officer stated:
  "I am concerned about the recent spate of irresponsible scare stories in the press suggesting that people are at risk of contracting the fatal Creutzfeldt-Jakob disease from eating beef. These sensational and alarmist reports must inevitably frighten large numbers of ordinary people—and for no good reason.
  The facts are clear. Creutzfeldt-Jakob disease is extremely rare—only one person in a million gets it—and those unfortunate people who do get it have contracted it for a variety of reasons. There is no evidence at all that eating infected meat is one of them.
  Newspaper reports have been commenting on the sad case of one 16-year-old girl—yet no one knows what illness she is suffering from.
  We do not ignore any suggestions about the causes of diseases of this seriousness, and the Government have invested considerable resources on the research issues in recent years looking at:

  the incidence of CJD;

  the causes of each individual case;

  any possible links with BSE.

  On the basis of the work done so far, there is no evidence whatever that BSE causes CJD and, similarly, not the slightest evidence that eating beef or hamburgers causes CJD.
  My position as the Government's Chief Medical Officer means that I must provide the best advice to the public, whatever the consequences. If there was any evidence that suggested a link, then I would regard it as my responsibility to bring it to public attention."

  Mr. Blunkett
  To ask the Secretary of State for Health what discussions she has had with Ministers at the Ministry of Agriculture, Fisheries and Food regarding the possibility of a link between BSE and Creutzfeldt-Jakob disease.

  Mr. Sackville
  Ministers and officials in both departments are in regular contact on these and other matters of mutual interest.

  NHS Hospitals (Private Medical Companies)
  Mr. Milburn
  To ask the Secretary of State for Health what guidance her Department has issued to NHS hospitals about leasing or selling part of their premises to house the facilities of private medical companies.

  Mr. Sackville
  None.

  Mr. Milburn
  To ask the Secretary of State for Health how many NHS hospitals have leased or sold part of their premises to house the facilities of private medical companies by region.

  Mr. Sackville
  This is a local matter for national health service trusts and health authorities.
  423

TRANSPORT

  Driving Offences
  Mr. Dunn
  To ask the Secretary of State for Transport what changes he is proposing to the present arrangements for disciplining drivers of large goods and passenger-carrying vehicles who commit offences.

  Mr. Key
  The traffic commissioners are responsible for deciding whether drivers are fit persons to hold an entitlement to drive large goods and passenger carrying vehicles.

  It must remain the responsibility of the traffic commissioners to deal with each case which comes to their notice on its merits. I am, however, recommending to the traffic commissioners that, in cases where no aggravating circumstances apply, they should follow the guidelines set out:

  (i) a first-time disqualification of 12 months or less should normally be dealt with by a warning letter, with no further disqualification of the driver's LGV or PCV entitlement;

  (ii) a disqualification of longer than 12 months should result in the driver appearing before a traffic commissioner and a period of one to three months' further suspension of the LGV/PCV entitlement should be considered to give the driver an opportunity to regain his or her driving skills and road sense in an ordinary car before starting to drive LGVs or PCVs again;

  (iii) where two or more disqualifications of more than eight weeks have been imposed within the last five years, and the combined total exceeds 12 months, the driver should normally be required to attend a hearing. A period of three to six months' further suspension of the LGV/PCV entitlement should normally be applied;

  (iv) Traffic commissioners should continue to deal on a case by case basis with drivers convicted of relevant non-endorsable offences—for example, drivers' hours—endorsable offences such as bad accidents and others which come to their notice and—in the case of PCV drivers—relevant criminal convictions; and

  (v) for new applicants for LGV/PCV entitlement, if the applicant has nine or more penalty points, traffic commissioners should consider either issuing a warning or asking the applicant to resubmit his/her application when the penalty points had been reduced.

  River Crossings (London)
  Mr. Spearing
  To ask the Secretary of State for Transport (1) what representation he has received about proposals for the construction of a rail tunnel from the existing electrified north London link line in the Silvertown-North Woolwich area to the London Bridge to Gravesend line south of the Thames at Woolwich; what estimate he has made of the approximate cost of (i) single and (ii) double bore tunnels; and what assessment he has made of the priority and value for money of (1) the proposed tunnel, (2) the projected east London river crossing and (3) the proposed Blackwall bridge;

  (2) pursuant to his oral answer of 24 January, Official Report, column 9, concerning studies of cross-Thames rail links in east London, what is the estimated cost of constructing a tunnel of about one mile between North Woolwich and Woolwich Arsenal (a) of one bore and (b) of two bores; and what is the approximate capacity of persons per hour in both directions that each would provide.

  Mr. Norris
  London Transport, the London Docklands development corporation and Network SouthEast have 424
  recently published a report of their joint study of the options for a rail tunnel between the royal docks and Woolwich. Provisional engineering feasibility work has established that the preferred option for the tunnel might be immersed tube, which could provide for a twin-track tunnel with a capacity of perhaps up to 24,000 passengers per hour in each direction. Depending upon the nature of the preferred scheme, capital costs, including rolling stock, are estimated at between £160 million and £250 million. A full study is to be undertaken during 1994.

  This rail crossing, the east London river crossing, and Blackwall bridges are all at different stages of development and it is too soon to assess priorities; but each appears to justify further study.

  Deregulation
  Mrs. Dunwoody
  To ask the Secretary of State for Transport whether operators of passenger and goods vehicles will still be required to advertise in the local press when they wish to renew their licences under the proposals in the Deregulation and Contracting Out Bill.

  Mr. Norris
  Yes.

  Mrs. Dunwoody
  To ask the Secretary of State for Transport what measures he intends to introduce to ensure that regular maintenance checks are carried out of goods and public service vehicle operating centres following his proposals in the Deregulation and Contracting Out Bill.

  Mr. Norris
  There will be no change to the present system. Operators will still be required to satisfy the traffic commissioner that they have adequate maintenance arrangements for their vehicles.

  Mrs. Dunwoody
  To ask the Secretary of State for Transport whether goods and public service operators will be able to increase their vehicle fleet size without the authority of the traffic commissioners under the proposals set out in the Deregulation and Contracting Out Bill.

  Mr. Norris
  No.

  Mrs. Dunwoody
  To ask the Secretary of State for Transport (1) what measures he intends to introduce to ensure that the environmental safeguards currently provided under current goods vehicle operating licensing laws are protected following the introduction of the Deregulation and Contracting Out Bill;

  (2) whether operators of passenger and goods vehicles will still be required to advertise in the local press when they wish to renew their licences under the proposals in the Deregulation and Contracting Out Bill.

  Mr. Norris
  Operators will no longer be required to renew their licences. Under the system of continuous licensing, an operator's licence would last for the lifetime of the holder, provided there was no breach of the conditions under which the licence was granted and payment of fees associated with the licence were paid. The system will allow for periodic checks to be made on operators, and an opportunity for goods vehicle operating centres to be reviewed at five-yearly intervals to ensure that they remain suitable.
  425

DEFENCE

  Pornography Magazines
  Mr. Milburn
  To ask the Secretary of State for Defence on how many occasions his Department has purchased soft pornography magazines for distribution or sale to members of the armed forces in each year since 1980; how many magazines have been purchased; and what has been the cost to his Department.

  Mr. Hanley
  My Department is not aware that any public funds have been or are being used for the purchase of such magazines for distribution or sale to members of the armed forces.

  Cyprus Bases
  Mr. John D. Taylor
  To ask the Secretary of State for Defence how many(a) Greek Cypriots and (b) Turkish Cypriots are employed at each of the two sovereign bases in Cyprus.

  Mr. Hanley
  A total of 2,327 Cypriots are employed in the sovereign bases in Cyprus. In the western sovereign base area, SBA, the MOD employs 1,414 Greek Cypriots. In the eastern sovereign base area there are 596 Greek Cypriot employees and 307 from the Turkish Cypriot community. In addition to those in the SBAs, we employ 93 Greek Cypriots and one Turkish Cypriot at other sites in the Republic of Cyprus.

  Ministry of Defence Flights
  Dr. David Clark
  To ask the Secretary of State for Defence, pursuant to his answers of 14 January,Official Report, columns 347–48, and 20 January, Official Report, column 826, what payments he has received from non-MOD sources for the use by non-MOD personnel of the weekly scheduled defence-specific flights to Washington, Belize and Decimomannu; and if he will make a statement.

  Mr. Hanley
  Further to my answer of 20 January,Official Report, column 826, the payments received from the use of scheduled flights to Washington, Belize and Decimomannu by non-MOD staff over the last 12 months amounts to £232,000.

  Anti-personnel Mines
  Dr. David Clark
  To ask the Secretary of State for Defence what assessment he has made of the dangers to civilians created by the placement of anti-personnel mines that have (i) self-destructing mechanisms, and (ii) self-neutralising mechanisms and (iii) that do not have self-destructing or self-neutralising mechanisms; and if he will make a statement.

  Mr. Hanley
  Anti-personnel mines are inherently dangerous to civilians. However, they are legitimate defensive military weapons if used properly and in accordance with the laws of war, as our armed forces are trained to do. The extra controls provided by self-destructing or self-neutralising mechanisms help to ensure that mines with such capabilities are likely to be less dangerous to civilians than those without them.

  Dr. David Clark
  To ask the Secretary of State for Defence what effect the recent UN resolution calling for a426
  moratorium on the export of anti-personnel land mines has had on the policies of his Department; and if he will make a statement.

  Mr. Hanley
  The resolution has had no direct effect, since the United Kingdom has not produced or exported conventional anti-personnel land mines in the category covered by the resolution for over a decade.

  Dr. David Clark
  To ask the Secretary of State for Defence what assessment he has made of the effect of the recent UN resolution calling for a moratorium on the export of anti-personnel land mines on the need for de-mining operations; and if he will make a statement.

  Mr. Aitken
  The UN resolution has no direct effect on the need for de-mining operations.

  Bosnia
  Dr. David Clark
  To ask the Secretary of State for Defence what assessment he has made of the effect on service morale of his policy on the provision of telephone services for personnel deployed in Bosnia; and if he will make a statement.

  Mr. Hanley
  We are fully conscious of the importance to service morale of regular telephone contacts with relatives and friends. For this reason, we have set up arrangements in Bosnia whereby service personnel at all major locations can make personal calls using commercial networks or, where these are not available, the military operational network. All British troops serving in the forner Yugoslavia receive a telephone allowance of –13·50 per month.

  Dr. David Clark
  To ask the Secretary of State for Defence what arrangements(a) existed prior to 11 January and (b) currently exist to enable British service personnel in Bosnia to make use of London-based operator services to place reverse charge calls; and if he will make a statement.

  Mr. Hanley
  Where commercial telephone lines are not available, service personnel in Bosnia are permitted to make personal calls using the military network. Calls to the United Kingdom on the military network are routed via an operator in London and the costs within the United Kingdom are billed by means of reverse charges. Since this is an operational network, its use is however limited to times at the local commander's discretion depending upon the operational circumstances. Since 11 January, following the installation of six British Telecom cardphones at Vitez, access to the military network there for personal calls has been withdrawn. These BT telephones take United Kingdom phonecards which can be purchased at reduced rates in the local NAAFI or can be sent by relatives in the post. The call charge rate is cheaper than the normal BT rate for calls from the United Kingdom to Yugoslavia.

  Mr. Ainger
  To ask the Secretary of State for Defence what information he has as to the policy of other Governments contributing troops to UNPROFOR in Bosnia concerning the retention or passing on of United Nations payments to their personnel; and if he will make a statement.

  Mr. Hanley
  We have no such information.
  427
  Mr. Ainger
  To ask the Secretary of State for Defence (1) what rate per day per soldier the United Nations pays the United Kingdom for stationing service personnel in Bosnia;

  (2) what payments the British Government receive from the United Nations to cover salary costs of British service personnel in Bosnia;

  (3) what payments the British Government receive from the United Nations for stationing their troops in Bosnia; and if he will give a detailed breakdown of those payments.

  Mr. Hanley
  The United Nations pays a standard troop cost of $988 per person per month irrespective of rank, plus a supplementary amount of $291 for a limited number of specialists as a contribution towards salary and allowances. The United Nations also pays $65 per person per month to cover personal clothing, and equipment and $5 per person per month for personal weapons and ammunition. Other claims for reimbursable items of expenditure—for example, vehicles, equipment—depend on the United Nations' ability to pay.

  Mr. Ainger
  To ask the Secretary of State for Defence how many British service personnel are currently stationed in Bosnia; what is the total pay bill for those personnel; and what supplementary payments or allowances they receive, on top of normal salary(a) from the British Government and (b) from the United Nations.

  Mr. Hanley
  There are currently some 2,300 British service personnel stationed in Bosnia. The total pay bill varies with the rotation of personnel in theatre who are paid according to their rank, their personal circumstances and the location from which they were posted. In addition to their normal salary, and subject to eligibility, they receive from the British Government a separation allowance of £3·50 per day after 30 days and a proportion of local overseas allowance—70 per cent. for married personnel, 40 per cent. for single personnel. They also receive a telephone allowance of £13·50 per month. All service personnel serving under United Nations auspices in Bosnia receive a United Nations set allowance of $1·28 per day for incidental expenses an a lump sum of $73·50 to cover the first seven days of rest and recreation leave.

  Mr. Ainger
  To ask the Secretary of State for Defence whether payments received by the British Government from the United Nations for stationing service personnel in Bosnia are(a) retained entirely by the Ministry of Defence or (b) passed on in whole, or in part to United Kingdom soldiers.

  Mr. Hanley
  In accordance with an inter-departmental arrangement, the MOD recovers the cost of United Kingdom participation in peacekeeping operations from the Foreign and Commonwealth Office. United Nations receipts to Her Majesty's Government are used by the Foreign and Commonwealth Office to offest the overall cost of United Nations peacekeeping. All United Nations troops in Bosnia, irrespective of nationality, are entitled to receive the same United Nations allowances, which currently stand at $128 a day each and a lump sum of $73·50 per person to cover rest and recreation; all United Kingdom service personnel serving in the former Yugoslavia receive these United Nations allowances in full.
  428

  Training
  Dr. David Clark
  To ask the Secretary of State for Defence, pursuant to his answer of 20 January,Official Report, column 824, if he will provide details of the special United Nations training programme for personnel in Bosnia, including what personnel provide this training, where the training is carried out, what is the source of funding for it, how long is the training and any other relevant information.

  Mr. Hanley
  The training package for personnel warned off for deployment to the former Yugoslavia consists of a 12-day special-to-mission package. 'The training is carried out by specialist training advisory teams at the Army's combined arms training centre at Warminster and, for Germany-based units, at Sennelager. Overall training costs are borne mainly by the Defence budget apart from some minor incidental costs which the Foreign and Commonwealth Office cover.

  Mercenaries
  Mr. Mullin
  To ask the Secretary of State for Defence when he first became aware the Azeri Government were hiring British mercenaries; and what steps he took.

  Mr. Hanley
  This is a matter for my right hon. Friend the Foreign Secretary.

  HMS Valiant
  Mr. Churchill
  To ask the Secretary of State for Defence what was the cost of HMS Valiant's most recent refit; when she was recommissioned; whether she remains operational; and when she is due to pay off.

  Mr. Aitken
  HMS Valiant's most recent refit was carried out in Rosyth and was completed in July 1989. The refit straddled the introduction of commercial management into the dockyards in April 1987 and that part of the refit which took place under commercial management cost around £77 million. There has also been a routine docking and essential defect period in 1992–93 at a cost of around £13 million although the final cost certificates have not yet been submitted. Refitting expenditure prior to the introduction of commercial management could only be identified at disproportionate cost. The vessel re-entered service on completion of the refit and currently remains in full time service with the Royal Navy; it is not our practice to discuss pay-off dates for individual vessels.

  Vacant Dwellings
  Dr. Berry
  To ask the Secretary of State for Defence how many vacant dwellings are owned by his Department in each parliamentary constituency in Avon, Somerset, Wiltshire and Gloucestershire; and what the figures were for January 1992.

  Mr. Hanley
  My noble Friend the Under-Secretary of State for Defence will write to the hon. Member.

HOME DEPARTMENT

  Young Offenders
  Mr. Cox
  To ask the Secretary of State for the Home Department with whom he discussed the increased powers that he has granted to adjudicating governors within the
  429
  Prison Service to sentence young offenders from three days to seven days' cellular confinement; and if he will make a statement.

  Mr. Peter Lloyd
  The maximum periods for the punishment of cellular confinement were increased for both adult prisoners and young offenders on 1 January this year. My right hon. and learned Friend has previously discussed the proposal with ministerial colleagues and with the Director General of the Prison Service and informed the House of his intention to make the change on 10 December last year in replying to a question from my hon. and learned Friend the Member for Burton (Sir I. Lawrence),Official Report, column 419.

  Mr. Cox
  To ask the Secretary of State for the Home Department for what reasons he agreed to increase from three days to seven days the punishment of cellular confinement that can be given by prison governors to young offenders and juveniles; and if he will make a statement.

  Mr. Peter Lloyd
  Maximum periods for the punishment of cellular confinement were increased for both adult prisoners and young offenders on 1 January this year. The purpose was to strengthen the disciplinary powers of governors, which was particularly desirable in the light of increased offending in prison establishments.

  Public Bodies
  Mr. Kilfoyle
  To ask the Secretary of State for the Home Department who are the members currently appointed to the Fire Services Examinations Board.

  Mr. Charles Wardle
  The members of the Fire Services Examinations Board are:

  Chairman (appointed by Secretary of State)

  Mr. B. T. A. Collins, OBE QFSM

  (HM Chief Inspector of Fire Services for England and Wales)

  Members

  (appointed by Secretary of State)

  Mr. G. P. Walker (Scottish Office)

  Mr. B. L. Fuller, CBE QFSM

  (Commandant, Chief Executive, Fire Service College)

  Mr. D. Dick, OBE

  Mr. M. J. Addison (Home Office)

  Appointed by

  The Association of County Councils

  Mr. A. Till

  Mr. T. Gorman

  Mr. T. L. Glossop

  Appointed by

  The Association of Metropolitan Authorities

  Mr. W. Dunlop

  Mr. S. G. Bennett

  Mr. G. Brewer

  Appointed by

  The Convention of Scottish Local Authorities

  Mr. W. E. Axon

  Mr. G. Bird

  Mr. P. Donnolly

  Appointed by

  The Chief and Assistant Chief Fire Officers Association

  Mr. J. H. Windsor

  Mr. J. G. Russel

  Appointed by

  430

  The National Association of Fire Officers

  Mr. G. Williams

  Mr. R. Anderson

  Appointed by

  The Fire Brigades Union

  Mr. K. Cameron

  Mr. R. Scott

  Mr. I. Brandling

  Appointed by

  The Institution of Fire Engineers

  Dr. R. W. Docherty

  Mr. Kilfoyle
  To ask the Secretary of State for the Home Department who are the members currently appointed to the misuse of drugs professional panel.

  Mr. Maclean
  A professional panel does not have a standing membership. It consists of a chairman and two other persons drawn from a pool of members of the respondent's own profession, nominated by the relevant professional bodies, and appointed by the Secretary of State.

  Mr. Kilfoyle
  To ask the Secretary of State for the Home Department who are the members currently appointed to the Criminal Injuries Compensation Board.

  Mr. Maclean
  The current members of the board are:

  Lord Carlisle of Bucklow, PC, QC

  Mr. James Law,QC1

  Mr. Charles Whitby, QC

  Mr. Barry Chedlow, QC

  Sir David Calcutt, QC

  Miss Beryl Cooper, QC

  Miss Shirley Ritchie, QC

  Mr. Hugh Carlisle, QC

  Mr. Colin Fawcett, QC

  Mr. Michael Park, CBE1

  Mr. John Crowley, QC

  Sir Arthur Hoole

  Mr. Donald Robertson, QC1

  Mr. Michael Lewer, QC

  Mr. Peter Weitzman, QC

  Mr. Conrad Seagroatt, QC

  Mr. John Archer, QC

  Mr. Owen Thomas, QC

  Mr. Leighton Williams, QC

  Mr. Graeme Hamilton, QC

  Sir Derek Bradbeer, OBE

  Mr. Crawford Lindsay, QC

  Lord Macaulay of Bragar, QC1

  Miss Diane Cotton, QC

  Mr. Donald Mackay, QC1

  Mr. Evan Stone, QC

  Mr. Daniel Brennan, QC

  Mr. Timothy Preston, QC

  Mr. John Cherry, QC

  Mr. Kevin Drummond, QC1

  Mr. Edward Gee

  Mr. David Barker, QC

  His Honour James Kingham

  His Honour Sir David West-Russell

  His Honour John da Cunha

  Mr. Michael Churchouse

  Mr. James M. McGhie1

  Sir Richard Gaskell

  Mr. Norman Miscampbell, QC

  Mr. Michael Lewis, QC

  Mr. Harold Gooddard, QC

  His Honour SirJonathan Clarke

  1 Member appointed by the Secretary of State for Scotland.

  Mr. Kilfoyle
  To ask the Secretary of State for the Home Department who are the members currently appointed to the Animal Procedures Committee.
  431
  Mr. Charles Wardle
  I refer the hon. Member to the reply to a question from the hon. Member for Glanford and Scunthorpe (Mr. Morley) on 14 January, column 337.

  Mr. Kilfoyle
  To ask the Secretary of State for the Home Department who are the members currently appointed to the Police Promotion Examinations Board.

  Mr. Charles Wardle
  The chairman of the Police Promotion Examinations Board is Professor J. A. Andrews, whose current appointment runs until August 1996. The members of the board are appointed by the bodies which they represent: these include the police staff associations, the local authority associations, the Home Office, Her Majesty's inspector of constabulary, the chief examiner and the local government management board, which administers the examinations.

  The current membership of the board is as follows:

  Professor J. A. Andrews—Chairman

  Mrs. P. G. W. Catto—Home Office

  Mr. W. Lawrie—Secretary

  Mrs. E. M. Eyers—Assistant Secretary

  Mr. J. Dunn—Assistant Secretary

  Miss S. Hubbard—HMIC

  Mr. P. Rabbeth—Police Federation

  Mr. D. Hayward—Police Federation

  Mr. B. Pallant—Police Federation

  Mr. H. Lowe—ACC

  Mr. V. Petrie—ACC

  Commander B. Aitchison—Metropolitan Police

  Mr. A. Dyer—ACPO (Moderator)

  Ch. Supt. B. MacKenzie—Superintendents Association

  Mrs. C. Webb—LGMB

  Mr. B. Whyte—CPTU Chief Examiner

  (Not including "Non-members likely to attend")

  Mr. Kilfoyle
  To ask the Secretary of State for the Home Department who are the members currently appointed to the Misuse of Drugs Tribunal.

  Mr. Maclean
  The Misuse of Drugs Act 1971 specifies that a tribunal should consist of five members. The chairman, who is currently Mrs. H. Sarkany, must be a barrister, advocate or solicitor and is appointed by the Lord Chancellor.

  The other four persons are drawn from a pool of members of the respondent's own profession, nominated by the relevant professional bodies, and are appointed by the Secretary of State for particular cases.

  Mr. Kilfoyle
  To ask the Secretary of State for the Home Department who are the members currently appointed to the Poisons Board.

  Mr. Maclean
  The role of the Poisons Board is under review as part of a general review of poisons legislation. It has not been necessary to convene the board since 1990 and it has no appointed members at present.

  Mr. Kilfoyle
  To ask the Secretary of State for the Home Department who are the members currently appointed to the Advisory Council on the Misuse of Drugs.

  Mr. Maclean
  The current membership of the Advisory Council on the Misuse of Drugs is as follows:

  Professor D. G. Grahame-Smith Chairman

  Mrs. J. Barlow Female Dependency Projects Manager, Stirling

  Mr. R. Bartle Metropolitan Stipendiary Magistrate, London

  Dr. W. B. Clee General Medical Practitioner, Cardiff

  Mr. D. S. Coleman—Unit Leader, Office of the Health Service Commission for England, London

  Dr. M. Donmall—Director, Drug Research Unit and Lecturer in Public Health, Manchester

  432

  Dr. A. J. Duxbury—Dentist, Manchester

  Professor G. Edwards—Consultant Psychiatrist, London

  Mrs. J. Faugier—Senior Research Fellow in Nursing, Manchester

  Dr. J. Greenwood—Consultant Psychiatrist, Edinburgh

  Ms K. Hager—Co-ordinator, SWRHA Drugs Services Project, Exeter

  Mr. P. Hayes—Probation Service, London

  Ms L. Hewitt—Project Manager, the Stockwell Project, London

  Mr. M. G. Hindson—Probation Service, Manchester

  Professor R. S. Jones—Professor of Veterinary Anaesthesia, Liverpool

  Ms R. Joyce—Health Education Co-ordinator, Cambridgeshire

  Mr. J. L. Kay—Managing Director Healthwise Ltd., Liverpool

  Dr. M. R. Keen—Consultant Psychiatrist, Cardiff

  Dr. D. H. Kennedy—Consultant Physician, Glasgow

  Professor M. H. Lader—Professor of Psychopharmacology, London

  Mr. A. D. Massaum—Pharmaceutical Industry, London

  Mr. M. NaraynSingh—Public Education Officer, Manchester

  Professor W. D. Ollis—Professor of Organic Chemistry, Birmingham

  Mr. D. Owen—Chief Constable, North Wales

  Mr. K. Patel—Deputy Director, the Bridge Project, Bradford

  Dr. D. Patterson—Consultant Psychiatrist, Northern Ireland

  Mr. A. W. Ramsay—Regional Adviser in Health Education, Strathclyde

  Dr. S. Ruben—Consultant Psychiatrist, Liverpool

  Viscountess Runciman—Outreach Adviser, London

  Mr. I. Sherwood—Senior Specialist Nurse, Bristol

  Professor G. V. Stimson—Director of the Centre for Research on Drugs and Health Behaviour, London

  Dr J. S. Strang—Consultant Psychiatrist, London

  Dr. D. J. Temple—Director of Post Graduate Pharmaceutical Studies for NHS in Wales

  Mr. D. Turner—Director, SCODA, London

  Mr. E. Unsworth—Deputy Director, Social Services, Cambridgeshire

  Mr. P. Walker—Headteacher, Kent

  Dr. T. Waller—General Medical Practitioner, Suffolk

  Mr. Kilfoyle
  To ask the Secretary of State for the Home Department who are the members currently appointed to the Misuse of Drugs Advisory Board.

  Mr. Maclean
  The Misuse of Drugs Act specifies that an advisory body should consist of three members. The chairman, who is currently Miss J. Southworth, must be a QC and is appointed by the Lord Chancellor.

  One of the other two members is drawn from a pool of members of the respondent's own profession, nominated by the relevant professional bodies, and the other is a member of the respondent's own profession who is an officer of a department of Government. They are appointed by the Secretary of State for particular cases.

  Mr. Kilfoyle
  To ask the Secretary of State for the Home Department who are the members currently appointed to the Police Staff College, board of governors.

  Mr. Charles Wardle
  Current membership of the board of governors is as follows:

  Sir Clive Whitmore, GCB, CVO (Chairman)

  Mr. I. M. Burns (Deputy Chairman)

  Mr. T. A. Morris—Home Office

  Mr. C. Scoble—Home Office

  Mrs. P. G. W.Catto—Home Office

  Mr. J. P. Ryan—National Director of Police Training

  Mr. A. Dyer—Association of Chief Police Officers

  Mr. J. C. Hoddinott—Association of Chief Police Officers

  Mr. B. H. Skitt—Association of Chief Police Officers

  Mr. B. H. Weight—Association of Chief Police Officers

  Mr. P. Condon—Commissioner of Police for the Metropolis

  Mr. B. Mackenzie—Superintendents' Association

  Mr. G. Wilson—Superintendents' Association

  433

  Mr. R. B. Coyles—Police Federation

  Mr. D. Hayward—Police Federation

  Mr. B. H. Drake—Association of County Councils

  Mr. H. Lowe—Association of County Councils

  Mr. C. P. Winterton—Association of County Councils

  Mr. G. Gill—Association of Metropolitan Authorities

  Mr. W. Smith—Association of Metropolitan Authorities

  Professor J. P. Martin—Academic Adviser

  Mr. P. Dawson— Staff College Directing Staff Advisers

  Mrs. C. Montague—Staff College Directing Staff Advisers

  Mr. G. A. Widdecombe—Secretary to the Board

  Miss E. B. M. Rak—Assistant Secretary to the Board

  Apart from the academic adviser, all members serve either in an ex officio capacity or are nominated by the organisations they represent.

  Political Asylum Seekers
  Mr. Cox
  To ask the Secretary of State for the Home Department if he will list the penal establishments in England and Wales at which people seeking political asylum were being detained as of 20 January.

  Mr. Charles Wardle
  The available information shows that people seeking asylum were detained at the following Prison Service establishments in England and Wales on 24 January 1994.

  Armley

  Glen Parva

  Beford

  Gloucester

  Birmingham

  Haslar

  Blakenhurst

  Highdown

  Blunderston

  Holloway

  Brinsford

  Hatfield

  Bristol

  Leeds

  Brixton

  Lewes

  Bullingdon

  Moorland

  Camp Hill

  Norwich

  Canterbury

  Pentonville

  Cardiff

  Risley

  Chelmsford

  Rochester

  Dorchester

  Walton

  Dover

  Wandsworth

  Durham

  Winchester

  Elmley

  Winson Green

  Exeter

  Wormwood Scrubs

  Feltham

  Mr. Cox
  To ask the Secretary of State for the Home Department how many(a) men and (b) women are being held in custody in England and Wales and are seeking political asylum into the United Kingdom as of 20 January.

  Mr. Charles Wardle
  The available information shows that on 24 January a total of 557 male and 44 female asylum seekers were being held in detention in England and Wales.

  Bail Hostels
  Mr. Blair
  To ask the Secretary of State for the Home Department what progress has been made on the bail hostel expansion programme which was announced in February 1992; and to what extent the programme has been revised as a consequence of the latest public expenditure survey.

  Mr. Maclean
  When the February 1992 announcement was made there were 2,400 approved hostel places. At the end of this financial year there should be 2,730 places. Our current spending plans provide for 2,680 places in April 1996.
  434
  Mr. Blair
  To ask the Secretary of State for the Home Department what is the projected bail hostel population in England and Wales for each of the next five years.

  Mr. Maclean
  On the basis of 83 per cent. planned occupancy, as set out in the Home Office annual report 1993, the average number of approved probation-bail hostel residents will be as follows:

  Number

  1994–95

  2,067

  1995–96

  2,150

  1996–97

  2,249

  1997–98

  2,249

  1998–99

  2,249

  Mr. Blair
  To ask the Secretary of State for the Home Department what is the projected average bail population for each of the next five years in England and Wales.

  Mr. Maclean
  No such projections are made.

  Remand Prisoners
  Mr. Blair
  To ask the Secretary of State for the Home Department what is the projected remand population for England and Wales for each of the next five years.

  Mr. Peter Lloyd
  Projections of long-term trends in the prison population covering the next five years were published in the Home Office statistical bulletin 6/93 on 30 March 1993 on the basis of the legislation then in force. These projections have been revised on an interim basis, reflecting the changes expected to result from the Criminal Justice Act 1993. A revised remand projection was not prepared. The interim projection is subject to a considerable margin of uncertainty. The revised figures for the total population were given in a reply to the hon. Member for Lewisham, Deptford (Ms Ruddock) on 18 October 1993,Official Report, column 118–19.

  Right to Silence
  Mr. Llwyd
  To ask the Secretary of State for the Home Department what assessment he has made of the implications for the provisions of the Criminal Justice and Public Order Bill relating to the defendant's right to silence of the ruling by the European Commission of Human Rights on 18 January in the case of John Murray; and if he will make a statement.

  Mr. Maclean
  This was not a decision on the merits of the case. The Commission has simply concluded, as a preliminary matter, that the application is not "manifestly ill-founded", an abuse of the right of petition, or otherwise incompatible with the European convention on human rights. The Government have made it clear in their observations to the Commission that they believe that the Northern Ireland legislation is fully in conformity with the provisions of the convention. The Government believe that the same is true of the similar legislation for England and Wales which is now included in the Criminal Justice and Public Order Bill.

  Probation Service
  Mr. Blair
  To ask the Secretary of State for the Home Department what cuts as a result of the public expenditure survey will be made to the probation service budget which
  435
  was originally published in the three-year plan for the probation service 1994 to 1997; and what the effect will be on staffing levels and service delivery.

  Mr. Maclean
  The Government's spending plans for the probation service as set out in the three-year planning document for the service 1994–97 are as shown below. The spending plans set out in the 1993–96 planning document published after the 1992 public expenditure survey are shown in parentheses. It will be for area probation committees and management to decide how best to provide services and what staff to employ from within the total resources available.

  £ million

  374·3

  1994–95

  (382·0)

  378·0

  1995–96

  (402·0)

  1996–97

  389·7

  Visas
  Mrs. Dunwoody
  To ask the Secretary of State for the Home Department when the European Commission's proposals to determine the list of countries whose national must be in possession of a visa when crossing the external frontiers of member states will be formally received.

  Mr. Charles Wardle
  I refer the hon. Member to the reply I gave to the hon. Member for Sedgefield (Mr. Blair) on 24 January 1994,Official Report, column 42.

  Police Resources
  Mr. Michael
  To ask the Secretary of State for the Home Department (1) what changes his Department has made in the last five years in the method of calculating the resource needs of police authorities in England and Wales;

  (2) what changes his Department has made in the last five years in the designation of areas as urban or rural in the assessment of their needs in terms of police resources and in the differential that results in terms of resource allocation.

  Mr. Charles Wardle
  In response to the recommendations of a joint Home Office and Treasury study, a formula was introduced in 1989 to inform the professional assessment by Her Majesty's inspectorate of constabulary of applications for increases in police free establishments. This formula compared the existing position of forces across a range of relevant indicators. One of these indicators takes account of the concentration of population in particular areas.

  Work is now in hand on the preparation of a new formula for the allocation of police grant to forces as from 1995–96.

  Criminal Injuries Compensation
  Mrs. Roche
  To ask the Secretary of State for the Home Department what was the precise value of each of the 25 awards of over £10,000 for fatal injury under the criminal injuries compensation scheme in 1991–92.

  Mr. Maclean
  [holding answer 24 January 1994]: The case sampling survey undertaken to establish "tariff" rates
  436
  examined 238 of the fatal cases resolved in 1991–92. These 238 cases gave rise to 162 awards, of which 16 exceeded £10,000. The awards made in the 162 cases were then grossed up to produce equivalent figures for the 252 fatal awards which it was estimated had been made in total in the 1991–92 financial year. Applying a similar grossing up factor to the 16 awards exceeding £10,000 produced the estimated figure of 25 such awards in total. The 16 awards actually identified—each of which included an element for funeral expenses—were for sums of £12,000: £12,671: £13,665: £14,539: £15,000: £20,000: £21,490: £22,169: £28,451: £31,704: £33,187: £41,995: £57,072: £88,230: £100,600: £260,178.

  Mrs. Roche
  To ask the Secretary of State for the Home Department if he will publish the survey of criminal injuries compensation board awards used in drawing up his proposed tariff of compensation for victims of violent crime.

  Mr. Maclean
  [holding answer 24 January 1994]: No. The survey data contain information which would make it possible to identify individual recipients of awards. Publication of such data would be contrary to the Data Protection Act 1988 and to the board's policy of confidentiality.

ENVIRONMENT

  Local Government Finance
  Mr. Straw
  To ask the Secretary of State for the Environment what staff and other resources, expressed in full-time equivalents and in cash value, were devoted to the review of standard spending assessments in 1993; and what levels of resources he expects to use to review standard spending assessments in 1994.

  Mr. Gummer
  In the financial year 1993–94 my Department will have devoted about 10 man years' work to the review of standard spending assessments. This represents a pay cost of about £300,000. It is difficult to assess precisely the value of the other resources devoted to the review, but the non-pay running costs involved are in the region of £45,000 in 1993–94. Officials in other Government Departments were also involved in the review.

  In the financial year 1994–95, my Department plans to devote six man years to development work on the standard spending assessments system.

  Mr. Straw
  To ask the Secretary of State for the Environment (1) how many authorities have made(a) written responses to and (b) requests for a meeting with Ministers about his proposals for local government finance for 1994–95;

  (2) if he will list those authorities which have made oral representations to Ministers as part of the consultation on his proposals for local government finance for 1994–95, showing in each case the Minister seen by the authority, the duration of the meeting and the main topics raised;

  (3) if he will place in the Library his Department's notes of each of the delegations received by Ministers as part of the consultation on his proposals for local government finance for 1994–95.

  Mr. Gummer
  During the consultation period on my proposals for the local government finance settlement for
  437
  1994–95, which ended on 10 January, we received representations from 143 local authorities and authority groupings, and 60 requests for meetings.

  The table shows the meetings held by each Minister. Also shown are four meetings which it was not possible for a Minister to attend, and at which delegations made oral representations to officials. No records are kept of the duration of meetings.

  Such meetings are private, having been requested by individual authorities, and it is not my Department's custom to publish details of what was discussed at them.

  Local authorities seen during the consultation period

  Seen by the Secretary of State

  Birmingham City Council

  Seen by the Minister for Local Government and Planning

  ADC major cities group

  Bournemouth borough council

  Burnley borough council

  Coventry city council

  Cumbria county council

  Derbyshire county council

  Dorset county council

  Hereford and Worcester county council

  Lancashire county council

  Liverpool city council

  London borough of Brent

  London borough of Lambeth

  London borough of Hammersmith and Fulham

  London borough of Merton

  London borough of Hounslow

  London borough of Haringey

  London borough of Hackney

  London borough of Greenwich

  London borough of Lewisham

  Manchester city council

  Norfolk county council

  Northamptonshire county council

  Nottinghamshire county council

  Rotherham metropolitan borough council

  Sheffield city council

  Shropshire county council

  Somerset county council

  Wear Valley district council

  Seen by the Minister for Housing, Inner Cities and Construction

  Kirklees metropolitan borough council

  West Yorkshire fire and civil defence authority

  Thanet district council

  Devon county council

  Northampton borough council

  Slough borough council

  South Yorkshire fire and civil defence authority

  Seen by the Parliamentary Under-Secretary of State for the Environment

  Avon county council

  Blackburn borough council

  Blackpool borough council

  Gedling borough council

  Harlow district council

  Havant borough council

  Ipswich borough council

  Isle of Wight county council

  Knowsley metropolitan borough council

  Leicester city council

  London borough of Newham

  Luton borough council

  North Yorkshire county council

  Pendle borough council

  Salford city council

  Sefton metropolitan borough council

  Solihull metropolitan borough council

  York city council

  Seen by officials

  West Yorkshire police authority

  438

  Cornwall county council

  Bradford city council

  Merseyside fire and civil defence authority

  Mr. Straw
  To ask the Secretary of State for the Environment which issues arising from the responses to his proposals for local government finance for 1994–95 will be discussed with the local authority associations as possible changes to the system of local government finance for 1995–96; and if he will make a statement on the continuing review of standard spending assessments.

  Mr. Gummer
  We are willing to discuss any issues which the local authority associations may wish to raise arising from the proposals for local government finance for 1994–95. As part of the usual round of discussions on standard spending assessments, we will wish to consider the treatment of the police element in the light of the changes in financial arrangements to take place for 1995–96. The associations will, no doubt, wish to bring forward their own agenda for discussion.

  Mr. Straw
  To ask the Secretary of State for the Environment what are the latest available figures of capital receipts, including receipts set aside to meet credit liabilities, for each local authority, and in total for England.

  Mr. Gummer
  Capital receipts information falls into two categories: receipts received during the financial year, and usable receipts held at a particular time, usually the end of the year. Receipts received during the year are divided into usable and reserved parts. The reserved parts are set aside as provision to meet credit liabilities and once set aside are no longer distinguishable from other amounts set aside, such as, for example, the statutory minimum amount set aside each year from the revenue account.

  The latest forecast of gross receipts received in 1993–94, based on local authorities' first quarter returns, is £2·2 billion. Of this amount £1·8 billion is forecast to be usable and £400 million reserved.

  The balance of usable receipts held at 31 March 1993 was £1 billion.

  The latest estimate for the total amount held by local authorities as provision for credit liabilities is £6·1 billion as at 31 March 1993. As indicated, this figure will include, among other things, a notional amount of capital receipts which have been set aside but not yet used to redeem debt.

  I am arranging for the latest available figures for each local authority to be placed in the Library of the House.

  Environmental Information Regulations 1992
  Mr. Llew Smith
  To ask the Secretary of State for the Environment what complaints he has received in regard to the failure or delay in reply by the appropriate authorities to requests for information disclosure under the Environmental Information Regulations 1992 since 1 January 1993.

  Mr. Atkins
  Two people have written to my right hon. Friend: the Campaign for Freedom of Information about a refusal by the Radioactive Waste Management Advisory Committee to supply information about the thermal oxide reprocessing plant; and an environmental sciences student who was concerned at Her Majesty's inspectorate of pollution's delay in replying to her request.
  439

  Biodiversity Convention
  Mr. Bayley
  To ask the Secretary of State for the Environment, pursuant to his answer of 18 January,Official Report, column 566, if he will make a statement on the nature of United Kingdom concerns about the financial provisions of the biodiversity convention and the safeguards which the United Kingdom is seeking.

  Mr. Atkins
  The United Kingdom is concerned to ensure that donor countries retain the right to determine their financial contribution under the biodiversity convention. We will continue to pursue safeguards to ensure this objective.

  Consultants
  Dr. Wright
  To ask the Secretary of State for the Environment on which occasions since 1979 his Department has employed the services of external consultants; and if he will give details of the purposes for which they were employed and the cost of employing them.

  Mr. Gummer
  The information requested is not held centrally by my Department and is obtainable only at disproportionate cost.

  Thermal Oxide Reprocessing Plant
  Mr. Llew Smith
  To ask the Secretary of State for the Environment, pursuant to his answer of 13 January,Official Report, column 244, on the Touche Ross report on THORP, whether his Department ever requested a copy of the report from Touche Ross or British Nuclear Fuels plc.

  Mr. Atkins
  No.

  Local Authorities (Security)
  Mr. Skinner
  To ask the Secretary of State for the Environment how many local authorities spent money on security under the provisions of section 137 of the Local Government Act 1972 in the latest year for which figures are available.

  Mr. Baldry
  This information is not available centrally.

  Water Charges
  Sir David Knox
  To ask the Secretary of State for the Environment what were the(a) average percentage increases in water and sewerage rates and (b) increases in the retail prices index used for upratings of income support, for each year since April 1988.

  Mr. Atkins
  The information requested is given in the tables:

  (a) Increase in domestic water and sewerage average bills

  Year

  Water Per cent.

  Sewerage Per cent.

  1988–89 to 1989–90

  14·8

  9·8

  1989–90 to 1990–91

  15·4

  10·7

  1990–91 to 1991–92

  16·4

  15·0

  1991–92 to 1992–93

  9·1

  10·1

  1992–93 to 1993–94

  8·2

  9·0

  Source CRI statistics series—"Charges For Water Services".
  440

  (b) Increase in the Rossi index used to uprate income support

  Year

  Per cent.

  1989

  4·7

  1990

  5·2

  1991

  8·1

  1992

  7·0

  1993

  3·6

  1994

  3·5

  Notes:

  1.The Rossi index is based on the retail prices index, which takes account of the rise and fall in the price of individual commodities excluding most housing costs.

  2. From the 1992 uprating the Rossi index was adjusted to include, water and sewerage charges, dwelling insurance, ground rent, repair and maintenance charges, do-it-yourself materials and for 1992–93 only, 20 per cent. of the community charge.

  Source: Information supplied by the Central Statistical Office.

  Mr. Spellar
  To ask the Secretary of State for the Environment, pursuant to his answer to the hon. Member for Bristol, East (Ms Corston) of 6 December,Official Report, column 9, whether water companies will be permitted to use council tax banding to calculate water charges.

  Mr. Atkins
  Subject to the non-discrimination requirements in its licence conditions and copyright and data protection requirements, a water company may use any legally obtained information as a basis for the calculation of water charges save that after 31 March 2000 it may not use rateable values. However, we stand by the assurances we have given in the past that local authorities should not be permitted to sell council tax valuation lists for use for other purposes.

  Rents Statistics
  Mr. Raynsford
  To ask the Secretary of State for the Environment, pursuant to his answer of 1 December,Official Report, columns 551–52, if he will now update the tables showing (a) average local authority unrebated rents, (b) mean housing association annual registered fair rents and (c) mean annual registered fair rents for private tenancies for each London borough, by providing figures and the index for 1993–94.

  Sir George Young
  I have today placed in the Library an updated table showing the average local authority weekly unrebated rent for each London borough for each financial year since 1988–89, including provisional figures for 1993–94. As in the earlier table, the rents are also expressed as an index with 1988–89 equal to 100.

  Information for 1993–94 on average registered fair rents for housing association and private sector tenancies is not yet available. Information is, however, available for the first quarter of 1993–94 and can be found in the publication "Rent Officer Statistics", a copy of which is in the Library.

  Solid Fuel
  Mr. Chris Smith
  To ask the Secretary of State for the Environment if he will introduce regulations to require high-sulphur solid fuel and fuel not authorised for use in smoke control areas to be clearly labelled as such.

  Mr. Aitken
  No.
  441

  Homelessness
  Mr. Straw
  To ask the Secretary of State for the Environment if he will list the local authorities or other bodies which made representations to him seeking restrictions on the rights of access of homeless persons to social housing, before October 1993.

  Mr. Raynsford
  To ask the Secretary of State for the Environment what representations he or his Department have received about the categories of people deemed to have priority need under the provision of part III of the Housing Act 1985.

  Sir George Young
  In the normal course of business—for example, meetings and presentations about housing investment programme submissions—Ministers and officials have talked to a range of people in local authorities of all political complexions; we have also talked to people in the housing association movement, and in the private rented sector. These encounters have been helpful to us in preparing the consultation paper "Access to Local Authority and Housing Association Tenancies".

  Ms Glenda Jackson
  To ask the Secretary of State for the Environment (1) how many single-parent families were classified as statutorily homeless in(a) the United Kingdom and (b) London for each year from 1979;

  (2) how many single-parent families have been accommodated in (a) bed-and-breakfast accommodation, (b) temporary housing, (c) permanent local authority housing and (d) private sector housing since January 1991;

  (3) how many single-parent homeless families have (a) one or more, (b) two or more or (c) three or more children under 16 years of age.

  Sir George Young
  Local authorities in England report details of the number of households for which they accept responsibility to secure permanent accommodation under the homelessness provisions of the housing acts in their quarterly P1(E) returns. These returns do not distinguish between one and two-parent households.

  For information about other parts of the United Kingdom I refer the hon. Member to my right hon. Friends the Secretaries of State for Scotland and for Wales and my right hon. and learned Friend the Secretary of State for Northern Ireland.

  Tenancies
  Mr. Raynsford
  To ask the Secretary of State for the Environment if he will explain how local authorities can satisfy the proposed obligation in paragraph 18.2 (i) of his consultation paper on access to local authority and housing association accommodation and at the same time accommodate existing tenants seeking a transfer while following paragraph 20.4 of the consultation paper under which waiting lists may be restricted to people who are not currently tenants and who are seeking a tenancy.

  Sir George Young
  The consultation paper invites views, in paragraph 20.4, on whether the names of people seeking a transfer should appear on the housing waiting list along with the names of people seeking a tenancy for the first time. If, in the light of responses to the consultation exercise, we conclude that people seeking transfers should not be included on the waiting list, they will be the subject of separate provisions.
  442
  Mr. Raynsford
  To ask the Secretary of State for the Environment what new arrangements he proposes to create for short-term tenancies within local authority housing stock.

  Sir George Young
  Paragraph 19.2 of the consultation paper "Access to Local Authority and Housing Association Tenancies" raises the possibility of giving local authorities greater flexibility in the types of tenancy they can offer. I would welcome views on the form that this flexibility might take.

  Housing
  Mr. Raynsford
  To ask the Secretary of State for the Environment (1) what representations he or his Department have received about the implications of the House of Lords decision in the case of Din v. London borough of Wandsworth;

  (2) what representations he or his Department have received about the operation of section 63 of the Housing Act 1985.

  Sir George Young
  The representations we receive about the operation of part III of the 1985 Act cover a range of issues.

  Mr. Raynsford
  To ask the Secretary of State for the Environment on what basis he considers that someone asked to leave accommodation by family or friends automatically qualifies for assistance under part III of the Housing Act 1985.

  Sir George Young
  Section 58 of the 1985 Act states that a person is homeless if, inter alia, there is no accommodation which he has a licence to occupy. Being asked to leave by relatives or friends would amount to the revocation of a licence.

  Housing Benefit
  Mr. Raynsford
  To ask the Secretary of State for the Environment what assessment he has made of the additional housing benefit costs which will be incurred in consequence of the implementation of the proposals in his consultation paper on changes to arrangements for access to local authority and housing association accommodation.

  Sir George Young
  I refer the hon. Member to paragraph 27·1 of the consultation paper.

  Mr. Raynsford
  To ask the Secretary of State for Environment what discussions he has had with the Secretary of State for Social Security and the Chancellor of the Exchequer on the additional housing benefit costs likely to arise from the proposals in the consultation paper on proposed changes to access to local authority and housing association accommodation.

  Sir George Young
  The proposals in the consultation paper represent the views of the Government.

  Power Station Emissions
  Mr. Chris Smith
  To ask the Secretary of State for the Environment if he will list for each power station in Britain the most recent emissions data submitted to Her Majesty's inspectorate of pollution.

  Mr. Atkins
  The emissions data for power stations in England and Wales, not Scotland authorised by HMIP are
  443
  placed on the public register in HMIP offices in Bedford, Bristol and Leeds as appropriate. The national plan emissions inventory is also placed on the public registers and I have placed a copy of the inventory for 1993, which has recently been received, in the Library of the House.

  Mr. Chris Smith
  To ask the Secretary of State for the Environment on what basis and frequency power stations are obliged to submit emissions data to Her Majesty's inspectorate of pollution.

  Mr. Atkins
  For all power stations in England and Wales operated by National Power and PowerGen and authorised by HMIP, the operator is required to send to the chief inspector, within 28 days of the end of the reporting period to which the results refer, the mass releases into the air from the authorised process of sulphur dioxide and oxides of nitrogen for that reporting period together with the operational data from which the releases have been calculated.

  Mr. Chris Smith
  To ask the Secretary of State for the Environment if he will list for each power station in Britain the reporting period stipulated in the authorisation for purposes of submitting emissions data to Her Majesty's inspectorate of pollution.

  Mr. Atkins
  For all power stations in England and Wales operated by National Power and PowerGen and authorised by HMIP, the reporting period is each of the 12 periods of either four or five weeks which correspond approximately to calender months in any year for which reports are compiled.

  Public Bodies
  Mr. Kilfoyle
  To ask the Secretary of State for the Environment who are the members currently appointed to the Office of Water Services national customer council.

  Mr. Atkins
  The OFWAT national customer council's members are the 10 chairpersons of OFWAT's 10 customer service committees and the Director General of Water Services.

  Mr. Kilfoyle
  To ask the Secretary of State for the Environment who are the members currently appointed to each of the customer service committees of OFWAT.

  Mr. Atkins
  The members of OFWAT's 10 customer service committees as at 31 March 1993 are listed in appendix one to the director general's annual report 1992, a copy of which is in the Library. New members and reappointments are announced in OFWAT news releases from time to time.

  Local Government Reform
  Mr. Gordon Prentice
  To ask the Secretary of State for the Environment if he intends to involve the Minister for Local Government when considering the Government's response to the final recommendations of the Local Government Commission on Yorkshire, Humberside and Lincolnshire.

  Mr. Gummer
  I refer the hon. Member to the answer given to him by my right hon. Friend the Prime Minister on 29 November 1993,Official Report, column 325.

  Mr. Gordon Prentice
  To ask the Secretary of State for the Environment if he will list the occasions when either he 444
  or Ministers in his Department have publicly advocated specific changes in the local government map of England when the Local Government Commission was in the process of reviewing that area.

  Mr. Curry
  It is the policy of my right hon. Friend the Secretary of State and Ministers in this Department who will be involved in decisions on changes to local government structure, not to comment on specific changes in an area which the Local Government Commission is in the process of reviewing. I am not aware of any breaches of this policy.

  National Rivers Authority (Laboratories)
  Mr. Chris Smith
  To ask the Secretary of State for the Environment which laboratories of the National Rivers Authority are scheduled for(a) market testing and (b) closure.

  Mr. Atkins
  The market testing and closure of its laboratories is primarily a management matter for the National Rivers Authority, which advises me that:

  (a) all NRA's 11 chemical laboratories were subject to an internal review of cost-effectiveness and efficiency; and

  (b) as a result, the NRA laboratories at Caernarfon Carlisle, Peterborough, Warrington and Washington have been closed and the work transferred to the NRA laboratories at Exeter, Leeds, Llanelli, Nottingham, Reading and Waterlooville.

  Water Industry (Regulatory Bodies)
  Mr. Jim Cunningham
  To ask the Secretary of Slate for the Environment what is the annual cost to public funds of the activities of the Audit Commission and the regulatory bodies, in relation to the water industry.

  Mr. Atkins
  The Audit Commission has no responsibilities in connection with the water industry, and the costs of the Office of Water Services are fully recoverable from licence fees. Costs of other water industry regulators, attributable to public funds, for 1992–93, were £56–71 million distributed as follows:

  Drinking water inspectorate £1·35 million.

  National Rivers Authority £55 million.

  Her Majesty's inspectorate of pollution £360,000.

  Sustainable Development
  Mr. Llew Smith
  To ask the Secretary of State for the Environment if he will make a statement on progress made in implementing a strategy for sustainable development by the United Kingdom.

  Mr. Atkins
  The Government published on 25 January 1994 the United Kingdom strategy for sustainable development, together with the United Kingdom's climate change programme, biodiversity action plan and forestry programme, as announced on 20 January,Official Report, column 844. Copies have been laid before the House.

  Radioactive Clinical Waste (Hillingdon Hospital)
  Mr. Shersby
  To ask the Secretary of State for the Environment if he will call for a report from Her Majesty's inspector of pollution in respect of the hospitals whose radioactive clinical waste is being incinerated at Hillingdon hospital incineration plant; and what estimate he has made as to the hazard to health resulting from the incineration of such waste.
  445
  Mr. Atkins
  HMIP has authorised the transfer and the incineration of very low-level radioactive waste at the clinical energy incinerator at Hillingdon hospital from the following hospitals:

  The Hillingdon hospital

  Mount Vernon hospital

  Harefield hospital

  In addition, it is authorised to receive low-level radioactive waste from Brunel university.

  In setting the discharge limits, HMIP is satisfied that any effect is environmentally acceptable and that no national or international dose limits applicable to members of the public would be exceeded.

  Standard Spending Assessments
  Mr. Michael Spicer
  To ask the Secretary of State for the Environment how many district authorities have been granted provisional increases in their standard spending assessments of more than 10 per cent. in 1994–95; and how that was provided for in his Budget statement that the growth in total standard spending in England for local authorities will be limited to 2·3 per cent. next year.

  Mr. Baldry
  There were 99 district authorities with provisional increases of more than 10 per cent. in their standard spending assessments for 1994–95. After excluding the additional resources provided for community care and making adjustments for changes in function the overall increase in total standard spending between 1993–94 and 1994–95 will be 2·3 per cent. and the equivalent increase in the total of SSAs will be 2·2 per cent. The review of SSAs and the introduction of information from the 1991 census has led to a number of authorities having large increases between 1993–94 and 1994–95, while other authorities have had decreases.

  Small Properties
  Dr. Spink
  To ask the Secretary of State for the Environment what directives he has given to local authorities regarding the treatment of small shops, and other small properties which are used for both business and domestic purposes, as single units for taxation purposes; and if he will make a statement.

  Mr. Baldry
  Properties are liable for council tax only where the occupier works from home, but the part of the premises used for business reverts to domestic use at the end of the day. Composite properties are treated as two units for local taxation purposes. The domestic part is liable for council tax, the business premises are liable for non-domestic rates. The domestic part will attract council tax transitional relief, where applicable, in the ordinary way. Composite properties have been afforded greater transitional protection than other properties from any adverse impact of the 1990 rating changes, and it is proposed that no such property should face a real rate increase in 1994–95. Government guidelines to local authorities on hardship relief for ratepayers draw attention to the special circumstances of composite properties, but it is for authorities to decide whether to grant any relief.

  Curtain Walling Contract
  Mr. Spellar
  To ask the Secretary of State for the Environment what progress has been made in his Department's inquiry into the exclusion of United 446
  Kingdom firms from the shortlist for the curtain walling contract at the Ministry of Defence procurement headquarters in Bristol.

  Mr. Baldry
  My officials have met with the MoD, the main contractor and the supply company which made the original complaint. I am satisfied that the choice of curtain wall contractor was a matter for the main contractor, and not the Ministry of Defence.

  We are reviewing with the industry what lessons can be learnt from this experience.

  Groundwork Trusts
  Mr. Robert Ainsworth
  To ask the Secretary of State for the Environment what funds are made available to the groundwork trusts; what consideration he has given to making these available equally to existing environmental trusts; and if he will make a statement.

  Mr. Atkins
  The Groundwork Foundation's grant in aid for 1993–94 is £5·5 million, which enables the foundation to support the existing network of 32 groundwork trusts and provide for the establishment of new trusts. Groundwork trusts bring together in partnership local authorities, private companies, voluntary organisations and local people to tackle environmental problems in the community. There is a wide range of grants available from this Department to support the environmental activities of local voluntary groups.

  Bed-and-breakfast Accommodation
  Mr. Battle
  To ask the Secretary of State for the Environment if he will list all the local authorities using bed-and-breakfast accommodation, and numbers in that accommodation, at the end of September.

  Sir George Young
  The numbers of households reported by local authorities in bed-and-breakfast accommodation at the end of September appear in the supplementary table of the information bulletin "Households found accommodation under the homelessness provisions of the 1985 Housing Act: England. Statistics for the third quarter of 1993", a copy of which is in the Library.

  Vacant Properties
  Ms Glenda Jackson
  To ask the Secretary of State for the Environment (1) if he will list the locations of the empty properties he wishes to return to the affordable rented housing sector;

  (2) how many of the empty properties he wishes to return to the affordable rented housing sector he estimates would have (a) bed-sitter accommodation, (b) one bedroom, (c) two bedrooms or (d) three or more bedrooms;

  (3) how many (a) flats, (b) terraced houses, (c) semi-detached houses and (d) detached houses are among the empty properties he wishes to return to the affordable rented sector.

  Sir George Young
  The HIP returns submitted by local authorities show that they estimate that there are 765,000 vacant private sector properties as at 1 April 1993. These estimates are not broken down into the categories requested. The Government aim to create the conditions which will encourage landlords to make their empty
  447
  properties available for sale or rent. I have no specific targets, but even if only a proportion could be returned to use that would be a valuable contribution to meeting housing need.

  Waste Disposal, Yorkshire
  Mr. William O'Brien
  To ask the Secretary of State for the Environment (1) if he will give details of rate support grant for waste disposal purposes in west Yorkshire for each of the last 10 years;

  (2) if he will give details of rate support grant for waste disposal purposes in south Yorkshire for each of the last 10 years.

  Mr. Baldry
  I refer the hon. Member to the answer I gave him on Thursday 27 January.

  Climate Change Convention
  Mr. Barnes
  To ask the Secretary of State for the Environment, pursuant to his answer of 18 January,Official Report, column 579, what was the voting record of the other member states on the European Community ratification of the climate change convention.

  Mr. Atkins
  The Council decision was adopted unopposed, with the United Kingdom abstaining on the grounds that it did not support the choice of legal base.

  Fair Rents
  Mr. Clelland
  To ask the Secretary of State for the Environment if he will publish the findings of his Department's consultation exercise on fair rents; and if he will make a statement.

  Sir George Young
  I announced on 15 July last year that following careful consideration of the representations received in response to our consultation paper on fair rents, we did not consider it would be desirable to make any changes to the existing legislation. To provide further legislative controls over rents would hinder efforts to promote the revival of the private rented sector.

  We are keen, however, to encourage greater exchange of information and views between rent officers and rent assessment panels. The educational trust of the Institute of Rent Officers has established a working party, made up of rent officers and rent assessment panel members, to look into how this might be achieved. The group aims to publish its report in the spring.

  Special Advisers
  Mr. Matthew Taylor
  To ask the Secretary of State for the Environment which special advisers in his Department are seconded from other organisations; and what are the organisations and the lengths and terms of the secondments.

  Mr. Gummer
  None.

  Severence Schemes
  Mr. McAllion
  To ask the Secretary of State for the Environment, if he will publish details of the severance schemes available to employees which were in operation immediately prior to the privatisation of the Thames water authority, including details of facilities to make early payment of pensions to staff under such schemes.
  448
  Mr. Atkins
  The severance scheme used was the water industry security and severance scheme as adapted by the Thames water authority. I have no plans to publish the scheme but the text is available from the National Rivers Authority. The early payment of pension benefits was subject to the provisions of the Local Government Superannuation Scheme Regulations 1986, as amended.

  Air Quality
  Mr. Mills
  To ask the Secretary of State for the Environment when he will publish the report on air quality undertaken for him by Professor Roy Harrison.

  Mr. Atkins
  [pursuant to his reply, 20 January 1994, c. 837]: I am pleased to announce the publication earlier today of the second report of the quality of urban air review group "Diesel Vehicle Emissions and Urban Air Quality".

  Copies of the report have been placed in the Libraries of both Houses, and are available free of charge from the QUARG secretariat, Institute of Public and Environmental Health, university of Birmingham, Edgbaston, Birmingham, B15 2TT.

SOCIAL SECURITY

  Consultancies
  Ms Abbott
  To ask the Secretary of State for Social Security if he will list the(a) accountancy firms and (b) merchant banks to which his Department awarded private consultancy work in 1992 and 1993, together with a list of the consultancies concerned and the amount paid.

  Mr. Hague
  The information is not available in the form requested.

  Elderly People
  Mr. Corbyn
  To ask the Secretary of State for Social Security what is his Department's estimate of the number of people who will be aged(a) 65 years and over and (b) 80 years and over for each year to 2010.

  Mr. Hague
  The information is in the table.

  thousands

  Year

  Total aged 65 and over

  Total aged 80 and over

  1992

  8,933

  2,174

  1993

  8,961

  2,227

  1994

  8,992

  2,280

  1995

  9,030

  2,327

  1996

  9,069

  2,352

  1997

  9,095

  2,354

  1998

  9,105

  2,328

  1999

  9,115

  2,312

  2000

  9,139

  2,417

  2001

  9,172

  2,449

  2002

  9,212

  2,560

  2003

  9,263

  2,601

  2004

  9,317

  2,637

  2005

  9,365

  2,669

  2006

  9,383

  2,702

  2007

  9,442

  2,729

  2008

  9,552

  2,751

  2009

  9,692

  2,776

  2010

  9,825

  2,806

  Source OPCS and Government Actuaries Department; based on mid-1992 GB population projections.
  449

  Special Advisers
  Mr. Matthew Taylor
  To ask the Secretary of State for Social Security which special advisers in his Department are seconded from other organisations; and what are the organisations and the lengths and terms of the secondments.

  Mr. Hague
  None.

  Families (Income Levels)
  Sir David Knox
  To ask the Secretary of State for Social Security if he will update the answer given to the then right hon. Member for Chesham and Amersham,Official Report, 29 November 1991, columns 667–70,

  Table 1

  Number of working families with children at various income levels: Great Britain 1990–91

  (Thousands)

  Gross weekly income excluding slate benefits £

  Total

  One parent family

  Two parent family

  One wage family

  Two wage family

  Number of dependent children

  One

  Two

  Three

  Four or more

  Under 80

  140

  20

  130

  130

  10

  50

  70

  20

  10

  80–99

  50

  10

  40

  40

  10

  20

  20

  10

  1—

  100–119

  60

  10

  50

  50

  10

  30

  20

  1—

  1—

  120–139

  80

  20

  60

  70

  10

  50

  20

  1—

  1—

  140–159

  130

  20

  100

  110

  20

  60

  50

  10

  1—

  160–179

  160

  30

  130

  120

  40

  60

  70

  20

  1—

  180–199

  150

  20

  130

  110

  40

  70

  50

  30

  10

  200–219

  190

  20

  170

  130

  60

  80

  80

  20

  10

  220–239

  220

  20

  200

  130

  90

  90

  100

  20

  10

  240–259

  240

  20

  220

  120

  120

  100

  110

  20

  10

  260–279

  280

  20

  260

  140

  140

  110

  110

  40

  10

  280–299

  240

  20

  230

  100

  140

  100

  90

  40

  10

  300–349

  570

  20

  550

  180

  390

  210

  290

  60

  20

  350–399

  550

  20

  530

  180

  370

  210

  270

  60

  20

  400–449

  440

  1—

  430

  110

  330

  190

  180

  50

  20

  450–499

  390

  1—

  350

  100

  250

  170

  130

  50

  10

  500 and over

  1,240

  10

  1,230

  290

  950

  510

  550

  150

  30

  Total

  5,100

  290

  4,810

  2,080

  2,980

  2,110

  2,220

  610

  160

  1 Denotes less than 5 thousand.

  Notes:

  1. The figures are estimates derived from the 1990 and 1991 family expenditure surveys combined. All figures have been rounded to the nearest 10,000 and because of this rows and columns may not exactly sum to totals. All estimates are subject to sampling error.

  2. Gross weekly income is the income reported in the year of the survey, either 1990 or 1991, with no adjustment for inflation.

  3. A "working family" is one where at least one parent/partner is in full-time employment or self-employment and working 30 hours or more.

  4. A "two wage family" is where the second wage exceeds £5 per week.

  5. The figures include only families in private households.

  Table 2

  Number of non-working families of working age with children at various income levels: Great Britain 1990–91

  (Thousands)

  Gross weekly income including state benefits £

  Under 50

  50–69

  70–89

  90–109

  110–129

  130–149

  150–169

  170–189

  190–209

  210–229

  230–249

  250 and over

  Total

  Total

  40

  80

  190

  330

  280

  190

  160

  100

  70

  40

  30

  160

  1,660

  One-parent family

  20

  70

  150

  270

  170

  90

  80

  40

  30

  20

  10

  30

  970

  Two-parent family

  20

  10

  40

  60

  100

  100

  80

  60

  50

  20

  20

  120

  690

  Number of dependent children

  One

  20

  60

  140

  210

  110

  50

  40

  30

  20

  10

  10

  70

  770

  Two

  10

  10

  40

  100

  100

  80

  50

  30

  20

  10

  10

  60

  530

  Three

  1—

  2—

  10

  20

  60

  50

  40

  20

  10

  1—

  1—

  20

  250

  Four or more

  2—

  2—

  1—

  1—

  1—

  20

  20

  20

  10

  10

  10

  10

  110

  Contributory benefits being received

  None2

  40

  20

  30

  30

  20

  20

  30

  20

  30

  20

  10

  110

  370

  None4

  1—

  50

  140

  270

  210

  140

  100

  60

  20

  10

  10

  20

  1,040

  UB2

  2—

  1—

  10

  10

  10

  1—

  1—

  1—

  10

  2—

  —

  10

  50

  UB4

  2—

  2—

  2—

  1—

  10

  1—

  1—

  1—

  2—

  2—

  1—

  1—

  20

  SB/SSP3

  2—

  2—

  1—

  1—

  10

  1—

  1—

  2—

  1—

  2—

  2—

  10

  30

  450
  showing the numbers of working and out-of-work families with children at different levels of income, according to family size, distinguishing between one-parent families and two-parent families and showing the benefits on which the out-of-work families depended.

  Mr. Burt
  The information is in the tables.

  Some of the estimates in the tables are based on small sample sizes and are therefore subject to a wide margin of error.

  The figures are based on estimates taken from 1990 and 1991 family expenditure surveys, using the income reported in the survey year. They are not adjusted to a common price base and therefore should not be used for comparison over time.
  451

  Gross weekly income including state benefits £

  Under 50

  50–69

  70–89

  90–109

  110–129

  130–149

  150–169

  170–189

  190–209

  210–229

  230–249

  250 and over

  Total

  SB/SSP4

  2

  2—

  2—

  2—

  1—

  1—

  1—

  1—

  10

  1—

  2—

  2—

  20

  IVB3

  2—

  1—

  1—

  10

  10

  10

  10

  10

  10

  1—

  2—

  1—

  60

  IVB4

  2—

  2—

  2—

  1—

  1—

  1—

  2—

  1—

  1—

  2—

  1—

  2

  60

  Other3

  2—

  1—

  1—

  1—

  1—

  1—

  1—

  2—

  1—

  2—_

  2—

  10

  30

  Other4

  2—

  2—

  1—

  2—

  1—

  2—

  —

  1—

  2—

  1—

  2—

  2—

  10

  1 Denotes less than 5,000.

  2 Denotes zero.

  3 Denotes without income support.

  4 Denotes with income support.

  Notes:

  1. The figures are estimates derived from the 1990 and 1991 family expenditure surveys combined. All figures have been rounded to the nearest 10,000 and because of this rows and columns may not exactly sum to totals. All estimates are subject to sampling error.

  2. Gross weekly income is the income reported in the year of the survey, either 1990 or 1991, with no adjustment for inflation.

  3. A "non-working family" is one where neither parent/partner is in full-time employment or self-employment.

  4. The figures include only families in private households.

  5.Other contributory benefits include widows benefit, maternity allowance and statutory maternity pay.

  6.It is known that receipt of income support is under-reported in the family expenditure surveys.

  Children (Statistics)
  Mr. Wicks
  To ask the Secretary of State for Social Security if he will publish the latest figures showing(a) the number of children living in families with an unemployed head and (b) the number of children living in families with a long-term unemployed head of household.

  Mr. Burt
  The labour force survey estimates that 1,133,000 dependent children live in families with an unemployed1 head and that 452,000 dependent children2 live in families with a long-term3 unemployed head.

  1 Unemployment defined by the International Labour Organisation.

  2 Children defined as being under 16-years-old and 16 to 19 years on full-time education.

  3 Long-term unemployed defined as 12 months or more.

  Source: Labour force survey for Great Britain, spring 1993.

  Income Support
  Mr. Steinberg
  To ask the Secretary of State for Social Security if he will give figures for the Durham area showing how many(a) families with children are living on income support and (b) how many children are living on income support; and what were the figures in 1979.

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

  Supplementary Benefit
  Mr. Wigley
  To ask the Secretary of State for Social Security if he will publish the numbers of people receiving supplementary benefit in Wales for each year since 1979.

  Mr. Burt
  The available information is in the table. Income support replaced supplementary benefit in April 1988.

  Year

  Recipents in Wales (000s)

  1979

  172

  1980

  186

  1981

  221

  1982

  253

  1983

  260

  1984

  275

  1986

  291

  452

  Year

  Recipents in Wales (000s)

  1987

  287

  1988

  259

  1989

  246

  1990

  248

  1991

  257

  1992

  287

  1993

  309

  Notes:

  Sources: Supplementary benefit statistics annual inquiries 1979 to 1987

  Income support statistics annual inquiries, May 1988 to May 1992

  Income support statistics quarterly inquiry, February 1993

  2. The figures have been rounded to the nearest thousand.

  3. Information for 1985 is not available.

  Child Support Act 1991
  Miss Lestor
  To ask the Secretary of State for Social Security how many reduced benefit directives have been issued to lone parents since the Child Support Act 1991 came into operation.

  Mr. Burt
  I refer the hon. Member to the reply given to the hon. Member for East Kilbride (Mr. Ingram) on 27 January at column 363.

  Compensation Recovery Unit
  Dr. John Cunningham
  To ask the Secretary of State for Social Security how much money the compensation recovery unit recovered in the financial year 1992–93 by recoupment of benefits from awards of damages in personal injury claims; and how much money the compensation recovery unit estimated in the same year it would recover by recoupment of benefit.

  Mr. Hague
  The administration of the compensation recovery unit is a matter for Mr. Michael Bichard, the chief executive of the Benefits Agency. He will write to the right hon. Member.

  Letter from M. Bichard to Dr. John Cunningham, dated 27 January 1994:
  453
  The Secretary of State for Social Security has asked me to reply to your recent Parliamentary Question asking about the performance of the Compensation Recovery Unit.

  In the 1992–93 financial year the Compensation Recovery Unit recovered over £51 million from awards of damages in personal injury claims. The estimated recovery for the same period was almost £49 million.

  I hope you will find my reply helpful.

  Benefit Overpayments
  Mr. Flynn
  To ask the Secretary of State for Social Security when instructions were first issued to local offices of his Department regarding the right to recover overpayments of benefits under common law in cases not covered by statutory provisions for recovery of overpayments.

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

  Letter from M. Bichard to Mr. Paul Flynn, dated 27 January 1994.

  The Secretary of State for Social Security has asked me to reply to your recent Parliamentary Question asking about the instructions issued to the Department's Local Offices about the recovery of overpayments under common law.

  The Benefits Agency (BA) seeks recovery under Section 71 and Section 74 of the Social Security Administration Act 1992. Under Section 71 the recovery is sought if the overpayment has been the result of "misrepresentation" or "failure to disclose" a material fact by the beneficiary. Section 74 applies where there has been a duplicaiton of Income Support and another benefit.

  Recoveries under Sections 71 and 74 are dependant on determinations made by the independent adjudicating authorities. Under Section 71 they decide whether benefit is overpaid and the amount. For Section 74 they decide the amount that is recoverable.

  There may be occasions where neither Section 71 nor Section 74 applies but benefit has been paid incorrectly and on the facts of the particular case the beneficiary ought to have realised that too much benefit was being paid. As there has been no misrepresentation or failure to disclose a material fact, and other considerations of Section 74 do not apply, there is no basis for the adjudication officer to decide on the overpayment. Nevertheless the BA is entitled to seek repayment of the money overpaid in such circumstances under the established principle of common law that where a person has received money to which he is not entitled, then he should repay it. This arrangement has existed for many years and has always been contained in instructions issued to Local Offices. No recent changes in instructions have therefore been necessary.

  I hope you find this reply helpful.

WALES

  Smoking
  Mr. Barry Jones
  To ask the Secretary of State for Wales what action he has taken and what further action he plans to discourage smoking among(a) children of school age and (b) adults; and if he will make a statement.

  Mr. Gwilym Jones
  Particular campaigns aimed at children of school age include the highly successful life education centres and the anti-smoking club Smokebusters Wales. A number of new projects aimed specifically at children are also being planned.
  454
  In relation to other groups, Health Promotion Wales' future plans include action to reduce the incidence of smoking by teenage girls, a pilot project to help smokers aged 15 to 19 to give up, and the development of materials for use in youth settings. These initiatives are the direct result of needs identified through research activity. In addition, the Welsh Office continues to support local health promotion units; each of which are carrying out their own local smoking cessation projects.

  The Government have set and are determined to meet the challenging targets set out in Health Promotion Wales' document "Plans for Action 3—The Agenda for 1992–94".

  National Curriculum (Changes)
  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for Wales when he expects to publish guidelines for education authorities in Wales regarding changes to the national curriculum in primary schools.

  Sir Wyn Roberts
  I announced on 5 January that the national curriculum in Wales would be slimmed down to allow schools more time to use at their discretion. Proposals for national curriculum orders, setting out the new requirements, will be issued for consultation around Easter. Schools and local education authorities in Wales will receive details of the revised national curriculum requirements at each key stage during the spring term in 1995. The revised curriculum will come into force for the 1995–96 school year.

  Modern Apprenticeships Scheme
  Mr. Ron Davies
  To ask the Secretary of State for Wales what are his objectives for the modern apprenticeships scheme in Wales.

  Mr. Redwood
  The aim of modern apprenticeships in Wales is to increase our economic competitiveness by increasing the number of young people qualifying to the key technician and supervisor levels. The main emphasis in 1994–95 will be on manufacturing engineering in order to support Wales' growing reputation as a manufacturing centre. Modern apprenticeships will be extended to other sectors in 1995–96.

  Arable Area Payments Scheme
  Mr. Tipping
  To ask the Secretary of State for Wales if he will give(a) the maximum, (b) the minimum and (c) the average amount paid out under the arable area payments scheme in Wales in the latest available year; and if he will make a statement.

  Mr. Redwood
  Amounts paid under the 1992–93 scheme are in the order of:

  £

  Maximum payment

  34,300·00

  Minimum payment

  70·00

  Average payment

  1,700·00

  These figures do not include payments for oilseeds because the final instalment is not due to be paid until early 1994.
  455

NATIONAL FINANCE

  Insurance Premium Tax
  Mrs. Beckett
  To ask the Chancellor of the Exchequer if he will give a full breakdown of the 35p weekly increase in tax for the average family which will result from the introduction of the insurance premium tax which he identified in his autumn Budget; and if he will outline the assumptions on which it was based.

  Sir John Cope
  The 35p figure can be broken down as follows:

  Pence per week

  Motor

  20

  Building

  10

  Contents

  5

  Total

  35

  These figures are based on the 1991 family expenditure survey, uprated to 1994–95. The figures cover expenditure by those households which have some insurance in each of the three main types of insurance.

  Interest Charges
  Mr. Wigley
  To ask the Chancellor of the Exchequer what measures he proposes to relieve small businesses and farms from paying interest charges considerably in excess of base rates.

  Mr. Nelson
  The Government have reduced base rates by 6·5 per cent. over the last 16 months and are committed to maintaining a competitive market for lending. The particular rates paid by individual borrowers is a matter for negotiation between them and their lenders.

  Land
  Mr. Chris Smith
  To ask the Chancellor of the Exchequer how many landowners and estates in(a) England, (b) Wales and (c) Scotland have made unsuccessful applications to benefit under the tax procedures by which tax liability is reduced on condition that there is an undertaking to manage and protect the land from development and allow reasonable public access.

  Mr. Dorrell
  Information is not available in the form requested. Under 5 per cent. of applications for conditional exemption from inheritance tax or capital transfer tax are wholly rejected or withdrawn. Applications may relate to a number of properties and some of the applications which have been accepted will have been accepted only in part.

  Mr. Chris Smith
  To ask the Chancellor of the Exchequer how many landowners and estates in(a) England, (b) Wales and (c) Scotland have benefited under the tax procedures by which tax liability is reduced on condition that there is an undertaking to manage and protect the land from development and allow reasonable public access.

  Mr. Dorrell
  There have been 126 designations of land for conditional exemption from inheritance tax or capital transfer tax in England; five designations in Wales; and 26 456
  designations in Scotland. In addition, there have been 106 designations of historic buildings in England; five designations in Wales; and 39 designations in Scotland. Some of the designations of historic buildings will have extended to surrounding land. Some designations of historic buildings have been for the purposes of the tax exemptions for maintenance funds rather than for exemption of the buildings themselves.

  Mr. Chris Smith
  To ask the Chancellor of the Exchequer what was the approximate value of the tax forgone in each year since 1976 in the cases where landowners and estates have benefited under the tax procedures by which tax liability is reduced on condition that there is an undertaking to manage and protect the land from development and allow reasonable public access.

  Mr. Dorrell
  The annual average cost of inheritance tax conditional exemption for land and buildings is estimated to have been between £5 million and £10 million over the period 1983–84 to 1992–93. Figures for earlier years are not available.

  Works of Art
  Mr. Gordon Prentice
  To ask the Chancellor of the Exchequer what steps he is taking to ensure that estates claiming exemption from inheritance tax make available to the public details of the works of art to which they have a right of access.

  Mr. Dorrell
  Public access to works of art granted exemption from inheritance tax may be provided in a number of ways. The publicity arrangements will differ depending on the way chosen.

  The owner may arrange to exhibit the object in a house or room which is open to the public for an agreed number of days each year; appropriate publicity for the opening of the house would be required. The owner may lend the object to a public collection for display on a long-term basis; publicity would then be the responsibility of the curator of this collection.

  Alternatively, the owner may arrange viewing by appointment provided he is also willing to lend the object on request to a public collection. All objects which can be viewed by appointment are publicised by means of an entry in the computerised register of conditionally exempt property held by the national art library in the Victoria and Albert museum in London. Copies of the register are also available for consultation in the national library of Scotland in Edinburgh, the national museum of Wales in Cardiff and the Ulster museum in Belfast. Copies of the register on computer disc can be purchased from the capital taxes office at a price of £10 each. The register is updated quarterly and the Inland Revenue issues quarterly press releases giving details of recent additions to the register.

  Unicorn Heritage
  Mr. Enright
  To ask the Chancellor of the Exchequer what total tax relief was given to investors in Unicorn Heritage plc under Treasury business expansion schemes when that company went bankrupt; and under what guidelines it was given.

  Mr. Dorrell
  For reasons of taxpayer confidentiality, details of tax relief, if any, given to individuals in any particular instance are not disclosed.
  457

  Income Tax
  Ms Harman
  To ask the Chancellor of the Exchequer if he will update table 2·3 of Inland Revenue Statistics 1993 with data for 1994–95 on the basis of his budget proposals for income tax.

  Shares of total income tax liability1 (percentages)

  Quantile groups of taxpayers

  1978–79

  1981–82

  1986–87

  1990–91

  1991–92

  1992–93

  1993–94

  1994–95

  Top 1 per cent.

  11

  11

  14

  15

  16

  17

  17

  17

  Top 5 per cent.

  24

  25

  29

  32

  33

  33

  34

  34

  Top 10 per cent.

  35

  35

  39

  42

  43

  45

  45

  45

  Next 40 per cent.

  47

  46

  43

  43

  42

  42

  42

  42

  Lower 50 per cent.

  18

  19

  16

  15

  15

  13

  13

  13

  All taxpayers (=100 per cent.) (£ billion)

  20·3

  30·5

  42·8

  60·2

  63·4

  63·1

  64·9

  70·6

  1 Independent taxation was introduced from 6 April 1990. For years up to and including 1986–87, married couples are counted as one taxpayer and their incomes are combined. For 1990–91 onwards, husbands and wives are counted separately.

SCOTLAND

  Teacher Training Costs
  Mr. McFall
  To ask the Secretary of State for Scotland what estimate he has of the total cost involved in training(a) a secondary and (b) a primary school teacher in Scotland.

  Lord James Douglas-Hamilton
  The information set out in the table is based upon returns from teacher training institutions, other than the university of Stirling, detailing course costs in 1991–92. The figures include also an estimate of student support costs, assuming entitlement to full maintenance grant and loan at the "home" rates.

  Course

  Estimated cost per student 1991–92 £

  BEd primary four-year course

  26,200

  PGCE Primary one-year postgraduate course

  7,220

  BEd Secondary four-year course

  26,390

  PGCE Secondary one-year postgraduate course

  7,290

  Procurators Fiscal
  Mr. McFall
  To ask the Secretary of State for Scotland how many cases were reported to each procurator fiscal by the police in each year since 1990.

  Lord James Douglas-Hamilton
  Procurators fiscal receive reports from over 50 reporting agencies including the police. The total numbers of such reports for each year since 1990 are given in the table. Separate statistics are not kept of the number of reports submitted by the police, but their reports will account for approximately 90 per cent. of the totals given.

  1990

  CRIM reports

  Aberdeen

  14,740

  Airdrie

  9,254

  Alloa

  3,341

  Arbroath

  3,104

  Ayr

  11,059

  Banff

  1,311

  Campbeltown

  665

  458
  Mr. Dorrell
  [holding answer 27 January 1994]: The information is given in the table. Estimates for 1992–93 onwards are based on a projection of the 1991–92 survey of personal incomes.

  CRIM reports

  Cupar

  2,800

  Dingwall

  1,931

  Dornoch

  546

  Dumbarton

  9,198

  Dumfries

  7,928

  Dundee

  15,016

  Dunfermline

  7,623

  Dunoon

  1,444

  Duns

  1,854

  Edinburgh

  37,028

  Elgin

  4,931

  Falkirk

  10,057

  Forfar

  3,624

  Fort William

  1,515

  Glasgow

  79,538

  Greenock

  7,080

  Haddington

  3,974

  Hamilton

  26,757

  Inverness

  6,946

  Jedburgh

  1,887

  Kilmarnock

  12,903

  Kirkcaldy

  8,130

  Kirkcudbright

  1,606

  Kirkwall

  616

  Lanark

  4,767

  Lerwick

  1,140

  Linlithgow

  9,566

  Lochmaddy

  199

  Oban

  1,141

  Paisley

  10,476

  Peebles

  1,029

  Perth

  11,392

  Peterhead

  2,959

  Portree

  574

  Rothesay

  289

  Selkirk

  2,411

  Stirling

  6,788

  Stonehaven

  3,637

  Stornoway

  1,030

  Stranraer

  2,124

  Tain

  1,542

  Wick

  1,426

  Totals

  360,896

  1991

  CRIM reports

  Aberdeen

  16,556

  Airdrie

  9,334

  Alloa

  3,526

  Arbroath

  3,151

  Ayr

  11,285

  Banff

  1,719

  Campbeltown

  875

  459

  CRIM reports

  Cupar

  2,602

  Dingwall

  1,873

  Dornoch

  535

  Dumbarton

  9,757

  Dumfries

  8,620

  Dundee

  14,202

  Dunfermline

  8,058

  Dunoon

  1,433

  Duns

  1,963

  Edinburgh

  33,805

  Elgin

  5,261

  Falkirk

  10,897

  Forfar

  4,003

  Fort William

  1,562

  Glasgow

  81,564

  Greenock

  6,984

  Haddington

  3,595

  Hamilton

  25,519

  Inverness

  7,836

  Jedburgh

  2,255

  Kilmarnock

  12,650

  Kirkcaldy

  8,502

  Kirkcudbright

  1,826

  Kirkwall

  593

  Lanark

  6,539

  Lerwick

  950

  Linlithgow

  8,741

  Lochmaddy

  211

  Oban

  1,105

  Paisley

  11,799

  Peebles

  1,093

  Perth

  10,475

  Peterhead

  3,126

  Portree

  789

  Rothesay

  339

  Selkirk

  2,302

  Stirling

  7,218

  Stonehaven

  4,777

  Stornoway

  1,078

  Stranraer

  3,365

  Tain

  1,520

  Wick

  1,206

  Totals

  368,974

  1992

  CRIM reports

  Aberdeen

  15,846

  Airdrie

  8,907

  Alloa

  3,650

  Arbroath

  3,693

  Ayr

  10,552

  Banff

  1,542

  Campbeltown

  786

  Cupar

  3,020

  Dingwall

  1,827

  Dornoch

  542

  Dumbarton

  8,759

  Dumfries

  9,430

  Dundee

  13,225

  Dunfermline

  8,404

  Dunoon

  1,381

  Duns

  2,134

  Edinburgh

  34,487

  Elgin

  4,568

  Falkirk

  10,983

  Forfar

  3,800

  Fort William

  1,693

  Glasgow

  81,977

  Greenock

  7,129

  Haddington

  4,338

  Hamilton

  24,548

  Inverness

  8,059

  460

  CRIM reports

  Jedburgh

  2,311

  Kilmarnock

  12,149

  Kirkcaldy

  8,915

  Kirkcudbright

  1,946

  Kirkwall

  627

  Lanark

  6,531

  Lerwick

  807

  Linlithgow

  8,655

  Lochmaddy

  236

  Oban

  1,113

  Paisley

  14,266

  Peebles

  1,423

  Perth

  9,833

  Peterhead

  3,188

  Portree

  494

  Rothesay

  307

  Selkirk

  2,043

  Stirling

  6,786

  Stonehaven

  3,346

  Stornoway

  785

  Stranraer

  3,196

  Tain

  1,500

  Wick

  1,326

  Totals

  367,063

  1993

  CRIM reports

  Aberdeen

  13,371

  Airdrie

  7,141

  Alloa

  2,933

  Arbroath

  2,879

  Ayr

  8,093

  Banff

  1,205

  Campbeltown

  652

  Cupar

  2,109

  Dingwall

  1,375

  Dornoch

  493

  Dumbarton

  7,573

  Dumfries

  6,411

  Dundee

  10,520

  Dunfermline

  6,508

  Dunoon

  1,068

  Duns

  1,211

  Edinburgh

  29,977

  Elgin

  3,669

  Falkirk

  7,832

  Forfar

  2,387

  Fort William

  1,556

  Glasgow

  72,638

  Greenock

  5,170

  Haddington

  3,766

  Hamilton

  17,296

  Inverness

  7,190

  Jedburgh

  1,727

  Kilmarnock

  9,811

  Kirkcaldy

  6,881

  Kirkcudbright

  1,155

  Kirkwall

  616

  Lanark

  4,716

  Lerwick

  789

  Linlithgow

  7,236

  Lochmaddy

  234

  Oban

  1,042

  Paisley

  11,734

  Peebles

  868

  Perth

  7,759

  Peterhead

  2,691

  Portree

  429

  Rothesay

  232

  Selkirk

  1,526

  Stirling

  5,202

  Stonehaven

  2,163

  461

  CRIM reports

  Stomoway

  761

  Stranraer

  2,129

  Tain

  1,252

  Wick

  1,065

  Totals

  297,041

  Mr. McFall
  To ask the Secretary of State for Scotland what procedures are in operation to monitor the way in which procurators fiscal deal with cases reported to them by the police; and what account is taken of the results of such monitoring in the rewarding or career patterns of procurators fiscal and in the allocation of financial resources.

  Lord James Douglas-Hamilton
  Procurators fiscal prepare monthly reports of workload and performance. The information is analysed centrally in Crown Office for senior management. The work of local offices is monitored regularly by regional procurators fiscal and by the management services group in the Crown Office, which is engaged in a continuing programme of review. Procurators fiscal are subject to the directions of my noble and learned Friend, the Lord Advocate and must report serious cases for the instructions of his Deputes.

  Financial resources are allocated on the basis of the workload of each office and the allocation takes account of the demands made by different types of case. A procurator fiscal is a civil servant. His competence is systematically appraised each year and he has the opportunity to earn performance pay. His performance is not measured in terms of results in court or by the number of convictions he obtains. The development of a procurate fiscal's career depends on how well he carries out a wide range of duties, and to advance he must be successful at promotion boards, which form part of the service's rigorous selection process.

  Nurses
  Dr. Marek
  To ask the Secretary of State for Scotland how many nurses were employed in national health service hospitals in each of the last five years for which figures are available; and what are the figures for nurses employed in the community alongside family doctors.

  Mr. Stewart
  The numbers of qualified nursing staff employed in hospitals and directly employed by GP practices are shown in the table. This also gives data for qualified staff working in the community who are employed by health boards and NHS trusts; these include those who work closely with GPs, like health visitors and district nurses, and others who may not, such as clinic or school nurses.

  Numbers of qualified nurses, WTE, working in the NHS in Scotland.1

  Hospital Staff

  Community Staff2

  Staff employed in GP practices

  1989

  29,412·0

  5,210·7

  295·3

  1990

  29,478·0

  5,261·1

  583·5

  1991

  29,731·6

  35,525·7

  646·8

  1992

  429,714·6

  5,432·8

  695·3

  1993

  429,510·4

  45,392·9

  735·5

  Includes midwives and only staff who are registered or enrolled. Bank nurses, staff in training or staff who are unqualified such as auxiliaries or
  462
  nursery nurses are not included. Data for hospital and community staff are at 30 September and for GP practice staff at 1 April.

  2 Includes both staff who work closely with GPs and those who may not.

  3 The increase in community staff between 1990 and 1991 is the result of a reclassification of staff previously classified as hospital staff.

  4 Provisional.

  Scottish Power (Fraud)
  Mrs. Fyfe
  To ask the Secretary of State for Scotland whether the Serious Fraud Squad has concluded its investigation into alleged complaints of fraud in the supply of coal to Scottish Power, and with what results.

  Lord James Douglas-Hamilton
  The investigation by Fife constabulary is not yet concluded.

  Scottish Legal Aid Board
  Mr. Darling
  To ask the Secretary of State for Scotland what is the total cost incurred by the Scottish Legal Aid Board in connection with market testing of its operations; if these costs have been met from the board's current budget; and if he will make a statement.

  Lord James Douglas-Hamilton
  In common with other non-departmental public bodies, the Scottish Legal Aid Board is undertaking a programme of market testing of certain of its activities. Separately identifiable costs to date amount to £30,000. These have been met from within the board's adminstrative budget of £7·862 million for 1993–94.

  Director of Information
  Mr. Norman Hogg
  To ask the Secretary of State for Scotland what is the salary grading and scale attaching to the post of director of information at the Scottish Office; what are the duties and responsibilities of the office; and to whom the office holder is responsible.

  Mr. Lang
  The post of director of the Scottish Office information directorate is graded at unified grade 5 within the civil service grading structure. At present the national rate of pay for the grade is within the range £36,019–£53,740 progression being dependent on performance.

  The director is responsible for the provision of advice to Ministers and all departments of the Scottish Office on the public presentation, through press, radio and television, of Government policy and the work of the Ministers and the departments of the Scottish Office.

  The post also carries responsibility for paid publicity, including advertising and publications, media arrangements for royal visits to Scotland, organising programmes and providing escorts for Foreign and Commonwealth Office-sponsored VIP visitors to Scotland, and the provision of news and radio tapes for overseas markets on behalf of the Central Office of Information.

  The director is directly responsible to Ministers as regards the professional advice provided by the information directorate. Management oversight of the directorate is exercised by the deputy secretary in charge of central services within the Scottish Office.

  Forestry
  Mr. Colvin
  To ask the Secretary of State for Scotland what plans he has to publish a strategy for woodlands and forestry to implement his policy objectives.
  463
  Sir Hector Monro
  [holding answer 24 January 1994]: We published on Tuesday 25 January "Sustainable Forestry: The UK Programme" which explains how the forest principles will be implemented in the United Kingdom under our existing forestry policy.

  NHS (Non-executive Directors)
  Mrs. Fyfe
  To ask the Secretary of State for Scotland if he will list the number of attendances, and the maximum possible of attendances, of non-executive directors at (1) national health service trust board meetings, and (2) health boards, in the latest 12 months or part thereof for which information is available.

  Mr. Stewart
  [holding answer 27 January 1994]: The information requested is not recorded centrally.

  Mrs. Fyfe
  To ask the Secretary of State for Scotland what steps he has taken to ensure that non-executive members of national health service boards(a) visit a representative sample of the units under their control to observe service delivery in action, (b) take part in joint training and development with executive members and (c) receive training in how the national health service is financed.

  Mr. Stewart
  [holding answer 27 January 1994]: All members of health boards and national health service trusts are invited on appointment to attend national conferences to develop their understanding of the strategy, structure and finance of the national health service in Scotland. Boards are also strongly encouraged to provide induction programmes covering all local issues, including site visits to a range of facilities. The management development group also actively promotes joint training and development locally for non-executive and executive members, and they are given the opportunity to participate in a range of training programmes, including corporate management and financial responsibility.

  Paediatric Care
  Mrs. Fyfe
  To ask the Secretary of State for Scotland (1) if he will make it his policy to increase the number and availability of paediatric intensive care unit beds;

  (2) if he will order a review in each health board area of the provision of children's intensive care; and if he will consider designating sites as area paediatric intensive care units;

  (3) what is his policy on the ratio of paediatric intensive care unit beds to the population of children aged under 14 years;

  (4) if he will require purchasers and providers to meet agreed standards for the provision of paediatric intensive care beds.

  Mr. Stewart
  [holding answer 27 January 1994]: It is a matter for health boards to purchase paediatric intensive care based on their assessment of local needs.

  Mrs. Fyfe
  To ask the Secretary of State for Scotland what is his estimate of the extent of the shortfall of paediatric intensive care unit beds.

  Mr. Stewart
  [holding answer 27 January 1994]: I refer the hon. Member to the reply I gave on 10 December 1993, Official Report, column 353.
  464

  Council Housing
  Mrs. Fyfe
  To ask the Secretary of State for Scotland how much from(a) grants, (b) consent to borrow and (c) capital receipts was spent in 1991–92 and 1992–93 on (i) council housing stock, (ii) owner-occupied stock, (iii) housing associations' stock and (iv) Scottish Homes stock; and how much of these sums, in each category of financial contribution and type of stock, was devoted to eradication of dampness and condensation.

  Lord James Douglas-Hamilton
  [holding answer 27 January 1994]: Information in the form requested is not held centrally. Decisions on whether particular expenditure is financed from grants, borrowing, capital receipts or from other revenue is a matter for individual housing authorities. Similarly housing resource allocations are not generally earmarked for specific purposes and it is up to individual housing authorities to decide on the balance of investment in specific areas, including tackling dampness and condensation. Local authorities and Scottish Homes have, however, been asked to give priority to eliminating dampness and condensation in preparing their capital programmes for future years.

  Development Corporations (Rent Increases)
  Mr. Donohoe
  To ask the Secretary of State for Scotland if he will make a statement on the rent increases announced by Irvine development corporation.

  1Mr. Stewart
  [holding answer 27 January 1994]: The house rent increases announced by Irvine development corporation, which will come into effect on 28 March, provide for a rise in management and maintenance costs above the rate of inflation and are expected to be broadly in line with the average set by other private sector landlords.

  Mr. Donohoe
  To ask the Secretary of State for Scotland what rent increases have been announced by Irvine, Cumbernauld, Livingston, East Kilbride and Glenrothes development corporations; and what guidelines the Scottish Office issued to the development corporations prior to a decision being taken on the level of rent increase.

  Mr. Stewart
  [holding answer 27 January 1994]: Irvine, Livingston and East Kilbride development corporations have each announced a 5 per cent. increase in house rents from the beginning of 1994–95. Glenrothes and Cumbernauld have yet to announce the level of rent increase which will apply. These increases are in line with my right hon. Friend's advice to corporations that present house rents should, on average, be increased by between 5 per cent. and 7 per cent. from the beginning of the new financial year.

  Inquiry Line
  Mrs. Ray Michie
  To ask the Secretary of State for Scotland if he will give details of the cost of setting up the Scottish Office inquiry line and the cost to date, the cost of administering the service, the number of staff employed and the salary of the head of the Scottish Office inquiry line.

  Mr. Lang
  [holding answer 27 January 1994]: The set-up costs for the Scottish Office inquiry line amount to

  465
  £176,871. This includes initial publicity costs of £150,000 necessarily incurred to make the new arrangements known to the public. The estimated annual cost of operating the information line is £28,500; the costs to date are approximately £7,125.

  The Scottish Office central inquiry unit has responsibility for the new information line and the unit was augmented by one to handle the new initiative. The unit is currently headed by a senior librarian whose annual salary is in the range of £19,215 to £24,780.

  Mrs. Ray Michie
  To ask the Secretary of State for Scotland if he will list the number of calls received from each region between 1 October and 13 December 1993 to the Scottish Office inquiry line.

  Mr. Lang
  [holding answer 27 January 1994]: Statistics on the number of Scottish callers to the inquiry line are divided into three catchment areas plus a fourth covering England and Wales.

  The number of calls received for the period 1 October to 13 December 1993 were:

  Number

  Aberdeen

  297

  Edinburgh

  579

  Glasgow

  864

  England and Wales— various locations

  98

  Mrs. Ray Michie
  To ask the Secretary of State for Scotland what was the number of calls received between 1 October and 13 December 1993 to the Scottish Office inquiry line.

  Mr. Lang
  [holding answer 27 January 1994]: The Scottish Office inquiry line received 1,838 calls between I October and 13 December 1993.

  Mrs. Ray Michie
  To ask the Secretary of State for Scotland if he will give details of the subject matter of calls received by the Scottish Office inquiry line; and which of his departments has been involved in each case.

  Mr. Lang
  [holding answer 27 January 1994]: No specific record is kept of the subject matter of each call received through the Scottish Office inquiry line but topics of inquiry have included trust hospitals, the opting out of schools, road building programmes, social services provision, planning and environmental issues.

FOREIGN AND COMMONWEALTH AFFAIRS

  Yugoslavia
  Mr. Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has regarding the country of manufacture of guns obtained by Serbian forces since July 1992 which have been used against(a) British service men and (b) Bosnian civilians in Bosnia-Herzegovina.

  Mr. Douglas Hogg
  Serbia has an extensive arms manufacturing capability. Most weapons held by Serb forces are produced domestically, although it is possible that they may have procured guns from other countries since July 1992.
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  We have no information that Serb forces have used foreign-manufactured weapons either against British service men or Bosnian civilians.

  Mr. Ainger
  To ask the Secretary of State for Foreign and Commonwealth Affairs what(a) financial help and (b) technical and professional help his Department is contributing to the United Nations Human Rights Commission investigation into alleged war crimes in former Yugoslavia.

  Mr. Douglas Hogg
  The United Kingdom provides financial assistance to the United Nations commission of experts through its contributions to the United Nations regular budget. We have also submitted to the commission three batches of substantiated evidence on war crimes, including a requested report on rape, collated by the Ministry of Defence's defence debriefing team.

  Mr. Ainger
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether his Department passed on to the United Nations Human Rights Commission all the testimonies of witnesses to and victims of alleged war crimes in the former Yugoslavia.

  Mr. Douglas Hogg
  The Ministry of Defence's debriefing team has inteviewed over 4,000 entrants to the United Kingdom from the former Yugoslavia since the conflict began. This material has been collated and substantiated evidence submitted to the commission of experts in three separate batches. We will continue to submit such evidence as it becomes available.

  Mr. Ainger
  To ask the Secretary of State for Foreign and Commonwealth Affairs how his Department is co-operating with the UN Human Rights Commission investigation into alleged war crimes in former Yugoslavia; and if he will make a statement.

  Mr. Douglas Hogg
  The United Kingdom co-sponsored Security Council resolution 780 of 6 October 1992 which established the UN commission of experts. Since its establishment we have submitted to the commission three batches of substantiated evidence, including a requested report on rape. Later this year we will submit further evidence following a request from the commission for information on specific regions.

  Arms Exports
  Mr. Janner
  . To ask the Secretary of State for Foreign and Commonwealth Affairs what is the Government's policy regarding arms exports to Israel.

  Mr. Douglas Hogg
  I refer the hon. Member to the reply given to him by my right hon. Friend the Minister of State for Foreign and Commonwealth Affairs on 1 December 1993,Official Report, column 534.

  Mr. Janner
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the Government's policy regarding arms exports to Iran.

  Mr. Douglas Hogg
  We apply the following criteria in considering applications for the export of licensable goods to Iran:

  (i) With two exceptions we should not approve licences for any goods or technology on the military or atomic energy lists—schedule 1. part 3, group 1 and 2—of the Export of Goods (Control) Order 1992, as amended. The exceptions are:

  467

  (a) goods essential for the safety of civil aircraft and air traffic control systems;

  (b) radioactive material in the form of sources for medical equipment and deuterium labelled compounds for medical use.

  (ii) We should not approve licences for any equipment—including the exceptions to the complete ban mentioned above—where there was knowledge or reason to suspect that it would go to a military end-user or be used for military purposes.

  Existing export licenses, approved under the old guidelines, will remain valid. As my right hon. Friend the Minister of State for Trade announced in his written reply to the hon. Member for Croydon, Central (Sir P. Beresford) on 18 January 1994, Official Report, column 509, an exception has been made in one case to date. We shall support efforts among supplier countries, in particular the G7 and our European partners, to promote a harmonised approach to effective controls on the export of dual use goods to countries of particular concern.

  Mr. Janner
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the Government's policy regarding arms exports to Syria.

  Mr. Douglas Hogg
  We do not sell arms to Syria.

  Mr. Janner
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the Government's policy regarding arms exports to Kuwait.

  Mr. Douglas Hogg
  We consider applications for the export of arms to Kuwait on a case by case basis. We refuse applications for exports which in our view would not be consistent with our established criteria, including the common criteria for arms transfers agreed with European Union partners at Luxembourg in 1991 and at Lisbon in 1992, the guidelines agreed by the Permanent Five in London in 1991 and the principles governing conventional arms transfers adopted by the forum for security co-operation of the conference on security and co-operation in Europe in November 1993.

  Mr. Janner
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the Government's policy regarding arms exports to Saudi Arabia.

  Mr. Douglas Hogg
  We consider applications for the export of arms to Saudi Arabia on a case-by-case basis. We refuse applications for exports which in our view would not be consistent with our established criteria, including the common criteria for arms transfers agreed with European Union partners at Luxembourg in 1991 and at Lisbon in 1992, the guidelines agreed by the permanent five in London in 1991 and the principles governing conventional arms transfers adopted by the forum for security co-operation of the conference on security and co-operation in Europe in November 1993.

  Mr. Janner
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the Government's policy regarding arms exports to Jordan.

  Mr. Douglas Hogg
  We consider applications for the export of arms to Jordan on a case by case basis. We refuse applications for exports which in our view would riot be consistent with our established criteria, including the common criteria for arms transfers agreed with European Union partners at Luxembourg in 1991 and at Lisbon in 1992, the guidelines agreed by the permanent five in 468
  London in 1991 and the principles governing conventional arms transfers adopted by the forum for security co-operation of the conference on security and co-operation in Europe in November 1993.

  Mr. Janner
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the Government's policy regarding arms exports to Egypt.

  Mr. Douglas Hogg
  We consider applications for the export of arms to Egypt on a case by case basis. We refuse applications for exports which in our view would not be consistent with our established criteria, including the common criteria for arms transfers agreed with European Union partners at Luxembourg in 1991 and at Lisbon in 1992, the guidelines agreed by the Permanent five in London in 1991 and the principles governing conventional arms transfers adopted by the forum for security co-operation of the conference on security and co-operation in Europe in November 1993.

  Iran
  Mr. Alton
  To ask the Secretary of State for Foreign and Commonwealth Affairs what action Her Majesty's Government will take to persuade the Government of Iran to investigate the disappearance of the General Secretary of the Iranian Assemblies of God, the Reverend Haik Hovsepian Mehr.

  Mr. Douglas Hogg
  We are concerned at Reverend Hovsepian's disappearance. According to the local press, the Iranian authorities are investigating. The EU presidency are seeking clarification in Iran on behalf of European partners.

  North Korea
  Mr. Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the progress in implementing the nuclear safeguards inspections at facilities in North Korea; and if he will place in the Library a copy of the safeguards measures list drawn up by the International Atomic Energy Agency for North Korea, pursuant to a decision of the United Nations Security Council.

  Mr. Douglas Hogg
  North Korea is still refusing to agree to International Atomic Energy Agency inspection of the two undeclared sites which led to its referral to the United Nations Security Council last April. The IAEA is currently discussing with North Korea arrangements for the next routine inspections of its declared sites. Details of specific measures required to ensure compliance with safeguards are not released by the IAEA. However, a copy of North Korea's safeguards agreement with the IAEA—INFCIRC 403—to which such measures are pursuant, has been deposited in the Library of the House.

  Bosnia
  Mr. Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on his recent visit to Bosnia.

  Mr. Douglas Hogg
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs visited Bosnia on 21 and 22 January to see at first hand the contribution British troops and civilian aid workers are making to the international aid effort. He was enormously
  469
  impressed by their professionalism and dedication. His visit will inform our consideration, with fellow troop contributors and other allies, of the future of UNPROFOR.

  Nuclear Weapons
  Mr. Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the outcome of the second preparatory committee meeting for the review and renewal conference of the nuclear non-proliferation treaty held in New York from 17 January; and if he will place in the Library copies of those documents circulated at the preparatory committee meeting making reference to the United Kingdom policy on the non-proliferation treaty.

  Mr. Douglas Hogg
  The second meeting of the preparatory committee for the 1995 non-proliferation treaty extension and review conference was largely concerned with organisational issues and the committee made good progress towards its task of preparing for the conference. The leader of the United Kingdom delegation also delivered a short statement in which he reaffirmed our commitment to our treaty obligations and our aim of securing the treaty's unconditional and indefinite extension in 1995. A copy of this statement has been deposited in the Library of the House.

  Defence Sales
  Mr. Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs what was(a) the gross national product of, (b) the amount of United Kingdom Government aid to and (c) the aggregate value of United Kingdom defence sales to (i) Jordan, (ii) Pakistan and (iii) India in each year since 1979.

  Mr. Lennox-Boyd
  The latest available gross national product and United Kingdom bilateral aid figures for Jordan, Pakistan and India are set out in the table. It is not Government policy to publish defence sales figures of the nature requested, which are commercially confidential between the suppliers and the customer Government. I refer the hon. Gentleman to table 1.11 of "UK Defence Statistics 1993" for defence sales information. A copy of this is available in the House of Commons Library.

  Jordan

  Year

  GNP Dinars million

  United Kingdom gross bilateral aid (£'000s)

  1979

  924·9

  13,618

  1980

  1,183·6

  4,682

  1981

  1,484·2

  7,086

  1982

  1,702·5

  3,308

  1983

  1,815·0

  2,747

  1984

  1,905·0

  6,105

  1985

  1,935·8

  2,332

  1986

  2,097·3

  5,641

  1987

  2,112·5

  4,809

  1988

  2,129·9

  4,495

  1989

  2,206·4

  2,822

  1990

  2,375·9

  5,105

  1991

  2,559·1

  10,925

  1992

  3,158·6

  3,122

  1993

  —

  14,717

  Notes:

  (1) GNP: years ending 31 December.

  (2) Aid: years ending 31 December up to and including 1987; thereafter years ending 31 March.

  (3) Source for GNP figures:
  470

  Pakistan

  Year

  GNP PRs billion

  United Kingdom gross bilateral aid (£'000s)

  1979

  209·45

  21,810

  1980

  252·46

  22,245

  1981

  300·89

  24,613

  1982

  349·51

  18,738

  1983

  403·78

  16,612

  1984

  459·40

  18,016

  1985

  510·47

  16,569

  1986

  555·89

  20,715

  1987

  608·86

  22,475

  1988

  704·48

  22,599

  1989

  797·75

  28,183

  1990

  894·71

  30,478

  1991

  1,053·09

  43,476

  1992

  1,225·39

  37,239

  1993

  —

  34,483

  Notes

  (1) GNP: Years ending 30 June.

  (2) Aid: years ending 31 December up to and including 1987; thereafter years ending 31 March.

  (3) Source for GNP figures:

  IMF International Financial Statistics, January 1984.

  India

  Year

  GNP IRs billion

  United Kingdom gross bilateral aid (£'000s)

  1979

  1,145·1

  153,314

  1980

  1,363·6

  86,080

  1981

  1,598·0

  168,550

  1982

  1,775·0

  54,204

  1983

  2,066·5

  127,600

  1984

  2,299·2

  146,537

  1985

  2,608·1

  106,466

  1986

  2,911·4

  143,481

  1987

  3,305·8

  78,464

  1988

  3,921·0

  99,097

  1989

  4,482·6

  84,647

  1990

  5,240·3

  87,652

  1991

  6,026·7

  100,815

  1992

  —

  136,386

  1993

  —

  115,370

  Notes

  (1) GNP: Years beginning 1 April.

  (2) Aid: Years ending 31 December up to and including 1987; thereafter years ending 31 March.

  (3) Source for GNP figures: IMF international financial statistics, January 1994.

  Mercenaries
  Mr. Mullin
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he first became aware that the Azeri Government were hiring British mercenaries; and what steps he took.

  Mr. Douglas Hogg
  I first became aware of the allegations published in The Independent on 24 January. We have as yet no evidence to support these allegations, but my officials are looking into them. It would be a serious matter if a British company were found to be breaking the conference on security and co-operation in Europe arms embargo against parties to the conflict in Nagorno-Karabakh.