Sitting of 30 November 1994

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

  CITY OF WESTMINSTER BILL [Lords].
  Order for consideration read.
  To be considered tomorrow.

  LETCHWORTH GARDEN CITY HERITAGE FOUNDATION BILL.
  Considered; to be read the Third time.
Oral Answers to Questions
  ENVIRONMENT

    River Thames
    Dr. Goodson-Wickes: To ask the Secretary of State for the Environment what assessment he has made of the value and usefulness of the River Thames and its tributaries in London; and if he will bring forward proposals to make better use of it.
    The Secretary of State for the Environment (Mr. John Gummer): We are preparing comprehensive strategic planning guidance to maximise the undoubted assets of the River Thames.
    Dr. Goodson-Wickes: As my right hon. Friend knows, the River Wandle, one of the main tributaries of the River Thames, runs through my constituency. Does he agree that the River Thames is much too often taken for granted and that it is under-used and under-recognised? Will he assure me that he will do his utmost to ensure that its aesthetic, historical and transport facilities are promoted to the full, perhaps in the context of the millennium fund?
    Mr. Gummer: It is vital that we use all the Thames's assets and ensure that it remains a working river. We want it to carry even more waste out of London, which would otherwise be moved by lorry, and to ensure that it is used to the full. I am sure that my hon. Friend's point about the millennium fund can easily be passed on to my right hon. Friend the Secretary of State for National Heritage.
    Mr. Cohen: Why does not the Secretary of State improve his aesthetic appreciation and visit the Whistler exhibition at the Tate gallery, where he would see pictures showing that the River Thames was far more heavily used at the end of the last century than it is now? All the Government seem to be doing is pushing more lorries on to London's roads. Should not we be using the Thames more?
    Mr. Gummer: The Thames was so dirty then that the House of Commons had to give up sitting on
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    occasions because of the smell. I am happy to tell the hon. Gentleman that it is cleaner now than it has been for 400 years and we can now take salmon and other fish from it. Finally, the hon. Gentleman should not believe that he is the only person who has been to an exhibition.

    Power Lines
    Mr. John Greenway: To ask the Secretary of State for the Environment what assessment his Department has made of the environmental impact of power lines in the vale of York.
    The Parliamentary Under-Secretary of State for the Environment (Sir Paul Beresford): Responsibility for assessing the environmental impact of the proposed power lines in the vale of York belongs to the Department of Trade and Industry, which is the consenting authority for such projects. I understand that, as required, environmental statements were submitted with the planning applications and that, following consideration of environmental matters by the public inquiry, my right hon. Friend the President of the Board of Trade was satisfied with the environmental information before him.
    Mr. Greenway: I thank my hon. Friend for that reply, but I urge him to take a much closer interest in the proposed national grid power line through the vale of York, which people in North Yorkshire regard as a potentially serious blot on the landscape. It is not good enough for the Department of the Environment to fail in this instance to apply the planning criteria that would apply to other such applications merely because the issue is decided by the Secretary of State for Trade and Industry. Does he agree that the public outrage is wholly justified, as the planning inspector considered that it was wrong for the ENRHON power plant to be given the go-ahead without an environmental impact assessment being conducted into the power lines through the vale of York?
    Mr. Dowd: That was a bit of a kick in the teeth.
    Sir Paul Beresford: I congratulate the hon. Gentleman on pausing a little, but I can suggest to him an appropriate dentist.
    I note what my hon. Friend says, but we must accept that there has been full consideration of all relevant environmental matters. The matter was put to a public inquiry, and my right hon. Friend the President of the Board of Trade, who has to decide, was satisfied with the environmental information presented to him.

    Radioactive Waste
    Mr. Wigley: To ask the Secretary of State for the Environment what steps he proposes to take in order to increase the safeguards to the environment from the leaching of radioactive substances from landfill dumps into which radioactive waste is deposited.
    The Minister for the Environment and Countryside (Mr. Robert Atkins): I am satisfied that

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    disposals of radioactive waste to landfill sites are properly regulated and that the public and the environment are fully protected.
    Mr. Wigley: Is the Minister aware of the considerable dismay and concern that has arisen, following publication of the Government's consultation document on radioactive waste, about the possibility that waste currently going to Drigg could be redirected to landfill sites? Is he aware that from one such site in my constituency, Cilgwyn, water could leach through into the waterways in the neighbouring valleys and on to agricultural land, which would be wholly unacceptable from every viewpoint? Will he ensure that when considering the outcome of the consultation document, that dimension is taken fully into account?
    Mr. Atkins: I understand why the hon. Gentleman raises the matter. No specific sites have been mentioned and no decisions have been made. It is a consultation paper. He will be aware, as will other hon. Members who take an interest in these matters, that the consultation is being undertaken because of pressure at Drigg in Cumbria on the low-level waste disposal. At many sites in the country such disposal of low-level nuclear waste has been made over the years, under all sorts of Governments. It would not be my intention to make the situation any more difficult. I emphasise again that we have not talked about any specific sites; at this stage, it is only consultation.
    Mr. Allason: Does my hon. Friend recognise that there will be widespread acceptance and a widespread welcome for the consultation document, especially because of the kind of speculation that we have experienced in the past? Is he aware of, and would he like to comment on, the disgraceful and damaging speculation that has been indulged in, especially by the Liberal Democrats in the south-west in relation to Torbay? Of all the sites for landfill for radioactive waste, that must arguably be the most unlikely in the country, yet that has not prevented local Liberal Democrats from making absurd political capital or from trying to frighten the local population and visitors to Torbay.
    Mr. Atkins: My hon. Friend is absolutely right. I speak with authority because Liberal Democrats in my constituency suggested that a site on the boundary of the constituency would be reopened for nuclear waste. That was an absolute fabrication and complete nonsense, and they frightened many people unnecessarily. My hon. Friend is entirely right to suggest that certain people not a million miles away from the Liberal Democrat Benches here should think carefully before making statements that are untrue and misleading.
    Mr. Campbell-Savours: I recognise the constraints placed on Ministers in the case of the Nirex deep repository application in the county of Cumbria, but will the Minister take an interest in Nirex's practice of bribing local organisations to win approval, thereby trying to avoid real resistance from the people of the county of Cumbria to its proposals?
    Mr. Atkins: I know that the hon. Gentleman, like me, takes an interest in these matters for constituency reasons, so I shall look most carefully at anything that
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    he says. However, I have no evidence of anything happening along the lines that he suggests. If he has evidence to present to me, I should like to see it.

    Ministerial Visits
    Mr. Tony Banks: To ask the Secretary of State for the Environment which capital cities he has visited since becoming Secretary of State.
    Mr. Gummer: I have visited 20 capital cities. The list is in the House Library.
    Mr. Banks: While the Secretary of State was clocking up his air miles, did he notice that each of the capital cities had city-wide local government and its own equivalent of County hall? In London, we have neither. Does he share my considerable concern about the bizarre happenings surrounding County hall at the moment? As it seems that the deal between the London residuary body and the Shirayama hotel group was based on a fraud perpetrated by Shirayama, and as we may now be moving into an area of criminal conspiracy, will he, to protect London, County hall and perhaps even himself and his reputation, now order a full inquiry into the events surrounding the takeover and sale of County hall and into the events now taking place?
    Mr. Gummer: I am grateful to the hon. Gentleman for his care for my reputation. I assure him that I have been to a number of capital cities, such as Paris, that do not have city-wide local government, so I do not think that that point is taken.
    The point that the hon. Gentleman raises about County hall is important and I share his concern. It is an important listed building in a very important position on the River Thames. If there is any significant change of use in the building, a new planning application will be needed. I shall consider carefully whether I should call that in to determine myself. Obviously, I cannot prejudge any application, as no application has been made.
    Mr. John Marshall: On his visits around the world, did my right hon. Friend discuss the impact of the private finance initiative, which we were told yesterday should very soon lead to an announcement of 100 new, modern trains for the Northern line in this great capital?
    Mr. Gummer: My visits were mainly concerned with selling British products. Interestingly, private finance initiatives, copied from this country, are now beginning to drive industry and government in a number of countries. In addition, the newly privatised industries are winning billions of pounds in orders for Britain—industries which, had they remained nationalised, would not have been able to win a single cent.

    Housing Finance
    Mr. Corbett: To ask the Secretary of State for the Environment what has been the change in real terms in Government expenditure on housing between 1978–79 and 1994–95.
    The Minister for Local Government, Housing and Urban Regeneration (Mr. David Curry): Over the past 15 years, Government expenditure on housing has

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    increased by £500 million in real terms. That takes into account social security spending on housing benefits and income support.
    Mr. Corbett: Is 90 per cent. of the Minister's constituency casework, like mine, related to housing, particularly in the wake of the halving of Government investment in social housing, which his figures should have confirmed? What hope does that give to 17,000 people on the waiting list in the city of Birmingham, which has an excellent record of private sector partnerships, and to the tenants of 4,500 council homes that still have outside toilets? Will he confirm that the further cuts in investment in housing announced yesterday will mean 20,000 fewer new homes next year and 15,000 fewer building jobs?
    Mr. Curry: The Government have created 180,000 new lettings in the past three years, and our policies will achieve the same in the next three years. As the hon. Gentleman is talking about Birmingham, he will no doubt wish to applaud Castle Vale housing action trust, a partnership with private sector developers and tenants that will receive £7 million worth of grant aid this year and £26 million of estate action schemes. He should not forget that housing is a question not only of new build but of new lettings. The regeneration of housing and the turning of some of the awful post-war estates into places where people want to live and have pride in living is a central part, and one of the most successful parts, of our policy.
    Mr. Hendry: Will my hon. Friend confirm that there are 2 million more houses in this country than there were 15 years ago and that the Government are well ahead of their manifesto commitment on social housing and building programmes? Does he agree that a good deal more would be spent on housing if Labour authorities were rather better at collecting rents on their council estates?
    Mr. Curry: My hon. Friend is absolutely right. Of course, one has to take into consideration not only the resources that Government make available for those programmes, but how much money is levered in. Since 1988, we have levered £2.6 billion of private sector funding into the programme. That makes a very substantial programme and that is exactly the right way in which to do it. I am confident that we shall continue to lever in proportional amounts.
    Mr. Raynsford: Will the Minister tell the House the truth about the cuts in housing investment over the lifetime of this Government? There has been a cut of more than 50 per cent. in real terms. Will he admit that that has been compounded by yesterday's disastrous Budget? Will he confirm that housing association starts will be reduced to fewer than 20,000 next year—the lowest level of rented housing since the second world war?
    Will he confirm that council modernisation schemes will be scrapped because of cuts in local authority credit approvals? Does he accept that the improvement of privately owned properties will be stopped because of cuts in that area? Does he also accept that, contrary to
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    the Secretary of State's weaselly words yesterday, council tenants will be clobbered by rent increases three times as high as the rate of inflation?
    Mr. Curry: First, the answer to most of that is no. Secondly, perhaps the hon. Gentleman—[Interruption.] If the hon. Gentleman had listened carefully yesterday, he would have noticed that the pattern of rent increases in future will be 4 per cent., 3 per cent. and 2 per cent. in real terms over inflation. Of course, that means that the Government are doing what they said. Where there is a public expenditure gain to be made from increasing rents, we have pursued it. When that ceases to be of benefit, it makes sense to review the policy.
    The hon. Gentleman should listen more carefully to what is happening and realise that housing policy, the creation of partnerships, the estate action programmes, action under the single regeneration budget, the schemes to improve lettings and new build, taken together, form a comprehensive housing policy that has been remarkably successful.

    Small Shops
    Dr. Spink: To ask the Secretary of State for the Environment what action he is taking to protect small shops in town and village centres from out-of-town super stores and car boot sales.
    Mr. Gummer: I am determined to support and improve our town centres, and our planning guidance has been revised to encourage in-town developments.
    Dr. Spink: I welcome unreservedly that answer from my right hon. Friend. Does he recall that it is now almost a year since he issued his minded-to-approve decision for a large out-of-town supermarket for Canvey island? The section 106 agreement has been delayed unacceptably by Aldersgate Development. Will he do what he can to bring that agreement forward so that my council and my constituents know what is happening about that development?
    Mr. Gummer: It is very important that people should know where they stand, and I will do all I can to ensure that there is a solution to that problem. However, I am sure that my hon. Friend noticed that the Labour party clearly does not think that it is a good idea to improve in-town developments and make our town centres live again. We know who is on the reactionary side in the House.
    Mr. Lewis: Does not the Secretary of State realise what a ridiculous figure he cuts at the moment—[Interruption.]—the Whale show—as he spends taxpayers' money trying to push through the Dumplington scheme in Greater Manchester, while at the same time he pretends to be in favour of in-town shopping?
    Mr. Gummer: The hon. Gentleman must know that the issue at stake is whether decisions by previous Secretaries of State should stand or whether they can be continually second-guessed thereafter. Any Secretary of State in my position would stand up for the maintenance of certainty in these decisions. That is precisely why I answered my hon. Friend the Member

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    for Castle Point (Dr. Spink) in the way that I did. What is more, if there ever were a Labour Secretary of State for the Environment, he would do precisely the same.
    Dr. Twinn: Does my right hon. Friend agree that out-of-town shopping centres are popular with the driving public because people can park their cars easily and for free? If we are going to make town centres competitive in respect of out-of-town shopping—and we should be doing that—does he agree that it is up to local authorities and shop owners in city centres to make city centres competitive, which means free parking?
    Mr. Gummer: My hon. Friend is quite right to say that parking arrangements are crucial to delivering the in-town shopping centres that we want. Local authorities must make that possible and recognise that car parking is not a matter largely for them but that it can be much better run by those with an economic interest in the success of city centres, who run better car parks and ensure that there is closed circuit television to cover them.

    Single Regeneration Budget
    Mr. Madden: To ask the Secretary of State for the Environment when he expects to announce decisions on bids made to the single regeneration budget.
    Mr. Curry: As soon as we are in a position to do so.
    Mr. Madden: As the Government shot themselves in both feet over the funding of English teaching to ethnic minority children, will the Minister ensure that the 50 single regeneration budget bids directly related to education, including that from Bradford, are given every sympathetic consideration? Will he do his best to ensure that the Cabinet sub-committee supervising the SRB quickly reaches new arrangements for the proper and secure funding of English teaching to ethnic minority children in schools?
    Mr. Curry: The hon. Gentleman may not have noticed that we have doubled section 11 funding for teaching in schools where there are particular problems. Schools can bid for that funding, and no doubt Bradford will be one of the areas to do so. All bids under the SRB will be considered according to the criteria laid out. The partnerships must be very solid and deliverable and the schemes must be well-founded. They will all be judged on that basis. It is not the intention that any bid should have a head start over any other bid. The bids should be on an exactly level playing field.
    Mr. Patrick Thompson: Bearing in mind Nestlé's recent announcement of the closure, in two years, of the Rowntree Mackintosh factory in Norwich and its employment implications in my constituency, will my hon. Friend give appropriate consideration to the single regeneration budget bids that he receives from Norwich and the surrounding area?
    Mr. Curry: I say to my hon. Friend, as I said to the hon. Member for Bradford, West (Mr. Madden), that we judge bids objectively. My hon. Friend will know that coverage was nationwide—we did not focus on certain areas—and that enabled us to address problems that arose from economic circumstances. We
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    did not want any part of the country to feel that it was not entitled to take part in the process or that its concerns were not being met.
    Mr. Vaz: How does the Minister intend to compensate local councils and other organisations that have spent hundreds of thousands of pounds and thousands of hours preparing for bids that, as the Minister knows, will not be successful because of the absurd funding regime of the SRB? When will the Government implement a regeneration policy that addresses the needs of urban Britain rather than the whims of Ministers and the Department of the Environment press office?
    Mr. Curry: The hon. Gentleman should spend more time, as I do, going around the country and talking to council leaders. He will find what great support Labour leaders are giving the process. [Interruption.] The hon. Member for Sheffield, Attercliffe (Mr. Betts) is a very good case in point. Since he ceased to be its leader, matters have improved considerably in Sheffield.
    Authorities have often learnt much from the process of putting bids together. I have no doubt that the hon. Gentleman forgot to welcome the additional funding under the second round. Bids that were not successful the first time will have an opportunity to correct what might not have been right. As for compensation, I regard the money as very well spent and the experience very well learnt.
    Mrs. Angela Knight: My hon. Friend will be aware of the concern that bids from areas that already have assisted or European regional status will receive preference in the SRB round. Can he assure me that that will not be so and that bids from areas such as Erewash, which will be put together by the business community and the local authority, will be judged on their merits only and will not be disadvantaged in the way that I have described?
    Mr. Curry: I am sure that I can give my hon. Friend the assurance that she seeks. We judge bids on their intrinsic merits, the strength of the partnership, their deliverability and whether the schemes are working and are practicable. When the results are announced, my hon. Friend will see that we have been absolutely consistent in our treatment of the bids.
    Mr. Betts: Does the Minister not understand that cities such as Sheffield are putting in bids for the single regeneration budget simply because there are no other sources of funds to deal with the major problems of city centres? The Government have not allocated new money for the budget. All that they have done is shut down the urban programme, cut the money available and put it into the single regeneration budget, and add to it money from housing investment programmes that have been top-sliced in the first place by central Government. There is no new money. There are real problems, and the Government are doing nothing to address them properly.
    Mr. Curry: The problems are being addressed properly, and they are being addressed properly in Sheffield, because the city of Sheffield has shown considerable and welcome enterprise in this matter. I have considerable dealings with the leadership in Sheffield. The development corporation and estate

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    action and housing programmes are working well. We will see whether it will be successful with its single regeneration budget bid. The scheme has certainly been well supported by Sheffield.
    Mr. Hawkins: Does my hon. Friend accept that my constituents, who were glad to welcome him on his recent visit, greatly look forward to the all-party delegation that my hon. Friend the Member for Blackpool, North (Mr. Elletson) and I will bring to see him on 12 December in respect of our single regeneration budget bid? I hope that he will sympathetically consider our proposals, which are based on a real partnership of business and the local authority. I join my hon. Friend in welcoming what our right hon. and learned Friend the Chancellor said yesterday about extending single regeneration budget funding.
    Mr. Curry: I look forward to meeting the delegation with my two hon. Friends from Blackpool. I know how hard they try to promote the interests of a borough that has its problems—we all realise that. No doubt, my hon. Friend will welcome the fact that resources have been increased and that there will be a second round on the same basis as the first round. Where bids have not succeeded the first time, there will be a chance to put them forward in the second round. Other bids will be invited as well.
    I repeat what I have said to every questioner in the House: we are judging the bids on their merits according to very clear and open criteria. Everyone understands that, and the process has spawned a great deal of effective co-operation between the private sector, local authorities, education institutions and training and enterprise councils. It has been an extremely useful exercise and people are learning that local government and the private sector can work together creatively and sensibly, supported by central Government.

    Water and Sewerage
    Mrs. Helen Jackson: To ask the Secretary of State for the Environment what representation he has received from the water industry about future charging arrangements for water and sewerage.
    Mr. Atkins: As the hon. Member knows, the water industry associations have recently presented to Ministers their views about future methods of charging for water and sewerage services which are being considered.
    Mrs. Jackson: Does the Minister recognise that in an industry where there is not usually political consensus, there is consensus—apart from the Government Front Bench and the Director General of Ofwat—that, because water and sewerage are public services, it is both fair and sensible to allow water companies to continue to use the local taxation base as a reasonable core charging method? Will he respond positively to the document which was presented to him by the water industry associations and say that they can use council tax data for their charging systems? Will he do that as soon as possible?
    Mr. Atkins: The hon. Lady and other Opposition Members must realise that, if they believe as much as we do in sustainable development of a natural resource, it is logical that a cost must be levied on the basis of consumption. That is the case with gas and electricity, and I do not see how water is any different.
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    It is crucial that we make the right decision. The water industry associations and others, including the hon. Lady, have presented their views to us. I give the hon. Lady an undertaking that my right hon. Friend and I will make a decision as quickly as we can.
    Mr. Ian Bruce: Will my hon. Friend think very carefully before moving to increase metering? I hate to agree with the hon. Member for Sheffield, Hillsborough (Mrs. Jackson), but there appears to be a great deal of evidence that water companies bear costs in the area of distribution of water as opposed to production of water. Therefore, the additional costs that may be added because of the introduction of metering might be out of all proportion to the benefit to consumers. If people were to reduce the amount of water they use, the price of water per gallon might rise dramatically. I hate to think what the political implications would be if we went ahead with metering.
    Mr. Atkins: My hon. Friend recognises, as we all do, that there is no party political division in this area; there is no dogma on this matter. Opposition Members keep telling us about the need for sustainable development and an environmental approach, but they seem to fly in the face of the logic of that stance, which is that cost should be based on consumption. If that is the case, metering is the logical answer.
    I recognise that there are other views, and we will make a decision on the basis of people's thoughts and concerns in due course.
    Mr. Matthew Taylor: Does the Minister accept that, if he decides to go ahead with compulsory water metering across the country, that cannot be brought into effect to meet the present time scale for ending charging on the old rating system? Therefore, would it not make sense to allow that system to be updated by using council tax to ensure a modern system with up-to-date values? That would open the possibility of providing help to people on low incomes and those who live alone, particularly those with high water charges, on the same basis as the council tax.
    Mr. Atkins: The hon. Gentleman and his party spend a lot of time preaching at us about the environment and about sustainable development. As I said to the hon. Member for Sheffield, Hillsborough (Mrs. Jackson) earlier, if we believe in the policy there has to be a consumption-related tax. Frankly, when it comes to water matters, I take less notice of what Liberal Members say than anyone else in the House.
    Mr. Dobson: Why do the Government insist that it would be right for everyone in the country to be forced to have a water meter and to find the cost of installing that meter? The public have made it clear that they do not want meters. The water companies have now described it as an untenable option. Why do not the Government abandon the idea and allow the companies to charge instead on the basis of council tax bands or rateable values? Only the Government and the water regulator persist in believing that compulsory metering is right. We have to start asking whose side the water regulator is on: the Government or the public?
    Mr. Atkins: When the hon. Gentleman has been doing the job a little longer, he will understand the complexities of the matter. Then he will realise that the logic of his

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    policy, as often declared, to support sustainable development of scarce and declining resources is to ensure that consumption is the factor, just as it is with gas and electricity. There is no compulsion as the matter stands. There are alternatives, and people have the opportunity to take them up. I suggest that the hon. Gentleman reads the subject up and then talks to me. I will tell him what it is all about.
    Mr. Harry Greenway: Bearing in mind the intense hardship to people whose water is cut off for non-payment or other reasons, will my hon. Friend join me in welcoming the fact that fewer people are cut off nowadays? Will he undertake to initiate research which will ensure that every possible step is taken before people are cut off, including finding other ways of paying their bills, perhaps through social security or in one way or another?
    Mr. Atkins: My hon. Friend is right to say that disconnections are declining. The recent figures announced for this year showed a continuing decline. The process that has to be followed by a water company before it can obtain disconnection—a court order, several letters and various other requirements—means that disconnection does not take place unless it is the absolute ultimate sanction. All the evidence, certainly from research by the water companies among customers in my area in the north-west, suggests that the majority of customers, by which I mean a substantial percentage, wish to retain the option of disconnection as an ultimate sanction for non-payment.

    Environmental Protection Agencies
    Mrs. Ewing: To ask the Secretary of State for the Environment what representations he has received on the plans to establish environmental protection agencies; and if he will make a statement.
    Mr. Gummer: I have received a number of representations, which I have taken into account in the Environment Bill which we intend to present for First Reading in another place tomorrow.
    Mrs. Ewing: I welcome the legislation which is to be presented, but I wish to express disappointment, particularly on Saint Andrew's day, that there is to be no separate legislation to establish a Scottish environmental protection agency. Will the right hon. Gentleman clarify how that decision was reached, given the different legislative systems? Despite that, will he give an assurance that he will consult Scottish-based organisations with reference to abandoned and contaminated land sites, which often contribute more to river pollution than the normal industrial activities of the modern day? Will he give us an assurance that a duty will be placed on the agencies to have a catchment management policy which will ensure that all aspects are examined closely together?
    Mr. Gummer: The hon. Lady is right to say that these things must be looked at together. That is why we are bringing the three agencies together and why there is a clear section in the legislation dealing with the Scottish environment agency, which will be a separate agency. It is perfectly proper that it should come in the same legislation because we all share in the environment and we all seek to ensure that environmental protection in Scotland and that in the rest of the United Kingdom
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    should complement each other. There is no reason why we cannot deal with the matter in the same Bill. All that I can say is that my right hon. Friend the Secretary of State for Scotland has taken an extremely detailed personal interest in the matter as it relates not only to Scotland but to the rest of the United Kingdom.
    Mr. Barry Field: When my right hon. Friend considers protection agencies in general, will he consider one for chief executives of Liberal-controlled authorities, who appear to be becoming an endangered species? Has he read the report in the Local Government Chronicle and from the Society of Local Authority Chief Executives that the Liberal Democrats seem to have a policy of sacking chief executives or not replacing them?
    Madam Speaker: Order. The question hardly relates to that on the Order Paper. I called the hon. Gentleman because I realised that he was Chairman of the Select Committee on the Environment and thought that he might have an interesting contribution to make. If the Minister can make some sort of reply, I would appreciate it if he could keep it to the subject on the Order Paper.
    Mr. Gummer: The environment agency will have a number of duties, but I fear that they could not reach so far, even though an agency to do as my hon. Friend suggests will be increasingly important.
    Ms Ruddock: On the cost benefit provisions of the proposed agency, does the Secretary of State care to reflect on the case of the Drax power station, where the need to reduce sulphur dioxide emissions on environmental grounds led to massive investment in flue gas desulphurisation? Is he aware that, due to the Government's bizarre criteria, the electricity companies are purchasing cheaper electricity from dirty power stations in preference to that produced cleanly at Drax?
    Despite the Secretary of State's good intentions and the new environment agency, which we wish to support, is it not the case that the Government's commitment to market forces, deregulation and privatisation will undermine that agency before it is even born?
    Mr. Gummer: No, precisely the opposite is true. That commitment makes it possible for us to protect the environment. The area of the world in which the environment has been least protected is eastern Europe, which ran a socialist society. We all know perfectly well how one destroys the environment—one has central planning, central control and no market forces and one does not introduce mechanisms whereby market forces support the environment.
    That is why, for example, we announced the landfill levy yesterday and why Friends of the Earth called my right hon. and learned Friend the Chancellor of the Exchequer the Chancellor with the greenest credentials that our nation has ever seen. No Labour Chancellor was ever considered environmentally friendly and the reason is very clear from the ridiculous position that the Opposition have taken on the environment.

    Local Government, Warwickshire
    Mr. Pawsey: To ask the Secretary of State for the Environment what representations he has received about local government reforms in Warwickshire.
    The Parliamentary Under-Secretary of State for the Environment (Mr. Robert B. Jones): I have received

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    many representations on local government structure in Warwickshire. However, the review of Warwickshire is still in the hands of the Local Government Commission. I expect to receive its report next month.
    Mr. Pawsey: Is my hon. Friend aware that the Local Government Chronicle recently published a report which stated that the Local Government Commission would recommend the status quo for Warwickshire? Is he able to confirm that? If he is, is he aware that the church bells will ring and wine—or at least beer—will flow in the streets of Warwickshire? It would be a marvellous Christmas present to hear something encouraging from my hon. Friend.
    Mr. Jones: I have learnt not to rely on gossip, even when it is in the Local Government Chronicle. We will await the report and judge it on its merits when it is submitted.
    Mr. Olner: Is the Minister aware that in Warwickshire and throughout the country people are sick and fed up with the Local Government Commission and with the fantastic amount of money that has been wasted on that futile exercise because it has not given local government the freedom that it needs to look after our constituents and communities? From start to finish, the whole thing is a sham and the Minister should admit it and abolish the Commission.
    Mr. Jones: Considering that we have not received the final report for all the counties, the hon. Gentleman is prejudging the exercise. The decisions announced so far seem to have been well received, although from time to time we will obviously disagree with the Commission's suggestions. If the hon. Gentleman has reason to disagree with its original suggestions, the appropriate thing to do is to direct his representations to Sir John Banham.
    Mr. Sykes: Is the Minister aware that, if beer will flow in the streets of historic Warwickshire, more beer will flow in historic Yorkshire if he allows the return of the historic county of north riding, as he did recently when he allowed the abolition of Humberside and its return to the east riding of Yorkshire?
    Mr. Jones: I hear what my hon. Friend says. We have announced our proposals for North Yorkshire and for the former Humberside, which include the recreation of East Yorkshire, although not precisely along the historic boundaries.
    Mr. Tony Lloyd: Does not the Minister understand that, if the Government are prepared to announce the order for the abolition of Cleveland while at the same time they are not prepared to let the review finish, it is not my hon. Friends who should be accused of prejudging the review but the Minister and his colleagues? Would it not be more responsible at this stage to stop playing party politics with local government reorganisation, and to let the commission finish its review before bringing any orders before the House?
    Mr. Jones: That would be disastrous, and it would leave a large number of people unclear about their future. The hon. Gentleman presupposes that we are looking at the reorganisation in terms of a universal blueprint. We are judging each county on its merits, and it seems reasonable to announce the proposals for each county and debate them as individual proposals.

    Green Belt
    Mr. Batiste: To ask the Secretary of State for the Environment how many planning applications for opencast mining affecting the green belt have been made in the last six months.
    Sir Paul Beresford: We do not hold this information, but my hon. Friend may be interested to know that our planning guidelines make clear that opencast coal mining should be allowed only where the development can be carried out in an environmentally acceptable way or where there are overriding benefits.
    Mr. Batiste: Will my hon. Friend consider collecting such information? If he does, he will become aware that there has, during the past year, been a surge in applications for opencasting on green field sites within the green belt in Leeds and elsewhere in the country? If environmental acceptability is rightly to be the key test, will he or my right hon. Friend the Secretary of State come to visit Garforth in my constituency to see exactly how unsuitable those applications are?
    Sir Paul Beresford: I understand that my right hon. Friend the Secretary of State has accepted an invitation to visit. As regards the information, I am willing to look into the possibility of providing it as soon as is reasonable.
    Mr. Enright: Does the Minister further agree that in a constituency such as mine—which had huge numbers of deep-mined pits until very recently—it is an affront that, during the past six months, applications have been made for opencast mining in the very small pieces of genuine countryside which we have? Will he make a presumption against opencast mining in such cases, as we have suffered enough from mining waste?
    Sir Paul Beresford: It is not an affront to apply. With the new regulations and the new attitude, there must be an environmentally-oriented balance. Nevertheless, we must accept that minerals can only be worked where they exist.

    Urban Development (Ebbsfleet)
    Mr. Spearing: To ask the Secretary of State for the Environment what are the strategic planning factors within the responsibilities of local government and his Department which favour urban development at Ebbsfleet.
    Mr. Curry: Planning guidance for the south-east aims to change the balance of development in the region from the west to the east. Thames Gateway is the main opportunity for growth in the region. Kent Thames-side, including Ebbsfleet, with its large and varied supply of development sites, has been identified as the main eastern focus for development in the Thames Gateway planning framework.
    Mr. Spearing: Will not any urban development at Ebbsfleet detract from the development of east London, which was one of the strategic reasons for putting the last channel tunnel link on its particular alignment? Is it not a fact that the proponents of stations at Ebbsfleet and Stratford respectively were not given equal access to Ministers? Do not both of those facts reflect upon the

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    integrity of Ministers, and of any hon. Member who did not have a constituency interest and who was involved in that controversial decision?
    Mr. Curry: As far as access to Ministers and ministerial visits to sites is concerned, I repudiate absolutely what the hon. Gentleman has said because it is not true. Ebbsfleet was chosen because it stood up commercially from the very start. Ebbsfleet was never in competition with Stratford—it was in competition with Rainham, because those were two potential sites within the M25 catchment area.
    The reasons for Stratford are different, and nobody has fought harder than my right hon. Friend and myself to make sure that Stratford is still in there with a chance. We hope that we will get the regeneration benefit from the development at Stratford, but Stratford already has city challenge, assisted area status, and objective 2 funding, and it is already served by rail, underground and the docklands light railway. It will also be served by the Jubilee line extension. We hope that further developments will be attracted to Stratford, because we want it to enjoy the benefits of regeneration.
    Mr. Jacques Arnold: My hon. Friend will know from his visits to Ebbsfleet when he was considering all the potential sites that it is located on exhausted chalk pits, so it is not a green-field site of specific environmental interest. Will my hon. Friend also note that Ebbsfleet was chosen because it is right alongside a pool of talent offered by my constituents of Gravesend and Northfleet, alongside deep water wharfs on the Thames and transport access to and from the M25 and the A2? Ebbsfleet is the right location for the international station and as a focus for the redevelopment of Kent Thames-side.
    Mr. Curry: I repeat to the House that Ebbsfleet was chosen because it stood up commercially when the potential sites for an international station were examined and for no other reason. We hope that Stratford, which is east inner London, will also attract developments if commercial logic suggests that. We have fought to keep that opportunity on the table.

    European Directives
    Mr. Mackinlay: To ask the Secretary of State for the Environment what proposals he has for ensuring that outstanding European directives relating to environmental and ecological matters are enacted into law within the next six months.
    Mr. Atkins: Our aim is to implement European directives as far as possible on time and in full. The House will be aware that we have just implemented the habitats and urban waste water treatment directives.
    Mr. Mackinlay: Should local planning authorities, in support of the spirit of those directives, pursue planning policies that presume against development on sites of special scientific interest, will the Minister undertake that his ministerial inspectors and his ministerial colleagues will support such policies rather than demonstrate mere regard to the existence of SSSIs? Will he and his colleagues join those local authorities by implementing policy that presumes against development on SSSIs?
    Mr. Atkins: No doubt my noble Friend the Minister for Construction and Planning will hear the hon. Gentleman's point. We must work from the supposition that we protect SSSIs, but there are occasions, albeit a few, when that policy does not fit. We try hard at national and local level to ensure that SSSIs and other sites of particular interest are maintained, usually in whole, but often in part.

    Carbon Dioxide Emissions
    Mr. Corbyn: To ask the Secretary of State for the Environment what is his estimate of carbon dioxide emissions for the United Kingdom in 1994 and predicted for 2000.
    Sir Paul Beresford: The latest estimate for carbon dioxide emissions in 1993 is 152 million tonnes of carbon, down from about 158 million tonnes in 1990. Figures are not yet available for 1994. We currently expect that in the year 2000 they will not exceed 1990 levels in line with our commitments under the United Nations climate change convention.
    Mr. Corbyn: Will the Minister ensure that the environmental and planning policies pursued by his Department are given some real teeth? For example, when considering planning applications for out-of-town shopping developments, the Department should take into account the fact that such developments lead to a vast increase in cars and, in turn, an increase in pollutants and obviously CO2 emissions. When will the Government change the general trend of their policy to encourage the private car as opposed to the interests of public transport, because that would be a major way in which to reduce CO2 emissions and thus the impact of global warming on the country?
    Sir Paul Beresford: The hon. Gentleman is obviously unaware that he has just stated many of the policies adopted by the Department on those issues, especially after inquiries have recommended such policies. I recognise his attempt at a pun and that should have been anticipated, but given the plastic teeth with which the hon. Gentleman is smiling at me, he better be careful.
    Mr. Robathan: My hon. Friend will know that the Opposition do not have a monopoly on concern about carbon emissions. Will my hon. Friend take decent steps to discuss with his Cabinet counterparts concrete proposals to reduce carbon emissions? In particular, will he consider reducing the motor mileage allowance to public servants, including Members of Parliament? Will he also consider reducing the number of cars made available to civil servants and possibly reduce the number of ministerial cars as well?
    Sir Paul Beresford: Perhaps my hon. Friend will join me one evening, going home on public transport with five red boxes.

    Nuclear Waste
    Mr. Gunnell: To ask the Secretary of State for the Environment how many responses his Department has received to the consultation paper he issued in August on the disposal of nuclear waste.
    Mr. Atkins: We have received 251 responses to the consultation paper. A list of those has been placed in the Library of the House. In addition, we have received about 5,000 letters.
    Mr. Gunnell: I am sure that many of those responses were from local authorities. Learning that the Secretary of State very much opposes central planning, when applications for the deposit of low-grade nuclear waste are received, will the Government's intention be that they should be determined by local authorities, so that they can respond to the opinions of local communities on the issue?
    Mr. Atkins: I make two points in response to that. First, Her Majesty's inspectorate of pollution consults the local waste regulation authorities and the local authorities before any authorisations of any type are made, and that has been the case for some time. Secondly—I am sure that the hon. Gentleman is not party to this—there is a suspicion sometimes that the talking up of low-level nuclear waste, as though it were more dangerous than it is, gets the issue out of proportion. Low-level nuclear waste is the type of waste that comes from hospitals—rubber gloves, old exit signs and other similar bits and pieces, which, although they are obviously radioactive, are radioactive to such a small extent that they do not cause any damage or threat to the environment.
    Mr. Michael Brown: Would it be helpful to remind my hon. Friend of the commitment that I gave to the electors of Brigg and Cleethorpes in the House in 1986? Would it be helpful for him to leave that constituency on one side when it comes to considering this matter? Would it also be helpful to him to be reminded of the constituency represented by my right hon. Friend the Patronage Secretary?
    Mr. Atkins: I am, indeed, well aware of my hon. Friend's earlier pledge about those matters. I know him well enough to know that he would never have to implement it in so far as I am involved in any policy that is of concern to him, but I emphasise again that, as he well knows, if we have mentioned any specific sites—which we have not—we are talking about very low-level nuclear waste, which is the sort of stuff that has been going on for years and does not cause a problem.
    Mr. Dobson: Will the Minister confirm that bringing the waste regulation authorities into the new environmental agency will mean that, rather than their decisions reflecting the opinions and anxieties of local people, as my hon. Friend the Member for Morley and Leeds, South (Mr. Gunnell) suggested, in future they will have to respond to directives from the Secretary of State,
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    and the Secretary of State could intervene and direct them to accept low-level nuclear waste, whether they liked it or not?
    Mr. Atkins: No.

    Planning Law
    Mr. Ronnie Campbell: To ask the Secretary of State for the Environment what plans he has to alter planning law.
    Mr. Gummer: I shall consider the need for amending legislation in the light of the report, "Shopping Centres and Their Future" by the Select Committee on the Environment, and of a symposium on quality in town and country that I have arranged for next month.
    Mr. Campbell: Will the Minister consider planning permission as regards Crown land? He may be aware that, obviously, residents who live next to Crown land cannot object to anything that the agent of the Crown land wants to build. In my constituency, where a big hangar has been built, the residents had little or no say in the decision to grant planning permission for that monstrosity. It was just built.
    In this age of the citizens charter, does the Minister agree that the residents who live around that Crown property should have at least a say in the decision whether to grant planning permission for whatever will be built on the Crown land?
    Mr. Gummer: I shall be happy to consider the specific case. I believe that another case is presenting problems in the hon. Gentleman's constituency, and I shall consider that as well.
    Mr. Clifton-Brown: Does my right hon. Friend agree that the planning system can never be totally prescriptive in every case, but that the normal presumption should be that the local plan and structure plan should take priority? Will he ask the planning inspectorate to make that the normal presumption?
    Mr. Gummer: Clearly, the structure plan is the one within which all such decisions should be made. Occasionally there are exceptions, but they need to be extremely well explained and there must be a real basis on which to make a change. We want a plan-led scheme, but I also want a great deal more flexibility within the plans. For example, I do not want local plans which designate in advance the use of every single site. We need to defend the green belt rigorously but get mixed development in our cities, towns and villages so that we can bring people back to the centres and enable them to live, work, take their leisure and worship in the same places instead of forcing them to use their motor cars to drive long distances.

    English Nature and Countryside Commission
    Mr. Bellingham: To ask the Secretary of State for the Environment when he next expects to meet representatives of rural pressure groups to discuss the merger between English Nature and the Countryside Commission.
    Mr. Atkins: My right hon. Friend the Secretary of State for the Environment announced on 7 October that we do not intend to proceed with a merger between

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    English Nature and the Countryside Commission at this time. Instead we have asked the chairmen of the two bodies to draw up a programme of closer working.
    Mr. Bellingham: Is the Minister aware that the announcement that the two bodies would not be merged has been widely welcomed in the rural parts of my constituency? Is he also aware that the practical and voluntary approach adopted by English Nature in past
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    years has built up an enormous amount of good will among farmers? Does he agree that it is essential to keep that approach rather than adopt that of the Opposition, which is to regulate and control all aspects of country life?
    Mr. Atkins: My hon. Friend, who speaks with considerable authority on rural matters, is entirely right, and I shall convey his thanks to the chairmen of both organisations.

Social Security
3.30 pm
The Secretary of State for Social Security (Mr. Peter Lilley): With permission, Madam Speaker, I should like to make a statement on social security following my right hon. and learned Friend the Chancellor's Budget statement.
Last year at this time I announced that social security spending would reach £88 billion next year and £92 billion the year after. Now I can announce that spending plans for those years have been reduced to £86.5 billion next year and £90 billion the year after. This is the first time since records have been kept that social security spending plans have been scaled down.
That reflects the impact not just of lower unemployment and lower inflation, but of my social security reforms. None the less, social security on average now costs every working person nearly £15 every working day. Therefore, I am now announcing further measures to curb the growth of expenditure and to help people get off benefit.
As my right hon. and learned Friend the Chancellor announced yesterday, we shall implement in full the second stage of help with VAT, as we promised last year. From next April, pensions will incorporate up to £52 for single pensioners and £73 for pensioner couples specifically to help with VAT on fuel. We shall let people know about the extra help with VAT on fuel by means of a special notice in their order books. We shall also increase help with cold weather payments and insulation grants beyond that previously planned. From this month, payments for cold weather will rise from £6 to £7 a week. They were to go up to £7.50 next November, but I shall in fact raise them to £8.50.
We are also spending a further £45 million, £10 million more than I announced last year, to help insulate homes and improve fuel efficiency. That will provide grants for more than 60,000 extra households next year.
A key aim of my fundamental review of social security is to improve work incentives. To help people out of dependency, it is vital to do four things: to make work more rewarding than benefit; to help people with the transition from benefit back into work; to persuade employers to take on the long-term unemployed; and to help companies create more jobs for the less-skilled. I can announce a £600 million package, which addresses all four tasks.
The first of those is to make work more rewarding. Family credit helps nearly 600,000 families in work. In October I introduced a child care allowance which, over time, should help 150,000 parents with their child care costs. But the more people earn, the less family credit they receive. Consequently, the incentive to move from part-time to full-time work is limited. So I am introducing a £10 a week supplement to family credit for those working 30 hours or more a week. The least well-off receiving housing benefit and council tax benefit will get the full value of the increase. That will cost £200 million and should help about 345,000 families.
Family credit has proved its worth in helping families back into work. But most unemployed people do not have children, so they are not entitled to family credit. However, an in-work benefit might help them into jobs, too. I therefore propose to test-run such a benefit through
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pilot schemes covering 20,000 claimants. If the pilots are successful, we shall consider introducing a national scheme.

Many people who want to work are hesitant about accepting a job because of uncertainties about the size and timing of family credit payments, so I intend to speed up payment of family credit so that all new claims are dealt with in five days. Other people fear loss of help with their rent or council tax, so I shall let people who take a job after six months out of work keep their housing benefits at their existing rate for four weeks, regardless of their earnings. We shall consult the local authority associations to ensure that entitlements to housing benefit and council tax benefit are revised speedily so that payments follow on seamlessly after the fourth week.
The new back-to-work bonus, which I announced in October, will be of particular help for people who want to work full time. It will enable people working part time on job seeker's allowance or income support to accumulate a bonus of up to £1,000 payable on return to full-time work. That bonus will be tax free.
I am also giving employers an incentive to take on unemployed people. Any employer who takes on someone previously unemployed for two years will receive a one-year holiday from the employer's national insurance contribution. That change requires legislation, so it will come in from April 1996. Assuming that employers take on 120,000 people a year, they will benefit by £45 million.
The greater the costs companies incur when they employ people, the less they can afford to pay or the fewer people they will take on. I particularly want to help less-skilled people to get jobs, so I shall be reducing employers' national insurance contributions by a further 0.6 per cent. for lower-paid employees from next April. I shall raise all the earnings bands used to calculate employers' national insurance contributions by £5. To help companies concerned about high levels of sickness, I can announce that we shall reimburse statutory sick pay for costs exceeding 13 per cent. of a company's monthly national insurance bill.

Housing benefit and income support for mortgage interest together now amount to £11 billion. They have doubled since they were introduced in 1988. The UK is almost alone in paying 100 per cent. of rents to those on benefit. As a result, tenants have no incentive to choose the less expensive of two dwellings or to negotiate over their rent level, and landlords may be tempted to push up rents for those on benefit. Rent officers determine whether rents are within reasonable market levels and help is not usually available above that. But in many areas, the market level is largely determined by those on housing benefit. The average private rent in the deregulated sector is about £70 per week. But housing benefit meets rents of more than £350 per week. Taxpayers on modest incomes, meeting their own housing costs, resent subsidising rents higher than they can afford themselves. People on housing benefit should have similar incentives to those paying their own rents when deciding what they can afford.
I will introduce a new scheme next October. New claimants and those moving home will be entitled to housing benefit for the full rent up to the average rent for similar properties in the area. Housing benefit will cover only 50 per cent. of the portion of rent above that. Existing claimants in their current tenancy will continue to receive full housing benefit as at present. Local

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authorities will be given funds to be able to reimburse more than 50 per cent. of the rent above the average in cases where they think that there is special need.
Prospective tenants will want to know how much housing benefit will be payable before they agree a tenancy. So we shall consult the local authority associations and the Institute of Rent Officers about how to produce that information. At present people who are away can claim housing benefit for up to a year, even if their home is empty. In future we shall limit that period to 13 weeks, except for people with exceptional reasons, such as those in hospital.
Taxpayers pay the mortgage interest of people on income support. Over the past 15 years, that expenditure has risen from £31 million to more than £1 billion, and the scheme has major drawbacks. Until I imposed a cap, it covered any size of mortgage—from cottages to castles. Next April, I intend to reduce that cap to £100,000. The generosity of the scheme for those out of work can create huge disincentives to move back into work—but to extend help with mortgages to people in work would be immensely costly.
Since income support cover is paid direct to lenders, the scheme is simply bailing them out for their bad lending practices. The present system also discourages individuals from taking out private insurance and dissuades lenders from insuring all their loans. None the less, private insurance has spread significantly. I believe that insurance of mortgages should become the norm.
For anyone taking out a loan after 1 October next year, we shall pay income support for mortgage interest only after the first nine months on benefit. I believe that insurance for that nine-month period will be readily available. I expect that many lenders will incorporate it in their loans at modest cost.
Existing mortgage holders qualify at present for 50 per cent. of their interest payments for the first 16 weeks—but that money is paid to borrowers, and they do not always pass it on to the mortgage lender. In practice, most people who lose their job and who are unable to meet their mortgage payments return to work within a few months. Most private policies make no payments in respect of the first few weeks. Lenders rarely repossess in such circumstances, even when the borrower is not covered by income support. I propose that no payments will be made for the first two months for existing mortgage holders who start an income support claim. For the next four months, the payment of 50 per cent. of mortgage interest currently made to the borrower will be made direct to the lender. Thereafter, mortgage interest will be paid in full, as at present.
We shall consult the Social Security Advisory Committee, mortgage lenders and insurers about circumstances that cannot be covered by insurance. I am confident that the insurance market will respond, that lenders will behave responsibly, and that sound lending will ultimately contribute to a healthier market.
The fight against benefit fraud remains a top priority. Last year, our crackdown saved a record £654 million and caught a record 300,000 people cheating—but prevention is better than detection. We want to stop fraud happening in the first place. That requires a secure system of payment. We are working with the Post Office to create
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an automated system of payment, probably involving a payment card, dramatically to reduce fraud involving pension books and giro cheques. We are seeking private sector finance for that major initiative, which will strengthen the whole Post Office network. Nine companies and consortiums submitted proposals to be prime contractors for a system that could be in use in 1996.
Most fraud involves people giving false information about their earnings or circumstances, so we shall be making more checks on people's circumstances and more home visits, and we are piloting a scheme in London so that local authorities can cross-check information about their housing benefit claimants. That programme will cost £100 million a year, but it should save more than £2.5 billion over three years. I am also tightening some benefit rules.
I have already acted against avoidance of national insurance contributions by employers who pay earnings in various non-cash forms, which undermines the whole basis of the NI scheme. Such practices are devious. I have already put a stop to fine wine wage packets, precious stone salaries and a number of other ruses. I give warning that I shall take further action as and when required.
Separately, I shall be limiting the grant paid through the social fund for funeral payments. Levels of payments for funerals through the social fund have grown by 6 per cent. a year above inflation. Costs rose from £18 million in 1988–89 to £61 million this year, a more than threefold increase. Funeral payments cover the whole cost, so funeral directors can force up costs to customers on social fund, knowing that they are unlikely to obtain better quotes. I have taken action to stop families claiming via remote relatives who happen to be on income support. I propose next April to limit the maximum payment to £875, which was the average payment for funerals last year.
The measures that I have announced today mark a further radical step in my reforms of social security. My aim is to improve incentives, to focus help on those most in need and to stop social security outstripping the nation's ability to pay. I have set out a £600 million programme to help people out of dependency and into work. I have fulfilled our promise to help pensioners and others cope with VAT on fuel at a far more generous level than anything suggested by the Opposition. I have also set out sensible plans to tackle the rapid growth in housing benefits. Any party that shrinks from those problems is unworthy of government; this Government have the courage to tackle them.
I commend the measures to the House.
Mr. Donald Dewar: The first basic point is that the uprating is the bare minimum to which the Secretary of State was committed; anything less would have been a breach of faith.
Does the Secretary of State accept that even the new figures represent modest subsistence levels? Is it not true that a family with two children under 11, living on income support, will be expected to exist on a bare third of average earnings and that, under this Government, the value of benefits as a percentage of earnings has steadily declined? Does not the settlement further underline and widen the gap between those trapped on benefit and those in work?

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Does the Secretary of State recognise that anger over the hike in value added tax on fuel will be compounded by the Chancellor's presentation yesterday, which bordered on the dishonest? Will he confirm—it is important to make this clear—that, for people on benefits and pensions, yesterday's announcement added not a penny piece to the direct compensation that had been promised in last year's Budget? Is he really proud of offering a single pensioner an inadequate 25p over and above the statutory uprating and a pensioner couple an insulting 30p?
Has the Secretary of State seen the research carried out by the Disablement Income Group, which suggests that, with VAT at 17.5 per cent., people with disabilities—just one of the vulnerable groups—will face additional fuel bills after compensation varying from about £1 to more than £3 a week? I realise that the Secretary of State is bound to back the Chancellor, but does not his conscience prick? Is he happy that, for example, those on disability living allowance—another special and vulnerable group—will get no help from this package other than from the impact on the annual uprating for increased fuel bills?
The Secretary of State has made much of cold weather payment increases. How much will that cost the Treasury, given that the total payment last year amounted to only £12.4 million? Is there not a touch of humbug in pretending that it is a significant concession when the gross Treasury take on VAT on fuel amounts to £2.85 billion?
The Secretary of State will perhaps recognise that pensioners and others will resent the inadequate VAT package, but does he accept that they will be frightened by the announcement on funeral costs? I am anxious not to increase fears unnecessarily and I certainly do not want to make too much of the issue, but it is very serious.
Can the Secretary of State give me an assurance that he has had assurances from the undertaking trade that it can offer a decent, adequate and dignified service at or below the new cap of £875 on funeral payments under the social fund? Can the Secretary of State promise to avoid a situation, which I and he, I am sure, do not want, in which families who qualify, who are in great poverty at a time of distress, have to scramble around to try to bridge a gap between that ceiling and what they are being charged? If that happened, it would be widely seen as a disgrace. I very much hope that the Secretary of State can give an assurance that that will not happen, and an assurance that the cap is now adequate and will be uprated, as necessary, to ensure genuine and proper protection in deserving cases.
In the small print of today's announcement, there is, I fear, much misery. Yet again, the higher rate of statutory sick pay has been frozen. Can the Secretary of State confirm that there has been no increase since 1990, which is a real cut of £9.23 a week from April 1995? Is it not the case that someone who is incapacitated for more than six months will get from the new incapacity benefit £18.75 less a week than the invalidity benefit rate he would have got?
Why should the non-dependant deduction for housing benefit purposes, to take one other example, be increased well above the rate of inflation? What is the point of that? What will that do to encourage a family to stay together—a cause, we always understood, dear to the heart of the Secretary of State?
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The Secretary of State has made much, as he always does, of the fight against fraud. The claims made for the introduction of electronic methods of payment are startling. Will the right hon. Gentleman note that effective moves to eliminate fraud will have our strong support, although we shall look closely at his claim that £2.5 billion can be saved over the next three years? When looking at fraud, will he not forget that last month, the Comptroller and Auditor General, yet again, found errors in income support payments amounting, on this occasion, to £672 million, and qualified the Department's accounts for the sixth year running? Is that not an eloquent comment on 15 years of Conservative stewardship?
I welcome the national insurance holiday for employers taking on the long-term unemployed. It is, however, a timid start and is unlikely to make any great impact. Why does the right hon. Gentleman's scheme ignore those who have been out of work for more than 12 months? Why is its start postponed to April 1996? I do not find the reference to the need for legislation convincing in any way. It means that someone who at present has been unemployed for more than two years may well find that he has spent four years in the dole queue before the scheme, which is meant to help such people, becomes operational.
Would it not have been better to adopt the Opposition's proposal for a tax allowance, which would have delivered a genuine incentive for the employer to take people off the unemployed list? Does the Secretary of State accept that if he wants to move on to Labour's ground, he must show a great deal more courage—[Laughter.] That is, apparently, what he is trying to do. Does he accept that he must show a great deal more courage and commitment than we have seen in the Budget?
We shall look carefully at the rather jumbled collection of schemes which the Chancellor paraded and to which the Secretary of State referred. Will he note that we shall welcome the sensible, although we believe minor, changes to speed up the availability of family credit to ease the transition from income support to work? I underline our fear, which will be widely shared, that, without minimum wage legislation, the pilot schemes on family credit will become an ineffective subsidy for low wages paid by bad employers.
Does the Secretary of State accept—I think that he must—that the clear implication of the announcement on housing benefit is that the escalating costs are a direct reflection of the Government's ruthless policy of forcing up rents? Is not the simple message of what the Chancellor and the Secretary of State have told us that the Government were wrong and that the Opposition were right throughout the argument? Is not the root cause of the Government's policy that they have forced up council rents in the past five years by 79 per cent. while the retail prices index has increased by only 27 per cent.? The effect on housing benefit has, of course, been devastating.
The Secretary of State appears to be proposing, in effect, an area cap on private sector rents for housing benefit purposes. Does he anticipate any problems with variations in rent levels within an area, as yet undefined? Is not there a legitimate fear that some landlords will set rents above the cap, leaving tenants facing a cruel raid on their limited incomes to keep a roof over their heads or, even worse, homelessness? Is not the Government's answer again to force local government into the firing

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line, leaving it to take the unpopular decisions and to take the flak? That does not say much for the Government's courage.
On the basis, however, that one should never fail to praise where praise is due, may I congratulate the Secretary of State wholeheartedly on repulsing the extraordinary theories of under-occupation, which the Chief Secretary has been peddling so enthusiastically in recent weeks? It will be a great relief to Labour Members that they have appeared to die a death.
Does the Minister recognise our deeply rooted concern about his announcement on assistance with mortgage interest payments? Is it not naive to think that private insurance cover can provide all the answers? Will it not impose on every new home owner a very considerable cost? I wonder whether the Minister can say anything about this: in the industry, they are talking of £25 or £30 a month for cover during that nine-month period. Will not the burden be especially severe for those who are seen to be most at risk?
How, for example, can the possibility of marriage breakdown, which one can never, perhaps, discount with total confidence, be covered at a reasonable and affordable premium? Will he confirm—this is important—that the Council of Mortgage Lenders' figures suggest that, of the 548,000 claimants currently receiving help, only 43 per cent. are unemployed and that the clear majority, the remainder, are made up of the disabled, lone parents and the elderly? Does the Minister think that it will be easy or convenient for them to find such cover?
The Minister's right hon. and learned Friend the Chancellor said:
"support will not normally be available in the first nine months".— [Official Report, 29 November 1994; Vol. 250, c. 1088.]
Can the Minister explain the circumstances in which the nine-month rule will be waived? Has he consulted the insurance industry? I return to the point about cost: will he make available in the Library examples of the type of policy and premium that he believes will be involved? What does he estimate the nine-month moratorium will save from the £1 billion plus at present being spent?
Does the Secretary of State expect—this is important—building societies to make that insurance cover a condition of lending, and has he consulted the building societies about the danger that the changes will depress a housing market still looking for recovery, and inhibit labour mobility? Will the building societies be happy to know that the Secretary of State considers the very large number of defaults on mortgages to be a problem of bailing out bad loans and not a by-product of a recession brought about by the mismanagement of this country's economy?
Does the Minister accept that many people will be genuinely frightened by the tough penalties that he is imposing on any existing mortgage holder who has the misfortune to be forced by circumstance on to income support? Is it not tantamount to a sentence to homelessness to leave that person in that circumstance, suddenly facing life on income support, with no help for two months and only 50 per cent. of the mortgage payments for another four months?
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This morning—I do not know whether you, Madam Speaker, were included in the mailshot—almost every hon. Member got a letter from the right hon. Gentleman stressing:
"we want to ensure that people starting work are not worried about paying their rent."
Do not the changes for existing mortgage holders bring to many people the threat that, if they lose their jobs, they will also lose their homes? That seems to be a very unpleasant prospect.
Social security spending makes up 31 per cent. of Government expenditure. Does the Minister accept that the record of recent years proves to us at least, and I am sure to him, that a high social security budget is no guarantee at all of improving standards and social justice? There can be no satisfaction in funding economic failure and the high unemployment that it brings.
Today's statement is part of what I would see as a bric-a-brac Budget, with little shape or sense of direction. What logic is there, in social security policy, in forcing hundreds of thousands of people on to means-tested benefits, with the introduction of incapacity benefit and job seeker's allowance, while at the same time proclaiming determination to cut the numbers on such benefits and tempt those concerned back to work? Is not it clear that the insensitivities and false economies of the incapacity benefit and job seeker's allowance are the dominant note in this so-called review of social security policy? The British people will see little there to undo the damage that has been done in recent years.
Mr. Lilley: The hon. Gentleman has shown himself to be unwilling to face up to any difficult decisions and resistant to change, and he refused to make any savings, but he was still willing to spend more on any conceivable programme than it is reasonable to expect the nation to afford.
The hon. Member for Glasgow, Garscadden (Mr. Dewar) began by saying that the increase in uprating to allow for VAT was the bare minimum. At least it was not as low as the 50p which, according to the hon. Member for Garscadden, would just do the trick and from which he constantly tries to dissociate himself. He would be more convincing if he could show us on the record that, before we announced these measures, he had ever proposed a higher sum than 50p, let alone a provision that will amount to £1.40 a week for a pensioner couple in the coming year and up to around £2 a week by the next year.
The hon. Gentleman asked whether it was true that the extra money is only 25p. In the coming year, single pensioners will receive £1 a week—£52 a year—and couples will receive £1.40 a week—£73 a year—of which they would not receive a penny were it not for the fact that VAT had been introduced and compensation was therefore necessary. That is substantially more than the Opposition have offered, proposed or suggested that they would be able to afford.
The hon. Member for Garscadden said that the total yield of the tax is about £3 billion. He did not mention the total value of the compensation package which, when it has all fed through, will be £1.25 billion a year.
The hon. Gentleman also referred to funeral costs. I can give him the assurance he sought. Of course funerals are available, within the pretty extensive sum of £875 that we are talking about, which are dignified and respectable. We want people to be able to have that. However, there must

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be a limit. It is absurd for the social fund to meet funeral costs of more than £2,000 for a funeral. A cap seemed reasonable in such circumstances.
The hon. Gentleman claims to have doubts about whether the electronic payment of benefits, probably through a payment card, would achieve the savings that I have suggested. We believe that such a system would largely eliminate the fraud and abuse of the payment system which, at present, is one of the easiest systems to abuse. It is important that we move in that direction. I believe that it is sensible to involve private capital and initiative in that regard to enable us—we hope—to introduce the new system in 1996.
The hon. Gentleman mentioned errors and overpayments in the benefit system. We hope that the various measures that I have taken to improve the accuracy of payments will help to eliminate those errors.
The hon. Gentleman rather grudgingly welcomed the change to national insurance contributions and the holiday for a year for employers taking on people who have been unemployed for two years. He asked why the proposal could not be extended to those who have been unemployed for just a year. Fortunately, more than two thirds of those who have been unemployed for a year find work in the ensuing year. The best way to achieve the maximum impact is to concentrate help on those who have been unemployed for two years, who find it most difficult to get back to work. That will be recognised as a sensible use of that incentive and of targeting the benefit.
The hon. Gentleman proposed a tax incentive. I believe that tax incentives are likely to be rather more complex and therefore less effective with regard to the motivation of employers. He also rather laughingly claimed that we were moving on to Labour's ground. We have heard precious little ever from the Labour party about incentives. As soon as we introduce yet another measure to improve incentives, Labour treats it at best with grudging support and most of the time attacks the very things that it rather belatedly now claims are its ground.
All Labour is really keen on is the minimum wage. The minimum wage amounts to a prohibition on the creation of jobs paying less than that. Family credit ensures that people's incomes are topped up so that they will have a decent income in work rather than be paid to stay out of work, because jobs would not exist if there was a minimum wage.
The hon. Member for Garscadden asked how much income support for mortgage interest would cost. At present, insurance policies, which cover more than will be required to meet the arrangements that we shall introduce in October, are available for a sum equal to roughly 0.5 per cent. or less of the mortgage interest rate. The Association of British Insurers has said today that it expects that cover to be widely available and that there will be no difficulty in meeting the wider demand that will ensue from the changes.
The hon. Gentleman suggested that we are introducing tough penalties and that we are making life difficult for people who find themselves homeless. That is not our intention. We have made it clear that we shall discuss the matter with lenders, insurers and the Social Security Advisory Committee, to make sure that the vulnerable groups whom we have mentioned are properly handled in the changes.
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It is right that, in the first instance, people who are buying a home should expect to meet any problems that emerge, at least over a limited period, out of insurance or other cover. Some lenders might increase pressure on people to have such insurance or might even cover their whole mortgage book themselves by insuring the mortgage book, and thereby reduce the cost of insurance to those to whom they are lending.
The housing benefit and mortgage interest changes and our reforms to increase incentives to encourage people back to work will be widely welcomed throughout the country and seen as a coherent whole. They will be contrasted with the Opposition's unwillingness to take any difficult decisions or to acknowledge the need for any change.
Several hon. Members rose—
Madam Speaker: Order. After that initial lengthy exchange, I remind the House that we shall return to these issues. Therefore, I seek brisk questions and answers from now on.
Sir Norman Fowler: May I congratulate my right hon. Friend on his statement? I hope that he keeps on his ground and does not move on to the ground of the hon. Member for Glasgow, Garscadden (Mr. Dewar).
Is my right hon. Friend aware that his announcements on family credit are particularly welcome and that they will help to create many jobs? Is it not clear that, contrary to what the hon. Gentleman said, it is better to tackle job creation and low pay by family credit rather than by minimum wages legislation?
Mr. Lilley: I am grateful for that endorsement from a distinguished holder of my present office. I welcome his support for our measures to enhance family credit and to get people back to work, rather than to consign and condemn them to the dole in the way that a minimum wage undoubtedly would, as in many countries on the continent.
Ms Liz Lynne: Why will disabled people not be compensated for the increase in VAT on fuel in disability living allowance? Why did not the Secretary of State bring about a transfer scheme to encourage more employers to take on the long-term unemployed? Why is he not considering merging income support and family credit into a new low-income benefit, which would help the transition from unemployment into work?
Mr. Lilley: As I explained last year, we are uprating pensions for people on invalidity benefit and, of course, people on disability premium and income support, and those on severe disability allowance. That covers the vast majority of disabled people. That is the sensible way to try to ensure that there is help for people in those circumstances, and it has been widely welcomed during the current year.
Sir Andrew Bowden: Arising out of my right hon. Friend's reply to the hon. Member for Glasgow, Garscadden (Mr. Dewar) regarding VAT compensation for pensioners, will the increase in compensation next April be composed of part of the cost of living, of the 2.2 per cent. increase—that is, 25p—and a further 25p as a special increase? Is my right hon. Friend

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aware that if he does it that way, the average pensioner will be 56p per week worse off than before VAT was imposed on fuel?
Mr. Lilley: I assure my hon. Friend that we are doing exactly what we promised to do last year and the proposal met with his support then, as it was meant to.
If we had not applied VAT to fuel, a single pensioner would receive £52 less in his pension next year and a pensioner couple would receive £73 less. The precise method by which it is calculated is not terribly important. The fact is that single pensioners have £52 and pensioner couples have £73 coming to them in their pensions next year to help them with their fuel bills. That is far more than the Labour party even dreamed of promising.
Mr. Frank Field: Does the Secretary of State recall that last year he announced a record increase in the social security budget and called it a stunning success? This year, he comes before the House to say that, for the first time ever, the projected increase in the social security budget has been cut and he calls that a stunning success. Which statement should the House believe?
Does the right hon. Gentleman accept that the back-to-work benefit programme is totally inadequate? Will he confirm that for each £100 paid in benefit only £1 goes in back-to-work benefits? When will he announce a radical programme that matches need?
Mr. Lilley: We accept that we have made commitments to increase social security spending, and we shall abide by them. Last year I was proud to say that, despite the speculation and scaremongering by the Labour Front Bench, we had met our obligations to the vulnerable and that we would help people with VAT on fuel, for example.
We are continuing to provide that help, but we are doing so while scaling down the prospective increases in the social security budget through our success in reducing unemployment and inflation and through the social security reforms that I have introduced. I think that it is a success when one is able to meet one's obligations within a curbed amount of money, and I intend to go on achieving that aim.
The hon. Gentleman believes that the back-to-work programme is inadequate. A £600 million programme—half of it in revenue forgone and half in money paid out—is substantially more than anyone anticipated before the Budget, and it is substantially more than was urged upon us by the Opposition.
Of course, that alone will not solve the existing problems which the hon. Gentleman and I recognise are endemic in the western world. They will be solved by improving skills and training, by improving the vibrancy of our economy through deregulation, by low taxation and by increasing the number of jobs, which we are doing better than any other country in Europe.
Mr. Peter Thurnham: I particularly welcome the measures announced by my right hon. Friend that will concentrate help on the long-term jobless. As I wrote a Conservative pamphlet entitled
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"Operation Longstop" in 1987, which urged those very measures, will my right hon. Friend consider introducing the in-work benefit pilot schemes first in Bolton?
Mr. Lilley: I am grateful to for my hon. Friend for his support and for his suggestions, which undoubtedly subliminally entered my consciousness and influenced the formulation of the measures. We shall certainly consider introducing the pilot schemes in Bolton and there will be consultation about them in due course.
Ms Ann Coffey: Does not the Secretary of State understand that his proposals for housing benefit are likely to create a two-tier market in the private sector, with the most vulnerable people driven into the worst housing? Will he put pressure on his colleagues to deal with the real problem of private landlords ripping off an unregulated market and vulnerable people at enormous cost to the taxpayer and to council tax payers?
Mr. Lilley: The hon. Lady does not realise that we have a two-tier market at present, with those on housing benefit sheltered from the impact of their rent and the factors that influence everyone else. It is sensible to give everyone in the market—particularly those who are considering occupying a property above average rent—an incentive to choose the less expensive of two properties and to negotiate with their landlords to reduce their rent rather than accept whatever is asked.
The hon. Lady suggested that the market was unregulated. She is wrong. There is a system of rent officers. They have to assess whether the rent is at a reasonable market level. It is inevitable that in some areas where tenants are predominantly on housing benefit there will be little for rent officers to use as a comparator to assess what the reasonable market level should be. The measures will improve the working of the market and reduce any scope for landlords to rip off the taxpayer in the way the hon. Lady rightly disapproves of.
Rev. William McCrea: Bearing in mind the statement by the Chancellor of the Exchequer about the healthy state of our economy, cannot the Secretary of State understand that there seems little reason why we should have the increase from 8 per cent. to 17.5 per cent. in VAT on domestic fuel? Is it not about time that he and his Cabinet colleagues listened to the country on this serious matter, which is causing grave concern despite the packages that Ministers have announced? Does he not realise that people are worried about the increase in VAT on fuel?
Mr. Lilley: My right hon. and learned Friend the Chancellor made it clear that money had to be obtained to help us reduce the deficit. If the revenue from VAT on domestic fuel was not available, it would have to come from somewhere else. Those who criticise the tax are remarkably silent about where they would find the money to replace it. They are also rather silent about the substantial support that we are giving to pensioners and others to shield them from the full impact of VAT in a way that goes beyond anything that the Opposition sought before the measures were introduced.
Mr. Stephen Timms: What steps will be taken to reimburse local authorities for the additional spending that they will incur on housing benefit, which will not now be reimbursed to them? Why has the Secretary of State chosen to increase the

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non-dependant deductions by such a large extent, and considerably more than the Rossi index would suggest? Does he not recognise that that will increase the pressure on families to split up?
Mr. Lilley: On the latter point, it seemed reasonable that where there were non-dependants in a household who had an income, they should make a contribution to the rent rather than expect so much of it to be met by housing benefit. I am sorry: I missed the first part of the hon. Gentleman's question.
Mr. Timms: I asked about the extra expenditure incurred by local authorities.
Mr. Lilley: There is no question of us assuming that the local authorities will continue reimbursing 100 per cent. of rents. The entitlement to rent for new claimants and those moving property will be up to the average, and 50 per cent. above the average up to a reasonable market level. However, we shall give local authorities a significant sum from which they will be able to pay over and above that in cases in which they believe that that would be helpful to avoid hardship or difficulties for the individuals involved. That money will come from central Government funds.
Mr. David Shaw: Will my right hon. Friend confirm that the £73 available to pensioner couples in their pensions next year will reimburse them for the VAT on the average annual energy cost of £417 and that that amount is close to the average fuel bill that a pensioner incurs? Can he further confirm that one way in which pensioners can reduce their fuel bills to the average amount is by taking advantage of the enormously generous home energy efficiency scheme, which allows pensioners to insulate their homes and gives them £305 of free household insulation courtesy of the Government?
Mr. Lilley: My hon. Friend is right: £73 is 17.5 per cent. of £417 and thus is the VAT that people will incur if their bill was £417 before the introduction of VAT. That is substantially more than anyone expected us to make available for people in those circumstances. My hon. Friend is also right that we are increasing the amount available to help pensioners who need insulation in their homes to reduce their heating bills. That must be in their interests and in the interests of conserving energy nationally.
Mr. Clifford Forsythe: How will the areas that will be used to decide the average housing benefit be selected? The right hon. Gentleman will be aware that in Northern Ireland our local authorities do not look after housing. Also, in the past, even though the social security system applies to the whole of the United Kingdom, on occasions decisions taken in Northern Ireland have been different from those taken in the rest of the UK. Will he ensure that that does not happen in future?
Mr. Lilley: We have discussed with rent officers how best the areas within which averages will be calculated should be assessed. It seems likely that they will be sub-areas of the rent officers' areas, which they are in the best position to help to define. That will be decided more finally as a result of our discussions.
Sir David Madel: If a man is unemployed and his wife has a small part-time job and
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manages to get a full-time job, while her husband remains unemployed, will she be able to claim the tax-free back-to-work bonus?
Mr. Lilley: We have certainly increased the number of hours that she can work without any loss of benefit from 16 to 24. If she is on benefit and working part time, she will be able to claim the back-to-work bonus when she returns to work full time.
Mr. Neil Gerrard: The Minister is obviously aware that some local authorities rarely pay housing benefit at a level higher than the rent officer's assessment. Does he understand that there is not a shred of evidence that that has led to landlords cutting rents in those areas? Does he seriously believe that the average, low-paid, private sector tenant is in any position to negotiate a rent reduction with a landlord? If he does, he is living in a dream world. If he believes that some landlords are charging extortionate rents, why does he not do something to tackle that problem, instead of the ludicrous pretence that tenants can do something?
Mr. Lilley: The hon. Gentleman cannot simultaneously maintain that landlords are charging excessive rents and that there is no scope for negotiating those rents down when people are given an incentive to do so. Rent officers already cut benefit entitlement to rent in one third of rent assessments. They are able to do so only when there are comparators for them to use. That will make the market more genuine, and therefore better able to reflect reasonable market rents.
Mr. David Congdon: I welcome my right hon. Friend's determination to reduce the growth in housing benefit. Can he confirm that the measures that he outlined will help to reduce fraud in relation to housing benefit?
Mr. Lilley: I am grateful to my hon. Friend for his welcome and can confirm that the measures that we are introducing on the fraud front will, I hope, reduce fraud in housing benefit. We have set up a pilot scheme, initially in 20 London boroughs, to enable them to cross-check that people are not entering multiple claims for housing benefit across borough boundaries, which is an important source of fraud that we hope to reduce and eliminate.
Mr. Malcolm Wicks: Will the Secretary of State tell us more about the new in-work benefits for single people and childless couples? If the scheme were up and running nationally, what would be the net cost to the Exchequer in a full year and how many people would be eligible? While that is a significant step, it does not seem sensible. What does it say about our low-wage economy after 15 years of a Conservative Government's stewardship that one can earn a weekly wage and yet not earn enough even to support a single person? Is it not the case that the Government's inability to regulate the market means that the taxpayer is increasingly subsidising exploitative employment practices in that market, at great expense to the Exchequer?
Mr. Lilley: I do not think that low earnings are determined primarily by Government decisions. They are a reflection of people's earning power in the marketplace. In a pamphlet published last week, I tried to spell out the reasons why, throughout the western world, the earnings

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of unskilled people have lagged behind and sometimes fallen below average earnings, which are rising healthily throughout the western world. We must try to tackle the problems that ensue from that phenomenon, and the measures that I announced in the statement will help us to do so. I would hope that they would be welcomed.
I am sure that it is not the case with the hon. Gentleman, but some Opposition Members are more antagonistic about paying moneys that might be seen to be subsidising employers who happen to offer low levels of pay than they are grateful for the help that those on low pay will receive as a result of the measures.
Mr. John Sykes: The housing benefit measures are extremely good news for Scarborough and for Whitby. Is my right hon. Friend aware that hon. Members with coastal resorts in their constituencies have had dreadful trouble in the recent past with badly run DSS hostels? Artificially high rents have made hotel conversions far too attractive, and the measures will help curb the scandal of "Dole-on-sea".
Mr. Lilley: I am conscious of the problems that my hon. Friend and other hon. Members representing coastal areas have found in their areas. I hope that the measures that we have announced on housing benefit will discourage the sort of abuse to which my hon. Friend referred and which may well be more prevalent in those areas. It is only right and proper that people who are occupying properties with above-average rent should have some incentive to reduce that rent where possible, or to choose a less expensive property to live in.
Mr. Harry Cohen: Is not the requirement of insurance on mortgages a hidden Tory tax on owner-occupiers, which the Chancellor of the Exchequer did not have the courage to announce in the Budget yesterday? Does not that insurance amount to about £25 to £30 a month on a £50,000 mortgage, a figure that will almost certainly soar at higher levels?
Mr. Lilley: The short answer to the hon. Gentleman is no. A statement from the Abbey National says that about 40 to 50 per cent. of new mortgages that it gives are covered by insurance already. It seems quite reasonable to encourage a higher proportion still to be covered by insurance, and that is the effect of the measures that I have announced.
Mr. Ian Bruce: Will my right hon. Friend confirm that introducing compensation in advance of VAT going up is an unusual measure for the Government, and that when RPI goes up eventually—the RPI figure will be inflated by VAT going through—additional money will come in the uprating statement when pensions go up again? Is there any suggestion yet that people are modifying their use of electricity by ensuring that they are not wasting energy which, after all, is the policy urged by all hon. Members?
Mr. Lilley: I can certainly confirm the point that my hon. Friend makes. In addition to the extra help that we shall give from April next year, there will be a further benefit to people as a direct result of VAT on fuel in the subsequent year through the natural up rating that will
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follow through. That reflects again the impact which has been, to some extent, already compensated for by earlier changes.
Ms Janet Anderson: The Secretary of State said that employers who take on people who have been unemployed for two years will receive a one-year holiday from employers' national insurance contributions. Will the Government be seeking any assurance from those employers that they will keep on those workers at the end of that year?
Mr. Lilley: I do not think that that would be feasible, as it would increase the bureaucratic add-ons to the scheme and make it less attractive. In general, I do not think that employers would seek to apply the scheme in the way in which the hon. Lady suggests. I think that employers will find that, when they take on people—about whom they may have a degree of suspicion, as those people will have been unemployed for a long time—they will be delighted by the response that they will receive from those people, who will be glad to be back in work, as most people want to be. The employers will be only too delighted to keep them on at the end of the year.
Mr. Michael Brown: Does my right hon. Friend accept that, historically, as unemployment has come down people have been caught in the poverty trap? Will he accept it from me that the measures that he announced today, alongside those announced by the Chancellor yesterday, represent important means of overcoming that problem? Does he accept, however, that those changes are only the start of the new thinking, to which it is absolutely essential that both sides of the House devote time, which is designed to try to get people back into work? Does he recognise, as a member of the No Turning Back group, that some written work has been done on that subject, which he might like to re-read as he continues his programme of radical reform?
Mr. Lilley: My hon. Friend is quite correct that, since the war, there has been a tendency for unemployment to rise in a recession and then for that rate not to come down by an equal amount during a subsequent recovery. As a result of the changes that we have made to the labour market and our trade union reforms, one of the encouraging things has been that unemployment started to come down earlier in this recession than in previous ones. We are determined to build on that improvement and to encourage unemployment to fall further so that more people can go back into work. That is what the back-to-work package in the measures that I announced today is about. I shall certainly reacquaint myself with the writings of the No Turning Back group, which are invariably stimulating and good for us all.
Mrs. Jane Kennedy: Yesterday, the Chancellor of the Exchequer described the changes that the Secretary of State announced today to the payments of housing benefit as a new system to prevent the current system from being prey to unscrupulous landlords. What estimate has the Secretary of State made of the amount that those unscrupulous landlords have taken out of the housing benefit system

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since it was deregulated in 1988? How much does he expect to save for the social security budget as a result of the changes that he announced today?
Mr. Lilley: The hon. Lady is quite right—we expect to make significant savings at a steady rate. The direct effect is likely to be about £200 million, but the indirect effect is likely to be substantially greater than that because many people will negotiate down rents and move to more economical properties. As a result of the changes that we have made, the entire rent level may be affected, so that the long-term effect could be substantially greater than that anticipated. We do not know how much has been ripped off by unscrupulous landlords, but I am glad to note the hon. Lady's implicit support for a system that will reduce such losses in the future.
Mr. Clive Soley: Does the Secretary of State understand that the £72 market rent is disguised in the areas of greatest housing demand, where the average rent is well above that sum and where the market rent is set by rent tribunals? Will he therefore refund those local authorities on the basis of the average rent in the area, because he has based his philosophy on that? Please may we not assume that people who are looking for housing can choose, because often their only alternative choice is a cardboard box?
Mr. Lilley: I can reassure the hon. Gentleman that the plan is to base the entitlement to housing benefit on the average rents for each type of property in each area and not to take a national average. It applies to those in the deregulated market where alternative accommodation is usually available, but in the event of hardship or any specific difficulties, local authorities will be funded to give additional support over and above the 50 per cent. above the average.
Several hon. Members rose—
Madam Speaker: We now move on.

Points of Order
4.32 pm
Mr. Tony Benn: On a point of order, Madam Speaker. I am grateful to you for allowing me to put to you in the House a point that I put in a letter this morning in respect of the Committee of Privileges.
You will recall, Madam Speaker, that in the debate on 31 October, I said that I intended to publish a report. I did that and I gave it to you. You made a statement on 2 November in which you drew attention to the issue raised by my action. You asked the Committee of Privileges to meet and to
"report so that the House can have an early opportunity to consider this matter in an orderly manner and to take any action that it may think fit." —[Official Report, 2 November 1994; Vol. 248, c. 1564.]
Normally a report of the Committee of Privileges is presented to the House by the Leader of the House, and on this occasion that would have allowed the House to consider not only the report but the alternative draft that I submitted. However, to my surprise—I make no complaint, because I was notified—the Government decided to table a motion tonight to remove me from that Committee and not to present its report. Although the motion is debatable, it cannot be debated because no time has been made available.
I am not making any complaint of sharp practice, but that decision has made it impossible for the House to have an orderly debate on the matter: it has not received the report—although it has been published—and hon. Members are not to have their attention drawn to the report for which you, Madam Speaker, asked. No time will be available tonight to debate a matter of considerable importance.
I should be grateful if you could amplify the statement that you made on 2 November, to make it clear that what you expect is that the House will have the Privileges Committee report put before it and be invited either to accept or reject it, which it is perfectly free to do. I am grateful to you for allowing me to raise this point of order because, whatever the merits of the matter, it is a very important question.
Madam Speaker: I thank the right hon. Gentleman for giving me notice of his very important point of order.
The House will have noted that the report of the Committee of Privileges is a special report recommending a certain course of action. It is not a substantive report on the actual complaint that has been referred to the Committee. It is in order and, indeed, it is normal practice, for the House to deal with such a special report by way of a motion inviting the House to take the action that the Committee has recommended.
As the right hon. Gentleman has himself already indicated, any Member of the House can seek to force a debate on a motion of the kind that has been tabled today by the expedient of objecting to it after 10 o'clock.
Mr. Charles Hendry: On a point of order, Madam Speaker. I seek your guidance on a letter that several of my hon. Friends and I received today from an Opposition Whip, the hon. Member for Ashfield (Mr. Hoon), asking whether I would give him advance indication of my voting intentions in Government votes next week. I understand why that information will be of more than passing interest to the Government Whip, but

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it comes as a bit of a surprise to find that the Opposition Whips believe that I should be accountable to them as well.
I was wondering whether you, Madam Speaker, as a former Whip yourself, would be willing to organise a training workshop for the new Labour Whips so that they understand their responsibilities more clearly, and also perhaps to tell them which Members of the House sit on which side.
Madam Speaker: As a former Whip, I think I never fell into that trap. I was always very keen to see that my correspondence went to the right recipient.
Mr. Tam Dalyell: On a point of order, Madam Speaker. May I raise a succinct point of order, of which I have given you notice, relating to the new rules recently agreed by the House for sittings of the Scottish Grand Committee?
The impression was given that the Lord Advocate and the Scottish Law Officers could both make statements to the Committee and answer Adjournment debates. Indeed, that was the initial clear understanding of the Government Chief Whip's Office, the usual channels, the political correspondents and editors of The Herald and The Scotsman and parliamentary colleagues of all parties. I think that the Secretary of State would not mind if I said that he himself was very vague about it, and under the impression that the Lord Advocate could answer Adjournment debates.
However, your advisers—as usual, I do not doubt that they are right; they have a habit of being right—contend that, under the arrangements as drafted, the Lord Advocate cannot answer Adjournment debates. As it appears that it was the Government's original intention to allow such an innovation, could I ask whether you have had any approach to rectify the matter?
This is more than an academic, parliamentary, pedantic point, because it raises the subject of Lockerbie, in relation to which the view expressed by the Prime Minister in answer to questions is that the lead Department is the Crown Office and the Lord Advocate's Department. As Lockerbie was the biggest mass murder perpetrated against western civilians since 1945, and as some of us have the gravest doubts about on-going policy as to whether Libya was responsible at all, surely the matter should be ironed out.
Madam Speaker: I appreciate the fact that the hon. Gentleman gave me notice of his point of order.
The Standing Orders relating to Scottish business permit the participation of Scottish Office Ministers or Law Officers who are not members of the Committee in the business of the Committee only in the context of ministerial statements. In answer to the hon. Gentleman's direct questions, I have had no approach to change the Standing Orders. If the hon. Gentleman wishes to make changes to the existing rules, he will need to find a way to amend the Standing Orders, which, as he knows, have only recently been approved by the House.
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I was interested to hear the hon. Gentleman say that the Secretary of State or those in his office were not too clear about the matter. Perhaps the Secretary of State is grateful to the hon. Gentleman for raising the issue so that the situation has now been made clear.
Mr. Dennis Skinner: On a point of order, Madam Speaker. On Tuesday, immediately after the Government lost their majority, I went to the Table Office, for which ultimately you have some responsibility, and asked the Clerks about the membership of Select and Standing Committees and the number of Opposition Members as opposed to Government Members on those Committees. They said that consultations were taking place at a much higher level.
Conflicting stories and advice have come from different quarters about what happened at various times in 1974–79 when Labour was in power. It appears that, certainly at that time, Labour had no more than parity on certain Committees while on others it had a majority of one.
There is another problem to which we should turn our attention, and it relates not only to the number of Members on Committees and the fact that, on some Committees, the Opposition should be in the majority. I refer to the question of what happens in relation to the nine Tory Members who no longer have the Tory Whip. If any of those hon. Members is serving on Select or Standing Committees there is an argument about which side they are serving on. Therefore it is time that we had a statement. I have no doubt that discussions will take place.
Mr. David Shaw: The hon. Gentleman should sit on a Committee.
Mr. Skinner: I have, many times. Check the record.
This is an important issue, and I want to know exactly what will happen. The Government have deprived themselves of their majority and should now be in a minority on those Committees. The Select Committees are in chaos because some of the nine Members who have lost the Whip serve on them. Appropriate action should be taken in all those cases and it is high time that we were all given the exact picture—and not just through the usual channels—of what is to take place on these various Committees.
Madam Speaker: I have not had a request from a Minister or from the Leader of the House to make a statement on this matter. I have made my own inquiries and I understand that it is a matter for the Committee of Selection. I am sure that matters will be resolved, perhaps not satisfactorily for everybody concerned, but for the majority of hon. Members.

Orders of the Day
  WAYS AND MEANS
  Order read for resuming debate on Question [29 November].

  AMENDMENT OF THE LAW
  Motion made, and Question proposed,
  That is it expedient to amend the law with respect to the National Debt and public revenue and to make further provision in connection with finance; but this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—

  (a) for zero-rating or exempting any supply, acquisition or importation;

  (b) for refunding any amount of tax;

  (c) for varying any rate at which that tax is at any time chargeable; or

  (d) for relief other than relief applying to goods of whatever description or services of whatever description.—[Mr. Kenneth Clarke.]

  Question again proposed.

Budget Resolutions and Economic Situation
4.42 pm
Mr. Gordon Brown: Yesterday, in what has become known as the VAT-on-fuel Budget, the Chancellor confirmed his plan to double VAT on fuel in April. That plan will mean an average 10 per cent. rise in fuel bills and it will hit the housebound, the old and the disabled. In total, the plan will mean £2 a week on pensioners' fuel bills.
The VAT rise is unfair, unacceptable and totally wrong. Hon. Members' first response to the Budget is that the Chancellor should think again. If he will not think again, the House should force him to do so. I believe that a majority of hon. Members wish to stop the increase to 17.5 per cent and that that majority should be allowed to express itself. The Government should be ashamed of the
fact that they told the electorate that they would not impose VAT on fuel and are now determined to impose it at 17.5 per cent. from April.
Why are Ministers so out of touch with public opinion that they think that they can get away with breaking election promises on VAT? Why are they so out of touch that they think that they can fob off millions of pensioners with a grossly inadequate compensation scheme? The Conservative party is so much the party of privilege that the Government are prepared to tax pensioners in poverty for their fuel while refusing to tax millionaire directors of privatised utilities on their executive share options—even when Conservative Members advise them that the system is indefensible.
Why is the Conservative party so much the party of the boardroom rather than the party of the people? The Government charge pensioners £2 a week more by way of VAT even as they refuse to criticise a £200,000-a-year rise for the chairman of British Gas. How do the Government think that they can ever soften the blow with the Chancellor's announcement of £1 a week more under
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the cold weather compensation scheme? Do they think that that is in any way adequate compensation for the anger and sense of betrayal felt by British people?
The scheme excludes 8.75 million pensioners from even the ability to claim. It is available only to pensioners who are on income support, and normally for only two or three weeks in the year. It is available only if temperatures fall below zero for seven days a week. Six days of freezing weather are not enough: a pensioner ends up with no help at all. The scheme demands that, in addition to being old, one must also be penniless and freezing before a penny can be claimed. Kafka would have been proud to invent that scheme. For British pensioners it is cold comfort indeed. Pensioners cannot heat their homes with false Government promises.
Why did the Chancellor not tackle the taxation of private medical insurance, executive share options, inheritance tax abuses and offshore trusts before contemplating his tax offensive on pensioners? He is so out of touch with public opinion that he is not a reluctant convert to VAT on fuel: he is, unfortunately, an enthusiastic advocate of it. Far from wanting to leave VAT at 8 per cent. next year, he wanted it to be 17.5 per cent. this year.
The Chancellor is so out of touch that he favours in principle putting VAT on books and newspapers as well. He has voted in the House for VAT on children's clothes and has already told us that not putting it on food and transport is an anomaly. A few months ago he was unable to deny the letter that he wrote to a constituent in which he said that he had always thought that in this country we exempt too many goods and services from VAT.
The Chancellor has a dependency on VAT and he moves from one VAT high to another. He cannot explain his craving for it and under pressure he seeks to deny it, particularly at election times. But like any addict he keeps coming back to it. There is no hope for this man other than to be completely removed from the temptation by an enforced period of abstinence—by a period of years in opposition.
The Government are out of touch in what they say about VAT, and they are out of touch in talking about tax cuts when everybody knows that they are imposing tax rises. They are out of touch with the effects that their economic policies have had on millions of British people. But I do not need to explain the impact on people. John Maples, who is a vice-chairman of the Conservative party, stated last week in his memorandum to the Prime Minister that living standards would fall again in 1995 and 1996. He went on:
"We have to see this rise in living standards soon or we will have had four or even five years of recovery with no rise in Lying standards."
Mr. Maples is fearful that under this Government we could move from recession to recession without an intervening period of prosperity for millions of people. In offering his advice to the Government, he says that there will be no prosperity this year or next.
Many companies are going out of business, and that has been the experience under Conservative Governments not just since 1979 but since 1970. The effect on British industry can be summed up by saying that there have been four recessions and that thousands of companies have been buried. The damage to manufacturing is great because of the third of manufacturing jobs that have been lost.
What about the effect on living standards of the Budgets that the Chancellor and his predecessors have introduced? There have been seven tax rises in six

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months. Mortgage tax relief has been cut even as mortgages are rising, costing the average family £122 a year. The married couple's allowance has been cut, costing the typical family £96 a year. There is a new tax on household insurance of £7 and on car insurance of £10, VAT on fuel and an airport tax which will amount to another £10 for the typical family.
Take the case of the widow already hit by VAT on fuel, hit by the insurance tax for her home, then hit by cuts in mortgage tax relief if she owns her own home. In April, she will be hit yet again by cuts in the widow's tax allowances. Before this year she started to pay tax at £99 a week. From April, shamefully, she will start paying tax at only £93 a week. The Government have taken the widow's mite yet they ask us to believe that the Conservatives are the party of low taxation.
We have had the biggest tax rise in history—20 tax rises in two years. We have had tax rises amounting to £500 last year and £350 in the year to come. I tell Conservative Members that the total cumulative tax increase under Conservative Government since the election, as recorded in the Red Book yesterday, amounts to extra taxes not of £1 billion, £2 billion or £3 billion but of £50 billion by 1997.
At the last election, Conservative Members said that to pay for public spending plans, Labour would take more than £30 billion in taxes. The Conservatives have taken £50 billion in taxes because of their economic failure. What do they say now, after the biggest tax rise in history? Unable to say that they are cutting tax; with no record of achieving cuts in tax; with tax higher now than it was in 1979; with no specific Budget proposals to cut tax for millions of people who are hard hit because, for most of them, taxes are to rise; with the Chancellor unable even to repeat in his Budget the promise that the Conservatives are the low-tax party—as he used to say—in the medium term, because the Budget statement shows taxes continuing to rise, what do they say now? Yesterday the Chancellor said:
"Conservative Members are tax cutters by instinct."—[Official Report, 29 November 1994; Vol. 250, c. 1102.]
Having been betrayed on action over promises, we are now asked to believe that we should trust the Government's instincts on tax. When we cannot believe what they do or what they say, we are asked somehow to believe in their instinct.
The Chancellor had chances in the Budget. He had a reduced public sector borrowing requirement. He had the option of taxing executive share options. He had the option of cutting public spending on private medical insurance. He had the option of cutting into waste. But his instinct was clear. His instinct was not to cut tax for millions of pensioners, but to raise it from 8 per cent. to 17.5 per cent. That was his instinct—not to cut taxes but to raise them for millions of people.
The Prime Minister says, in his own inimitable language, that more must be done to get back to our instinct of cutting taxes. We will treat such statements with the contempt that they deserve. So were they all men of sound instincts. After 15 years, we have a Cabinet in long retreat, from deed to intention to instinct, which cannot now talk about its achievements, only about intermittent and occasional instincts.
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What would the Home Secretary or the Prime Minister have said about the repeated offender asking for one more chance, on the strength of his instinct, to do better? Would the Home Secretary or the Prime Minister say, "Let us trust the instincts of these men"? Or would they not say, as they have, "We should condemn a little more and understand a little less"? The Home Secretary said, "The critics say give them chance after chance. I say, what about the victims?" In this sorry tale of repeated multiple tax offences, there are 50 million victims and 300-plus Tory Members of Parliament responsible. Again in the words of the Home Secretary, "We should have no truck with trendy theories on this. Those who are responsible should be held to account for their actions and punished accordingly." It would take a cut of 7p on the basic rate of income tax today just to undo the damage of the tax rises that the Chancellor and his predecessor have introduced.
The Government are so out of touch with the British people that while they talk of tax cuts they are bringing in tax rises. Not only that—they try to persuade us that they have a strategy for attacking unemployment when their proposals do not even begin to measure up to the problem.
Consider what the Secretary of State for Employment called "the Budget for jobs". The community action programme was not increased, but cut from 55,000 places to 40,000 places—not doing more for the unemployed next year but doing less. The training budget was not increased but cut—not doing more but doing less. Far from investing more in helping the unemployed, the Government propose cuts in the employment budget which will mean that £500 million less—not more—is paid out next year. The claim of the Chancellor and the Secretary of State for Employment that this was a Budget for jobs is a travesty of the truth.
The main measure for the unemployed announced yesterday—the national insurance holiday for people unemployed for more than two years—is not on offer until April 1996. If a man or woman has been unemployed for two years or more, why should he or she have to wait three and a half years before the Government begin to act? If it is right to take action, why did not the Chancellor take action yesterday rather than postponing it for 16 months? But is that not typical of the Government? They have been forced by events to admit that for 16 years they have not done enough to help the long-term unemployed. They have now had to accept the principle that action must be taken to avoid the threat to social cohesion. They have adopted one, but only one, of Labour's measures in a desperate attempt to give the impression of acting. But they cannot measure up to the problem and they take another 16 months to act.
Who will benefit from the scheme? Why has the date of April 1996 been chosen? Which redundant people are likely to be calling on the services of the scheme? Conservative Members should be interested. Will Kleinwort Benson apply for a national insurance holiday if it chooses to employ the ex-Chancellor? Does the Secretary of State for Employment merit a work trial of three weeks free of charge to let, as his statement says, a future potential employer draw conclusions about his propensity to work? If the Chief Secretary were to seek employment, no doubt abroad, would the job finder's

1229
grant be enough to keep him in the style to which he would like to be accustomed? What of the great scheme called workstart?
Mr. John Butterfill: I am sorry to interrupt the hon. Gentleman's jokey line, but does he think that, if we pursued the socialist policies that he would advocate in dealing with the unemployed, we would be any better off than the French or the Spanish, who have much higher rates of unemployment and rates which are rising while ours is falling? Does he not think that we have it right here and that his remedies would not work?
Mr. Brown: The workstart scheme is specifically designed for the hon. Gentleman. I will come to the measures that we would adopt to deal with unemployment. The workstart scheme is designed specifically to cover employer prejudice against any group of people. When the time comes, perhaps all Conservative Back Benchers will be eligible for the scheme.
Let me tell the hon. Member for Bournemouth, West (Mr. Butterfill) what we would do about unemployment. We would release the capital receipts to local authorities in a phased way and let local authorities build. The hon. Gentleman, with his expertise in these areas, should be supporting us. We would expand the small business grant scheme and let small businesses employ. We would create an environmental task force and let young people have hope again. We would give employers not £6 a week under the scheme that the Chancellor proposed but a realistic figure of £75 a week to get the long-term unemployed back to work.
Mr. Butterfill rose—
Mr. Brown: I shall not give way to the hon. Gentleman again.
If the Chancellor wants to know how he can pay for the first year costs of measures that would eventually save the Exchequer money, let him look at the privatised utilities. Let him look at the £1.5 billion windfall tax allowances given to the water companies, at the allowances that he is to give to the privatised British Rail, at the £3 billion windfall from the demerger of the national grid and at the excess profits among the £45 billion that the privatised utilities have made during the recession. At a time when 1 million people under 25 are out of work and more than 1 million people have been unemployed for more than one year, it is our duty to be more ambitious in our policies to help the unemployed.
Mr. David Shaw: Does the hon. Gentleman accept that his proposal to tax privatised utilities would mean taxing the savings, pension funds and life assurance companies of the 16 million savers in this country who own 50 per cent. of the shares of privatised utilities? Is not the hon. Gentleman proposing the biggest theft of pension fund money since Robert Maxwell—another socialist?
Mr. Brown: If privatised utilities can afford to pay their chief executives salary increases of up to 75 per cent., they can afford to pay a windfall tax to the Treasury on their excessive profits. I would think more of the hon. Member for Dover (Mr. Shaw) if he sought to explain to
1230
his constituents why he has reneged on his manifesto for the last general election, which told them that there were two vital messages to remember:
"David lives locally … David Shaw supports lower income tax."
I gather that the hon. Gentleman has kept one of his promises, but he will pay dearly for breaking the other promise when he faces his electorate again.
What of the long term for industry, skills and training, and investment? Public investment will be cut 9 per cent. next year and more the year after. The Government cannot help industry, improve skills or aid investment through the Department of Trade and Industry because they are divided from top to bottom. The industry budget was cut because the President of the Board of Trade and the Chief Secretary to the Treasury went to war over the cuts that were necessary, resulting in the budget being halved. We will soon find out whether regional incentives, support for small businesses, or research and development funding have been placed at risk as a result.
The employment budget was cut because, although the Chancellor may want to act, the Secretary of State for Employment doubts whether there should be a Department of Employment at all.
As to the review of dividends and savings, we know from press cuttings that Lord Hanson blocked the Chancellor. There is no long-term policy because the people who fund the Tory party are no longer interested in Britain's long-term prospects. The Government can do nothing for industry, employment or skills because the Conservative party is divided from top to bottom and cannot begin to agree the action to be taken—as with the Post Office. The Government have no strategy, policy, direction or leadership, and few followers.
A letter to Conservative supporters sent by Conservative Central Office states:
"Dear expatriate,
It is now 15 years since the general election victory in 1979."
The recipient is asked to consider registering to vote at the next general election. But a problem arises in the penultimate paragraph, with which I will acquaint the House. It states:
"If you want to vote Conservative and do not have a relative or friend on whom you can completely rely to follow your wishes, tear off part 2 of the form and discard it, and fill in a 'Find me a proxy' request form, sending it to us. The Conservative Party will then suggest to you a reliable Conservative who will agree to be your proxy."
To whom was that letter sent? Mr. Nadir in northern Cyprus and Mr. Bottna in Switzerland? Mr. Thatcher in Dallas—can he no longer trust his mother to exercise his proxy?—or Mr. Patten in Hong Kong? Is there no one on whom he can rely? The letter ends:
"Please be as generous as you can. It will be an investment with a real return."
The Tory party is so divided that its mind is not on the Budget, the state of the economy or even solving the VAT problem but on the war raging within it.
The Chancellor broke a number of other promises in yesterday's Budget. In the run-up to the general election, the Prime Minister said:
"If we were going to cut public expenditure, we would have done it before, and I don't believe it is economically right … I see no reason why we should not meet our promises … We have seen these concerns in the past and it has not been necessary to change plans."

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What has happened since the general election, and what happened yesterday?
Mr. Butterfill: There was a recession.
Mr. Brown: The one thing that we did know about was the recession, which was raging before the general election. That is hardly an excuse for not keeping public spending promises. On transport, the Conservatives said:
"Over the next three years, we are committed to the biggest investment in Britain's infrastructure."
The Government will slash the transport budget 30 per cent. next year and 23 per cent. in 1997–98, and will slash London Transport's spend by £40 million next year and £165 million the year after. That is what promises mean to the Conservatives. They said also:
"We believe that the railways can play a bigger part in responding to Britain's growing transport needs."
The Budget cuts spending on the railways by £521 million.
The Conservatives promised:
"We will continue to give the police the support and resources they need to carry out their duties effectively on behalf of the public."
The Budget will cut Home Office spending by £200 million over the next two years. All that from a Government who said that they stood by their public expenditure figures, that there would be no cuts and that such cuts were not economically necessary.
After hearing today's statement by the Secretary of State for Social Security, we are clearly seeing the dismantling of vital parts of the welfare state that have been accepted by both political parties for 40 years, since the second world war. Sickness pay has been transferred to employers, there have been cuts in invalidity benefit, there will be cuts in mortgage help to the unemployed, and there will be a ceiling on help for the bereaved with funeral expenses—even when the Government are in a position to reclaim those expenses from the estate of the deceased.
Why do not the Government deal with problems of bed-and-breakfast accommodation and find a far better way of investing in this country's housing? They cut, cut and cut again. They have failed to act against offshore trusts, abuse of non-domicile and non-resident taxation facilities, privatised utilities and their tax arrangements, and abuse of corporation and capital gains tax. The Government are prepared to make the unemployed, sick, disabled and pensioners suffer instead of imposing the changes necessary for fairness in our society.
Eighteen months ago, the Chancellor made an analysis of the problems facing the Government and the country. He said:
"We are in a hole. We are in a dreadful hole."
He identified the problem precisely. His difficulty now is that, 18 months later, we are even further from a solution. The Chancellor identified urgent action. He said that there had to be agreement in the Conservative party, yet it is even more split than it was. The Chancellor said that a medium-term view had to be taken, and there is none. He said that there must be a sense of purpose, but where is that now? The Chancellor said that the Government must have an agenda for the next two years. They had Post Office privatisation for a day or two, but then dropped it.
1232
What does the Chancellor tell us now? In an interview a few days ago he talked about what he called a "slightly hysterical political atmosphere", which is no doubt a reference to Cabinet meetings under the present Prime Minister. He said:
"The key thing for the party is not to panic".
There we have it—the Tory strategy is "Don't panic, don't panic," with the Chancellor as the Corporal Jones of the embattled rerun of "Dad's Army" but without any of the resolve, organisation, leadership or popularity of the original.
Let us describe the Government's problem in terms that Conservative Members will understand. The Government now have all the hallmarks of a business on its last legs. As we saw in the Budget yesterday, they have no new ideas and there is no innovation from the Cabinet. Decisions are made not for the future but just to get through the day. They have lost credibility, exploited all the assets and wasted them for no long-term benefit. They have run out of credit; they are now divided and paralysed by a board that is split. They ignore all the problems and challenges facing us in the future and have ceased to operate as a viable entity—they are bankrupt in all but name. They are wasteful, divisive and incompetent; they are in need of liquidation and being wound up.
There is one final point of which the House should be aware. The Dudley by-election takes place in a few days. The Conservative manifesto in Dudley at the previous election was very clear. It rejected what the Conservatives called
"the disastrous pathway of higher taxation and national insurance contributions taking money out of your earnings",
but the Conservatives went on to do precisely what they had promised the electorate they would not do. The Chancellor said that promises made in Dudley do not matter. Let us remember the election manifesto—[Interruption.] Oh yes, the Chancellor not only said it in the Press Gallery but repeated it in the House. The manifesto issued at the last election contained words that will haunt the Conservative party throughout this campaign. It stated:
"You can depend on John Major".
But the voters of Dudley will never trust the Conservative party on taxation again.
The Budget is unfair. It cannot unite Britain and does nothing for Britain's long-term economic future. What people will remember above all about this Budget is that, when the Government had the opportunity to think again, they still decided to impose VAT on fuel. That is why Conservative Members should use the next few days to wrestle with their conscience. They should look again at the election manifestos that they signed and which the Conservative party issued; they should reconsider what they said immediately on the imposition of VAT some months ago and then vote with us to defeat the Government next Tuesday.
5.11 pm
The Chief Secretary to the Treasury (Mr. Jonathan Aitken): This is supposed to be a debate about this year's Budget, but instead the hon. Member for Dunfermline, East (Mr. Brown) treated us to a vintage Uncle Grumpy performance, during which he complained bitterly, mainly about measures that were not in this year's Budget but in last year's.

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The hon. Gentleman's speech was an absolutely characteristic mixture. He could not bear to say a single good word about the excellent health and success of the British economy but indulged in ludicrous exaggeration and made uncosted public expenditure pledges, such as that in his throwaway line about the £6 billion capital receipts, which would add massively to the public sector borrowing requirement. We witnessed his over-reliance on pantomime humour and his over-confidence in his personal infallibility as a prophet of doom on the British economy.
Mr. Gordon Brown: Will the Chief Secretary begin by apologising for breaking promises on VAT on fuel?
Mr. Aitken: If it comes to breaking promises, I have a rather more up-to-date example of the hon. Gentleman's own activities in that department. I was very amused when, as a rehearsal for his pantomime performance today, he became so over-confident at the weekend that he made a rather embarrassing appearance in the News of the World. There he was, on page three in a full-frontal photograph, holding up Mr. Gladstone's famous Budget Dispatch Box outside No. 11 Downing street. Someone might have warned him of the danger of such a Prince Hal-like performance, trying on a crown before he is entitled to it—it can sometimes bring bad luck because pride comes before a fall.
Even worse than the presumptuous photograph was the preposterous prediction in the opening words of the article—
Mr. Brown: I was not there.
Mr. Aitken: The hon. Gentleman says that he was not there so I am sure he will have great sympathy with me over forgeries by newspapers. If he was in a compromising position for the News of the World, he should have used the famous exit line of that newspaper and made his excuses and then left.
The hon. Gentleman is trying to get out of the embarrassing situation to which I was referring, which was the preposterous prediction in the first words of the article. They were:
"Nobody should look to Kenneth Clarke for new hope for the unemployed when he presents Tuesday's Budget."
As we now know, the hon. Gentleman yet again got it hopelessly wrong, because one of the most important and much-praised features of the Budget—even The Guardian praised it—was the £680 million package of measures to help the unemployed back into work. I shall say quite a bit more about that later.
No one should be surprised that the hon. Gentleman got everything so wrong in the News of the World last Sunday. Whenever Uncle Grumpy talks about unemployment, he defies the law of averages and always gets it wrong. It is worth reminding the House of what he said in the debate on the spring 1993 Budget resolutions. He said:
"I make one Budget forecast—that, after the Budget, unemployment will rise this month, next month and for months afterwards."—[Official Report,17 March 1993; Vol. 221, c. 289.]
No sooner had the hon. Gentleman opened his mouth than unemployment fell steadily month after month. It has dropped by more than 450,000 from its peak and continues to fall at a rate of more than 1,000 a day.
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As we have now firmly established the hon. Gentleman's credentials as an economic forecaster—he is in a rather less reliable category than the astrologer in the News of the World—we can perhaps deal with more serious matters.
Dr. John Reid: I know that the Chief Secretary's memory does not stretch back 15 years but I remind him that, when the Conservative party came to power, there were 340,000 long-term unemployed people; there are now more than 1 million, or three times as many. Why?
Mr. Aitken: As that statistic comes from a member of a party that, whenever it has been in power, has left unemployment much higher than when it took office, I do not regard it as reliable.
Instead of my following the Uncle Grumpy pantomime line, I thought that the House would expect the Chief Secretary to make a serious speech about what the Budget means to the fundamentals of our economy—[Interruption.] I know that Labour Members do not like to be told home truths or the good news about the economy, but the country at least will wish to hear the facts, seriously presented.
Mr. Nigel Griffiths: If the action to help unemployed people is so important, and if the Chief Secretary and the Chancellor are so proud of it, why do we have to wait 16 months before it is implemented?
Mr. Aitken: Some of the measures are in trial schemes that are already in place. Let us not lose sight of the fact that unemployment is coming down—by 28,000 in September, by 46,000 in October and by more than 1,000 a day. My right hon. Friend the Secretary of State for Social Security has introduced a package of measures that will accelerate that downward trend, and all credit to him. [HON. MEMBERS: "Why wait?"' Those who were listening to my right hon. Friend the Secretary of State for Social Security will know that some DSS schemes take a Little time to introduce, which is fair enough.
Let me now return to the serious speech about what the Budget means to the fundamentals of the economy, about how our policies will be seen after the Budget by international markets and about the public spending programme of priorities and reductions for the next three years.
Mr. Derek Enright: Will the Chief Secretary please, before he leaves the subject, explain in words that even I can understand why it takes so long to put the measures in place?
Mr. Aitken: There are not always instant solutions to long-term problems. My right hon. and learned Friend the Chancellor's measures complement measures that are already in place. Some of the schemes, which have been piloted for some time, are now being built on and extended at considerable cost, quite rightly, to the taxpayer. This criticism of the timing is not well merited. What really matters is whether unemployment will come down, as it is coming down now, and whether it will continue to come down, which is what will happen.
I was trying to tell the House how the Budget relates to a number of important areas and, above all, how it relates to the ordinary and understandably anxious people who are having to learn to live with the consequences

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of a global economic environment that is in a period of astonishing change. It is not surprising that new measures on unemployment or on anything else have to be tailored to cope with a fast-changing world.
Mr. Clive Betts: The Chief Secretary has drawn international comparisons. Does he accept that on every comparison—the growth of the economy, manufacturing capacity, manufacturing investment or the loss of manufacturing jobs—this country has done worse since 1979 than has every other one of the G7 countries? If he disputes that, will he give us one indicator on which we have done better than any of the other G7 countries?
Mr. Aitken: This is the old game of selective statistics. Let us get back to the hard facts of what is going on today. We have had two and a half years of steady growth and falling unemployment. Our economy is now growing at more than 4 per cent., easily the fastest rate of growth for any of the major economies in Europe. Underlying inflation is at 2 per cent. and my right hon. and learned Friend the Chancellor has kept inflation below 3 per cent. for more than a year. The last time we saw a performance as good as that, the hon. Member for Dunfermline, East was 13 years old. In those days, good news for Britain may have made him a great deal more cheerful than he was this afternoon.
Mr. Tim Sainsbury: My right hon. Friend could go further. Far from the situation being as the hon. Member for Sheffield, Attercliffe (Mr. Betts) described it, in the 1960s and the 1970s, this country finished bottom of the league of the G7 countries in productivity, exports and output growth. In the 1980s, we did not just move right up the league, but went right to the top of the G7 countries. That performance is quite contrary to the one described by the hon. Member for Attercliffe.
Mr. Aitken: I am grateful to my right hon. Friend for reminding the House of the old terrors of a Labour Government, which were much more extensive even than those he has mentioned. The average rate of inflation, for example, during Labour's years of power was 15 per cent.; today, we have inflation at 2 per cent. The Chancellor has kept it below 3 per cent. for more than a year, as I have just said.
Let us give credit today to the remarkable performance of Britain's companies, which are creating a great turn-around in our national trading performance. Today, our visible exports are at record levels, with a growing contribution of invisible exports. My right hon. and learned Friend the Chancellor forecasts that our balance of payments on the current account will improve by about £7 billion this year overall. In fact, some independent forecasters are going further and saying that next year we shall actually be in trade surplus. After all those locust years of Labour, in which we had huge trade deficits, this turn-around in our economic performance deserves some congratulation.
Mr. D. N. Campbell-Savours rose—
Mr. Aitken: I will take one more intervention and then I must get on.
Mr. Campbell-Savours: Are the growth assumptions on which the public sector borrowing requirement for
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1997–98 calculations are made the same as the growth assumptions on which our contributions to the European Community are made?
Mr. Aitken: I am sure that the Treasury is consistent in these forecasts and I have no reason to think otherwise.
Mr. Denzil Davies rose—
Mr. Aitken: I shall take one last intervention and then I shall say something about interruptions.
Mr. Davies: The right hon. Gentleman mentioned the current account and the balance of payments. I do not have the Red Book in front of me, but I seem to remember that for the non-oil visible account, the forecasts show deficits of about £12 billion for the next three years. How does that accord with the great manufacturing upsurge about which the Chancellor spoke yesterday?
Mr. Aitken: I will send the right hon. Member a copy of the lecture I gave only two nights ago on Britain's trade performance. It shows how well we are doing in both the invisible sectors and the non-oil sectors. We are having a success in exports which we have not seen in the country's recent history.
I have now been interrupted about seven times in 10 minutes. In the speech made by my right hon. and learned Friend the Chancellor yesterday, the shadow Chancellor, the hon. Member for Dunfermline, East, interrupted seven times and was like a jack-in-the-box on pep pills. I draw the attention of the House to a thought from the Father of the House, my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath). We should reflect on what he said if we are to be a serious debating Chamber. He said:
"We sit in the Chamber, and we jump up constantly. Nobody on the Front Bench can any longer deliver a speech, as there are an enormous number of interventions. Hon. Members who intervene are not trying to find a solution, but are trying to find some way of knocking the other chap down … I hope, therefore, that we can perhaps give some thought to the way in which we behave in the Chamber. People want to hear what ideas we have".—[Official Report, 23 November 1994; Vol. 250, c. 637.]
Mr. Gordon Brown: Will the Chief Secretary now take this opportunity to condemn Mr. John Maples and his memorandum, which suggested that Conservative Members should shout down the Labour leader?
Mr. Aitken: I do not agree with everything that every private memorandum says. If I were the hon. Member for Dunfermline, East, I would be a little quieter than he has been. The Maples memorandum, warts and all, was at least written in English whereas the Balls memorandum, on which the hon. Gentleman based a major speech, was incomprehensible and was written in jargon, such as endogenous growth zones, which needed a translator. The hon. Gentleman's intervention shows only that he does not want to listen to serious debate and serious argument. He was not in the endogenous zone, but in the dodgy zone. This afternoon, he dodged all mention of the public sector borrowing requirement and certain key features.
There are two important things about the Budget. First, it enhanced our international competitiveness. We are determined to stick to our supply-side reforms. No social chapter, no minimum wage legislation and no interfering socialist quangos of the kind that spew out from the Labour party with great regularity will destroy jobs or

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scare away the great inward investment surge which is coming into this country as long as this Government are in power.
Secondly, the key element in our approach is the commitment to sound public finances. I sometimes think that the Labour party does not even understand what the term means; it thinks only in terms of soundbite public finances. We want none of the pantomime sideshows in which more public expenditure can be promised without any payment from the taxpayer and in which it is assumed that full employment can be produced by the wave of a wand—[Interruption.] My right hon. and learned Friend the Chancellor—[Interruption.]
Madam Deputy Speaker (Dame Janet Fookes): Order. The House knows my views on seated interventions. My view is even stronger on what I call a seated running commentary.
Mr. Aitken: I am grateful to you, Madam Deputy Speaker. I appealed to the wise words of the Father of the House because the country sometimes wants to listen to serious arguments and serious speeches.
I was making the point that my right hon. and learned Friend the Chancellor lives in the real economic world. He has set out a sensible Budget to reduce our debt. Some of the things that the hon. Member for Dunfermline, East advocated this afternoon would simply increase our debts automatically. He needs, of course, to ensure that our standing in the international markets of the world is maintained because that is important in terms of judgments on our interest rates and our currency rates.
Last year, the Government borrowed more than £45 billion, or 7 per cent. of gross domestic product. This year, on the revised forecasts in my right hon. and learned Friend's Budget, we are set to borrow £34.5 billion, which is more than £25 a week of borrowing for every household, or 5 per cent. of GDP. We forecast for next year a PSBR of £21.5 billion, or 3 per cent. of GDP. That means that in two years of steadfast policies, we shall have more than halved our borrowing, and that is real progress.
Even at those levels of borrowing, no prudent domestic or international observer of the British economy should have expected to see tax cuts in this Budget. My right hon. and learned Friend was absolutely right to signal that clearly some months ago because in the real world, where sound public finances are the litmus test by which a nation's economic status is judged, it is far more important for the British Chancellor of the Exchequer to be right than to be popular. That is why he has not played to the gallery or taken any fast and loose risks with the British economy and premature tax cutting.
The hon. Member for Dunfermline, East did his best to reopen last year's Budget by concentrating on VAT on fuel. While we are on the subject, I should refer to tax cuts because I know that the Labour party has tabled a procedural amendment to seek to reopen the debate on the second tranche. Indeed, it is getting so desperate in its quest for support that its finance Whip, the hon. Member for Ashfield (Mr. Hoon), is sending unsolicited mail to Conservative Members asking whether they will join the Labour party in the Lobby. I think that the hon. Member for Dunfermline, East, who likes to make noises about the Maples memorandum, should be a little careful about the
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Hoon memorandum and the Balls memorandum. He seems to have more skeletons in the cupboard than we have.
The amendment tabled by the Opposition is entitled "Amendment of the law"—an appropriate title, since Parliament has now approved this tax in both its stages and four votes by clear majorities. The procedural amendment is an opportunistic wheeze, but the Opposition spokesman who appeared on "Newsnight" last night did not seem to know whether he wanted to repeal one stage of VAT on fuel or not—a sort of half-pregnant position.
The one thing that the Labour party does know is that to proceed with its procedural machinations, it has to ensnare the support of at least a dozen or so of my hon. Friends—hence the Ashfield or Hoon letter, which tries to wheedle my hon. Friends into the Lobby on Labour's side.
Mr. Phil Gallie: Will my right hon. Friend note that not only the hon. Member for Ashfield but the shadow Chief Secretary to the Treasury, the hon. Member for Oxford, East (Mr. Smith), seems to be sending letters? It seems to be a developing habit in the Labour party, and I wonder why.
Mr. Aitken: It is getting like St Valentine's day cards at school. One sends out messages from Cupid to people who do not know, in the hope that an arrow will strike here or there.
I should like to say a friendly word to my hon. Friend the Member for Ayr (Mr. Gallie) and to one or two others who I know have sincere reservations about the second stage of the imposition of VAT on fuel. Perhaps they may listen to me with some sympathy because, although my official title in the Government these days is Chief Secretary, for a good many of my 18 years on the Back Benches I am told that my unofficial title in the Government Whips' Office was "chief rebel".
From the vantage point of that somewhat unusual parliamentary qualification, the first point that I would like to make to some of my hon. Friends is that serious rebellions should be kept for big votes on great issues of confidence and principle. Voting with the Labour party to support opportunistic and disruptive procedural motions is a cop-out, not just from party discipline but from the Queensberry rules of rebellion. True Conservatives do not, I believe, and will not, I believe, cast their votes in this House to support Labour's procedural dirty tricks letters and department.
Mr. David Winnick rose—
Mr. James Wallace rose—
Mr. Aitken: I said that I would not give way for a little while and that I would make progress.
Secondly, and perhaps more important, anyone thinking of following the siren voices of the Labour party on this matter has to come up with the answer to one vital question. If they are to support a Labour game plan to blow a £1.5 billion hole in the Budget arithmetic and damage the strategy of sound public finances that my right hon. and learned Friend Chancellor has created—at the admitted cost of doing what is right rather than what is popular—the question that they must answer is, where will Labour find the extra £1.5 billion in revenue that

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would be lost by not going ahead with stage two of the imposition of VAT on fuel? Will it find it by supporting increases in taxation, in which case, which taxation?
Mr. Winnick rose—
Mr. Aitken: I shall give way to the hon. Gentleman, but it will be the last intervention that I shall take for some time.
Mr. Winnick: With regard to conscience and great issues, presumably the Chief Secretary himself was party to the Cabinet decision to exert much pressure on and, indeed, intimidate Conservative Members of Parliament to vote as the Cabinet wanted them to on Monday. Does he agree that, if there were a free vote on a motion that VAT should be applied at the full rate on domestic fuel, it would be overwhelmingly defeated? That would reflect the feeling in the country. Hardly any other issue at the moment is more unpopular than the Government's intention to impose the full rate of VAT on domestic fuel. That is why the House should be given an opportunity to reflect the opinion of the people.
Mr. Aitken: The hon. Gentleman made a speech rather than an intervention, but I shall briefly try to respond. I utterly reject his charges of intimidation by the Cabinet. We thought that it was absolutely right for last Monday's vote to be a confidence issue because it was an international obligation into which we had entered freely and because we should stick to our word, as Britain always should in international matters.
The hon. Gentleman's second point about free votes is a case of the pot calling the kettle black. If we had had a free vote on Monday night, the Labour party and the Liberal Democrats, who have supported the financing of the European Community and the Edinburgh agreement, would have been in the Lobby with the Government—so much for free voting. We do not want too much hypocrisy and humbug on that matter.
I shall return to the serious question of thinking, as some of my hon. Friends are, of blowing a hole in the Budget arithmetic with a reversal of stage two on fuel. Where would the £1.5 billion be found—by increasing taxation, and, if so, which taxes? Or would it be found by cutting spending, in which case, which public spending? Those questions will have to be answered.
Mr. George Stevenson rose—
Mr. Aitken: I said that I was not giving way any more.
Mr. Stevenson: Give us the answer.
Mr. Aitken: I am going to give the answer. They are serious questions, but one of the reasons why I will not give way to the hon. Gentleman is that his party has already answered them, but in the most frivolous and lightweight of ways.
In his so-called shadow Budget last week, the hon. Member for Dunfermline, East proposed one of his many pantomime solutions: that all Labour's extra spending plans, as well as the plan to drop VAT on fuel, could be paid for by new taxes on what he calls loopholes and windfalls. If the legendary Canon Spooner were still alive and were to describe those two new Labour taxes as loopfalls and windholes, he would be no more credible or
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incredible than the shadow Chancellor. Whatever terminology is used, those two proposals are simply not serious or workable measures for raising that taxation.
Mr. Stevenson: Will the right hon. Gentleman give way?
Mr. Aitken: No, I said that I would not give way.
Labour's proposed new windfall tax would be a tax not on windfalls, as my hon. Friend the Member for Dover (Mr. Shaw) has pointed out several times, but on the earnings of certain utility companies, which are already paying £2 billion a year in corporation tax. They pay those earnings out as dividends to shareholders such as pension funds, which are in turn paying them out as taxed income to occupational pensioners. It would also be a tax on the investment programmes that those companies undertake, such as new telephone lines for BT, or new gasfields and gas pipelines for British Gas. In effect, the windfall tax would be an extra tax on investment, an increase in corporation tax and some form of double taxation on pensioners and shareholders. It would hit all customers by undermining quality of service, raising prices, or both. So much for the windfall tax.
The loopholes that the hon. Gentleman talks about, at least on the scale that he is thinking of, simply do not exist. Of course there are loopholes in the tax system. The Inland Revenue tries to find them every year and my right hon. and learned Friend the Chancellor has closed some down in this Budget, as Chancellors of all parties do every year. However, the bonanza of which the hon. Gentleman is dreaming is simply a fantasy. Some of these loopholes are, in fact, tax reliefs designed to encourage businesses to invest and create wealth. Labour would not be closing loopholes, but closing business. Do not take my word for that. Howard Davies of the CBI said that Labour is proposing
"a massive increase in business taxation."
So, whether we are in the world of Canon Brown or Gordon Spooner, those phoney taxes do not add up or make sense as a fiscal panacea to pay for VAT on fuel. My advice to the hon. Gentleman, if he has loop-fallen into a windhole, is to stop digging and, instead, come clean with the British electorate about how he will really pay for Labour's expensive and ever-expanding high public spending programme, including the cancellation of the second stage of VAT on fuel.
Mr. Wallace: The right hon. Gentleman said that if we were not to increase VAT on fuel to 17.5 per cent., it would blow a hole in the Government's public finances, yet his right hon. and learned Friend the Chancellor has accepted that, at some stage, he would like to cut taxation. At that stage, would it be a priority to reduce VAT on domestic fuel or to seek cuts in direct taxation?
Mr. Aitken: I cannot anticipate my right hon. and learned Friend the Chancellor's next or future Budgets. He will cut taxes, in whatever direction, only when it is prudent to do so. It is certainly not prudent to do that with public finances recovering as they are and with the present high level of borrowing. All the Labour party wants to do is to add to borrowing, which is about the most irresponsible of policies that anyone can think of.
I want now to consider the important subject of the Government's public spending programme. In parenthesis, may I say, in this age of leaks and leaked

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memoranda, that this year's public spending round and the public spending totals that it produced were, on the whole, remarkably leak-free? Virtually no commentator envisaged that what we would achieve were reductions in public spending that would total £28 billion over the next three years, with £24 billion off the control total. The ratio of public spending to GDP is projected to fall from 43.5 per cent. this year to 41 per cent. by 1997–98.
There have been no quick fixes or conjuring tricks. There are genuine reductions in our previous spending plans across virtually all Departments. They show the strength of the new arrangements for determining public spending created by my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont), to whom I pay tribute for that innovation.
Mr. David Nicholson: May I take this opportunity to compliment my right hon. Friend the Chief Secretary on the same skill and achievement in handling this year's public spending round that he showed when he was at the Ministry of Defence in handling the successful "Front Line First" exercise? In particular, may I thank him and the Chancellor for listening to the representations that a number of my hon. Friends and I made, and in particular my right hon. Friend the Minister for Agriculture, Fisheries and Food, for not cutting the hill livestock compensatory allowance this year?
Mr. Aitken: I am grateful for my hon. Friend's very kind remarks. I can confirm that HLCA spending will remain constant at, from memory, £105 million.
I want now to consider the way in which we have been guided in the public spending round. We have been helped by lower inflation and the private finance initiative. Many of the sweeping criticisms made by the hon. Member for Dunfermline, East completely missed the fact that billions of pounds—the latest estimate is £5 billion—are coming into spending on public projects through co-operation with private sources. That was a most important part of the speech by my right hon. and learned Friend the Chancellor.
I want to concentrate on the priorities in public spending and improving efficiency. One of the great divides in British politics is about priorities in public spending. That great icon of the Labour party, Nye Bevan, once said:
"The language of priorities is the religion of Socialism."
If Nye Bevan were around today, he would be amazed that his modern heirs and successors have become Trappist monks on the fundamental questions.
On the fundamental question—is public spending too high or too low?—the hon. Member for Dunfermline, East resolutely refuses to give an answer. When my hon. Friend the Member for Chingford (Mr. Duncan Smith) asked the hon. Gentleman that question in the economic debate during the debate on the Queen's Speech, Garrulous Gordon, the great gusher of soundbites, suddenly fell silent and became Dumbstruck of Dunfermline.
However, at least one member of the shadow Treasury team was allowed briefly to escape from the Trappist nunnery to say something about priorities on public spending when she gave a long press conference. The hon. Member for Peckham (Ms Harman) introduced a bizarre new dimension to the argument by saying that the new modern Labour party would separate public spending into
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new categories, the first of which was rescue spending. In the language of "1066 and All That", that was a "Bad Thing". The second category was renewal spending, which was a "Good Thing".
I said that those categories were bizarre. For example, rescue spending—a "Bad Thing"—included spending on the unemployed, the poor and the police. That last line should change the slogan of the Leader of the Opposition to "tough on crime, soft on paying the bills for the crime fighters".
The row about renewal and rescue spending was quite enough to set the brothers and sisters of old Labour at the throats of the new yuppie Islington economists, because old Labour finds it very hard to see how lower rescue spending on the poor and the unemployed can possibly be reconciled with the Labour party's long-standing commitment to high welfare state spending.
I do not want to intrude too much on private grief in that respect, because I candidly admit that we Conservatives, ever since the time of Disraeli, have also been trying to identify and deliver the right priorities in public spending. From time to time, we have not been entirely averse to borrowing good ideas from Opposition parties. I offer a quotation from Disraeli to illustrate my point. He said that we
"caught the Whigs bathing, and walked away with their clothes. We left them in the full enjoyment of their Liberal position while we are the strict Conservatives of their garments."
There is an echo of that in the spending round today. It would perhaps be a little unchivalrous of me to use Dizzy's quotation while the hon. Member for Peckham was still up to her neck in the muddied waters of Labour's confused thinking on public expenditure priorities, but now she has moved on to higher ground I can certainly tell the remaining members of the shadow Treasury team that public expenditure is now running in a sound and Conservative direction.
While we have reduced the public spending totals by £28 billion over the next three years, we have also given priority to several key areas, of which I want to highlight two or three, and some of which Labour likes to treat as its own private fiefdoms. For example, with regard to health, we now plan to spend £1.3 billion more in 1995–96 than this year on the national health service. That is an increase of 1 per cent. in real terms over and above this year's 3.75 per cent. growth in real terms. That demonstrates once more this Government's commitment to improving the NHS. By next year, spending will be 70 per cent. higher in real terms than in 1979—an extra £12.5 billion at today's prices.
When asked, the Labour party is quite unable to say whether it would spend more or less public money on health. Perhaps Dumbstruck of Dunfermline needs a course of speech therapy at his local NHS hospital and I am sure that he would receive very good treatment there.
My right hon. and learned Friend the Chancellor also introduced an imaginative and far-reaching package of new spending to help the unemployed. The national insurance contribution changes will make a significant difference to those who benefit from them. It was interesting that the Leader of the Opposition could find nothing to criticise yesterday among our plans to help the unemployed.
I recognise that if we are to have priority areas of public spending, some programmes must be trimmed. Perhaps the most interesting aspect of the public spending round

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that we have just been through is the quiet revolution that we have initiated in that unglamorous area of public spending—administrative efficiency, cost reductions and improving the output of public services without a commensurate increase in the input of taxpayers' money.
Soon after I arrived at the Treasury, I was rather startled to discover that the running costs of Whitehall were £15 billion a year. That is approximately £13 a week in taxation for every household in the land. We have been tough on those plans. The new plans announced in yesterday's Budget represent a 10 per cent. reduction in real terms over three years in the cost of running central Government. Despite increasing work loads, for example in social security, that is quite an achievement. The public sector is increasing its efficiency while continuing to deliver high-quality services to the taxpayer.
The size of the civil service is falling. There are 10,000 fewer civil servants now than in April, and the numbers have fallen by 40,000 since the last election. The civil service is now at its smallest since Neville Chamberlain was in power in 1939, and the plans introduced in the Budget will ensure that that trend continues.
Service to the public is our priority, but we can still serve the public's needs without having to squeeze their pockets. In each area of government, that involves asking questions to ensure that we are doing the right things and doing them as efficiently as we can. That is why we started the programme of fundamental expenditure reviews in each Department. They are improving the cost-effective delivery of front-line services on all fronts. The Ministry of Defence defence cost study, to which my hon. Friend the Member for Taunton (Mr. Nicholson) was kind enough to refer, produced annual savings of £750 million and enhanced operational capability.
That trend continues. The NHS will reduce central bureaucracy by 21 per cent. The Department of Transport is increasing efficiency by a fifth and the Treasury is consulting on the recommendations of its fundamental review, which could lead to savings in senior posts of more than a quarter while improving its performance as an Economics Ministry.
A new round of reviews is now starting that will include reviews into spending on agriculture, the environmental programmes of the Department of the Environment, on the Department of National Heritage and on the Office of Public Service and Science. All those rather unglamorous reforms are, nevertheless, fundamental to our target of keeping the costs of Government under control and reducing the public sector borrowing requirement.
Of course I recognise that a Budget, the centrepiece of which is its success in reducing public spending totals by £28 billion, is hardly likely to be greeted with immediate celebrations or dancing in the streets, but let me say a word about the so-called feel-good factor—a phrase much beloved of journalists, but which does not exactly resonate around the hearths and homes of Britain at the present time. Indeed, I have some doubt whether it is within the power of politicians to make people suddenly feel good. Certainly, in the pubs of Ramsgate in my constituency, nobody raises his glass and says, "Oh, I see that GDP growth has now reached 4.2 per cent.—cheers!" or, "I see that manufacturing production is now up by 6 per cent. this year. I feel good; I'll have another half." Human
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nature simply does not work like that. People feel good because of much deeper and more personal factors in their lives.
I was rather struck by speeches in the economic debate on Wednesday and by the words of my right hon. Friend the Member for Old Bexley and Sidcup, whose thoughts were also echoed by my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd)—I hope that I can still call him my hon. Friend, despite his newly independent status. In their different ways, my right hon. and hon. Friends made a point that the Government have not missed—that we are living through a revolution of changing expectations, in which many of the old economic certainties of life are vanishing.
People are having to adjust to uncomfortable changes such as the loss of expectation of lifelong employment in any one job. Quite naturally, they are worried about their employment prospects, their debts and their pensions, even when national economic statistics are cheerful. We should sympathise with such feelings and respond wisely to them, because man certainly cannot live by economic data alone.
There are difficulties, too, in adjusting to what might be called the problems of success—the new world of low inflation that my right hon. and learned Friend the Chancellor has created, for that, too, means a shift in expectations, particularly for those who lived through the fool's paradises of artificial booms followed by all too real busts. My right hon. and learned Friend has shown consistently in the Budget and in his many speeches that he is absolutely determined to avoid the phenomenon by his steady steering for a low-inflation and real-growth course.
I believe that, sooner or later, the electorate will see what many commentators have already seen—that my right hon. and learned Friend's Budget responds to the anxiety and insecurity factors that I have mentioned, because it is a courageous, cautious and correct Budget. People who do not relate now to a good economic statistic such as the current 10 per cent. annual growth in exports might start to feel rather less anxious when the firm or factory in which they work starts to increase its production because it wins a big export order.
That is happening throughout the country because of Britain's spectacular success in the export sector. The people who are not rejoicing now about 2 per cent. inflation might start to recognise their better fortune when their pension or weekly wage holds its value and buys the same amount of goods in the shops month after month because prices are not rising, as a result of my right hon. and learned Friend's determination to keep inflation down.
Let us consider another category of people for whom the Budget might start to ease anxiety and insecurity factors—the unemployed. Let me again repeat the good news, which the Opposition Treasury team cannot bear to hear. Unemployment has been falling for nearly two years. The level is 450,000 lower than its peak. During the past few months, more than 1,000 people per day have been coming off the unemployment register.Incidentally, that is good news for public spending, too. Every 100,000 people who come off the unemployment count save the public purse £365 million a year.

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We want to see more and more unemployed people going back into work, so we have been listening carefully to what unemployed people tell us are the main things that make them hesitate in deciding whether to take work if a job is on offer. Unemployed people tell us that the three things that make them hesitate are insecurity about how to manage between leaving benefit and receiving the first wage, uncertainty about being able to meet the rent and uncertainty about whether they really are better off in work or on benefit.
My right hon. and learned Friend's package has tackled all three issues in an imaginative way. It builds substantially on all the work that the Department of Social Security and the Department of Employment have been doing to encourage unemployed people effectively to search for jobs and to keep in touch with the marketplace. My right hon. and learned Friend's work incentives package includes substantial measures targeted at precisely the very obstacles and barriers that I have mentioned, which hinder unemployed people in taking up jobs, and the lack of incentives or reward for working harder or for working longer hours.
The package provides especially powerful incentives for employers to take on unemployed people, particularly those who have been out of work for long spells and who might have lost confidence in their ability to hold down a job. Those people need extra assistance and encouragement, and that is what we have provided them with.
My right hon. and learned Friend's package proves that, above all, the Government listen carefully to what the unemployed tell us are their real problems. Those problems have been addressed positively and imaginatively, with a large package of small, tightly targeted, relevant work-incentive reforms.
When we consider the great sweep of the Budget, with its emphasis on sound public finance and on maintaining credibility in international markets, the public spending totals and the effect on the lives of ordinary people, it is greatly to the credit of my right hon. and learned Friend the Chancellor that he has introduced an austere, prudent, responsible and, already, well-respected Budget. He has certainly not taken the soft and easy pathways of personal and political popularity. Perhaps in footwear terms he is thinking of exchanging his famous Hush Puppies for some long-distance walking boots, for he has embarked on a long, steady, strategic march, the results of which will take time to achieve. If the results could be achieved by an overnight miracle, we would be back in boom and bust territory.
Mr. Ken Livingstone: Will the right hon. Gentleman give way?
Mr. Aitken: No, I will not give way.
Good management of the economy requires not only resolution from the Chancellor but some patience and resolution from our own supporters, particularly when we are only just past the halfway mark in the life of this Parliament. Sometimes, I think that the patience of politics is better understood by the electorate than by journalists and politicians who work in the fevered hothouse atmosphere of Westminster. My right hon. Friend the Prime Minister made a good point recently, when he highlighted the yawning gulf between the 1,000
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or so active politicians and their media camp followers and the rest of the 50 million or so who are our fellow countrymen.
Britain gives its judgments slowly and thoughtfully, and certainly on a different time scale from that of the shadow Chancellor, a man whose vision is limited to tomorrow's headlines or to tomorrow morning's "Today" programme soundbite. By contrast—it is well recognised by today's media—my right hon. and learned Friend the Chancellor, who is variously described as cool Clarke, cautious Clarke, calm Clarke and canny Clarke, has a much longer, more profound and more substantial agenda.
The Guardian, which is not always my favourite newspaper, got it right when it headlined yesterday's statement as a
"slow burner of a Budget".
The Budget will gradually thaw out the chill winds of personal economic anxiety in the country. Its warm measures on work incentives will encourage a fall in unemployment. Above all, the Budget will stoke the fire of our already successful national economic recovery. I commend it to the House.
5.56 pm
Mr. James Wallace: Slow burners can sometimes have the heat turned up on them later. Many of us suspect that that is what is proposed in the longer-term strategy to which the Chief Secretary to the Treasury referred. We have a Budget for the short term. The right hon. Gentleman said that the shadow Chancellor's horizons are tomorrow's newspapers, but, for the Chancellor and his team, the short term appears to be the interests of the Conservative party and the next general election.
The country needed a Budget for the longer term, to secure the long-term well-being of the economy and the growth that can last well beyond the next general election. We needed a Budget for investment in jobs and industry and for investment in our infrastructure, and in particular in the talents and skills of our people. Instead, we have a missed opportunity.
Twenty-four hours on, we have an opportunity to consider some of the fine print of the Budget and some of the accompanying departmental press statements. What dismal reading they make. Perhaps the House will recall that, yesterday, the Chancellor highlighted education as one of the priority spending sectors for the Government, with a budgeted increase of 1 per cent. in real terms next year. One then reads the press statement from the Department for Education, and, when one looks beyond next year, one finds a control total budget which, in real terms, is 1 per cent. less in 1997–98 than it is this year.
The Chancellor highlighted the Home Office budget—it has been earmarked for growth—but the true nature of the Government's approach to unacceptable crime levels can be found in the Home Office press release. 'The budgeted sum, we are told by the Secretary of State for the Home Department,
"is fully sufficient to enable the present numbers of officers to be maintained across the country if chief officers … choose to do so."
The significant word is "maintained". When chief constables have requested additional police officers, they have been told that, by squeezing other parts of their budget, they might just have enough to keep the numbers that they already have.

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While the hon. Member for Taunton (Mr. Nicholson) seemed to think that it was a matter for congratulations that hill livestock compensatory allowances would not be cut in the agriculture budget, he must know that maintaining them at present levels will mean a real cut in allowances. The Government, who used rising farm incomes as an excuse to cut HLCAs in previous years, now refuse to follow the logic of their argument and increase HLCAs when farm incomes are falling. Our rural communities will have to tighten their belts even more and sustain farming and related service enterprises with reduced support in real terms.
This will impact particularly hard on the more remote communities where essential car use and haulage costs will be penalised by the imposition of higher duty on petrol and diesel, without any relief from the compensatory measures which were proposed by my right hon. and hon. Friends. In my constituency a difficult position is exacerbated by the Government's withdrawal of freight subsidies and the reduction of subsidies in the export of livestock.
The Chancellor said that more would be done in the area of health, and made the somewhat platitudinous statement that the Government would deliver even better standards of patient care. I doubt whether that will bring much comfort to the long-term frail elderly or young people with acute disabilities who are told that there is no longer any room for them in the health service and that they must place themselves in the hands of local authorities whose cash runs out halfway through the year.
With the number of health service administration staff in Scotland rising by 45 per cent. in the five years from 1988 to 1993, what guarantee do we have that additional funding will not be taken up by administrative costs?
Mr. Butterfill: On the point about cash running out, will the hon. Gentleman confirm that the Isle of Wight council, which is run by the Liberal Democrats, had a substantial increase in resources and still ran out of money?
Mr. Wallace: It ran out of money while trying to deliver a service. It was given that responsibility and it may have had an increase in resources, but quite clearly the increase was not sufficient. It has always been acknowledged that the provision of proper packages of care for individuals who are now the responsibility of local authorities is expensive. If an authority runs out of money halfway through the year, it has clearly received insufficient funding.
The press release from the Overseas Development Administration proudly proclaims that Britain's aid programme is to be increased. But when one analyses the small print, one finds that there will be a £116 million reduction in real terms between this year's estimated figure and the planned expenditure for 1997–98. At a time when the Chancellor boasts that we have easily the fastest growth rate of any of the major European economies, as a country we seem incapable of sharing any of the fruits of that increase with those who struggle to survive in the developing world.
Closer to home, the Scottish Office budget is set to fall by £590 million in real terms over the next three years. The Secretary of State for Scotland has made it clear that
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local authorities will bear the large burden of those cuts. Local authorities have been obliged to cut back more and more over the past 18 years. In addition to trying to contain tight budgets even more, they are being asked in the next year or two to deal with a reorganisation of local government which no one wants. They will have to undertake even more community care, and they face ever-increasing repair and maintenance bills for schools.
There is no fat left to cut away and our councils are now being asked to hack away at the backbone of local public services. That is hardly an auspicious start to the promised era of democracy, with new councils coming into being in 1996. The elections of these unitary authorities will take place next year. They may well serve a useful purpose, because the timing will not be lost on the people of Scotland, coming five days after the 17.5 per cent. VAT on domestic fuel is to take effect.
The House, through the amendments on the Order Paper, will have the opportunity next week to make the Chancellor rethink the increase in VAT on domestic fuel. My right hon. and hon. Friends will certainly take the opportunity to make him think again.
Mr. Gallie: I thank the hon. Gentleman for giving way. How can he ask the Chancellor to step back from the increase in VAT when he has demanded increases in public expenditure in many areas? It does not add up.
Mr. Wallace: I thought that the hon. Member for Ayr wanted the Chancellor to back away from the VAT increase. The Budget measure which extended the band of the 20 per cent. income tax rate goes a long way to achieving the same result as increasing VAT to 17.5 per cent. The Chancellor should rethink his decision, and I hope that the hon. Gentleman will have the courage of his convictions and vote for the Chancellor to think again when he has the opportunity to do so next week. If the House does not vote that way, the people of Scotland have an opportunity to give their verdict on the VAT increase on 6 April next year.
Mr. David Nicholson: I am grateful to the hon. Gentleman for giving way, as he mentioned me early in his speech. His long list of points amounts to the Liberal party trying to have it both ways as usual, but I want to probe him about petrol taxation. Is the Liberal party opposed to an increase in petrol taxation? I know that it is in favour of the expansion of public transport infrastructure, and that may be desirable, but in most rural and semi-rural areas people depend on cars to get around.
Mr. Wallace: I am grateful to the hon. Gentleman for giving me the opportunity to comment on that. The Government have increased petrol duty without any compensation to people in rural areas who, as the hon. Gentleman says quite rightly, need to use cars and to whom cars are not a luxury.
I draw the hon. Gentleman's attention to the proposals in our alternative budget. We said that any increase in petrol duty should be accompanied by a decrease—not the increase that we have seen—in vehicle excise duty, with the biggest decreases going to those vehicles which are the most fuel efficient. A number of examples have shown that that would benefit motorists in rural areas. We acknowledge that it is a problem. We have faced up to it and we are trying to deal with it.

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The Conservative party used scare tactics in most rural constituencies in the run-up to the last general election by speculating as to the amount that the Liberal Democrats would increase tax on fuel. The Government have put up the tax on fuel even more than they suggested in their propaganda against us, and they have not introduced any of the compensatory measures which we have always said would be part and parcel of any increase.
The measures that the Government have introduced to compensate for the VAT on fuel are inadequate because they are calculated to help those who will have an average increase in their fuel bills. However, because it is an average, inevitably for some the burden will be above average.
That will be the case not just in Scotland—although the 1993 family expenditure survey showed that, while average weekly household expenditure on fuel, light and power was 4.8 per cent. of a family's total budget, in Scotland the figure was 5.1 per cent—but in areas such as the north-east and west midlands, Wales and Northern Ireland where the percentage was higher still. People in these areas with above-average fuel bills will continue to suffer.
The Government have asked us to accept that the most vulnerable members of our community will have to suffer because of the Government's past economic mismanagement which has led them to impose such measures. The Chief Secretary could not say what will happen in the future. If there is an opportunity to cut taxation, he would not say whether he would reduce this particularly punitive tax or whether he would take the opportunity to give a handout to those who are better off already.
The Government's short-termism is demonstrated by its cutting expenditure and obtaining revenue from measures such as the VAT on domestic fuel. They want to tax today and hand back tomorrow in the run-up to the general election. It is short-termism which makes the Budget such a wasted opportunity.
It is time that we encouraged industry to invest in the future. I accept that the Budget contains a range of measures that will particularly benefit small businesses. That is very welcome. I welcome in particular the increase in the VAT threshold. A significant measure which will be of most immediate help is the transitional rating relief which will ease the pain of revaluation for many small businesses.
When I wrote to the Secretary of State for Scotland in the summer warning him of the potential damage that the revaluation could do to small businesses, he suggested that the concerns had been overstated. However, I am pleased to see that in Scotland, as in the rest of the United Kingdom, proper attention has been given to the issue and that significant funds have been made available to cushion the impact of revaluation.
In the longer term, investment in our country's future will require both public and private investment. At a time when rail and urban networks are ill equipped to deal with a modern industrial economy, the Government are cutting their capital expenditure even further. We have heard talk in successive Budgets about public and private partnerships, which in general my right hon. and hon. Friends support. The lack of a high-speed link to the channel tunnel is not exactly a glowing testimony to the success of those projects to date.
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I often think that the contrast between the link between Calais and Paris and the link between Folkestone and London is a fitting example of the Government's much-vaunted policy of a two-speed Europe. Liberal Democrats believe that there is an important place for joint public-private ventures, but the Government should recognise the importance of the public sector priming the pumps.
Considering what the Chancellor said yesterday, perhaps my most doom-laden comment must be about the obvious cuts in the training budget. We are not exactly in the position that there is so much training in Britain or that we have so few people unemployed that we can afford to cut our training budget. That is particularly so when we compare what we have achieved, or not achieved, in training with what our main competitors have achieved.
The inadequacy of our training provision and achievement was well documented in the report of the Confederation of British Industry Scottish manufacturing group entitled, "Manufacturing Matters", which was published earlier this year. It pointed up the absence of any training strategy for Scotland and drew attention to the report of the Policy Studies Institute, which showed that almost half of all employees had not received any training in the previous three years.
The CBI report highlighted the low rate by employers of the promotion of vocational qualifications. Too often, employers see training as a cost rather than an investment. Yet if we are to be a competitive economy and if employees are to remain employable throughout their working life in an ever-changing global economy, training and retraining will have to become part and parcel of tomorrow's work patterns. That will require a change in attitude and culture. It is one that the Government should promote rather than stifle.
It will cost money to increase the training budget and provide incentives for training, but what is the cost today of failure in the past to invest in training? Already, at this stage of the recovery, 2.5 million people are unemployed yet industry is hitting skills shortages. The managing director of an electronics firm which I visited earlier this month in central Scotland, which has relatively high unemployment, explained to me his difficulties in finding employees who had the necessary skills for his company's work. He pointed out that the company's sister company in France received support to allow nine weeks full-time training of new employees. That is the contrast between the attitudes on different sides of the channel. That is the measure of an approach to training which is qualitatively different to ours.
Investment in training and investment in research and development are long-term projects which have a long-term payback so we find that they are off the Government's agenda. The Government have their horizon at the ballot box. Tax levels with cuts in expenditure are to be used to provide fuel for the all-too-familiar pre-election tax bribes. We should be using the opportunities and revenues created by our recovery to invest now for the future. We are paying today for yesterday's failure to invest. We shall pay tomorrow for today's failure to invest.
6.13 pm
Mr. Tim Sainsbury: It is perhaps appropriate that I resume my contributions to our affairs from the

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Back Benches, after a short interval of 111/2 years, in an economics debate, after spending some time at the Department of Trade and Industry.
Following the hon. Member for Orkney and Shetland (Mr. Wallace) takes us from the northern extremities of our country to the south coast. The challenges that our economy faces are the same whether we are in Orkney and Shetland or Hove. Those challenges are not met by vague suggestions of more expenditure here or there or less tax here or there, which are characteristic of the speeches of not only the hon. Gentleman but of Liberal Democrat Members in general. If I may say so, my speech will move from the woolly world to the real world.
My right hon. Friend the Chief Secretary to the Treasury gave us perhaps too short a taste of his ability for knockabout stuff, but I particularly welcomed his reference to the need to enhance our competitiveness and to the long-term approach to the problems and challenges in our economy that the Budget represents, and which he reflected fully in his speech.
I should be overlooking an opportunity if I did not make some reference to the speech by the hon. Member for Dunfermline, East (Mr. Brown). When he was shadow spokesman on trade and industry, I spent some time sitting opposite him on the Front Bench. I listened carefully, as I did today, to many of his speeches. That was when I developed my admiration for his fluent style and his skill in using—and, not infrequently, abusing—statistics. Most of all, I constantly developed an amazement at the inaccuracy of his predictions. Every time that he spoke from the Opposition Dispatch Box he predicted doom, gloom and disaster for our economy.
As my right hon. Friend the Chief Secretary has already pointed out, every time—or, to be fair to the hon. Gentleman, almost every time—he was entirely wrong. He became a master at finding a cloud for every silver lining. It appears that a change of portfolio has not changed that part of his skill. His speech today, rather like the speech by the right hon. Member for Sedgefield (Mr. Blair) yesterday, put me in mind of an article in yesterday's Financial Times. The article referred to the skills of French diplomats from the Quai d'Orsay. The article said that they were particularly good
"at striking rhetorical poses that bear little relation to reality".
That is an admirable summary of the speeches of both the hon. Member for Dunfermline, East and the right hon. Member for Sedgefield.
The hon. Member for Dunfermline, East went a little further. The article also attributed to French diplomats the skill of
"holding two almost irreconcilable positions at once."
We heard the hon. Member for Dunfermline, East—it is a characteristic not only of his party but of the Liberal Democrats—at the same time demand more spending practically anywhere one cared to ask and demand lower taxes.
I sometimes wonder whether Opposition Members recognise any connection between taxes and spending. I have to tell them that the Government do. I welcome what my right hon. and learned Friend the Chancellor of the Exchequer was able to announce about the public sector
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borrowing requirement. The importance of maintaining and building on improvements in the public finance is paramount if we are to have a successful economy.
That reminds me that this is not only my first speech from the Back Benches after a short gap but almost exactly the 21st anniversary of my maiden speech, which was also in a debate on the economy. It was in fact what one could call a Budget or mini-Budget debate—the sort of debate to which we had become too accustomed under Governments of both parties, but never more often than during Lord Healey's period as Chancellor. If he did not introduce two or three Budgets a year, he was slipping. We had many of those extra debates. We unhappily became familiar with them in the 1970s.
It is generally accepted everywhere except among Opposition Members that our economy did badly compared with our main industrial competitors in the G7 during the 1960s and 1970s. We did much better in the 1980s.
Ms Hilary Armstrong indicated dissent.
Mr. Sainsbury: In view of the hon. Lady's sedentary comment, it will perhaps be instructive if I remind the House of some of the background facts and figures for 1973.
In the three years preceding the economic debate in which I first participated, the increase in the retail prices index had been 7.6 per cent. When we came to 1979, after a period of unhappy Labour government in the three years before 1979, the average increase in the RPI had been 18.8 per cent. In the three years preceding this year, the average increase was 3.7 per cent. My hon. Friends on the Treasury Bench think, as I do, that that is too high, but today it is 2.2 per cent.
Economic growth was very strong in 1973, but negative—the output of the economy declined—in four of the following nine years. The growth rate recovered to something approaching our present rate only in 1983.
I hope that the hon. Member for Durham, North-West (Ms Armstrong) accepts that productivity is a very important factor if we are going to generate wealth and jobs. In 1973, productivity in manufacturing, to which the Opposition rightly attach great importance, was only 54 per cent. of the level that we have achieved. Five years later—after five years of Labour misgovernment—it had hardly improved and had crept up to only 56 per cent. of the present level. During the 1970s, it hardly grew, but it grew strongly throughout the 1980s and I am happy to be able to say that it is still growing strongly now.
The growth in productivity contributed to unemployment. As we all know, unemployment is a problem that is common throughout the developed world, and it is much worse in most European countries. I am glad that my right hon. and learned Friend the Chancellor of the Exchequer sensibly tackled it in his Budget in two ways: first, through his detailed proposals to encourage investment in business, especially the small and medium-sized enterprises that are so important in our economy. They make an particularly vital contribution these days as so many of the larger firms assemble components and sub-assemblies produced by smaller companies. If the latter are not efficient and productive, the efficiency and productivity of the larger companies are bound to be damaged. They also contribute as

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innovators and companies that can respond flexibly and fast to changes in their market. Most of all, they contribute as job creators.
Another comparison with 21 years ago shows that small and medium-sized enterprises employed only 27 per cent. of the work force in manufacturing at that time. Five years later, under Labour, it had crept up to only 30 per cent., whereas it is now about 40 per cent. Those small businesses will greatly welcome the further help given to them in the Budget.
Mr. Wallace: Is not one explanation for that increase the fact that many big businesses have been destroyed and, therefore, from sheer mathematical analysis we may deduce that more people are employed in small and medium-sized enterprises? As the right hon. Gentleman is so fond of comparisons, is he proud of the comparison that the World Economic Forum made with other countries? It found that in Britain fewer young people between the ages of 17 and 22 were in full-time education and training than in almost every other industrialised country and we came 37th out of 41 for total gross domestic investment. Is he proud of that comparison?
Mr. Sainsbury: I am very proud of the fact that, when a Conservative Government came to power in 1979, one in eight of our young people went on to higher and further education—a lower proportion than had done so in 1973—and that that it is now one in three. I am sure that the hon. Gentleman is well aware of the major steps that we have taken to improve vocational training, and I am also proud of those.
The second important way in which the Budget contributes to solving unemployment is by maintaining macro-economic stability, low inflation and low interest rates. Unless we maintain that stability, we cannot hope to achieve the investment that we all want and that is necessary to maintain and enhance the competitiveness of our economy and to create jobs. I know from my business experience that investment decisions, especially those involving a long time scale to fruition, are difficult to make and require difficult judgments. Invariably, they are taken in the absence of all the information that the investor would like. If they have to be taken against a background of macro-economic instability—with high and varying rates of inflation and interest rates jumping all over the place from 6 per cent. to 20 per cent. or whatever—it will make those decisions much more difficult and be much more damaging to the most important investment decisions.
We must maintain that macro-economic stability and I think that my right hon. Friend the Financial Secretary would agree that that was one of the ingredients that was missing from the otherwise successful record of the 1980s. It was the one area in which we did not achieve the necessary improvement on the dismal record of the 1970s. We now have that stability.
Ms Armstrong: I did not want to intervene before as I hope to have my opportunity to speak later, but the hon. Gentleman should at least try to be consistent when quoting the statistics. Is he proud of the fact that investment as a proportion of our gross domestic product is nearly 3 per cent. lower than it was in 1979? Should he not move on from some of the other statistics that he quoted and recognise that, far from everything being as
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good as he is trying to paint it, investment is lower than it was in that awful year of 1979 that he keeps talking about?
Mr. Sainsbury: The hon. Lady is worried not so much about my consistency as about what she might consider to be my selectiveness when quoting the statistics, but the one to which she referred must be considered in the light of two factors. One factor that the Opposition have consistently ignored is that what matters about investment is its quality and not merely the quantity. When the private sector and private enterprises choose investment, we can be sure that it is of better quality.
Mr. Michael Connarty rose—
Mr. Sainsbury: I shall not give way. I have not finished responding to the hon. Member for Durham, North-West.
The second factor of statistical importance is that investment must be considered in relation to the proportion of manufacturing industry in the economy and, as in all advanced economies, that has been declining. I refer the hon. Lady to an answer that I received earlier this week, however, which pointed out that, merely by transferring certain functions of industry to sub-contracted firms—whether in transport, catering, cleaning, laundry or anything else—the activities are now carried out by companies that are classified among the service industries, which has made a difference of about 750,000 in the number of people employed in manufacturing.
Mr. Connarty rose—
Mr. Sainsbury: If the hon. Gentleman will excuse me, my right hon. Friend the Chief Secretary to the Treasury has already reminded us that we should try to develop our arguments instead of constantly giving way to interventions, especially when other hon. Members are waiting to speak.
We now have the stability that I said was so important to investment in our economy and I congratulate all my hon. and right hon. Friends on the Treasury Bench on that achievement. I congratulate them even more on their determination to maintain that stability. Added to the other reforms, gains and changes that we have made since 1979—industrial relations laws, personal and corporate taxation, the advantages of privatisation, progress with deregulation, market opening and especially the single market and our success in attracting into this country the lion's share of inward investment from Japan and America—they have given us a better opportunity of achieving steady and sustainable growth than we have had for decades.
I strongly support my right hon. Friend the Chief Secretary to the Treasury in his determination to avoid the illusory boom that leads inevitably to a painful bust. I support his commitment to the virtuous circle of improved competitiveness, rising productivity, economic growth, low inflation and more jobs. This Budget will help us to stick to that virtuous path.
6.29 pm
Mr. Robert Ainsworth: The speech of the Chief Secretary, who opened the debate for the Government, gave us a clear example of how out of touch are the Government. His rather weak appeals to us not to talk about VAT on fuel because it was in last year's

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Budget suggested that he is not aware of what people up and down the country are talking about. They are not talking about the changes that have been made to certain aspects of public finances in this year's Budget. They are talking about the cruel and unnecessary imposition of the second half of VAT on fuel, which the Chancellor decided to go ahead with. That is what I want to speak about, as it is what my constituents are speaking, and worrying, about.
When talking about a potential rebellion by Government Members, the Chief Secretary said that he did not consider the imposition of VAT on fuel to be an issue of great consequence. I must tell him that for many people it is an issue of great consequence. The figures for 1993 show that 141 people died directly from hypothermia, and that 13,457 people died of pneumonia. Help the Aged estimates that 30,000 deaths a year are related to heating and fuel poverty.
It is a serious issue, but it does not have to be so. Such figures are not repeated in other countries. A 1991 survey shows that the average number of deaths in January rises by 16 per cent. above the annual average in Scotland and by 19 per cent. in England and Wales. The comparative figures for Sweden and Germany are 7 and 4 per cent. respectively. Despite the crueller winter climates in those countries, their increase in winter deaths due to fuel-related poverty is smaller.
There is very little doubt about that, and yet the Chancellor of the Exchequer decided to go ahead and impose the second increase of VAT on fuel. Help the Aged estimates that, as a direct result, the increase will rob people of 19 days of heating. That will still apply after the compensation package, which has not improved at all on what was suggested last year.
The only fig leaf of cover which the Government have for the imposition is the £10 million increase in the allocation for the home energy efficiency scheme. I have to say that that is a drop in the ocean. We started off with a home energy insulation scheme costing about £35 million in the Budget. That was increased to £70 million, and now to £80 million. It is estimated that it will take more than 25 years to get around to all the homes where energy efficiency work is needed. Despite the numbers of people who are suffering the consequences of the astronomical rises in their fuel bills, it will be 25 years before the Government's scheme will give them any relief.
I resent the hype and the deliberate misinformation that is put about by the Government about the consequence of the package of compensation. Those who will receive it—those who are suffering from the imposition of the first half of VAT on fuel—know that the package is totally and utterly inadequate. There are poor families and people who will not receive any compensation and who will face the consequences of the imposition of VAT who think that, in some way, pensioners are being protected. However, pensioners are being given totally inadequate protection, and families none at all.
So when the Chief Secretary quotes the right hon. Member for Old Bexley and Sidcup (Sir E. Heath), he ought to remember that the most telling thing that the right hon. Member said last week was that there was far too much fear in the country and it was about time that the Government started to tackle that fear. He was talking
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about employment issues, but I suggest to Government Members that there is a lot of fear about the appalling imposition of VAT on fuel, and they ought to be prepared to do something about that. We can have all of the cliches for the Chancellor, such as "Cool" Clarke, but I suggest that we ought to be talking about "Cruel" Clarke.
The Budget raises transport and environment issues. I heard the Secretary of State for the Environment, supposedly quoting Friends of the Earth, saying that the Chancellor was the greenest Chancellor we have ever had. I do not know whether Friends of the Earth said that—if it did, it, not we, must live with that.
The imposition of a landfill tax instead of a landfill levy—where the money raised from its imposition on landfill sites would be used to treat contaminants and enhance the environment—is a sign that the Government are interested only in taking revenue from those situations, and that they are not really interested in that aspect of the environment.
I shall speak now on what are probably the more important issues of the transport-related decisions that have been taken. I have been brought to a position where I now agree that there is no justification, as I understand it, for a differential in taxation on diesel and on unleaded fuel. I accept that that difference should be levelled in the way in which the Chancellor proposes, but I must ask why he has done nothing about super unleaded fuel. There is absolutely no justification for giving a tax advantage to a type of fuel that has been proven to contain higher levels of volatile organic compounds—particularly benzine—does nothing for the environment and is by and large used in cars without catalytic converters. Yet we continue to give tax incentives for people to use super-unleaded fuel. There is no justification for that, and the Chancellor should have taken the opportunity do something about it in the Budget.
Overall, the Chancellor's transport decisions cannot be considered to be green in any way. Increases in petrol taxes have been combined with huge cuts in the road programme, but with even bigger cuts in railway expenditure, which has been slashed by £521 million. We all know that we shall see the attacks on local government expenditure which, combined with deregulation, will make absolutely sure that we cannot develop and maintain a public transport system that provides people with alternatives to their cars.
Clearly, it is not an environmentally friendly strategy to have motorways jammed with cars and lorries which do not necessarily have to be on them. That is not good for the environment or for jobs. We need a decent infrastructure, we need investment in our transport infrastructure and, yes, we need to be concerned about the environment when making those investments. The Chancellor's proposals have done nothing about that at all.
The Chancellor called it a Budget for jobs. As an hon. Member representing a constituency that contains areas of some deprivation, I welcome the right hon. and learned Gentleman's attempts to get the long-term unemployed off the register, but they are hardly adequate when we are talking about people who have been unemployed for two years. By then, it is already considerably more difficult to get those people back into work than it needs to be. Why have the Government not done something about those

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who have been unemployed for one year? Why have they not done something about the long-term unemployed now, instead of in April 1996?
The Government may talk about getting the long-term unemployed back into the labour market, but why have they slashed the training programme? They set up the training and enterprise councils, the TECs, but even before they started to operate properly the Government cut their programmes and their budgets to a shadow of what they had been promised. The Government are now taking another £115 million off the budgets of the TECs and £500 million from the Department of Employment's budget in total.
Hardly anything in what the Government propose is designed to do anything serious to overcome the problems of unemployment. However, the Government's attempt to ensure that the long-term unemployed are as fairly treated by employers as those who are unemployed for a short time is welcome as far as it goes. I am slightly concerned, however, because a few years ago, before the flexibility and deregulation in the employment market that the Government have introduced, employees were in a better position to ensure that they could not be deliberately put out of work just to enable employers to pick up the incentives, such as those now offered to get the long-term unemployed into jobs. I fear that the employment practices that the Government have encouraged may result in the worst employers trying to do exactly that to their existing workers.
The Government have identified the increasing concern about unemployment and they want to pretend to do something about that. We have not heard much about the long-term problems in the economy. We are, supposedly, at that point in the recovery when things should start to get better. However, as recently as 17 November, the Engineering Employers Federation issued a document which analysed the employment prospects in the engineering sector. It concluded:
"Employment in the sector … After falling 20 per cent. over the last four years … will fall by 18,000"—
a further 18,000 jobs—
"in the next 12 months to reach 1.66 million by the second half of 1995."
Even though we are in a recovery, the engineering industry has lost 20 per cent. of its existing jobs and employment in that industry is continuing to fall. I suggest that any reasonable person would accept that, by the middle of 1995, when we reach the end of the recovery, such as it is, we shall then have to face whatever downturn may hit the economy with an engineering industry offering far fewer jobs than it does even now.
Mr. Gallie: What levels of investment has the engineering industry received during that time? Can the hon. Gentleman estimate the proportion of the labour force that has been lost as a direct result of investment in new technology?
Mr. Ainsworth: Some investment has been made in the engineering industry but jobs have not been created. I do not know how Conservative Members think that the country can be run on the basis of a policy, pursued for such a long time, that has deliberately created and maintained a pool of unemployed people.
Different types of employers operate within the engineering industry. Some employers still believe that they should run their companies using exploitation and
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divisive employment practices, but the most successful companies are run by those employers who have come to recognise that the only way to be successful is by getting everyone working together in the same direction. They recognise that everyone should be rewarded appropriately. That is what makes those companies successful. Why do the Government not recognise that our country would be successful if they brought everyone on board and ensured that we all work in the same direction? Instead, the Government have deliberately pursued an utterly unfair taxation policy and other divisive policies that have created and maintained unemployment.
The basic issue is that our manufacturing base is too small, because such a massive proportion of it was lost in the early 1980s. The recovery will be choked off because of that fundamental lack unless and until the Government invest in our future. Small businesses should be given capital allowances so that they can offer new jobs, but the Chancellor has deliberately refused to do that.
I should like some answers about what has happened to the single regeneration budget, but I would not be surprised if I did not get any, because, despite all my studies, the bundle of information that we received on the Budget is absolutely beyond me. Tucked in that bundle was a press release from the Department of the Environment claiming a £800 million increase in the single regeneration budget. It claimed that that was a huge increase in that fund, but the figures contained in the Budget tables reveal a cut in the figures that were supplied to me in answer to a parliamentary written question in April. I do not know how the £800 million has been created. In some way, every penny of new spending on the single regeneration budget, not just for one year but for each year in a given four years, plus a little bit more, has been lumped together to round the figure up to £800 million.
The Government are pretending that there has been a big increase in regeneration money, but they have cut the budget. The Government originally created that budget from a number of budget heads of a number of Departments and, in doing so, they managed to inflict a massive cut in the available funds. Now the Budget figures reveal yet another cut in the money available for that single regeneration budget.
It is clear from the Budget that the Government are continuing to implement the huge tax increases announced last year. They are treading water while the British people continue to pay higher than necessary taxes just so that those taxes can be cut, cynically, before the next election. They have failed to address the appalling unfairness of the tax system. They have failed to address the long-term need to invest in our future. The Government have divided our country and they are divided themselves. As we know, a house divided always falls, so let us hope that the Government fall before they do irreparable damage to our economy and our society.
6.47 pm
Sir Andrew Bowden: The hon. Member for Coventry, North-East (Mr. Ainsworth) made great play of fuel costs in relation to deaths. Perhaps he has forgotten, or was lucky enough to be too young to remember, the days of the previous Labour Government when electricity prices went up by 2 per cent. a month, month after month. The hon. Gentleman is therefore on dangerous ground.

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I welcome the great bulk of the proposals in the Chancellor's Budget. I am particularly glad about the active steps that have been taken to help the long-term unemployed and I know that they are also welcomed by people throughout the country. Before I discuss pensioners and some of the problems that they face, I must mention tax on alcohol.
I feel that my right hon. Friend has not been quite as imaginative as he might have been. Unfair competition is being created as a result of the competition in Europe, and the ease with which many thousands of people can travel to Europe and obtain large quantities of cheap drink. Jobs are being lost in my constituency in Brighton, and throughout the country, as a result of the massive quantities of alcoholic refreshment that enter Britain month after month.
I know that the Chancellor will not increase the duty on beer and wine. I would have preferred a positive cut, because there continues to be a massive gap between the prices of those drinks in Britain and the prices a few miles across the water, or under the channel tunnel. That does not provide fair competition for the industry.
On pensioner issues, the Budget contains good news and some not so good news. I welcome the approach by the Chancellor to clamp down on the misuse of housing benefit, which happens in far too many places, but I urge that that be done carefully. We must not create a position whereby older people who are new claimants of housing benefit may be penalised for living in high-cost housing when they have nowhere else to go, or for living in districts where they may have spent most of their lives, with their families and friends nearby, when it would be difficult and unwise for them to move far from the district where they have their roots. We need to be flexible and careful in framing those regulations.
I warmly welcome the Chancellor's announcement of an increase in tax allowances for pensioners. Indeed, I wrote to him, with my fellow officers of the all-party parliamentary group for pensioners, on 7 October, when we used the following words:
"we feel strongly that tax allowances should not be frozen for a third year. Some pensioners have actually been brought into taxation by the freezing of allowances even when their income has only kept pace with inflation. A continued freeze on allowances will affect the least well off taxpayers, many of whom are pensioners."
Therefore, that increase is very much welcomed by retired people.
To give two examples, a pensioner aged between 65 and 74, with an income of only £5,000 a year, will, in the next 12 months, be better off to the extent of £86 less tax. If that pensioner has an income of £8,000, he or she will be better off to the tune of £118. That was a splendid move by the Chancellor, which I am sure that the whole House will welcome.
The cold weather payments are the most generous and the best that we have ever had. The increase to £8.50 per week brings those payments near to meeting the average fuel bill of the average single pensioner. It will mean that, if that pensioner is in the financial category of entitlement to cold weather payments, he will be able to spend, in a very cold week, nearly double the amount that he would otherwise.
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Another of the important reforms that the Government have already implemented is that no longer will pensioners who are entitled to a cold weather payment have to apply for it—it will be paid automatically. In the past, many pensioners who were entitled to the payment did not, for one reason or another, apply for it, and did not receive it.
Mr. Connarty: I know of the hon. Gentleman's work on behalf of pensioners, but does it not strike him as odd that the payment is made only after the event, and that the Government have rejected the concept of a cold weather credit so that people can have the money in advance? The problem is that often they cannot afford to heat their homes when the cold snap comes.
Sir Andrew Bowden: If the hon. Gentleman thinks through what he said, he will realise that it would be difficult to pay cold weather payments in advance because one would not know when the cold weather was coming. For example, we have had a very mild November this year. The object of cold weather payments is to give additional help in exceptionally low temperatures.
As the payment will be paid automatically, it will quickly come through the social security system. In the past, it did not, because the person concerned had to fill in forms to apply for the payment and the application had to be considered and checked. Now all that has gone, and the arrangement works much more smoothly than it has ever done before.
Mr. Sainsbury: I am sure that my hon. Friend shares my welcome for the generous improvement to the home energy efficiency scheme, which I know has helped many older people in his constituency, as in mine—they are close together. We need to do all that we can to give more publicity to that excellent scheme, which reduces costs to pensioners at all times of the year and in all weather conditions.
Sir Andrew Bowden: I endorse what my right hon. Friend has said. That help must be concentrated on people who do not have the financial resources to protect and insulate their homes properly. The great bulk of the nation's householders must invest in ensuring that their homes are heat-efficient and have double glazing and proper insulation in the roofs or elsewhere.
Let me return to cold weather payments. I continue to be worried about the group of pensioners who have a small income that slightly exceeds the income support level. That group is not eligible for cold weather payments. I urge the Government and my Front Bench colleagues to consider carefully whether they can find a way to help that group next year, because many of our pensioners whose incomes marginally exceed the income support level are worse off than pensioners who are in receipt of income support. That is not just.
I must now discuss a subject that leads me, I fear, to criticise Government action somewhat—value added tax on fuel. When the tax was proposed and announced by my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont), I did not oppose VAT on fuel in principle, although no one likes new taxes. However, I believed that, if we were to introduce that tax, it was essential that significant help was given to pensioners and people on low incomes.

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I am pleased to have played what I believe was a significant part in the campaign to persuade the Government to help, not simply pensioners in receipt of income support or other state benefits, but all pensioners. That is not because I believe, broadly speaking, in universal benefits—I do not. About 3 million pensioners pay tax, some even paying tax at the rate of 40 per cent., but I could envisage no way in which it would be possible to help the 3 million pensioners who have only a comparatively small amount—£5, £10 or £15 a week—more than income support levels, without giving that help on VAT on fuel bills to all pensioners.
I am delighted that the Government accepted that suggestion, and took action to implement it. That is the first time ever that a Government have increased the basic pension to help towards the costs of a specific tax that they have brought into operation.
The House will recall that, this April, the specific increase was 50p a week for single pensioners and 70p a week for married couples, on top of the basic pension and in addition to the increase for inflation in that basic pension in the previous year. That was clearly a separate increase for all pensioners. It was widely believed, certainly by me and I think by many hon. Members, that next April that would happen again, and there would be an additional 50p and 70p for single and married pensioners, plus the increase for inflation.
In last year's social security uprating statement my right hon. Friend the Secretary of State for Social Security said:
"I was also determined to help those who have worked, saved and earned modest pensions, and who normally get no extra help. So, from next April, on top of uprating for inflation, all pensions will be increased by 50p a week for single pensioners and 70p a week for couples. The following year, extra help for VAT on fuel will be £1 a week for single pensioners and £1.40 for couples."—[Official Report, 1 December 1993; Vol. 233, c. 1039.]
From that statement I concluded that that increase would be implemented in the same way as the additional 50p and 70p for this April. In his broadcast last night, my right hon. and learned Friend the Chancellor said:
"By next April, a single pensioner will have an extra £52 a year, and a couple an extra £73 a year, put into everybody's pension, on top of the normal pension increase."
I am extremely disappointed at the way in which the increase will be applied. It will be applied on the basis that in the year September to September, inflation went up by 2.2 per cent. As the House knows, that automatically means that the following April the basic pension will increase by 2.2 per cent. But within that 2.2 per cent., 0.4 per cent. was inflation caused by VAT on fuel. The Government now say that that means that for the single pensioner, that is worth approximately 25p a week, and that they will reduce the 50p increase on the overall basic pension to only 25p and that there will be a proportionate decrease for married couples. I deeply regret that decision, which will be extremely difficult to explain to our 10.5 million pensioners.
Because of the way that the Government intend to apply this increase, I am afraid that it is true that the average fuel bill for a pensioner will leave that person with a net loss from April on of 56p a week. That is not a fair deal for millions of pensioners, and especially for those who have only a small amount above the level of income support. I ask the Chancellor and the Government to think again about that.
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I am not asking for a massive sum. I want to support the Government on the second wave of VAT on fuel, not because I like it, but because we have to deal with the PSBR, and the money has to come from somewhere. The vast majority of our people can pay VAT on fuel without hardship, but many pensioners cannot. The Government should implement what they proposed last April—a separate 50p for the single pensioner and 70p for the married couple. That would cost a maximum of £130 million, but there would be a considerable tax clawback from the 3 million pensioners who pay tax.
The House must never forget that today's pensioners are from the second world war generation. They made enormous sacrifices and suffered great hardship during that war. Some pensioners are still with us from the first world war. The great majority of those people had little chance to save, and by today's standards had relatively low incomes. They deserve, and should receive, a more generous slice of the national cake.
7.5 pm
Mr. Ken Livingstone: The Government owe a great debt to their former Chancellor, the right hon. Member for Kingston upon Thames (Mr. Lamont). The press have described the Budget as boring, and most press comment has been about jam tomorrow and about how the Chancellor has not taken any risks. But if the former Chancellor had not announced in advance two years' worth of tax increases, and those increases, which people will begin to pay at the start of this financial year, had been announced yesterday, the country would be in uproar.
The reduction of mortgage interest relief alone would have dominated our debate and Conservative Members, as much as Opposition Members, would have been expressing doubts about that and worrying about its impact on middle-class household incomes. If out of the blue yesterday the Chancellor had announced that he was more than doubling VAT on fuel, there would also have been uproar. It might have been like the time when Nigel Lawson announced the reduction of the top rate of tax to 40 per cent. On that occasion the uproar in the House was so bad that the sitting had to be adjourned until order was restored.
However, because measures have been trailed and debated for months, most people think that this was rather a dull Budget. I nodded off because the beginning of the Chancellor's statement was so mind-numbingly dull. At least Nigel Lawson gave a view of what was happening in the world economy and said what he thought would happen. Yesterday's Budget statement was largely a party political speech that was geared to domestic politics and looked no further than the next general election.
I was surprised at the absolute unanimity, even among newspapers that give blanket support to the Conservative party, that everything has been put off until next year's Budget. In that Budget the basic rate of tax will be reduced to 20 per cent. so that some time in the summer of 1996, at about the time of the intergovernmental conference on Europe, money will be feeding its way into the pockets of ordinary families and voters. That is when the Government will make their dash to try to get re-elected and will run a Europhobic campaign about how we do not want to be dominated by the Germans. It is clear that that is the strategy, and it is completely out of keeping with Britain's needs.

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Because of the way in which the Budget has been managed in public relations terms, its reception has been favourable, but the Budget is disastrous for the reconstruction of the economy. It is deeply flawed. I am used to people on the left delivering fairly savage critiques of the Government's economic policies, but I am surprised that there has not been more comment about the recent analysis by The Economist.
It is not news when members of the Labour party, Tribune or The New Statesman slag off the Government for economic incompetence, or warn that disaster is coming. But when The Economist—which, year by year, has supported the Government and their economic policies totally, giving the most widespread and consistent support for all their economic measures, such as financial deregulation and privatisation, being almost a generator of many of the ideas that have been taken up by the Conservative party in government—published its predictions for the British economy for next year in a book that is now on sale on the bookstands, I assumed that it would back the Government and say that they were broadly right, but I was amazed because I thought that I had picked up a copy of one of my articles in the Socialist Economic Bulletin.
I shall read what The Economist says in order to put it on the record. It is a damning indictment of the Government. I put it down as an early-day motion and the usual suspects all signed it. However, I want it to have a wider circulation. This is the expectation of The Economist about what will happen to the British economy and it is in complete and stark contrast to much of the misinformed waffle in the media yesterday.
The Economist says:
"Believe it or not, the best is over for Britain. The economy will decelerate in 1995, living standards will slip and 1994's sharp falls in unemployment will slow to a crawl. There will be no return to recession nor will there be any kind of inflationary explosion. But humiliatingly for John Major, who has become accustomed to bragging about Britain's place at the head of the European league of economic performance, the country will slide back to its traditional place near the bottom of the international pile."
Coming from The Economist, that has much more force than any complaints from Labour Members, particularly when one remembers that this book of predictions is edited by a Conservative Member of Parliament, the hon. Member for Kensington (Mr. Fishburn). If that is what the hon. Gentleman believes, he should be joining those who are now sitting unwhipped on the Conservative Benches, withdrawing his support from the Government who are presiding over this economic mess.
The Economist does not take the view that this is all some international problem; it nails the blame exactly where it lies—with Government incompetence. Referring to the time since we were evicted from the exchange rate mechanism, leading to the boost to the British economy that we have seen in the past year, it states:
"What has gone wrong since those happy days? The answer is simple—government policy. Kenneth Clarke, the chancellor of the exchequer, quite rightly undertook a drastic tightening of fiscal policy, announcing the biggest round of tax increases in post-war history for 1994 and 1995. But he failed to counterbalance this with a corresponding monetary relaxation. The result was bound to be a slowdown in the economic recovery. This was just becoming
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apparent in the late summer with the weakening of consumer spending, car sales and housing, when the Bank of England bizarrely piled on the monetary pressure with a half-point increase in rates"—
that is, interest rates.
"This masochistic mix of monetary and fiscal tightening, combined with the sharp increase in long-term interest rates caused by the worldwide collapse of bond markets and the Bank of England's misguided warnings about inflation, is sufficient to explain Britain's deteriorating prospects. With macroeconomic incompetence like this, there will be no need to look for sob stories in the alleged deficiencies of the economy's supply-side—deficiencies like low skills, inadequate training or unwillingness by industrialists to invest for the long term."
The Economist, which has supported the Government more loyally than any other economic organ during the past 15 years, is not saying that the problem is an international one, but that it is the incompetence of the Chancellor and the Bank of England that will lead to the deterioration in living standards next year.
It would be easy for Opposition parties to say that that is good news, because, just as the Government are trying to sneak their way into the 1996 election, people might see that the economy is turning down again. But I know what that means in my constituency where, effectively, one person in four is out of work. The Economist article sums it all up perfectly with its heading, "A lost last chance". Already, the Government's incompetence in handling the period since our eviction from the exchange rate mechanism and the way in which they have lost the opportunities presented to them will lock us into the next recession.
Hon. Members should consider where we are in the economic cycle. We know that we have a business cycle. This is the high point. This is the boom between the recession of 1990 and the recession of the late 1990s. That is what is so depressing. If one compares where we are on the economic upswing today, since the end of the recession in mid-1992, with the last time that we came out of recession in the early 1980s after the Government's first real severe recession, we are in an equivalent position to the end of 1983. In 1983 people thought that there was a feel-good factor. They were confident. They were taking on bigger mortgages. They were expanding their personal consumption because they thought that they could see real growth.
When one compares the situation then and now one realises how much more weak and fragile has been the recovery from this recession and how much shorter and insubstantial it will be. When one considers the past 25 years of economic history in Britain and removes the distortion of the great bonus of North sea oil, one sees a consistent pattern of decline, with each recession biting deeper and longer than the one before and each subsequent boom shallower and less substantial, leaving a weaker economy than before. That is why I find this depressing.
Had we had policies that encouraged investment, we should now see the increase in exports being built much more strongly into our economy. But how many businesses will go for a sustained expansion of investment when they have already seen a 0.5 per cent. increase in interest rates and when the overwhelming assumption is that that will be followed by another 0.5 per cent. and another 0.5 per cent? The markets are telling us that they expect inflation to rise in the long term. That is why

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long-term borrowing is so expensive. The Government have not convinced the markets that we have broken free of the cycle.
There is much talk of us being in a uniquely good position and that we can see the prospect of export-led growth and low inflation stretching ahead, but that view is not shared by the markets or the economists. But people are talking themselves into that belief and I find that worrying because we are missing an opportunity.
The Economist accuses the Chancellor of macro-economic incompetence. We have been bubbling along with inflation at 2 per cent., but inflation is still the overwhelming obsession of Conservative Members. But the most frightening prospect for the British economy is the fact that our investment has collapsed.
For the past 20 years I have been used to seeing those interesting analyses of what proportion of GDP in each of the G7 countries goes on investment. We all know the pattern. Japan has 30 per cent. or 35 per cent. year by year, most of continental Europe has between 20 per cent. and 25 per cent., and Britain has 15 per cent. or, if we are lucky, up to 18 per cent. The only country investing less than us has been America, with about 14 per cent. For the first time, we have sunk below America's pattern of investment. We are now at the bottom of the G7 pile for investment.
That means that, in the Government's failure to create a climate in which business feels that it can plan its own investment, and when the Government have savaged their own investment programme year by year so that our infrastructure is a disaster in comparison with that of modern European nations such as Germany, Holland or Sweden, we have lost an opportunity and our competitors will pull further ahead of the British economy. In Japan, Germany and France, industries with their higher investment will be a greater threat in terms of competition in the export markets. Their people will see a higher degree of skilled labour building up as it matches the investment pattern. We are already locked into a further qualitative decline between ourselves and our major competitors. Conservative Members are slapping themselves on the back for a cunning strategy, but the Government are preparing a grim and depressing inheritance for the next Administration.
Whether the next Government are the lot opposite, having conned their way back to power with a little chicanery, or whether my poor right hon. and hon. Friends will be left to clear up the mess, they will find, immediately they assume office, declining productivity and export markets relative to our competitors. International investment will be looking elsewhere, and the new Government will be confronted with all the usual economic crises that flow from that situation.
I am not interested just in slagging off the Government—I have been critical of my own party on more than one occasion. I want to examine what should be done. The Economist is not a magazine that I usually invoke in my arguments, but the final paragraph of its article on developments at the time of the next general election is equally revealing:
"Britain will become more prone to inflation in the long run. This malady will again be more threatening from 1996 onwards, when the government suddenly takes its foot off the monetary brakes and steps on the fiscal accelerator ahead of the general election. That
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would have been the right time for the authorities to put on the brakes against a traditional boom-bust cycle. But when did the Bank of England or the Treasury ever do the right thing at the right time?"
The next Government will not find it easy to take that inheritance on board. My party should be thinking now what should be done to break out of the trap. Although inflation has been a problem in the past, it is not the immediate problem. The overwhelming difficulty facing the British economy is lack of investment and of a skilled work force who can fully utilise high investment.
The Labour party has published a series of proposals, which I completely support, to increase work force skills, improve education spending and increase training. I should be more than happy to see a fairer system of taxation, to restore many of the inequalities of the past 15 years. If it were up to me, the Budget would include a top rate of tax of 55 per cent. for anybody earning more than £50,000 per annum, and of 48 per cent. for anybody earning more than £40,000. That group, which accounts for 4 per cent. or 5 per cent. of society, has done well out of the Government, and in attempts to rebuild the economy, it must make the greatest contribution.
Low-income and middle-class families are already taxed more severely than in any period outside wartime, and no one could seriously propose major increases in the burden of taxation on them. The people who should make the greatest contribution are those who have done best over the past 15 years. I much regret that my party is not saying that loudly, and persuading the public that we shall increase tax rates for that group. Once one has spelt out the point in the wealth structure at which taxes will be increased, one can make a firm commitment to taxpayers below that point that they will not pay a penny more under Labour. I want a firm commitment to taxing people who have done best, but to protecting those already squeezed by the Conservatives.
If possible, some of the increased taxation on those earning more than £40,000 a year could be used to relieve the tax burden on ordinary working-class and middle-class families. That would redress the redistribution of wealth, which has been going the wrong way in recent years.
The two tax increases that I propose would produce another £3 billion. It would be for the Government of the day to decide whether to redistribute that revenue to people on pensions or benefits, or to remove part of the tax burden on lower-income groups. It might have to be used further to reduce the PSBR or to fund an investment programme.
Nevertheless, no one believes that £3 billion from the richest in society could solve the problems facing the British economy. A much more vast sum is needed. If Britain is to match German investment levels, it must look elsewhere than the taxation of private income—to the City of London. The operation of Britain's financial sector is like something from "Alice's Adventures in Wonderland".
Not everybody knows this, but I grew up as a working-class Tory in a working-class Tory household. I was the first person from either side of my family not to vote for the crooks opposite. It was traumatic. I was not allowed to tell my ailing grandmother that I had become a Labour supporter in case the shock killed her. My information came from the Daily Express, so I do not know how I ended up on the Labour Benches. Nothing in my early childhood led me to question the usual assumptions.

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I grew up believing in capitalism. I understood that, when there was a boom, companies made a profit, shareholders received dividends and workers enjoyed wage increases. I understood also that in a slump, companies did not make a profit, shareholders did not receive dividends and the poor old workers were kicked on to the dole. The simple, raw logic of capitalism has been replaced by a system whereby when there is a boom, profits are made, dividends are paid and workers enjoy a pay increase—but when the boom ends and there is recession, companies do not make a profit but dividends are increased, often while workers are laid off.
The year 1986 is generally thought to have been one of Mrs. Thatcher's best years. I remember Nigel Lawson saying that Britain was on track to replace Germany as the strong economy of Europe. That is a bit of a laugh now, but in those days people thought that we were living a boom and had broken out of the cycle of boom and bust. People began to believe Tory party propaganda. At that time, good dividends were paid but today, after all the pain of the past few years, dividend values have doubled in real terms. On what basis can one justify paying today twice the dividends that were available during the Thatcher boom of the 1980s?
The effect of doing so is to squeeze out investment, because the first call on company profits will be increased dividends. There is nothing in this squalid little Budget to challenge that. Where is there any encouragement, in terms of tax concessions, for companies to increase their investment? That should have been the centrepiece of the Budget and would have had the support of Labour Members. Instead, the Budget contains piddling little measures against a crisis of under-investment.
The Labour party will be failing in its duty if, when it takes office, it does not pass legislation or use the tax system to reduce dividends to a reasonable level. I am not proposing anything revolutionary—I just want the Budget to return to the situation that existed in Mrs. Thatcher's heyday. Why not cream off the extra money that is paid in dividends and return it to what it was in 1986 in real terms? If there were a tax mechanism to do that, £11.96 billion would be released this year and every other year for investment—the sort of sum needed to match German investment levels and research and development. At present, that money is siphoned off and taken out of the City and paid as dividends.
Company law is so structured that virtually everybody running a major company in Britain has as his first concern not investment or capturing new markets, but that a shark such as Hanson will make a vast bid, shareholders will sell out, and Hanson will immediately make a quick profit and destroy the industry by asset stripping and dumping its workers on the dole, so that another productive part of our economy is lost. That is how the British economy is functioning, and nothing in the Budget will shift those priorities. Unless we shift them, we shall continue to fail in comparison with Germany, Japan and the more successful industrial nations.
A couple of years ago, I was invited to open an extension to a factory in my constituency. There are not many factories left in my constituency because, like most of the core of outer London which used to be a manufacturing heartland, it has been destroyed by the first and second Thatcher and Major recessions. The factory is
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small but competent. It was the last in Britain to produce the wall sockets into which one plugs electrical appliances; every wall socket not produced by that company is imported.
The factory had bought the most modern high-tech machinery and plant, which Germany and Japan have. Its work force was drawn from the locality and comprised many who had failed in or been failed by the education system. They may not have had great skills, but the firm ensured that they were offered day release and training to improve their skills so that they could fully utilise new equipment.
I said that I was surprised to have been invited to open the extension because I had expected the factory to ask El Presidente—the Secretary of State for Trade and Industry—or one of his juniors. I was told that Ministers were not welcome there because they had never lifted a damned finger to help such companies.
It soon became obvious to me that the company was successful because it had no shareholders. It was owned by two brothers, which meant that, at the end of the year, they could make their own calculations. They could work out their profits and decide how much to invest. The investment decision was the first to be taken.
Until we change our company law and, therefore, the pattern of investment, we shall continue to fall behind other nations. That means that the next Labour Government will have to tackle the City with a major programme of taxation and general reform to shift the balance. If the next Labour Government do not do that, they will fail just as the previous two Labour Governments failed. I desperately want my party's Front-Bench spokesmen to start to spell out in detail, as I have tried to do in my small contribution to the debate, precisely what it is going to do to reverse the decline in the economy.
We can all slag off the Tories; it is wonderful stuff. Having listened to their speeches, one cannot fail to slag them off. However, I am in the Labour party because I know that the Tories are useless. I want to be told what we are going to do and I want us to tell the British people so that there is no doubt or illusion.
Whichever party wins the next election will face a long period of pain. No one can turn the economy around without a major adjustment, without many people having to change their employment and be retrained and without a great change in the way in which the City of London operates. Unless we are prepared to stand up and tell the people that in advance, I greatly fear that we shall be vulnerable to some of the distortions that we have witnessed in previous election campaigns.
I have not the slightest hesitation in saying that I condemn the Budget and the Chancellor to the oblivion which they so richly deserve and to which they are condemning the British economy and the British people. However, it is not enough to oppose the Conservative party; we have to spell out what we will do, how it will be better than what the Conservatives have done, who will pay the price and who will benefit. Until we do that, people will continue to doubt us, and the Conservative party, with its skilled electoral machine and its supporters in the media, will seize on every doubt, just as it did during the previous election, to distort reality.

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It is in the Labour party's interests to spell out the truth and tell people that there is pain to come, whoever governs Britain, but that we would ensure that it was fairly spread and that, at the end of that period of pain, we would emerge as a modern European economy.
7.33 pm
Mr. John Butterfill: While I was listening to yesterday's debate, I looked across to the Opposition Front Bench and saw the grinning features of the right hon. Member for Kingston upon Hull, East (Mr. Prescott) and the mournful features of the shadow Chancellor, the hon. Member for Dunfermline, East (Mr. Brown). I was reminded inexorably of "Hancock's Half Hour" with Sidney James and Tony Hancock. However, the big difference was that Tony Hancock was a good deal less gloomy than the hon. Member for Dunfermline, East. I am sorry that he is not in his place at the moment. His speech today reminded me rather of "Four Weddings and a Funeral" because he is the only man who, by his very presence, can make a wedding seem like a funeral.
The gloomy way in which the shadow Chancellor approached our economy was matched only by the incompetence of his suggested remedies for reducing, for example, unemployment. His big idea was to release local authorities' capital receipts to be spent in the economy. He thought that that was the secret to reduce unemployment. Of course, he does not realise that most of the councils that he was talking about, especially those run by Labour, have no cash but enormous debts. Indeed, some of the fiefdoms controlled by Labour have debts so large that the majority of the taxes paid by their residents are going to pay for the servicing of that debt rather than the provision of services.
Dr. Lynne Jones: I hope that the hon. Gentleman is not suggesting that housing debts are being paid from council tax receipts. As he will be aware, the housing revenue account is ring-fenced and it is the tenants and their rents who pay those debts. If councils were allowed to raise capital and then invest in their housing stock, they could generate more rents, invest further and give tenants what they really want and, at the same time, put people back to work.
Mr. Butterfill: The hon. Lady should know that if some Labour councils collected their rents they might be considerably better off. However, the fact is that some, although not all, are enormously indebted. There are a few, exclusively Conservative councils, I believe, that have some money in the bank and do not have enormous debts. If the hon. Member for Bristol, South (Ms Primarolo) would care to name a Labour council that does not have enormous debts, I should be happy to give way to her. I see that she is not anxious to respond.
Dorset county council was controlled by the Conservatives and had £20 million in the bank. Unfortunately, the Liberals took over at the previous local election and, in a very few months, they have spent nearly all of it. Some councils are debt-free, but not the vast majority. The shadow Chancellor's proposition would merely add to the public sector borrowing requirement. My right hon. Friend the Chief Secretary suggested that it would add about £6 billion when we are radically trying to reduce it.
Mr. Connarty: Is the hon. Gentleman suggesting a model for industry—it should not invest and take on
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indebtedness and, therefore, not grow? Is that the model that he is planning for the economy—just like the local authorities that he admires, it should have no debts and therefore no investment?
Mr. Butterfill: No, I am suggesting that the level of debt should be reasonable and appropriate to balance the budget and ensure decent housekeeping. That is why I commend the Budget of my right hon. and learned Friend the Chancellor. He has ensured that we shall have sound finances and he has laid the foundations for a growing economy—the fastest growing in western Europe at the moment. That is the right thing to do. In the process, he has of course had to reduce some aspects of Government expenditure.
I commend the Chancellor on the fact that, within a policy of general spending restraint, he has found substantial additional money for the national health service and education and has found enough to increase police expenditure by 3 per cent. while cutting Home Office expenditure as a whole. That shows that he has his priorities right. It is the right way to run the economy. All the commentators whom I have read certainly believe that to be so.
I now turn to VAT on fuel, which is, of course, a controversial item. I greatly respect my hon. Friend the Member for Brighton, Kemptown (Sir. A. Bowden), who made a passionate plea on behalf of pensioners. I also have many pensioners in my constituency and I know that many of them find great difficulty in meeting their fuel bills. However, we can exaggerate the problem.
A constituent came to my advice centre earlier this month and she showed me her fuel bills. She said that she was very worried about her ability to meet them if we increased the level of VAT to the full 17.5 per cent. The interesting thing was that she thought that she was currently worse off as a result of the previous increase than she had been before. She spends a small amount—about £37 a quarter—on fuel.
When we went through her bills, we discovered that far from being worse off, even with only the 50p increase we have given this time, she was better off by a few pounds a year than she would have been without the changes we have made. If we take into account the reductions in fuel costs in the past two years, she was actually significantly better off. It is wrong to alarm all pensioners, as the Opposition have done, because although some of them will undoubtedly be a little worse off, the great majority of them will have their bills met and some of them will, as I have illustrated, be better off.
I am especially pleased that we have found more money for home insulation. The £10 million proposed means that many pensioners will be able to spend about £300 per house on insulation. The most vulnerable will, of course, be eligible for the large increase in cold weather payments that the Chancellor has been able to make, and I am very grateful to him for that.
I made a number of representations to the Chancellor before the Budget and I especially drew to his attention the predicament of those who, because they have small savings or a modest occupational pension, are just outside the level at which they can obtain benefits. It is true, of course, that they have had an especially difficult time during the recession. I was especially pleased, therefore, that the Chancellor was able to raise the level of personal allowances, which most benefits those on the lowest

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incomes. I was pleased in particular that he was able to raise the age allowance by £430, which is a considerable sum and will certainly be of great assistance to my pensioners who have modest incomes from a source other than the state retirement pension.
The increase in the number of people paying the lower rate of income tax is also especially welcome and is something that I urged on my right hon. and learned Friend. About one in five of all taxpayers now pay at only the 20 per cent. rate. That is something on which we should and, I hope, will continue to build.
The other matter that gave me particular pleasure was the help that we have given on business rates. When we passed the Local Government Finance Act 1988, I tabled an amendment urging the Government to keep any increase to a maximum of 10 per cent. At that time, the Government did not feel able to go that far, but they met my concerns by agreeing to a maximum of 15 per cent. I am especially pleased that now, with things getting a little better and with a revaluation coming up once again, the Government have recognised that the impact of sudden and unexpected changes in business rates can be very disruptive, especially for small businesses. The restriction of any increase on a transitional basis to a maximum of 10 per cent., with a maximum of 7.5 per cent. for small businesses, is therefore especially welcome and will give great heart to that sector of the economy, which is so vital in securing our economic recovery.
The changes that we made in national insurance will not only help many of the unemployed back into work, but will be of great benefit to many small businesses. All in all, this is a good Budget for small businesses. The encouragement of the provision of capital other than through bank borrowing—through business angels or venture capital trusts, for example, where we have made important improvements—is another aspect of trying to recreate a more secure capital base for business and I greatly welcome the Chancellor's action in that respect.
I am also pleased that the Chancellor has given help for personal equity plans, PEPS, by widening their investment criteria, thus enabling many people to invest more widely—perhaps sometimes more wisely in the present climate—than they have been able to do hitherto. The roll-over that the Chancellor has given to tax-exempt special savings accounts—TESSAs—will mean that some of the schemes will not have to close down and that these important savings areas will be safeguarded.
TESSAs are very important. I point out to the hon. Member for Brent, East (Mr. Livingstone), who talked about lack of investment, that, historically, the problem in this country has been that our savings ratio has been so much lower than that of our competitors—lower than that in almost any nation except the United States. The encouragement of savings produces the funds for investment, so it is vital that we continue to encourage saving as against giving incentives for borrowing or spending. That is the path on which the Government have been embarked for a considerable period and I hope that they will continue on it.
On a personal note, last year I tabled a new clause to the Finance Bill in which I asked the Government to exempt from tax liability the indemnities that companies give directors and other employees against claims being made against them in the performance of their duties;
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those indemnities are called directors' and officers' insurance. I am delighted to note that the assurances given to me by the Financial Secretary at the time have borne fruit and that the Government have announced this year, in the document IR6 from the Inland Revenue, that all my representations on that subject will be met in full. In future, this important safeguard for companies, employees and the public at large will be secure.
I am a little sorry that the Government have not been able to reform the capital gains tax regime; we may be able to debate that further in Committee. In terms of encouraging saving and investment, it cannot be right that a man who has spent 10 years of his life building up a business is taxed on its disposal at the same marginal rate as applies to somebody who makes an overnight, speculative gain on the currency markets. We must do something to encourage more long-term investment. At the moment, it pays people to strip the money from companies through dividends and exorbitant salaries, which we should all like to discourage, rather than to leave the money in the company, thereby helping it to grow. I hope that, in the fulness of time, the Government will look at that area.
I also hope that the Government will look at the impact of inheritance tax on small businesses. I hope that they will look in particular at some of the inheritance tax concessions, such as gifts on marriage or gifts to an overseas-domiciled spouse—we purport to support the family—and will realise that it is important that they are indexed. Many of them have not been increased in line with inflation since inheritance tax came in. I hope that the Government will look at that matter at some time in the future.
Having said all that, I believe that this is a prudent Budget. It has clearly been welcomed in all quarters. The financial markets have given a favourable verdict on it. It has kept Britain on its course—and strengthened its position—as the fastest-growing economy in the whole of the European Union. I congratulate my right hon. and learned Friend on a thoroughly prudent and well-judged Budget.
7.47 pm
Mr. Michael Connarty: I appreciate the problems that Chancellors have in budgeting. I remember that when I was a university student studying economics in the late 1960s, the Labour Government had problems and were forced to bring in what seemed to me to be draconian cuts in public services to keep the International Monetary Fund happy. I remember that the sum was £3 billion, which seemed like a very large sum. I have since read Lord Healey's excellent book "The Time of My Life", in which he explains that when the outturn figures were eventually presented to him two or three years later, he discovered that the £3 billion which he was supposed to have as a deficit was in fact not a deficit, and that the balance of the Budget would have been fine in that year.
Lord Healey was, of course, driven by the statisticians. He recounts a story about the time when he was in the Army and was asked to check the people going to and from a railway station—people getting on trains and off trains, transferring to other places. He bribed the guards on each train to give him a figure and he bribed the chap on the gate to give him the figure for the gate. When he eventually left the station, they all had a little celebration and he said, "You were quite accurate with your figures.

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How did you manage to count all those people?" They replied, "We just made up figures and added them together." Every one of them made up a separate figure and all the errors balanced out and it became quite an accurate account of the people who went through the station. Lord Healey realised that he should have drawn on that experience when looking at the statistics which were presented to him in relation to the Budget.
Let us consider the public sector borrowing requirement figures presented in the economic indicators in the House of Commons Library—the latest of which were for 28 November. There is absolutely no doubt that the figures for the United Kingdom show a very stark difference between 1988–89 and 1992–93—and, in fact, 1993–94. There is no doubt that the Government had got themselves into such a mess with a £45.95 billion deficit in the public sector borrowing requirement that they had to do something very serious.
What they have done is very serious, all right. It is very serious for the people of this country because the Government's plan, as announced by the Chancellor in the latest Budget, is to take another £24 billion off public spending. That is not just about money being lopped off bank balances and deals being done with the Bank of England: it means £24 billion off services.
Given that the Government have been in power for 15 years, those services must initially have been set by them—albeit perhaps reluctantly. They may not have wanted to provide them because they had a different philosophy—but they seemed to think that they had to respond to the people and provide services. Now they are slashing those services and selling off assets and they are still having to cut the public sector borrowing requirement by cutting public services further. It is not a fiddle or a Healeyite statistical error: it is a real attack on people's services.
The second thing that the Government felt that they had to do—it is important to return to this as everyone mentions it in the debate—was to attack the poorest in the country by putting a tax on yet another unavoidable use of resources: full VAT on fuel. People have been asking why Labour does not find another tax. There is nothing wrong with the idea of taxing people who received share options when they were senior officials of privatised industries—often, the same officials as those in charge when the industries were public. They got large salary hikes and, on top of that, share options. Those share options have become valuable—some of those officials are millionaires.
It is very strange that those same people were running the industry when this Government were saying how inefficient it was but that when they became private sector chief executives or chairmen or whatever they suddenly became extremely competent and talented entrepreneurs deserving of large salaries and very large slices of the available shares. Why not tax them?
I am told that taxing the share options and other gifts to those people in the privatised industries alone would raise enough money to enable us to keep VAT on fuel at 8 per cent. That seems to be a perfectly adequate transfer of responsibility away from those who are struggling to those who have made large amounts of money.
Mr. Butterfill rose—
Mr. Connarty: I noted that the hon. Gentleman said, in contradiction to his hon. Friend the Member for Brighton,
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Kemptown (Sir A. Bowden), the chairman of the all-party pensions group, that most people would not be worse off. His hon. Friend the Member for Kemptown said that most people would be 56p per week worse off even with the Government's compensation scheme.
Mr. Butterfill: I wanted to explore with the hon. Gentleman the idea of taxing options at the time at which they are granted. Of course, shares can go up or down, as he will appreciate. Suppose that the hon. Gentleman raised a tax on a gain which has not yet been realized—in other words, charged somebody up front before that person dispensed with the shares. Would the hon. Gentleman give him a rebate, with interest, if those shares were subsequently sold at a loss?
Mr. Connarty: The theory would be to tax people on the realisation of the asset. If people receive share options, after a certain number of years, they can capitalise on them. Those shares then have a value. Those people have share options which they can take up. They are taking up those options at the price that was offered on the market when the private sector got its hands on public assets. As we know, the Government's incompetence has meant that every privatised industry has been sold vastly under the market value on day one but that its value has increased very quickly—and then, over the years, has increased massively.
In fact, those taking up share options are getting the value of the share as it stands in the market when it is taken up by the chief executive or whoever was bribed with the offer, compared with the value at which the Government sold it. So in a sense such a tax would not only be a windfall tax: the Government would be taxing their own incompetence, which would be quite valuable.
Mr. Butterfill rose—
Mr. Connarty: I do not wish to get into a dialogue with the hon. Gentleman, but he obviously wishes lo intervene.
Mr. Butterfill: I am puzzled by what the hon. Gentleman said. He said that the tax would be levied when the asset was realised. Of course, that is what happens now: we do not tax the gain until somebody gels the money by selling the shares. But I understand the hon. Gentleman and some of his hon. Friends to be saying that they would levy a tax up front on a notional gain, before the asset was realised. In other words, a theoretical gain would be taxed.
Where would people get the money to pay such a tax, because they would not have it from the realisation of the shares? And what would happen if the share value went down subsequently? Would Opposition Members then repay the tax with interest?
Mr. Connarty: Although it is a very interesting theoretical debate, the question what the word "realises" means is worth looking at. If the share option is offered at, say, 100p a share, and three or four years later when people are allowed to take it up, it is worth 500p a share, that is the point at which those people would be taxed. Yes, that would mean that they would have to realise some of their vast windfall asset to pay their tax burden. There seems to be no unfairness in that at all.

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It would appear that the Government do not care that a pensioner knows that he or she cannot afford to pay VAT on fuel without cutting something else—without cutting expenses on food or other expenses, which are meagre at the moment. That does not seem to bother the Government or their supporters. Is it because the burden is spread among so many millions of pensioners that the Government do not have to look them in the eye and see the pain? I know that the hon. Member for Ayr (Mr. Gallie), who is present, has told the pensioners that he sees their pain and is distressed about it. I hope that that pain is carried with him to the day on which we vote against the Government next week.
I received a delegation from Scotland yesterday and the day before, led by Mrs. Ina Craig, a retired nurse, whom I would wish to commend. She is the secretary of a local pensioners group. The members of that delegation spoke eloquently to members of the Scottish parliamentary Labour group, and to others who wished to be present about the real hardships that pensioners will face and the choices that they will have to make between putting the heating on or putting a cooker on.
It is a strange world. I was told by one of them that things have got so bad in the world of social security benefits under this Government that a cooker is now not considered to be an essential item of household furniture if one lives in an urban environment where fast-food shops are round about. People cannot even get a social fund loan for a cooker. But if people do have a cooker, they will have to choose whether to cook food or put on the heating because they will have to find extra money.
According to the figures given by the chairman of the all-party group on pensions, a Conservative Member, the deficit per pensioner per week will be 56p even after the compensation schemes. The deficit will be up to £3 per week for a pensioner couple, even with the compensation. Pensioners are having to take real-life decisions. They do not have to take theoretical decisions about how many millions of pounds or hundreds of thousands pounds they will have after their share options are realised and have to be taxed. Instead, they are having to worry about where they get the money for food and heating when the Government take VAT from them.
As I turn to the Chancellor, I am reminded of the story of the person who once asked whether Hitler was a bad or a good man and was told that he was good at the job he set himself. The Chancellor is good at his job. He wants to bring down the public sector borrowing requirement; he wants to cut expenditure; he wants to bring down inflation. There is some movement in that—there is no doubt about it. He cut £8 billion last year and is on for a target of £28 billion.
In that environment, why did the right hon. and learned Gentleman not say that we could be softer on the elderly sector of the community? Is it because the Government have another agenda? Do the Front-Bench spokesmen have to be tougher that anybody else in the Conservative party now to get any support for any future position? It would have been sensible and politically adept of the Chancellor to relax in this Budget—not to have put the 17.5 per cent. VAT on fuel; to have worked out another taxation strategy; even to have let borrowing go up slightly. The cost would not be so fantastic that it would affect the Government's calculation over the longer
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period. I do not understand why they did not do it. Is it because they are determined to go down in a suicide pact on one vote or another?
On the question of taxes, I had thought that the Conservative ranks always looked for the support of the middle income person. In fact, every analysis of the tax burdens placed on such people in the previous two Budgets and this year's Budget shows that Mr. and Mrs. Average will be hit. Some of the figures struck me as very interesting. Someone earning £14,000 a year will be £9.52 a week worse off under this Government. Someone earning £19,500, which is roughly what Mr. and Mrs. Average earn in the community in which I live, where we have quite high average earnings because of the petrochemical industry, would be £12.52 a week worse off.
Getting closer to the Mr. Average who socialises with Members of Parliament, someone earning £29,000—which is about what Members earn—would be £21.58 worse off a week. That sort of salary is usually a joint income in my community. Someone earning £40,000, a potential Conservative voter in most parts of the country other than in Scotland where people's income does not take away their social conscience, would be £26.74 a week worse off. Someone earning £60,000 would be £32.50 a week worse off. On earnings of £80,000, someone would be £38.26 worse off. Even someone earning £100,000—which must be natural Conservative-voter territory—would be £44.02 worse off.
Not only are the Conservatives attacking each other, which seems to be their favourite sport this season; they are attacking the people who have given them their present mandate and the mandate that they have held for the past two Parliaments. Tax is not something in respect of which the Chancellor is doing the Government any favours.
Mr. Gallie: The hon. Gentleman has just referred to someone earning £100,000 a year. I suggest that that person is considerably well off and certainly does not move in the circles in which I move. The hon. Gentleman referred to the high levels of tax that such individuals are charged. In the past, the hon. Gentleman said that the Conservative party has not hit such people with high tax bills, but he is now arguing the reverse. There seems to be some confusion.
Mr. Connarty: When the hon. Member for Ayr speaks, there is always confusion—not just sometimes. The elements of tax are income tax, national insurance, VAT and other indirect taxes. There is no voter in the country who does not know that this Conservative Government are the Government of high taxation. All voters have got the message that indirect taxes have substituted for direct taxes and that we are carrying a higher and more unreasonable tax burden than our neighbours in Europe.
We are talking about incompetence. If the tax burden was meant to lead to investment in manufacturing to reclaim our manufacturing industry given that it has been almost destroyed by Conservative ideology, we would not mind. People would put up with that. However, people are fed up with paying high taxes because of the Government's failure and the fact that 5 million people who want to work are languishing on benefits or the dole—[HON. MEMBERS: "What?"] If hon. Members want to challenge my figure, they can do that later. I am interested in employment. I am carrying out a task for the

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parliamentary Labour party in Scotland which has made me look closely at employment and unemployment figures. We can debate whether unemployment is at a certain level and whether investment is at the level that the Government claim it is or whether it is heading in the direction in which everyone else says it is heading, but the Government are not listening.
According to the Scottish analysis, a single parent will be £5 a week worse off. On average, a pensioner couple will be £2 a week worse off. A low-paid family will be £2.20 a week worse off and a higher-paid family will be £3.80 worse off. An average family on an average wage will be £1.15 a week worse off. A single person will be £2 a week worse off.
That is the result of this Budget. That is what the Conservatives have done in the Budget to the people whom I—perhaps falsely—thought they were trying to win round. The Conservatives must know that they have to win the people round because the Conservative party is not the electors' favourite party. The electorate will not wait long enough for the Government to get their act together and get the economy going.
I want to consider the real economy. The Chancellor has done something about inflation. My Opposition Front-Bench colleagues may not want to jump up and down about this because that could have created the headline: "Opposition Front Bench commends Chancellor". However, I believe that controlling inflation is a good thing. Inflation is not necessarily generated by the United Kingdom Government. It is created mainly by world forces and those who control oil prices and the prices of the raw materials that we used to get so cheaply when we exploited the world as our playground and as a source of cheap raw materials. When fair prices began to be charged, the British economy could not cope with that and we have been paying the price ever since.
There is an investment debate in respect of the real economy and I want to consider some of the statistics provided by the Government in their "Financial Statement and Budget Report". I presume that the Government did not put the statistics together on one side while they drew up the Budget. They must have collected the statistics at the same time as they drew up the Budget.
The most important point is the level of fixed investment in the economy. That is the measure of our ability not just of coping at the moment or taking advantage of the world upturn or the trade cycle or Germany's recovery from its depression and from its problem of overheating when it took in East Germany. According to page 27 of the Red Book, business investment was only 1.25 per cent. higher than it was a year ago. That is not enough to put our economy on an upward growth path. It is enough for us to turn over and take some advantage of the trade cycle, but until the upturn reaches 3 per cent., we will not be able to say that we are investing enough to be on a growth path.
As my hon. Friend the Member for Brent, East (Mr. Livingstone) said earlier, we are slightly hiccuping up on a continuously downward trend. That is clear if we consider the statistics over a considerable period. There is clearly a downward trend in investment in this country. Chart 3.11 on page 27 of the Red Book shows that there has been a decline from 1989. According to that chart, the estimates suddenly take a sharp upturn for 1994 to 1996. However, there is no evidence that that is happening.
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I attended a briefing with the Engineering Employers Federation a couple of weeks ago. The federation makes it clear that, in terms of investment,
"The 24 per cent. reduction in fixed investment"
by volume in the manufacturing industry since 1990 is a very significant trend. If we cannot get our manufacturing investment up, we can only eke out our spare capacity in the upturn. We must take the next step and jump out of the trough and begin to grow. There is no evidence that that is happening so far.
According to the federation's table on fixed investment in manufacturing and non-manufacturing, it is clear that engineering fell steadily from the third quarter of 1989. The latest figures available, that is for the first quarter of 1994, show the same downward trend. In engineering and non-manufacturing, there is a bit of a turn up after 1992.
What element has caused that? It may be a positive element. It may be possible to say, "Yes, we are doing something. Our manufacturing industry is turning up." However, that is actually happening in housebuilding. It is the same old trap for the Conservative party that was in evidence during the Lawson boom when the Government pumped up the economy which pumped up the housing sector. At the end of the day, after the Lawson boom, it went down like a deflated balloon.
Page 28 of that wonderful document, the Red Book, shows that Government fixed investment rose by 5.25 per cent. in 1993. Despite themselves, the Government are way ahead in percentage terms in investment in comparison with the rest of the economy, so what are the Government going to do? The Chancellor said that he was going to cut several hundred million pounds off the roads programme.
When that element of the roads programme switches to private investment, that will not be investment in new projects. It will be investment in exactly the same projects for which the Government should have been responsible. However, if they ever come off, it will be called new investment. I have never quite managed to work out why the Government are so pleased when they can do that. It is the same investment and it has the same result for the real economy.
What can we do? It is important that we consider what could have been done in the Budget to get out of the trough and to leap beyond that turnover percentage. The Engineering Employers Federation did an excellent job by making recommendations for the Government but the Government did not seem to pay much attention to them.
The EEF sent us all a brief and I have kept in touch with the federation in Scotland and in England for some time and I believe that the federation should have been listened to. The Engineering Employers Federation said:
"Inflation indexation of existing capital allowances for plant and machinery"
should have been brought in. It also suggested a
"100 per cent. capital allowances for the initial £200,000 of plant and machinery investment".
The Chancellor and others often talk about quality investment. They would leave it to companies: they are not given incentives so they pick the best projects in which to invest. That is rich coming from a Government who brought in the business expansion scheme, which was supposed to be the last marvellous incentive for industry. It brought about a massive, pumped-up level of housing investment. It did not create many more houses,

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but it created massive inflation in house prices. That was caused by a Government who were badly tailoring, badly guiding and badly constraining an investment package. The bubble burst. I bought a flat in London which was worth almost £20,000 less than was paid for it two years earlier. People could not get their equity back. They had to abandon their homes because their mortgage debts were worth more than their properties.
All that we needed to achieve quality investment was for the Chancellor to heed the suggestion of the Engineering Employers Federation and say that the proposal would apply only to plant and machinery and only to things that can be sold. Things that should have been done were not done, and things that should not have been done were done.
The Chancellor made much of employment levels. I was in the House in October when the right hon. and learned Gentleman said that we should not take account of people on benefit because there was a problem with that. We had statistics showing that 500,000 new people were on category E income support—that is, for disability, single parenthood and sickness—and that 2 million people were receiving that category of benefit who did not register as unemployed. We were told, "Don't look at that, look at the work force count."
I always like to consider matters that the Chancellor recommends, on the basis that he thinks that he is an intellectual, as my colleagues say, because he wears Hush Puppies. I have never liked Hush Puppies, but the Chancellor obviously favours them. I do not think that they are the mark of an intellectual. Perhaps they are the sign of someone who is locked in an era before people wore sensible shoes. However, the Chancellor told us to look at the employment count, so I have been looking at the employment count in the House of Commons research documents.
The 1994 figures show that there are 1,992,300 fewer people in the work force. That includes people in employment, the self-employed, Her Majesty's forces, and people on work-related Government training programmes. There are almost 2 million fewer people in employment now than there were in 1990 at the previous peak in unemployment in England and Wales. According to the Scottish statistics, there are 55,000 fewer people in employment in Scotland than there were in 1991.
The Chancellor says, "I don't mean that you should look at the work force count. I was only kidding. You should look at something in this wonderful document that the Government have produced." At page 31 of the "Financial Statement and Budget Report" we find that the labour force survey is mentioned. Much to my amazement, the right hon. and learned Gentleman told us in his Budget statement that there are 334,000 more people in employment in 1994 than there were in 1992–93.
We are always told that employers are closer to the Government and that they are the people whom the Government should consider. Their statistics are almost the same as those in the research documents of the House of Commons, which show that almost 2 million fewer people are employed in our economy. The balance of two to one is against the Chancellor. We must seriously consider how his policies and those of past Chancellors have affected employment. We have a £40 billion to £50
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billion deficit in the public sector borrowing requirement because people are not employed. They are not contributing in taxation. They must live on benefits and other support. That is the crux of the problem in our economy, and it is closely linked with the statistics relating to investment levels in the United Kingdom economy.
Some of the employment measures that the Chancellor mentioned are deeply offensive. Once or twice, he mentioned the encouragement of low-paid employment—saying that we should actually encourage people to take low-paid employment. I do not see the virtue in that. I see a virtue in work and in employment. The Chancellor seems to be fixated on the idea that there should not be a national minimum wage. The Government wave Euro-banners which they hope will frighten the public and stampede them into voting for the Conservative party.

There is no evidence around the world that jobs are lost if people are paid a decent wage. I believe that Winston Churchill said that if we do not have wages councils and minimum wages, we will have poor employers at the cost of good employers. We have a strange system in which family credit means that poor employers who pay low wages are supported by taxpayers. Employees are paid low wages to keep them at an adequate standard of living, not a decent standard of living, while the employer is commended by the Government for creating low-paid employment. It is a very strange country indeed.
We heard the Chancellor say that exports are turning up. Nothing from the Engineering Employers Federation confirms that. Its analysis of exports and imports is that imports are increasing faster and staying ahead of exports in manufacturing. As the analysis is that fixed investment in manufacturing is not increasing in the productive and non-building sectors at the required speed, we will soon run out of capacity to compete with imports. We will suck in imports so that we can fulfil suppliers' demands even from our local economy. Certainly, in respect of products that we send to other countries, there will be a greater percentage of foreign input. That is the consequence of not getting back on a manufacturing track. The Chancellor stands rightly condemned for that.
The Engineering Employers Federation candidly says that, in 1993–94, we are having the benefit of a once-and-for-all effect of the devaluation of the pound in the autumn of 1992. When we are on a level playing field, we will fall badly behind our European and other world competitors.
There has been a sharp increase in electronic imports and an exceptionally high level of aerospace equipment imports. That is not to be commended, because they are supposed to be at the sharp end of high technology.
I shall give another statistic on the problem of fixed investment, as I want to place on the record the matters that the Government have failed to address. In 1971, more than 10 per cent. of our net domestic product was in net fixed investment. We are now talking about 5 per cent. The trend is clearly downward. There are little blips, but there is mostly a continually decreasing trend.
Having dealt with several points of interest to the economy, I shall refer to one or two matters that I found rather offensive. In fact, I probably shouted from a sedentary position yesterday, because it seemed that the Chancellor's housing benefit amendments attacked people at the poorest level. We know the rents that people must

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bear. I place the statistics on the record because they are very important. Average local authority rents have risen by 35 per cent. since 1988. Housing association rents have doubled in the same period. Private sector rentals have risen so rapidly that the mean assured rent was £53.65 a week in 1993–94. Government pressure mounts to cut the housing benefit bill.
When I was the leader of a council, we went through the trauma of the Government switching support from bricks and mortar, to which everyone then had access, to support only for people who could prove that they were on low incomes. I always found it rather odd that, if I wished to buy a house, I could get mortgage interest tax relief on up to £30,000. People who had to pay rent had to prove that they were very poor before they could receive any state subsidy. I personally look forward to the day when there is no mortgage tax relief, because I believe that it should be replaced by a housing benefit for everyone. Those in the private and public sectors should gain some support for the principle of having a roof over people's heads. They should not be discriminated against on the basis of whether they are poor or not.
There have been eight amendments to eligibility for housing benefit to take people out of housing benefit. It is becoming more and more difficult to get an adequate level of housing benefit, and the latest attack will make it more difficult for more people.
I do not know why the Conservatives are doing what they are doing if they are looking to win an election. They appear to be attacking people who, at this moment, are in great difficulty anyway. If people with a mortgage become unemployed or are made redundant, it is a difficult trauma because they obviously thought that their standard of living was rising and thus went into the private sector.
The Chancellor announced that he is going to find a way of cutting support for such people, so from October 1995, if they take out a mortgage they will lose everything if they are made redundant. Those people will not get support from the Government in the way that others do at the moment. I think that that is a foolish move and one that will obviously deeply offend many of the people that the Government are looking to for support.
The Government have not managed to deal with the problem that they created with the explosion of the Lawson boom. A total of 160,000 people are in serious mortgage arrears in 1993–94 as a carry-over consequence of the Government's responsibilities in that period.
I want to make one or two comments about the effect on Scotland, because it seems to me that, as usual, Scotland will bear the brunt of the Government's attacks. The Scottish budget will go up by only £220 million to £14.3 billion—a rise of 1 per cent. That means in fact that the Scottish budget will be seriously cut.
That budget will be wholly inadequate in providing housing in Scotland. It means that—I know that the hon. Member for Ayr understands this—the effect of the local government reorganisation and transition costs added to that will cut available moneys for public services very severely.
The effect of the care in the community programme will not be paid for by the rise in funds available for councils in Scotland. There will be massive cuts in services in other areas so that community care can be brought in.
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I want to make one special plea in relation to something about which the Chancellor has failed to do anything. I represent the port of Grangemouth. It received a very good submission from the National Union of Marine, Aviation and Shipping Transport Officers about the Budget, which presumably went to the Chancellor as well but about which nothing was done.
The figures in the NUMAST submission show that in 1976 there were 1,614 ships under United Kingdom ownership. We are down to 258 ships in 1994. The age of those ships is now an average of 15.4 years, and only one fifth of our fleet are under 10 years old. The average in the world is one third of fleets 10 years old or less. We are not the great seafaring nation that we were. We are not looking seriously at the needs of those who work in shipping and exporting and those who get the added value.
Currie Line, the firm at the port that I know best, has to lease German shipping in order to ship materials from the United Kingdom. That is the pattern now. Germany has put in place a financing method whereby small investors can get together to form a consortium, buy into shipping and then lease it out to the world. The British—the great sailing nation of the world—now have to rent German ships in order to export British goods. That has become a shame on this Government and they must look at that matter very seriously.
Mr. Eddie Loyden: My hon. Friend has raised a very important point which, as far as I can see, the Government continue to ignore. Future projections regarding shipping investment are tremendous and the increases in investment in shipping that will be made over the next decade will mean that this country will be left far behind the rest of the world. We are a maritime nation and rebuilding the British merchant fleet will not only mean a great deal to Britain's economy but will improve the viability of shipyards in Tyneside, Merseyside and Clydeside. The skills that they have accrued over many years could be adapted to future shipbuilding to give this country a great role to play in the industry's future. My hon. Friend has raised a very important point.
Mr. Connarty: I am very grateful to my hon. Friend.
I do not represent anything that could be called a shipbuilding area; as he represents Liverpool, Garston, my hon. Friend obviously has a greater knowledge of the industry than I do.
As a Scot, I can plead one unique statistic to quote. The largest passenger-carrying fleet in Britain today is the MacBrayne fleet, which plies its trade between the islands of Scotland. It was always seen as a joke by the great liner and shipping companies of the past but it has now become the single largest passenger-carrying fleet in Britain. That is a shameful indictment of the Government.
I conclude by saying to the Conservatives that the Budget did not help anyone. It was not a boring Budget; I am prepared to be bored by someone who is being rational and is showing a little sensitivity. Often when people talk about responsive policies they do not do so in histrionic terms. It was a Budget which showed that the Government did not really care about anything apart from their own wish to be re-elected and to store up some goodies in the cupboard to dish out before the next election.

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I think that the public have twigged that. They took the pill last time; they said, "We'll give them one more chance," and they have been seriously let down. They have been betrayed on the promises about VAT and they have been betrayed on all the promises about the economy. It is no longer enough to stagger along; if Britain wishes to recover, it needs to get off its knees. I am afraid that the Chancellor did not in any way give us the incentive to do that.
8.26 pm
Mr. Paul Marland: I was absolutely shocked by the speech of the shadow Chancellor of the Exchequer. I have never heard such a shallow, ill-thought-out sham from someone who poses as the chief economic spokesman of the Labour party.
In fairness to the hon. Member for Falkirk, East (Mr. Connarty), at least he tried to put a constructive argument together. However, it was heavy going following much of what he said. When he talked about a housing subsidy for everyone, I am afraid that he lost me completely.
I agree with the hon. Member for Brent, East (Mr. Livingstone)—it would have been very nice to hear a little more about what the shadow Chancellor has in mind for the economy. Instead, we heard something—it is a pity that you were not hear to listen to it, Mr. Deputy Speaker—which was more like a musical turn than a serious speech. He failed to recognise that the economy does not stand still and that circumstances and conditions change. Instead he bleated about the Government not having made these changes years ago. The fact is that conditions change.
The hon. Gentleman suggested that we should plunder funds from the sale of council houses. He said that this was the great salvation: everyone will be in work if we dig into that money. That is utterly ludicrous. He does not seem to realise that the money is invested to keep down the rate of council tax. What will happen to council taxes if we spend all the money which has been squirrelled away from the sale of council houses?
The hon. Member for Coventry, North-East (Mr. Ainsworth) said that there was fear in the countryside. I believe him. I think that people are frightened by the horrendous thought that the hon. Member for Dunfermline, East (Mr. Brown) might one day take the place of my right hon. and learned Friend the Chancellor of the Exchequer, who has just come into the Chamber.
Thoughtful commentators recognise the value of my right hon. and learned Friend's Budget. Large employers and many other people have commented that it is quite a dull Budget, with nothing much for the larger employers. Today when larger companies invest, information technology means that they invest in plant and machinery rather than in people. But I have heard small employers say on the radio—it is rather refreshing to hear favourable comments about the Budget on the radio—that my right hon. Friend's measures will help to create more jobs for the long-term unemployed.
So I welcome my right hon. and learned Friend's speech. What he has achieved by sticking to principles is excellent. I believe that principles in political life are essential. We have principles in the Conservative party and we stick by them. They include opportunity,
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ownership, low direct taxation, helping those who are in need and promoting and endorsing the principle that the user should pay through value added tax. I agree with that.
In recent years, whenever VAT has been discussed, we have been reminded that food, rent, fares and children's clothes are zero-rated. We always took some pride in the fact that fuel for domestic heating was also zero-rated. I applauded that. I am sorry at this stage to have to sound a note of discord. To me, VAT on domestic heating and lighting costs goes against the grain. Heat and light are essential. Every family in the land is affected by the tax. People have no way of choosing to avoid it. I like indirect taxation because, if people do not want to pay the tax, they do not spend the money in the first place. They can save it. With VAT on heating, there is no way of avoiding paying.
I applaud the extra money that has been made available for the insulation of homes. It costs a lot to insulate homes, yet, I am sad to say, those who live in rented accommodation may not have an opportunity to make use of the money that has been made available. Much of the rented accommodation that needs to be insulated is in Labour-controlled boroughs. Those authorities will not make money available to take advantage of the opportunity to conserve energy in such homes.
Mr. Connarty: The hon. Gentleman knows more about farming and investing in Lloyd's than running public authorities. As a former vice-chair of the Convention of Scottish Local Authorities, I assure him that the heatwise, heatsave and energy saving schemes came from local authorities. They did not come from central Government Departments. They were all introduced by local authorities, which have asked for funding. They asked not for a piffling £10 million a year but for a great deal more to get up to the speed of the rest of the continent.
Mr. Marland: I have already commented on the hon. Gentleman's belief that everyone should receive a housing benefit, so I regard with some scepticism his point that the idea of insulating homes came from local authorities. I am sure that they would like to join in with that, but the point that I made and which I stick by is that the landlord has to make a contribution if people who want to insulate their home live in rented accommodation.
Sadly, as we heard earlier from my hon. Friend the Member for Bournemouth, West (Mr. Butterfill), too many Labour-controlled local authorities have large debts and cannot come up with the money to pay their share of the cost of insulating their properties. That is a disgrace. It is a fair indication of the way in which the Labour party, whether potentially in national government or in local government, talks a great deal but effects poor stewardship of our affairs.
I approve of the aim and ambition of my right hon. and learned Friend the Chancellor of the Exchequer to hand back considerable sums of money to help pensioners and those on income support with their heating costs. However, I am worried about those who struggle to earn whatever money they can and are just above the threshold. They are on low incomes, but their income puts them just above the threshold. They will receive no help with the extra cost of heating.
In my constituency, pay levels are pretty modest. I would have liked the Budget to keep everyone in the Forest of Dean warm on cold winter nights. Furthermore, massive rebates go against the principles of a Government

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who believe in deregulation. Rebates are well intended but costly. There will be some winners and an awful lot of losers.
The proposal reminds me of selective employment tax, which was a muddle created by the Labour party. I remember wrestling with it when I was trying to run my farm—to which the hon. Member for Falkirk, East referred. Selective employment tax was a muddle and a mess. We should not go down that path.
I have found in my constituency that there is a considerable problem with communication about increases in the pension to compensate for VAT on heating costs. If the proposals go ahead, which I am sure they will, and increases in pensions are given, the Government should make more effort to ensure that pensioners understand precisely what proportion of their increase comes from the compensation package to give them more help with their heating costs.
The only people who will be genuinely pleased with the system of enormous rebates are those who will administer them. I believe that we have far too many administrators already and not enough people adding value and creating wealth. We have too many people redistributing other people's efforts. We have learnt that the economy is going much better than forecast. That is a great credit to my right hon. and learned Friend's stewardship of our affairs.
However, it is high time that we demonstrated to the citizens of Britain that we want them to share in the success of this Administration. It is a great shame that it has not been possible to drop the second tranche of VAT so that a little warmth could flow into every home in the land and people could share our success.
My right hon. and learned Friend the Chancellor rightly asked where those who suggested that the second tranche should be dropped would get the money. I made some inquiries this morning in the statistical section of the House of Commons Library. I was told that the revenue from the second tranche would amount to £1,500 million. That is the figure that my right hon. and learned Friend has used on the radio. From that we have to deduct the refunds to pensioners and others, which amount to £600 million. That leaves a net gain of £900 million. From where could we obtain that amount?
The increase in road fuel tax will yield £1.33 billion. I believe that we should have put another penny per litre on road fuel tax and let pensioners and everyone else share in the recovery of our economy. The rest of the money could have been mopped up from the general economic recovery. That is what I suggested that we should do. I hope that by now I have made clear my view on the imposition of the second tranche of VAT.
I should like to move now from one struggle to another. This struggle involves small businesses and modest property owners. The problem that I want to bring to the attention of my hon. Friend the Paymaster General is highlighted in a small town in my constituency called Cinderford. I make no apology for being parochial because the town demonstrates the problem. Sometimes things are easier to understand if a real example is put before us.
Cinderford was once the busiest town in the Forest of Dean. All the local activity revolved around it. However, over time other towns in the district—Lydney, Coleford
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and Newent—have flourished while Cinderford has declined. That small town now has far too many empty shops and offices. It looks rather dreary.
In order to do something about the problem, the mayor of Cinderford, Mr. Graham Morgan, and I have put together a task force of local business men and wealth creators. Graham Morgan is a socialist. He and I have decided that we will put our party differences to one side and work together for the benefit of the citizens of Cinderford. It may interest hon. Members, especially Labour Members, to know that Graham Morgan's peer group in the Labour party in the Forest of Dean is extremely cross with him for working with the wealth creators and me to solve the problems of the town. I get the impression that too often they would rather leave the town in its current difficult circumstances and do little about them.
So poor Graham Morgan has been criticised by his peer group. I respect him for standing up to that criticism and doing what he can to help out.
Mr. Connarty: May I suggest, to assist the hon. Gentleman, that he should go to Stirling and talk to people there? It has a Conservative council because of a strange quirk of the electoral dice. He will find a pattern through the 1980s similar to the one that he describes. He might find some good examples in which there was no antagonism between the parties because the purpose was local wealth creation.
Mr. Marland: I thank the hon. Gentleman for that suggestion. I appreciate it, but I shall now stay with my speech and I shall not give way again.
I do not see why what I suggest for Cinderford should not work for Stirling as well. One of the biggest problems that has emerged during the past five years is the fact that 50 per cent. of the uniform business rate is payable on empty shops and offices after three months.
The charge represents a huge drain on the owners, many of whom are people of modest means who saved like mad to buy the property, but find that instead of being an asset it is turning into a millstone around their necks. They have no money to paint the shop front, to do it up inside or to promote their premises and attract a new tenant. The uniform business rate is such a drain on their resources that they often find that they must dig into other savings accumulated during their working lives so that they do not get into trouble with the local authority. Banks now regard shop premises not as the asset that they should be but as a possible liability that may drag them and the person who borrowed money to buy them into considerable trouble.
We must encourage small business people. The imposition of 50 per cent. of the uniform business rate on shops and offices that have been empty for more than three months is a disgrace. Local authorities have no discretion over the rates and the situation is causing much resentment.
When I took the matter up with the Department of the Environment, I was told that owners of such premises had to pay 50 per cent. of the rate in case they wanted to call out the fire brigade or the police force. That might happen in some unfortunate circumstance, but it seems over the top to charge 50 per cent. of the UBR in case someone

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has to call out the fire brigade. I should have thought that 5 per cent., or a maximum of 10 per cent., would be much more in order.
The anger of shop and office owners is compounded when they discover that the owners of empty factories and warehouses do not have to live by the same rules. They do not have to pay any uniform business rate if their premises are empty for more than three months. It is utterly wrong that one proprietor should have to pay when the other does not. What happens if an empty factory is vandalised or catches fire? Would their owners not call the fire brigade? The owners of empty factories should pay the same as shop owners, or better still, those who own empty shops should pay nothing at all.
In Cinderford, to give the town a boost and make the high street look busier, the owners of empty shops are willing to let other traders dress their shop windows. It gives the town a better look as they try to stimulate business in their shops. That is a generous and a good idea, but there is a problem. The full amount of uniform business rate becomes payable if the windows are dressed. The local authority has little or no discretion in the matter. If it did and the district auditor found out, he would pounce.
A little local initiative is being strangled at birth and a shop owner who once thought of his or her property as an asset has found that it has turned into a liability. I am sure that a similar problem exists in Stirling.
Will my hon. Friend the Paymaster General reflect on what I said about the UBR and its impact on the local business community? We want businesses both large and small to flourish, but we are seriously penalising those citizens who have made a commitment, saved up to buy their commercial property and find that it has turned into a millstone. Will my hon. Friend discuss that scourge—UBR on empty premises—with his right hon. Friend the Secretary of State for the Environment to find out whether they can come up with something practical and instant between them to help our small businesses?
8.43 pm
Mr. George Stevenson: First, I congratulate the Chancellor of the Exchequer—Conservative Members may be a little surprised about that, but I congratulate him on his sheer brass neck.
We are witnessing a classic Conservative strategy: first create the problems and then claim the credit when they begin to be less of a problem. The Conservative party and the Government would love people to forget the past 15 years and to concentrate on what is happening now. The Government talk about reducing unemployment and give statistics and figures that everyone knows are massaged out of existence, but they want the people to forget that they trebled unemployment. We are here to ensure that they do not.
The Government want the country to forget that they murdered 30 per cent. of our manufacturing industry and that—as we heard from my hon. Friends—they are continuing the policies that did that. Conservative Members continually talk about manufacturing industry, but they have only to look at the statistics to realise that, in spite of what the Chancellor said, our manufacturing industry continues to decline.
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The Government create the problem, hope that the country will forget that fact, and then claim some credit for any marginal improvement that may take place. There has been an improvement, they are taking the credit for it, and saying that it is a result of deliberate Government policy. They want the country to forget what happened on black Wednesday and the fact that that selfsame Government deliberately kept to a policy that slaughtered our economy and destroyed whole tranches of our manufacturing base year in and year out, until they were thrown out of the exchange rate mechanism. Of course, we know what happened after that.
We are looking at a blip, but the trends are there for us to see. We do not intend to allow the Government to get away with it. We do not intend to allow them to con the people into thinking that the past 15 years do not matter and that the only thing that does matter is what the Chancellor said yesterday. The Government know what they are about and have put their case subtly and ably. They want to concentrate on the here and now and they want the country to forget what has happened in the past 15 years. I believe that the people understand that.
I listened with great interest to the hon. Member for Gloucestershire, West (Mr. Marland) when he talked of principles. I happen to agree. I know the hon. Gentleman well and was glad that he raised that issue. Where was the principle in a Government who told the country, "We have no intention of raising taxes"? Where was the principle when the Prime Minister, when challenged, deliberately told the people that there would be no extension of, or increase in, value added tax?
The hon. Member for Gloucestershire, West and his right hon. and hon. Friends preach to us and to the country about principles, but they should examine theirs first. If they did, I am sure that we would hear no more lectures about principles. We remember January and March 1992, when the Prime Minister gave commitments to the people on taxation and VAT. We shall continue to remind them of those commitments and to ram them down the throats of the Conservatives at every possible opportunity, so we want no lectures from Conservative Members about principles.
I wish to refer to a comment made by the hon. Member for Bournemouth, West (Mr. Butterfill), which was probably a part of the Conservative party's strategy to convince the country that everything in the garden is rosy. The hon. Gentleman said that pensioners would be better off as a result of the VAT increase. I do not know where the hon. Gentleman gets his figures, but no statistic can justify that statement.
Let us take that logic a bit further. When the Chancellor extends VAT to passenger fares, books, children's clothes and possibly food—as I predict that he will—presumably hon. Members such as the hon. Member for Bournemouth, West will tell pensioners and the British public not to worry because, although the Government are imposing extra taxes, they will be better off.
The Government have failed to understand, and continue to do so, that pensioners and the low-paid do not believe them when they talk about taxation and about the meagre compensation package with which they try to alleviate the effects of VAT increase. They do not believe the Government—not because of how much VAT that compensation package may offset in their bills—but because you told untruths. [Interruption.] I nearly did say

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the dreaded word. They do not believe the Government because you went to the country and gave promises which you cynically broke at the first opportunity.
Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. I hesitate to intervene, but the hon. Gentleman keeps referring to "you". The Chair is responsible for none of the things of which the hon. Gentleman is speaking. He should refer to Conservative Members.
Mr. Stevenson: I apologise, Mr. Deputy Speaker. I am still on a learning curve, and I apologise if I gave offence to any right hon. or hon. Member.
I return to what is a very important point. The people do not trust the Government, not because they have produced a compensation package which they keep pushing, but because the Government broke their promises. That is why people are angry, and that is the reason why the Government will never again be trusted, particularly when they talk about taxation.
Another element of the imposition of VAT which is a real source of anger is that, of all the taxes that the Government could have chosen to reduce the PSBR, they chose the most regressive tax. They chose the tax that will hit pensioners and the low-paid worst.
The Opposition have been challenged by the Government to talk about alternatives. The hon. Member for Gloucestershire, West pointed to one alternative, and there are many others. So let us have no more talk from Government Members about there being no alternatives. Hon. Members know that there are alternatives—what is missing is the political will to address them.
I shall give the House an example of a matter which the Government have not yet addressed, but which I hope that they will address during the debate. When the electricity companies were privatised, they were given the national grid, which was valued at £1 billion. They are now about to dispose of it, and its value is about £4.5 billion. What are the Government doing about that? Are they simply going to wring their hands and say—as the Prime Minister often says—"It is nothing to do with us"?
The national grid was a public asset which was cynically given away by the Government. The people who are in charge of that ex-public asset are about to get a massive windfall. Are not the Government even prepared, in the public interest, to look at that windfall to see what can be done with it? Nobody in the regional electricity companies has done anything for it—the windfall will be a gift to them from the Government. Christmas is coming early for the regional electricity companies.
The Government and the Chancellor have made their usual attack on public expenditure. I was interested to hear the Chancellor talking about how public expenditure would be cut, and I remembered that that was the same Chancellor who sent a letter saying that, between now and the end of the decade, the European Union budget was to increase in volume terms by 16 per cent. There we have the hypocrisy of the Government and the Chancellor. On the one hand, public expenditure is to be cut drastically in this country. On the other, the Government are perfectly prepared to increase the European Union budget in volume terms by 16 per cent.
Where will those cuts fall? Housing is one example. In my constituency, the waiting list for social housing increased by 12 per cent. last year, and the housing investment programme submitted by Stoke-on-Trent
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showed that it needs to double its provision of social housing to meet the demand. There is no chance of that at all. People, including young couples, who are waiting for housing will get no joy at all from the Government.
If I have one major criticism of the Budget, it is that I did not hear the Chancellor, or any of his hon. Friends, address chronic short-termism. It is a fact that we suffer from short-termism. Banks and financial institutions want their returns quick and high. If one tries to invest over a period of five years, one is not likely to get any positive response from them. Short-termism is rife, and the Budget does not address it at all.
Share dividends are going up, and average dividends have risen by between 8 and 10 per cent., yet investment has dropped to levels equivalent to those of 1979. We have billions of pounds which could be used in positive way, but they are not being used in that way because of short-termism. The Chancellor of the Exchequer did not address that issue at all. One can conclude only one of two things—he does not recognise the problem or he is not bothered about it. If the Chancellor has taken either of those two views, the Budget will fail the country for that, if for no other, reason. Unless we get to grips with short-termism, we shall not get the economy moving in the way in which we want it to.
I shall conclude by making a few remarks about the Government's frustration at the lack of the feel-good factor. I know why that factor does not exist in my constituency or in the midlands region—Severn Trent Water has just announced another 750 job losses, and job losses in our manufacturing capacity are affecting people in my constituency. They do not have the feel-good factor because the Government's policies—in spite of what we are told—are simply not working in a way that will positively affect the ordinary people of this country. They still believe that their jobs are not secure and that their children and other young people have no future.
The Budget has done nothing to address those fundamental issues and until the Government do so there will be no feel-good factor, no matter how hard their propaganda machine tries to convince people that they should feel good. The Government cannot continue to tell people that; they can only produce the policies to engender that feeling. For years the Government have failed to deliver such policies and, as a result of the Budget, they will continue to fail to do so.
Mr. Nicholas Winterton: I have been listening with considerable interest to the hon. Gentleman, who represents an area where manufacturing industry is important. I accept that there is a lack of a feel-good factor and that the Chancellor has done very little to help the manufacturing industry. He also failed to discourage short-termism. Does the hon. Gentleman accept, however, that there are many good economic indicators? For example, unemployment has fallen by nearly 500,000, the rate of inflation is at a 27-year low and our growth rate, at 4 per cent., is the highest in Europe. Surely those indicators herald well for the future.
Mr. Stevenson: I can tell the hon. Gentleman quite openly that I do not accept the unemployment figures because they are false. I said earlier, however, that some improvements are apparent in the economy, but as I pointed out, they have nothing to do with Government

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policy. The Government have benefited from them almost by accident and the hon. Gentleman knows that as well as anyone else.
We could make a start on improving the economy if, next Tuesday, right hon. and hon. Members of the Conservative party joined us in voting down the second stage of the VAT increase. That would force the Government to rethink their strategy and perhaps we could then make a start on getting the country back to work.
8.59 pm
Mr. Barry Legg: Budget days are great occasions in the parliamentary year, but in any modern economy people would be wise not to overestimate the effects that a Chancellor or a Finance Minister can have upon the economy in the short term, or even the degree of accuracy that may be attributed to any forecasts that are given. The summer economic statement, which the Chancellor presented to the House only four months ago, offers an admirable example of the difficulty of forecasting with accuracy. He forecast that growth in the current year would run at 2.5 per cent., but in the Budget statement that he produced yesterday that forecast had been revised to a growth expectation of 4 per cent. for the current year.
I certainly accept that bad Chancellors and bad Governments can harm an economy, but I believe that the best Chancellors work with the grain of the domestic economy and take into account global economic developments.
There is some pessimism in the country about Britain's prospects, but I think that we have a great deal to be optimistic about, because Britain's performance has improved markedly. The world is moving in Britain's direction, because the policies that we advocated in the 1980s, based on free markets and privatisation, are the very policies that are creating success across the global economy. Free markets are working well; 10 years ago just 1 billion people worked in the global free market system, but now that number has risen to 5 billion people. The global economy has changed markedly, but it has done so in the United Kingdom's direction and to our advantage.
I welcome the Chancellor's efforts to reduce the Budget deficit projections for the coming years. I also welcome the fact that he has endeavoured to cut increases in public expenditure. In the five years to March 1994, public expenditure in the United Kingdom increased by £96.1 billion. If hon. Members take note of that figure they will appreciate that taxes have had to be increased to pay for that substantial increase in public expenditure. I do not remember any Opposition Member, be it the hon. Member for Dunfermline, East (Mr. Brown), or whoever, arguing against those public expenditure increases.
I welcome the reductions that the Chancellor has made in future public expenditure plans. I note in particular that that expenditure is set to reduce, according to next year's forecast, by £8 billion. My right hon. and learned Friend is now projecting a reduction in public expenditure of 0.8 per cent. in real terms next year. That sounds like a pretty tough Budget, but I would draw the attention of hon.
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Members to last year's Red Book, in which the Chancellor predicted a reduction in the control total of 1.3 per cent. in real terms for the current year.
This year's Red Book shows that the control total for the current year has increased by 1.4 per cent. in real terms. On public expenditure, there has been a 2.7 per cent. swing between what the Chancellor forecast and what has been delivered. That difference accounts for about £6 billion. Therefore, scope remains for ensuring that departmental budgets are drawn more tightly, and that expenditure is firmly controlled.
I welcome the comments of the Chancellor about reducing the running costs of Government; that is a sector in which a great deal of effort needs to be made, and in which the number of civil servants has expanded quite a lot over the years. The Chancellor has set a flat Budget for running costs in the coming years. I think that he should go further, to ensure that projections are achieved and running costs fall. It is essential that Government Departments and agencies produce projections for their manpower levels for the coming three or four years, and that the Government ensure that those manning reductions are achieved. Much needs to be done to improve the Government's management techniques, and to ensure that that is carried through to the agencies.
The rate of growth in the economy for the current year is estimated to be 4 per cent. That is very strong growth for the UK economy. The Chancellor yesterday said that he would adopt a "neutral" budget stance. I think that neutrality may not always be enough and that, when growth in the British economy is so strong, further tightening on the public expenditure front in addition to what is in the Red Book would have been welcome.
In the past two years, monetary policy has been one of our outstanding economic successes. The Chancellor and his predecessor, my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont), have established a domestic monetary framework that will ensure that we can achieve low inflation in the United Kingdom. Hon. Members will remember that one of the reasons that was advanced for our membership of the exchange rate mechanism was that we could not achieve an effective domestic monetary framework—that we needed an external guide to achieve low inflation. We have now shown that we can do that in our domestic economy, and we should be proud of it.
Floating exchange rates have worked well in the past two and a half years. They worked extremely well from 1979 to 1986, a period of great economic success for the Conservative Government, and I think that, as long as we hold true to floating exchange rates, economic success for the Conservative Government will prevail.
Mr. Nicholas Winterton: My hon. Friend referred to a monetary policy that has been extremely effective. Does he agree that the Chancellor said that he might have to increase interest rates again? Is he aware that the inflationary pressures in the economy are not domestic pressures on the economy but external pressures resulting from the price of raw materials, over which we have no control? Does he accept that it would be devastatingly damaging for manufacturing industry if interest rates were increased again?
Mr. Legg: I think that inflationary pressures in the economy are well subdued, and that significant increases

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in interest rates should not take place. As I said earlier, a tighter fiscal stance would probably have helped to achieve that.
The Red Book has plenty of good economic news in it, especially on the export side. In the current year, exports have increased by about 8.25 per cent. It is extremely good news that export-led growth is emerging.
The report of the Panel of Independent Forecasters, submitted to the Chancellor in November, reflects that dramatic growth in exports. The panel noted that, in July and August 1994, the volume of exports to countries outside the European Community was about 10.2 per cent. greater than the comparable level in 1993, and about 21.1 per cent. greater than the 1992 averages. We are achieving good increases in export volumes. Paragraph 3.53 of the Red Book shows that invisible exports are also growing strongly, and that there was a sharp increase to a surplus of £3.5 billion in the first half of this year.
Earnings from overseas investments are at a record level of more than £4 billion a year. That shows the British economy at its best. Britain is a global trading nation and a global investor, and the changes in the world economy are going Britain's way. We are able to invest successfully in the fastest-growing economies and are directing our exports to those economies. I welcome the changes in Export Credits Guarantee Department cover because they are in line with the endeavours of private manufacturers to strengthen Britain's economy.
I congratulate the Chancellor on reducing public expenditure compared with GDP. It is to come down from 43 per cent. in the current year to 41 per cent. by the end of this Parliament. Public spending under each expenditure heading is being kept flat, is reducing or is increasing by less than the rate of growth in the economy as a whole. The economy is growing at 4 per cent., and, with one notable exception, public expenditure under every heading is increasing by less than that. That exception is the UK contribution to the European Community. The Government have committed themselves, and consider it a high priority to make payments to the EC in excess of the rate of growth in our economy.
Overall, public expenditure is moving in the right direction. The Chancellor had little scope for taxation measures, but those on national insurance contributions and personal allowances are welcome. I was encouraged by his comments on simplification of the tax system, and I endorse the remarks of my hon. Friend the Member for Bournemouth, West (Mr. Butterfill) who pleaded for a root and branch reform of capital gains with, hopefully, a tapering system replacing the present complication and confusion.
The Chancellor has provided the right framework, with tighter control, and an unequivocal acceptance of Britain's global economic interests, which should deliver prosperity and success to the British people.
9.12 pm
Mr. David Congdon: I think that it was Harold Wilson who said that a week is a long time in politics. A year in politics is a lifetime, and it is easy for hon. Members to forget last year's Budget in which the Chancellor had two key requirements. The first was to reduce the enormous deficit and the second was to
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ensure that any taxation changes did not harm the recovery. At that time many people were concerned about whether the Budget judgment would prove right.
It is pleasing to note, and we should never forget, that the past 12 months have been a period of economic success. In that time the economy has turned round. Growth has been 4 per cent. and although some people think that is a little too high, I do not. The public finances have been brought into much better shape. Therefore, last year's Budget was a great success. Likewise, this time next year this Budget will have proved to be a great success.
Last year the Chancellor was rightly tough on public spending when he reduced planned growth. I say that deliberately because my hon. Friend the Member for Milton Keynes, South-West (Mr. Legg) rightly said that when politicians talk about cuts in public spending they mean cuts in proposed increases which, of course, are much easier to make than real cuts. This time last year taxes were put up to try to put Britain's budget on an even keel. Therefore, this year, it was obviously right also to try to keep public spending on a tight rein.
It is easy for Opposition Members to suggest that we should increase spending here or not have this tax there, but we should not forget that the public sector borrowing requirement planned for next year will still be £21 billion and be increasing our national debt. Therefore, we cannot take a relaxed view of the PSBR. Quite rightly, the Chancellor judged, and I am sure that most would agree with him, that it would not be appropriate to reduce taxes when public finances are in their present situation.
The Budget provides the opportunity to continue to build on the strong foundation that has now been laid for our future prospects. We have low inflation and we have growth, and for two years running growth will be higher than the level of inflation, a situation that we rarely achieve in the management of the economy.
My right hon. Friend the Member for Hove (Mr. Sainsbury) rightly pointed out that the Government's key role is to create a stable macro-economic framework which enables businesses to get on with their job, which is to produce the goods and services that people wish to buy here and overseas.
Opposition Members talk a lot about investment, but the reality is that businesses invest only if they believe that there is an opportunity to sell more goods arid services. They do not invest simply because Governments or Opposition Members say that investment is a good thing; they invest if they know that they are likely to sell what they produce.
As was pointed out earlier, there is a double edge to the sword of investment. In many areas, more investment will lead to more of the product being produced but with a reduced labour force. It does not necessarily follow that increased investment leads to increased employment. That is one of the problems for all modern industrial economies.
The key is for Governments to keep out of the way and let businesses produce their products. That is why all the initiatives, such as deregulation and freeing up the labour market, are important, but equally important is the need to ensure that the tax burden on businesses is not too

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great. Last year's Budget went a long way towards helping businesses and that is one reason for the growth in the economy during the past year.
Dr. Robert Spink: Will my hon. Friend give way?
Mr. Congdon: I would very much like to, but I am short of time.
This year's Budget rightly took the view that something had to be done about the revised business rates and that has led to £600 million of extra expenditure there. I am pleased to see that that threshold has increased and that various other measures have been taken.
At one stage it was predicted that the Budget deficit would be £50 billion in 1993–94. We now understand that it reached a level of about £45 billion. Much has been said about how we arrived at that situation, much of it wrong. Of course, a lot was the result of the recession which meant that some expenditure on cyclical social security rose. But equally importantly, tax revenues were down by £20 billion in real terms between 1990–91 and 1993–94.
It is equally fair to point out that about half of that deficit was the result of growth in spending which was welcomed by all hon. Members. We did not hear many Opposition Members complain when spending on health was increased in real terms by £4 billion, on education by £3 billion and on Scotland, Northern Ireland and Wales by £4 billion. We have never ever heard from Opposition Members where they would cut public spending because, in reality, they would like to see it increased continually.
The trend for public expenditure has been continually to increase. One only has to look at page 134 of the Red Book to see that it normally increases year on year. It rose vastly from the late 1980s, but initially that growth was masked by buoyant tax revenues. Once they declined, there was a high deficit. It is critical that we never find ourselves in that situation again, which is why I welcome the determination of my right hon. and learned Friend, despite the difficulties, to rein back public expenditure.
Despite the tight settlement, I am pleased to see growth in key areas. Much has been said about the health service, but few people have commented that as a result of not clawing back the excess provision made for inflation, which was lower than forecast, NHS expenditure this financial year will grow 3.75 per cent. in real terms. That follows significant growth in 1991–92 and 1992–93.
The Budget provides for another 1 per cent. growth in the next financial year, and in education as well. That is the way to frame a Budget—rein back less necessary expenditure, such as that on administration to which my hon. Friend the Member for Milton Keynes, South-West referred. That will provide the freedom to provide growth in areas where it will be most useful. The NHS has a good record of expenditure growth—70 per cent. in real terms since 1979, and significant increases since 1991.
It ill behoves Opposition Members to complain, particularly in respect of community care, of a shortage of funds when social service departments throughout the country have enjoyed more growth than ever before. It is about time that they got their act together.
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I warmly support the Budget and look forward to saying next year that it embodied the right judgment. I am sure that Britain will enjoy continued growth in future years.
9.21 pm
Ms Hilary Armstrong: It is interesting to sit through a large part of a debate and hear different ideas of reality. Several hon. Members claimed to deal with the real world, but their worlds seemed far from those that our constituents face.
The hon. Members for Croydon, North-East (Mr. Congdon) and for Milton Keynes, South-West (Mr. Legg) said how pleased they were that civil service administration is being cut. Their speeches seemed to be based mainly on press releases and they did not seem to have examined the fine detail. Red Book figures for the health service show anything but a real increase in spending of any note this year, and there will be a decrease next year. That is another broken election pledge.
In so many ways, the Budget is dishonest. It is aimed at a short-term fix for the Chancellor and his troubled party, rather than at devising long-term solutions for the economy and the British people. Whatever the Government may like to think, the electorate have not been fooled and will not be fooled. A former Conservative Member of Parliament who now holds a senior post in the Conservative party said:
"What we are saying is completely at odds with their experience."
There have been too many broken promises and wasted opportunities and too much public money has been squandered.
We have had many lectures from the Conservatives about our wish for more public spending but, in the past year, we have identified many spheres where public money has been squandered on the Government's ideological fantasies. Their latest escapade involves a private sector hospital in Scotland, which has not been bailed out although the Government intend to put a further £30 million into it to try to rescue something. It is a waste of money that could and should have been spent elsewhere.
The Budget gave the Government the opportunity to remedy some of their worst errors. The Chancellor was pressed to think again by some Conservative Back Benchers about what people regard as his most heinous crime—his failure to cancel the proposed increase in VAT on domestic fuel from 8 per cent. to 17.5 per cent. Instead, he claimed that he was introducing a wonderful rise in the compensation available but, if one examines the figures, one finds that there is no such rise. The amount that pensioners will receive is no more than they should have expected last week; there is to be no rise over and above what they had already been told.
The hon. Member for Brighton, Kemptown (Sir A. Bowden) has made it clear that he finds the compensation package inadequate. I hope that the Paymaster General will prove that he is listening to what Back Benchers are saying but I am confident that he will not. I therefore hope that the hon. Member for Kemptown will join us in our genuine attempt—[HoN. MEMBERS: "Genuine?"] Yes, genuine. I hope that the hon. Gentleman will join us in our efforts to ensure that the Government learn to listen to people outside.

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The Government offered no new money. Instead, the Chancellor gave us a cynical publicity stunt, of which he should be ashamed. Whatever he may think about that stunt, he should realise that it will not work because people do not trust the Government any more. However, at least he did not try to follow the example of his predecessor, who first announced the new tax and tried to tell us that it was a green tax imposed in response to the Rio summit. I suppose that we should be grateful for that.
The increase in support for insulation schemes is so derisory that it will probably create more problems than it will solve. The Chancellor announced that he was making available an additional £10 million for the scheme, which, I understand, will, on current costings, insulate approximately 60,000 more homes. There are already 90,000 homes on the waiting list, and in some areas there is a six-month backlog.
The reality is that, far from being a wonderful effort to help people to pay the increase in VAT, the Chancellor's action will merely raise people's expectations. People will apply for the grant but the organisations that will deal with it tell me that their credibility will be undermined when they have to push people back down the queue. It is no surprise that people just do not believe what the Government say.
Let us think again. It is important to remember what the Government have said—I know that they do not like us to do this—and then to see how they have done something quite different. The Conservatives have, again and again, yesterday and today, proclaimed themselves to be the party of low taxation. They obviously did not like hearing the words of my hon. Friend the Member for Dunfermline, East (Mr. Brown)—[HoN. MEMBERS: "Yes we did."] I hope that Conservative Members enjoyed them and that they learned from them, too.
The Conservatives cannot continue to say, in whatever way they want, that their instinct is for low taxation and then take no notice of their instincts, their words or anything else. The Conservative party said in its manifesto:
"We are the only party that understands the need for low taxation."
This Government have raised taxes by more than any other Government this century and they have ensured that the typical family is paying £840 more in taxes as a result of their changes over the past two years.
If I was being generous, I could imagine, I suppose, that the writer of the manifesto simply did not have time in the rush before the election to finish the sentence. Perhaps it should have read, "We are the only party that understands the need for low taxation the year before an election and the need for very high taxation in the intervening years."
The Government proclaim themselves as a Government of opportunity and a Budget is always a time for a new opportunity, yet this Budget is limited in the new opportunities it gives. Public expenditure cuts—real cuts—will mean job losses in the construction industry and in the civil service. Last night, Customs and Excise unions were told that 4,000 jobs were to be cut, including jobs in the front line of tackling drug smuggling. Yesterday, the Prime Minister told the House that this was simply an efficiency measure which would not affect the detection of smuggling. I do not believe that, and neither do drug officers or those who have been caught smuggling drugs at ports of entry.
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The Budget was supposed to offer new opportunities for those seeking to get back into work and those seeking to equip themselves to get back into work. However, one of the meanest measures of the Budget deeply affects those who are seeking new opportunities for learning in their later lives. Yesterday, the Chancellor announced a mean measure to phase out the means-tested allowance for mature students. That will mean the loss of about £1,000 a year for the students over 29 who are least able to make the move back into education.
From my experience of training mature students before I came to the House, I know that before they take the decision to go back into education and training, they consider every option. The last thing that they want to do is to make life even more difficult for their families, so they work out in detail exactly how they will sort things out. The loss of an extra £1,000 for those who can least afford it—those who are means-tested—is penny-pinching and mean. More than that, it is an incredible disincentive for the very people whom we should ensure get back into learning, into reskilling and into developing their talents so that they can change their careers and get back into work.
Today, the Chief Secretary to the Treasury spoke about the effort that the Government had made to listen to unemployed people and to understand the barriers that they faced in getting back to work. I agreed with the right hon. Gentleman on the three points that he made, but he missed another two critical points. First, many people have become unemployed because their skills have become redundant.
The men who have been made redundant at Swan Hunter, who should have been kept on, are now having to think about a change in their work pattern. That will not be solved by the sort of scheme that will give them three weeks' trial in a work trial. That will not be sorted out by giving them the sort of short-term measures that the Government seem to be proposing in this Budget. They need good-quality retraining opportunities, they need to be able to afford to take those opportunities and they need to be able to find those opportunities in the area where they live.
Mr. Aitken: If the hon. Lady would, just for a moment, look at this problem of Swan Hunter employees from the point of view of an employer from that area, she may see it from a completely different perspective. I think that I know the Swan Hunter work force quite well from my days as Minister of State for Defence Procurement. I had long talks with the convenor, Mr. Eddie Darke. One of the problems facing all the admirable men at Swan Hunter, who finished ships to the highest quality, will be finding a new job because all employers will doubt whether a man who has been on the employment register for a certain length of time is back in the habit of work and should be taken on.
Surely the scheme that my right hon. and learned Friend the Chancellor has proposed is good because it offers a trial work scheme and a range of measures that will make it easier for the employer to take such good

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people on. The hon. Lady is leaving out of her calculation what employers may think of the admirable schemes that my right hon.—
Mr. Deputy Speaker: Order. That was a very long intervention.
Ms Armstrong: I understand the anxiety that the right hon. Gentleman feels in trying to get to the heart of the problem. I agreed with his three points, I give him that. Those measures will meet some people's needs, but I am dealing with a different problem. One cannot, with those measures, sort out the needs of people who need proper reskilling and proper retraining. If his measures are the only measures on offer to the men who have been made redundant at Swan Hunter, they will join the ranks of the long-term unemployed before they get another chance. That is the problem. We want them to get jobs now. We want them to have other opportunities of proper reskilling and proper training. Instead, savage cuts have been made in the training programme, showing that the Government have no serious intention of reskilling the work force.
The second point that the Chief Secretary missed is that jobs need to be created to get those who are unemployed back into work. Those men from Swan Hunter are not the only people on Tyneside or in Wearside who are looking for jobs. Thousands and thousands of people are looking for jobs who will not be re-employed until new jobs are created in the economy. The Budget has provided no new incentives for manufacturing investment, it has provided no incentives for business start-ups, and, if anything, opportunities have been reduced. The enterprise allowance, for example, will be all but extinct. Certainly, it will be extinct in my area because the single regeneration budget does not include the enterprise allowance scheme.
The Government have been in the habit of boasting that unemployment has fallen by more than 400,000 since the end of 1993; but they have neglected to mention that total employment has also fallen by a little under 440,000 since the middle of 1992 through the recession. Of the jobs which have been created since 1992, 90 per cent. are part-time. We want to see a flexible labour market so that people have the choice to work full or part-time. Instead, we have an economy in which employment opportunities have shrunk and those opportunities that are available tend to be limited far too much to low-paid, low-skilled and part-time work.
The Government have taken no steps in the Budget to increase the capacity of the economy. That limits our competitiveness and growth in employment. The Government's short-sighted approach is most apparent when we consider the building industry. My hon. Friend the Member for Dunfermline, East explained earlier how that problem could be tackled. We have spelt out clearly how we could have a decent welfare-to-work programme. We have acknowledged the importance of providing individual support and the importance of that for social cohesion. We could have got many more people back into work.
The programme offered nothing for women. There was no incentive for women with children to take up opportunities for child care. From our previous exchanges, the Chancellor is aware that I know that that can be achieved in partnership with local authorities in ways that
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improve the quality of opportunity for the child and give parents a decent choice about their career and development.
In all ways, the Government have failed to meet the opportunities that were available to them yesterday. The Secretary of State for Education promised 10 days ago that there would be new money for nursery education, but no money was included in the Budget yesterday for nursery education: what a betrayal and a lost opportunity.
We had a Budget yesterday that Conservative Back Benchers cheered. We should be used to that. Even in my short time in the House, I recall the way in which they cheered Nigel Lawson and I remember the real problems that the economy faced after that. I remember how Conservative Back Benchers cheered the present Chancellor's predecessor and how quickly his Budget unravelled.
Order Papers were waved yesterday. Perhaps for once Conservative Members were really being honest. The speech made by the Chancellor yesterday was meant to satisfy Conservative Members that the Government's craving for short-term, short-fix income tax cuts in next year's Budget are what is really on the Chancellor's agenda.
However, those cheers hide the stark reality for the British people this year. They hide the reality of the new taxes that they will face. They hide the reality of the increase in VAT on fuel and the attack on living standards. They hide the increasing divisions in this country.
The Government have thrown away the major opportunities to change and give this country long-term growth and opportunity. They are out of touch and, at the next general election, we will make sure that they are out of office.
9.42 pm
The Paymaster General (Mr. David Heathcoat-Amory): The background to this debate is one of a steadily strengthening economy in which all the main economic indicators are favourable. We heard a note of desperation creeping into some of the speeches made by Opposition Members today as they searched Europe for countries outperforming us in one sector or another. As they found fewer and fewer of them, they tended to go global in their search for economies which, allegedly, are outperforming us. However, if they found such a country, they would discover that the policies pursued by that country would have very little to offer the Labour party.
The point that was brought home in the debate by Conservative Members was that that transformed economic outlook still requires discipline, particularly over the public finances, and a continuing and sustained drive to reduce the deficit, which still exists, between what we are raising in taxation and what we are spending. That was one of the messages spelt out by my right hon. Friend the Member for Hove (Mr. Sainsbury) who made a speech—I do not think that we could exactly call it a maiden speech—which relaunched him on a new phase in his career as an elder statesman. [Interruption.] Perhaps I should rephrase that and call my right hon. Friend a statesman. In due course, he will become elder as well. My right hon. Friend made well the powerful point that the indispensable element in the recovery and in the

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Government's achievement over the past few years is the creation of macro-economic stability, which has eluded almost all Governments since world war two.
In the past, we had a good combination of growth and low inflation, but the tendency has been to watch with increasing exasperation how inflation tends to rise and how prices and assets start to take off. After three or four years, the bright economic outlook runs into the sands of yet another macro-economic hitting of the buffers. As my right hon. Friend said, this time we have the fundamentals in place. All that we hear from the Opposition is how they would add to public expenditure and relax taxation.
Mr. Livingstone: Will the hon. Gentleman give way?
Mr. Heathcoat-Amory: The hon. Gentleman has made his contribution. I hope to respond to one or two of his points.
The easy part of politics is to spend other people's money. The difficult part of politics is to restrain public expenditure and, where necessary, to put up taxes to cover the deficit. By history and by nature, the Labour party is the party of public expenditure, whether it is good or bad, efficient or inefficient, affordable or unaffordable. For Labour Members, the state, almost by definition, is better than the individual when it comes to making decisions.
Dr. Spink: Is my hon. Friend aware that the right hon. Member for Kingston upon Hull, East (Mr. Prescott) is even calling for inefficient public expenditure at the moment?
Mr. Heathcoat-Amory: Yes, we have noticed that. Instead of modernising and reforming the public service, Opposition Members want to load it with excess labour, against the wishes of the organisations involved.
We heard the voice of the past from the hon. Member for Durham, North-West (Ms Armstrong), when she bemoaned the prevalence of part-time jobs. She has not understood a recent labour force survey showing that 85 per cent. of people in part-time work are quite happy to have that part-time work. The world has changed since the Labour party was in office.
Despite Opposition Members' efforts to update their economics—the so-called new Labour economics—we still hear the authentic voice of the Labour party from the hon. Member for Brent, East (Mr. Livingstone), who tried to intervene. I listened carefully to his speech. Not for him the new Labour gloss. He gives us a more authentic voice of a Labour party which might be past but which is not unrepresented in the House. Labour Members still believe in the power of officialdom over the power of the market. They always will, and, to some extent, they always should. At the election, people should choose between that philosophy of the economy and the one which we offer.
On taxation, we had again the two new Labour friends, loophole and windfall. That is not a tax policy, it is an illusion. It gives a glimpse of what a future Labour Government would be like, running around looking for loopholes and windfalls, instead of taking clear, if difficult, decisions on how to run the economy.
We had the shadow Labour Budget last week. It was certainly a shadow, but it was not a Budget. There was no precision in it, no figures, and nothing was costed. It was another appeal to their new friends, loophole and windfall. The Government believe in picking up and
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blocking loopholes where they exist. This Budget, like the ones before it, protects revenue against potential loss from real loopholes where they are identified.
I will not weary the House with technical and complex details, but I will give hon. Members an idea of one loophole. There is a perfectly good commercial practice of lease and lease-back. However, businesses which are exempt from VAT—particularly those in the insurance and banking sectors—have been exploiting this practice to spread their VAT over 2,000 years. We are all in politics for a long time, but we wish to see VAT on transactions made today at least recouped in our own lifetime, even if not in the present Parliament.
We have closed that genuine loophole. The value of that and other measures on the indirect taxation side—which is my particular concern—amounts to £340 million. They are real anti-avoidance measures, which have been properly and precisely targeted, in contrast with the broad political sideswipe attempted by the Labour party.
The subject of VAT on fuel was raised again. No Conservative Government like to increase taxes, but the VAT on fuel is an indispensable element in the package of tax-raising measures announced in last year's Budget. The value of that package has been demonstrated in getting national finances under control and creating real growth with low inflation. Now is not the time to relax our discipline and knock away the very foundations of the economic recovery.
Fuel is a rather sensible commodity to tax. That is why all other countries in the European Union impose VAT on fuel—most of them at standard rates. The four Nordic countries, many of which are considerably colder even than Scotland, tax fuel at rates of either 22 per cent. or 25 per cent. It makes environmental sense to tax a commodity which is so directly related to environmental concerns such as the build-up of carbon dioxide in the atmosphere, which leads to the greenhouse effect.
Mr. Robert Ainsworth rose—
Mr. Heathcoat-Amory: I am answering the point raised by the hon. Member for Orkney and Shetland (Mr. Wallace). In front of other audiences, the hon. Gentleman and his hon. Friends have constantly argued for environmental taxes, including a carbon tax. One of the Liberal party's slogans from a few years ago was "Think globally, act locally". That has now been changed to "Tax globally, but not specifically". The Liberal Democrats are very keen on the idea of environmental taxes, but when measures are brought forward to tax fuel, of course they oppose them.
Mr. Wallace rose—
Mr. Heathcoat-Amory: I hope that the hon. Gentleman will forgive me, but I must press on as I have to respond to a number of other points which were raised during the debate.
Sensible environmental pressure groups like Friends of the Earth have agreed that a tax on fuel is a sensible measure.
Mr. Wallace rose—
Mr. Heathcoat-Amory: I will not give way because I need to make some other points.

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Of course, fuel tax must be allied with other measures in order to protect the most vulnerable. That is why the Government have provided substantial help to pensioners, widows and the disabled. Assistance is also given to other poorer households, such as to those on income support.
I want to pick up the point made by my hon. Friend the Member for Brighton, Kemptown (Sir A. Bowden), whose work for pensioners and pensioner organisations is well known and much appreciated on both sides of the House. He understands not just the problems of pensioners, but the solutions to those problems.
He was generous in his praise of the raising of the age allowance. I am therefore particularly concerned to examine the figures that he brought to the House and the worries that he has about uprating. If I cannot answer his questions decisively this evening, I will write to him about the matter. I believe that there is a genuine misunderstanding about the effect of the uprating on this year's pensioner figures. I can assure my hon. Friend that next year there will be a full 50p uprating for a single person. It will amount to that in April of next year. I hope that, with the uprating that takes place in any case of the rest of the pension, that meets the concerns that my hon. Friend raised.
Mr. Robert Ainsworth: Will the Minister give way?
Mr. Heathcoat-Amory: I am sorry. The hon. Member for Durham, North-West (Ms Armstrong) who answered the debate for the Labour party has left me extremely short of time and I have a number of points to make.
My hon. Friend the Member for Gloucestershire, West (Mr. Marland) made the valid point that pensioners are often not aware of the help that they are receiving. I have no doubt that we shall have to return to that issue. He made the specific suggestion that we should drop the second tranche of VAT and instead put a penny on road fuel tax. I have to tell him that a penny would not be enough. An extra 2p a litre on fuel would be required. I ask him to consider the consequences that would flow from doing that. My hon. Friend and I both represent rural constituencies. Motorists in rural areas would begin to find such an increase, on top of the extra 5 per cent., not simply taxation but penal taxation. As the fuel cost would also feed through into the costs of hauliers, there is a competitiveness argument to be answered, too.
I shall have to get back to my hon. Friend on his point about the uniform business rate. I wish to make some further points about the compensation package for VAT on fuel that we have put in place. The home energy efficiency scheme has been mentioned several times. The funding for the scheme has been more than doubled in the past two years. It provides grants, usually at 100 per cent., for insulation, draught-proofing and so on. More than a million homes will have been treated by early next year and we expect another million homes to be grant-aided in the next three years.
Cold weather payments were the subject of some disparaging remarks from Labour Members. I remind them that, when the Labour party was last in office, there were no such things as cold weather payments. All the cold winters that we remember in the 1960s and 1970s happened without cold weather payments going to anyone.
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The other point about VAT on fuel is on prices. Some Labour Members talk as if energy prices have risen continually. Perhaps they remember the days of the last Labour Government. Since the utilities have been privatised, prices have fallen substantially in real terms. Even with the addition of VAT this year, gas and electricity prices are 1 per cent. lower in real terms than they were two years ago. If one adds the compensation package to that, one can see that, arithmetically, many people must be better off.
I draw the attention of the House to another feature of the energy industries. We all agree that one of the criteria that we use in judging a supplier company or industry is the way in which it treats its customers who get into trouble with debt and face disconnection. Does the company reach for the disconnection switch or help the customer manage the debt? The old state-owned domestic utilities presided over by the right hon. Member for Chesterfield (Mr. Benn)—I see that he is in his place—when he was Secretary of State for Energy reached for the disconnection switch far more frequently than today's privatised utilities.
I can give the figures to the House. Since privatisation, the electricity companies have reduced their disconnections by a remarkable 98 per cent. British Gas has reduced its disconnections—I have the precise figures with me—from more than 45,000 in 1986 to just more than 16,000 in 1993. That is a reduction of two thirds. All that the Opposition parties want to do is reduce the wages of the chief executive. We have reduced prices—or the companies have—and the incidence of disconnection. Those old, cosy, state-run utilities were far more brutal with the old and the cold than the private sector companies are today.
The debate has shown up the natural sharp divisions between both sides of the House, but it is increasingly recognised that the Budget is building on firm foundations. The recovery is based on production, investment and exports and builds on the supply-side reforms of the 1980s, which turned those sluggish domestic utilities into world-class companies. It is not a recovery based on consumer expenditure, or on an asset boom. For that reason it may not get the quick—
It being Ten o'clock, the debate stood adjourned.
Debate to be resumed tomorrow.

PRIVILEGES
Motion made, and Question put,
That Mr. Tony Benn be discharged from the Committee of Privileges.—[Mr. Andrew Mitchell.]
Hon. Members: Object.

PETITIONS

  Mellor Primary School
  10 pm
  Mr. Keith Vaz: My first petition has about 1,500 signatures, which have been collected by parents, staff and local councillors on behalf of Mellor primary school in Clarke street, Leicester. The people who signed the petition are very concerned about the traffic situation outside the school and have been campaigning every Tuesday and Thursday morning for a crossing to be installed.

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  The petition states:
  we urgently need a pedestrian crossing to be installed outside Mellor primary school, near the Checketts road entrance, to protect the lives of pupils and parents who have to cross the busy Checketts road every day on journeys to and from school,
  Wherefore your petitioners pray that your honourable House takes note of the danger faced by children and parents every day on journeys to and from the school and makes provision that local authorities should provide safe crossings where necessary, to protect lives.
  And your petitioners as in duty bound, will ever pray etc.
  To lie upon the Table.

  Millennium Commission
  10.1 pm
  Mr. Vaz: The second petition is presented on behalf of Mr. Gurdip Gujral, Mr. C.B. Patel, Mr. G.K. Noon and about 1,000 members of the Asian community in Britain, who are very concerned that the new Millennium Commission which has been set up by statute in the National Lottery etc. Act 1993, does not contain a representative from Britain's Asian community. They felt strongly that, to be fully representative, the Commission ought to contain someone of Asian origin. I pointed that out to the Secretary of State for National Heritage. The community has, therefore, asked in the petition that the Government appoint someone of Asian origin to that Commission.
  To lie upon the Table.

Merseyside Police Budget
Motion made, and Question proposed, That this House do now adjourn.—(Mr. Conway.]
10.2 pm
Mr. George Howarth: First, I offer the Minister an apology, as he has had less than the usual notice of this debate. I do not know whether he is aware of the fact, but my original title was changed because of a material change in the subject, so the Home Office did not get the usual amount of notice. Secondly, I thank the Office of the Speaker for advice on how I could change the title last Friday.
The funding of the Merseyside police budget is a matter of great concern and speculation, especially in respect of the funding formula and how it is applied to Merseyside. The Minister will be aware that the standard spending assessment, as applied to public expenditure for the police, amounts to about £6 billion per year. The formula proposed, which has caused all the problems nationally and on Merseyside in particular, is based on seven areas of police work that the Association of Chief Police Officers identified from an activity analysis. Those are: core management, crime management, public order, traffic management, community relations, security and pensions. Those are now built into an adjusted regression analysis formula which is, in effect, the funding formula. ACPO provided those suggested areas of activity, but it has serious reservations about the way in which the formula will be applied.
For example, the formula does not take into account the willingness—or, for that matter, the unwillingness—of the victim of a crime to report that that crime has taken place. Anybody with experience of localised crime, such as burglaries, thefts from cars, break-ins and so on, realises that there are many reasons why people often do not feel able to report that a crime has taken place. That means that the true level of crime in any given area can often be underestimated. Merseyside police authority certainly feels that that applies in our case.
People may not report a crime because of their perception of what might happen if they report it. It is not unknown for people to be afraid of reprisal if they report a crime, and it would be unwise to underestimate the fact that, in some areas, people are physically afraid of reporting crime because of the consequences. It also depends on whether the victim has adequate insurance to cover the replacement cost of any item that has been stolen, because it is invariably necessary to have a crime number to report to one's insurance company if a theft has taken place. If they are not insured, people may take the view that—as there is little chance in some crimes of goods being recovered—there is no point in reporting it.
It becomes a vicious circle. People do not report a crime because they do not think that the criminals will get caught. Because they do not report it, the crime statistics are suppressed and not enough resources are put in to make sure that proper levels of policing are applied. There are specific problems about the way in which the formula can be applied.
ACPO questioned the statistics. It feels that in some cases when an incident has been reported, there may be more than one crime involved, but that not all the specific crimes that have been committed within the compass of

1307
one incident will find their way into the reporting system. Again, that leads to a statistical under-recording of the actual level of crime.
Merseyside police produced statistics to show that the cuts will have a major effect on the police and civilian numbers employed by the police authority. Those estimates show that a reduction of 2 per cent. would mean the loss of 170 police officers and 35 civilians. Given the fact that the Government place great stock on taking away paperwork from police officers and moving it to civilians, the number of civilians lost will equally affect the fight against crime.
If we take the upper end of the possible reductions that have been talked about—a 6 per cent. reduction—that would mean 500 police officers and 100 civilians lost. The effect of that would be catastrophic. As a result, there has been a great deal of pressure from the police authority, the local community and local hon. Members—particularly my hon. Friends the Members for Liverpool, Garston (Mr. Loyden), for Liverpool, Riverside (Mr. Parry), for Knowsley, South (Mr. O'Hara) and for Bootle (Mr. Benton), who are here tonight. Some Conservative Members have been involved also.
I understand—although I have not seen it in print—that a member of the Cabinet has lobbied the Home Secretary on this very issue. That ought to speak volumes about the public reaction on Merseyside to the possible consequences.
The Government did appear several weeks ago to climb down on the formula, but there are no guarantees that that will resolve the problem. They have not resolved the underlying difficulties with the formula itself, and there has been no effort on the part of the Government to enter into any meaningful consultation with the police authorities and other bodies, such as the Association of Metropolitan Authorities and the Association of County Councils.
Mr. Alun Michael: My hon. Friend is right to draw attention to the considerable difficulties that have arisen because of the Government's failure to produce the fair and transparent formula for which we have been calling for a number of years. Does he agree, however, that that formula would change only the size of the pieces into which the cake is cut? During the 1992 general election campaign the Conservative party promised to increase the number of police officers by 1,000, but they delivered a cut by 401 in the 12 months following the general election. Surely that shows that we have a problem with a formula that is designed to share out a cake that is not as large as the Government had promised to make it.
Mr. Howarth: As ever, my hon. Friend hit a well aimed hammer on a nail that was presented to him. The figures that he gave are correct. He is also right that the Government have failed to deliver even a proportion of their electoral promises on law and order.
The Minister should be aware that it is not just a Cabinet Minister and Labour politicians who have been exercised about the formula. I have a press release from Merseyside police authority, which hon. Members may be surprised to learn is controlled not by a Labour chairman but by a Conservative councillor from the Wirral.
1308
Recently, two Conservative members of the authority, Councillor Kate Wood and Councillor Norman Williams, met the Home Secretary. They issued a press release, dated 18 November, which said:
"We will not know the outcome for next year's funding decision by the Home Secretary"—
even though they had just met the right hon. and learned Gentleman—
"until December. The question of inflation provision will have an important bearing on how the Home Secretary's decision will affect Merseyside. If no allowance is made for inflation, this will equate to a reduction of 170 police officers and 35 civilians."
Those are the figures that I gave earlier, so if the Minister is unwilling to accept my assessment, surely he will listen to members of his party.
Mr. Eddie Loyden: Does my hon. Friend agree that, in future, fewer police officers will be available on Merseyside to perform the most important task of crime prevention? One of the greatest assets of the police is their physical, visible presence. Because of the cuts that have effectively already been made, police officers will be unable to carry out that important role on Merseyside. Does my hon. Friend agree that that task is an important part of the debate?
Mr. Howarth: My hon. Friend, with his great experience in the House and of Merseyside, makes an exact, proper point. I agree that the visible presence of the police, not necessarily in great numbers, on the streets and patrolling estates, is a positive deterrent against crime. Their presence also reassures people and we should not underestimate how important that can be. I am grateful to my hon. Friend for drawing attention to those important considerations.
It would be improper of me not to try to take into account what we can glean from the bundle of documents produced with the Budget. I am sure that the Minister will quote some of the statistics in those documents.
Mr. Robert Parry: Some weeks ago I met the chief constable of Merseyside to discuss the formula, because I had been told by the authority's treasurer that the reduction in the police force's budget, announced by the Home Office, could cause the council tax in Liverpool to be increased greatly. The Home Office has refused to answer my written questions about that. I hope that the Minister will give an adequate response to them when he replies to the debate.
Mr. Howarth: My hon. Friend is absolutely right.
There are only two options. If the full cost of providing an adequate police service on Merseyside is not covered by the formula, or what passes for a standard spending assessment settlement on a modified formula—which, apparently, will be announced tomorrow—there are only two ways of closing the gap. One way is to increase the council tax—but there are capping limits, which will be brought into play—and the other is to reduce services. The consequences of that would be horrendous.
Where do we stand according to the Budget? According to the Association of Metropolitan Authorities, which was kind enough to provide me with briefing on that today, the shortfall can be met only—as my hon. Friend the Member for Riverside said—by a reduction in other vital services already provided by local authorities, which would mean cuts in social services, education and other vital services, as a result of the revenue support grant

1309
settlement. If the police budget is protected—I hope that it will be—it will be at the cost of other sectors of local government expenditure, and that would be equally unacceptable.
In any event, it will not be clear until tomorrow exactly where the police stand. In the absence of meaningful consultations, we must, regrettably, assume either that there will be cuts in policing and expenditure on policing or, if they are protected, that there will be cuts elsewhere in local government expenditure, which would be equally unacceptable.
My constituents, and people throughout Merseyside, are rightly outraged at the implications of cuts on spending for the police on Merseyside. It will place an enormous burden on the police authority and might mean reductions in staff. Not since a notorious Bill in the previous Parliament instigated by, I think, the hon. Member for Liverpool, Mossley Hill (Mr. Alton), have I had so much correspondence on one subject as I have had on police funding as it applies to Merseyside.
The problem is that the police have a straightforward job—although it is at times difficult to deliver—of catching criminals and also, as my hon. Friend the Member for Garston said, of instituting crime prevention measures where possible, so that those crimes never take place. If that is in any way undermined on Merseyside, the progress that we have made in the past few years—I acknowledge that there has been some progress—will be seriously undermined.
Mr. Edward O'Hara: Does my hon. Friend agree that there is a further danger? Merseyside police is to be congratulated on its success in apprehending dangerous criminals. There comes a time when criminals have to appear before the Crown court and they need professional escorts. The Merseyside police force is on a knife edge already, before the cuts, in its ability to provide adequate escorts for those dangerous criminals.
Mr. Howarth: My hon. Friend makes another good point. The Government's record in holding on to criminals once they have caught them is not of the highest standard already, and if there is any further security risk of that type, it will be unacceptable.
In some debates, the signals that we send out to the wider community are often almost as important as the substance of what is under discussion. What signals do we send out if the issue is not resolved? First, criminals will rightly say that there is a green light. They will say, "The Government might talk tough about law and order, but they do not really mean it, and there will be fewer police, so we shall have more freedom to roam, causing difficulty and carrying out our worst."
There could also be a disastrous effect on inward investment. If prospective investors in the region feel that there is inadequate security and that it will be open season on their premises, they may well think twice and move somewhere else. Existing employers in parts of Merseyside, as in other regions, have difficulty with adequate security. If the levels of policing are reduced, they may even consider moving out of Merseyside. That is the problem that confronts us.
Every public opinion survey that is carried out shows and, for that matter, every Member of the House knows—or should know—that law and order is an issue about
1310
which people are very worried. Unless the Government can reassure people, especially those on Merseyside, by providing the necessary resources to avoid cuts in police cover, people on Merseyside will be entitled to conclude that the Government are not carrying out their responsibilities, and not only those which they accepted at the general election, but those which any normal Government should fulfil. People will be entitled to tar the Government with an entirely new mantra—soft on crime and bewildered by its causes.
10.19 pm
The Minister of State, Home Office (Mr. David Maclean): I am grateful to the hon. Member for Knowsley, North (Mr. Howarth) for his kind but unnecessary apology for the short notice given for the debate. I was not aware that he had given us such short notice but I have such excellent staff at the Home Office that they would have been able to provide a response to the hon. Gentleman if he had told us about the debate only yesterday. However, I do not want him to do that for future debates.
My only criticism of the hon. Gentleman relates to his sense of timing. He alluded to tomorrow's business. If he had been content to wait until after tomorrow's announcement of the local government settlement, which, of course, includes details of funding for the free-standing authorities, all would have been clear and, it is to be hoped, his mind set at rest.
The Government's commitment to policing in England and Wales is as strong as ever. That commitment, which has resulted in an extra 16,000 police officers being employed since 1979, was underscored by yesterday's announcement in the Budget statement that provision for the police service in England and Wales next year will increase by approximately 3 per cent. compared with 1994–95. That is fully sufficient to enable the present number of officers to be maintained across the country if chief officers, in consultation with police authorities, choose to do so.
In addition, central controls on manpower have been abolished, giving police authorities and chief officers much greater flexibility in the way that they determine their spending priorities. Major efficiency improvements are enabling chief officers to make more officers available for front-line duties. We will, of course, have to wait until tomorrow's local government finance statement by my right hon. Friend the Secretary of State for the Environment before we know the individual allocations of police funding for 1995–96.
In the past, the Government's specific grant for policing has met 51 per cent. of whatever has been spent by the police authorities. To give the Government some say over how much police authorities spend, my right hon. and learned Friend the Home Secretary has had detailed controls over items such as manpower numbers and capital expenditure.
Decisions about the best use of resources should be made by the people on the ground. Therefore the Home Secretary is giving up unnecessarily detailed controls on manpower numbers and on all but the largest capital expenditure. At the same time, to make sure that the income tax payer does not lose control of expenditure on the police, the police specific grant will be cash-limited. After all, there is no reason why the spending decisions of a police authority at one end of the country should be

1311
subsidised 100 per cent. by income tax payers who live at the other end and who are not to benefit from the policing services that the extra expenditure is designed to provide. Therefore, in future, local decisions to spend extra money on policing will impact on those local council tax payers who are to benefit from the extra expenditure.
Given that central Government funding is to be cash-limited, its distribution to individual forces must be fair. A working group was set up in October 1993 to identify such a system of distribution—a needs-based allocation formula. As the hon. Member for Knowsley, North knows, that is the basis of the standard spending assessments or SSAs, which are already used to distribute funding for other local services such as education and social services.
The working group was chaired by Home Office officials, but it included representatives from local authority associations, the Association of Chief Police Officers and the Metropolitan police service. The group issued a report in September which contained exemplifications of how a version of the funding formula might work. The figures in the report were provided only to illustrate the effects of the formula.
An existing consultation programme was launched following the issuing of the allocation formula working group's report. I deny completely that there was not full consultation. There has been full consultation on those exemplifications. We listened carefully to the concerns expressed—
Mr. George Howarth: If there was such full consultation, will the Minister explain why ACPO and the Association of Metropolitan Authorities, both of which one would have expected to have a major role in any consultation exercise, deny that there has been any meaningful consultation whatever?
Mr. Maclean: I am sorry, but I am not aware of that. They have never made that clear to me. They have always made it clear to me that they disliked the exemplifications—many of us were unhappy with the initial exemplifications in the formula—but they have never told me that they were unhappy with the level of consultation. I am perfectly content that there has been adequate and full consultation. We have listened carefully to the concerns expressed by police and local authority associations about the size of potential gains and losses implied by that version of the formula and the figures then in circulation.
We have always realised that the size of some of the potential swings in funding produced by the working group's version of the formula were too large. Some of those swings would have jeopardised the need for stability in the policing of communities. So that the formula could take more account of that need for stability, my right hon. and learned Friend decided to include police establishments as an indicator within the formula for 1995–96. As hon. Members will be aware, police establishments were the basis for previous funding allocations. Including police establishments in the new formula therefore ensures continuity of funding and guarantees the capacity of police authorities to maintain existing levels of policing.
1312
But funding, of course, is only half the equation. The other half, spending decisions, are the responsibility of local police authorities. It is the police authorities—not the Government—which set the budgets for their police forces.
Mr. Loyden: Does the Minister agree that, if a serious attempt is being made to combat crime, it should be on the understanding that the police should be where crime is prevalent? Crime is not distributed equally throughout the country. Some areas need more resources to combat crime. Conservative Members who come from the leafy suburbs do not recognise the problems facing inner cities as a result of crime.
Mr. Maclean: The hon. Gentleman should be careful before assuming that crime occurs only in inner cities and that plush leafy suburbs are exempt from crime or that crime is not a serious problem there. Complaints about crime come from many parts of the countryside and the suburbs. I know from my visits to all the police forces in England and Wales that many areas complain that they are suffering not from their own home-bred criminals but from criminals who come from inner-city areas, and they would like a funding allocation to deal with their imported problem.
Mr. O'Hara: Does the Minister recognise that hardened criminals who realise that there are not rich pickings to be gained from inner cities often travel out to the leafy suburbs for their rich pickings? The crimes that are solved appear on the records of those policing the leafy suburbs, but the leg work in apprehending those criminals is done by the police forces in the inner cities. I do not want anyone to say, "That means that scousers are robbing people blind around the country." There are hardened criminals in all inner cities, and Merseyside police are to be congratulated on knowing who they are and helping other forces to apprehend them.
Mr. Maclean: No one is more in the forefront than me in congratulating Merseyside police on their fantastic success in reducing crime. Their figures are falling dramatically and excellently, along with the vast majority of other forces throughout the country. That is the reason for the largest fall in recorded crime in the past 40 years.
One requires a formula for distributing resources for the police that is based on need. That need is not as simplistic as the hon. Gentleman says. Of course inner cities have their particular problems, but they are not unique in having problems. It is too simplistic to say that if criminals in inner cities are committing crimes in other areas, those other areas are successful in arresting them. I wish that that were always true. In some cases it is, but in others it is not.
Police forces throughout the country complain that someone else is causing a problem for them, and they are right to make that point. We must be careful not to produce broad-brush solutions. We have been striving to find a formula that takes account of problems of inner-city and other forces.
Mr. Parry: Will the Minister answer my question as to the estimated increase in Liverpool council tax—one of the highest-rated in the whole country?
Mr. Maclean: No, I cannot speculate on such a hypothetical point. The hon. Gentleman does not know

1313
the settlement or what budget Merseyside police authority will set, and I cannot speculate on the council tax level. The hon. Gentleman must wait until tomorrow to learn the financial settlement and the police allocations.
Merseyside was well to the fore, together with many others, in raising concerns about the possible impact of the new funding formula. However, whoever was behind the campaign that was mounted within Merseyside sought to scare residents rather than to inform them. I am not surprised that the hon. Member for Knowsley, North received a record number of letters. If millions of those scary leaflets were distributed, I would expect all the hon. Gentleman's constituents to write to him.
1314
That misleading leaflet, which was circulated to 600,000 householders, suggested that 500 police officers were to be lost on Merseyside next year because a cut of £13 million was to be imposed. There was never any intention of imposing a £13 million cut on Merseyside. Even the changes proposed in the working group's report, if that formula was accepted—
The motion having been made after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned accordingly at twenty-eight minutes to Eleven o'clock.

LORD CHANCELLOR'S DEPARTMENT

  Alternative Dispute Resolution
  Dr. Lynne Jones
  To ask the Parliamentary Secretary, Lord Chancellor's Department what measures he has taken to support alternative dispute resolution.

  Mr. John M. Taylor
  The Lord Chancellor has welcomed the growth of private alternative dispute resolution services where the parties do not need the compulsion, finality and certainty that only the courts can provide. My officials have carefully studied reports of ADR experience in this country and abroad. However, before committing public money to ADR the Lord Chancellor is concerned to have much greater certainty that such methods would produce the benefits to the Department which its supporters claim.

  Secret Files
  Mr. Byers
  To ask the Parliamentary Secretary, Lord Chancellor's Department how many(a) top secret and (b) secret files his Department holds.

  Mr. John M. Taylor
  There are three top secret and 124 secret files out of a total of 105,535 files in the Lord Chancellor's Department. These figures refer to individual file parts. The proportion of top secret and secret files is 0.002 per cent. and 0.117 per cent respectively.

HOME DEPARTMENT

  Christmas Expenditure
  Mr. Bayley
  To ask the Secretary of State for the Home Department how much public money will be spent on entertaining, Christmas decorations and other festive activities this Christmas season by his Department and Government agencies answerable to his Department; and of this sum how much will be spent in Ministers' private offices, his official residence in London and official residences.

  Mr. Howard
  Disaggregated information of this nature is not available, but no public expenditure is envisaged in relation to Christmas festivities.

  Crime Statistics
  Mr. Redmond
  To ask the Secretary of State for the Home Department if he will take steps to ensure that all chief constables define crimes accurately when compiling statistics.

  Mr. Maclean
  When recording offences police consult Home Office rules for classification and counting of crimes which are standard for all the police forces in 696
  England and Wales. The classification of crimes is determined by precise statutory definitions. A comprehensive set of counting rules is used by police forces in order to maintain the consistency of recording multiple, continuous and repeated offences. Whilst these detailed rules are issued centrally, many decisions still have to be taken locally about the recording and counting of criminal incidents. When carrying out force inspections, Her Majesty's inspectorate of constabulary looks carefully at how forces record crime. If it seems that crimes are being wrongly recorded, HMIC will advise forces to adjust their practice.

  Criminal Justice Act
  Mr. Corbyn
  To ask the Secretary of State for the Home Department how many representations he has received on the Criminal Justice and Public Order Act 1994 and on the Bill which led to it.

  Mr. Maclean
  About 2,000 letters have been received from members of Parliament, most of them covering representations from constituents about the Criminal Justice and Public Order Bill or Act or aspects of them. In addition, around 2,500 letters have been received direct from members of the public, together with representations from groups with a particular interest in the criminal justice system.

  Mr. Corbyn
  To ask the Secretary of State for the Home Department how many people have been charged under the Criminal Justice and Public Order Act 1994.

  Mr. Maclean
  Information on numbers of people charged is not collected centrally. Information on the number of people cautioned and the number of court proceedings for offences committed under the Criminal Justice Act 1994 will become available from the autumn of 1995.

  Police (Disciplinary Code)
  Mr. Cohen
  To ask the Secretary of State for the Home Department what representations he has received from the Police Federation about police officers incurring debt due to the Child Support Act and their disciplinary code; what response he has given to the suggestion to change the disciplinary code; and if he will make a statement.

  Mr. Maclean
  None. On 28 June, the president of ACPO wrote to chief constables expressing confidence that the service would be compassionate to officers who experienced financial difficulties as a result of Child Support Agency commitments.

  The Government have already announced that new police disciplinary procedures will be implemented under the Police and Magistrates' Courts Act 1994. These will give police managers greater discretion when dealing with officers in debt, however the debt was incurred.

  Fire Services
  Mr. Chidgey
  : To ask the Secretary of State for the Home Department what percentage of fire appliances arrived at emergencies in the London area within (a) three minutes, (b) four minutes, (c) five minutes, (d) six

  697
  minutes, (e) seven minutes, (f) eight minutes, (g) nine minutes, (h) 10 minutes, (i) 11 minutes and, (j) 12 minutes, in 1992, 1993 and in the current year to date.

  Mr. Nicholas Baker
  The data requested are shown in the table; 1993 is the latest year for which data are available.

  Response times1 to fires in London, 1992 and 1993

  1992

  1993

  Response times (minutes)

  Number of fires

  Cumulative percentage

  Number of fires

  Cumulative percentage

  Within 3

  5,650

  27.3

  5,142

  25.7

  4

  6,319

  57.9

  5,769

  54.5

  5

  5,269

  83.3

  5,015

  79.5

  6

  1,639

  91.3

  1,941

  89.2

  7

  776

  95.0

  1,048

  94.5

  8

  476

  97.3

  529

  97.1

  9

  209

  98.3

  244

  98.3

  10

  129

  99.0

  139

  99.0

  Response times to fires in London, 1992 and 1993

  1992

  1993

  Response time

  Number of fires

  Cumulative Percentage

  Number of fires

  Cumulative Percentage

  Within 5 minutes

  1,970

  51.8

  1,890

  54.8

  6–10 minutes

  1,439

  89.7

  1,263

  91.5

  11–15 minutes

  279

  97.0

  211

  97.6

  16–20 minutes

  49

  98.3

  31

  98.5

  Over 20 minutes

  27

  99.0

  8

  98.7

  Unknown

  38

  100.0

  44

  100.0

  Note:

  1) The interval between the time of the first call taken by the brigade and the time the first appliance arrived at the fireground.

  Source:

  Home Office fire statistics.

  Omasese Lumumba
  Mr. Cohen
  : To ask the Secretary of State for the Home Department if he will now place in the Library the internal prison report into the death of Mr. Omasese Lumumba; and if he will make a statement.

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

  Letter from Derek Lewis to Mr. Harry Cohen, dated 30 November 1994:
  The Home Secretary has asked me to reply to your recent Question about the death of Mr. Omasese Lumumba.
  Subject to considerations of security and to the Coroner's consent, before an inquest, the Prison Service is generally prepared to disclose copies of documents provided to the Coroner to anyone who is a "properly interested person"under the Coroner's rules.
  Reports of follow-up internal investigations, including statements taken by the investigating governor, are not disclosed as the Prison Service needs to be able to conduct its own review of the case in confidence.
  A similar policy applies to the deaths of persons in the custody of the Prison Service detained under the Immigration Act.

  Asylum Seekers
  Mr. Corbyn
  To ask the Secretary of State for the Home Department what is the current average wait for asylum applications; and how many applicants have
  698

  Response times1 to fires in London, 1992 and 1993

  1992

  1993

  Response time(minutes)

  Number of fires

  Cumulative Percentage

  Number of fires

  Cumulative Percentage

  11

  59

  99.2

  57

  99.3

  12

  29

  99.4

  36

  99.5

  Over 12 minutes or unknown

  129

  100.0

  105

  100.0

  1 The interval between the time of the first call taken by the brigade and the time the first appliance arrived at the fireground.

  Source:

  Home Office fire statistics

  Mr. Chidgey
  To ask the Secretary of State for the Home Department if he will publish the data he has for the response times for fire appliances in Hampshire in Mr. Nicholas Baker: The data requested are shown in the table:

  waited for (a) six months, (b) one year, (c) two years and (d) over two years.

  Mr. Nicholas Baker
  The estimated average length of time between the receipt of an asylum application and the decision, for cases decided in the period 1 August 1994 to 31 October 1994, on applications received since the introduction of the Asylum and Immigration Appeals Act 1993 on 26 July 1993 was 6.8 months.

  In the period 1 August 1994 to 31 October 1994, there were 6,105 decisions made on applications for asylum. Of these, 1,600 took under six months to decide; 1,525 took between six months and a year; 1,385 took between one and two years; and 1,595 took longer than two years for an initial decision on their application for asylum.

  Mr. Corbyn
  To ask the Secretary of State for the Home Department what is the length of time each detained asylum seeker has been held in custody; what review he undertook of their cases; and if he will make a statement.

  Mr. Nicholas Baker
  On 18 November 1994, 654 people who had claimed asylum at some stage were detained under powers contained in the Immigration Act 1991. Of this total, 167 had been detained for less than 1 month; 125 between one and two months; 233 between two and six months; and 129 had been in detention for more than six months.

  The initial decision to detain is reviewed within 24 hours by an immigration service inspector. Thereafter, all detention is reviewed locally at least every seven days.

  699
  After one month the case is reviewed at immigration service headquarters. These reviews continue monthly and at an increasingly senior level. In addition, I receive a monthly report on all cases where detention has been maintained for more than 12 months.

  Private Security Services
  Mr. William O'Brien
  To ask the Secretary of State for the Home Department if he will make a statement on the provisions of training and health and safety practices for people working in the private security service.

  Mr. Maclean
  The Government believe that training is essentially a matter for the private security industry and its customers. We welcome the industry's efforts to develop and raise standards in this area. The Health and Safety at Work Act 1974 applies to those employed by private security companies as it does to other employees in the workplace.

  Mr. William O'Brien
  To ask the Secretary of State for the Home Department if he intends to introduce regulations to ensure a minimum standard of conduct for private security operators; and if he will make a statement.

  Mr. Maclean
  We have no plans to do so.

  Commission for Racial Equality
  Mrs. Ann Winterton
  To ask the Secretary of State for the Home Department (1) how much money has been spent on hospitality by the Commission for Racial Equality in each of the last five years; if he will indicate(a) the nature and cost and (b) the purpose of each event; how many (i) guests and (ii) commission personnel enjoyed the hospitality at each event; and if he will make a statement;

  (2) under what authority the Commission for Racial Equality may extend hospitality in public houses to the staff of right hon. and hon. Members; what was the purpose of the reception for research assistants planned by the commission for Thursday 24 November in the Red Lion pub, Whitehall; why that reception was subsequently cancelled; if he will ensure that public funds are not used by the commission for such purposes in the future; and if he will make a statement.

  Mr. Nicholas Baker
  I will write to the hon. Member and a copy of the letter will be placed in the Library.

  Mrs. Ann Winterton
  To ask the Secretary of State for the Home Department if he will make it his policy to suspend all payments to the Commission for Racial Equality until such time as the House has the opportunity to consider proposed legislation for its abolition.

  Mr. Nicholas Baker
  No.

  Mrs. Ann Winterton
  To ask the Secretary of State for the Home Department (1) what funds have been made available to the Commission for Racial Equality in each of the last five years for which figures are available; for what purpose those funds are intended; and if he will make a statement;

  (2) if he will give a breakdown by (a) ethnic background and (b) salary of the numbers of people currently employed by the Commission for Racial Equality.

  Mr. Nicholas Baker
  The information requested is detailed in the Commission for Racial Equality's annual reports, copies of which are available in the Library.

  Police Pay
  Mr. Redmond
  To ask the Secretary of State for the Home Department if he will ensure that police authorities fully compensate police officers for any losses incurred as a result of changes in pay day arrangements.

  Mr. Maclean
  It is for a police authority, within the terms of regulation 46 of the Police Regulations, to fix the pay day for members of the police force. I am confident that if a police authority decided to change existing arrangements it would manage the process so as to ensure that police officers were not disadvantaged.

  Conservative Party Conference, Brighton
  Mr. Redmond
  To ask the Secretary of State for the Home Department if he will state(a) the number of payments made, (b) the total sum, (c) the highest individual award and (d) the average time taken to make the payment in respect of persons injured in the Brighton bombing at the Conservative party conference.

  Mr. Maclean
  I refer the hon. member to the answer given to the hon. member for Cardiff, South and Penarth (Mr. Michael) on 19 October at column 246.

  Bail Hostels
  Mr. Straw
  To ask the Secretary of State for the Home Department what was the average cost per person per month for bail hostel accommodation.

  Mr. Nicholas Baker
  The total average cost per person per month for approved probation/bail hostel accommodation in 1993–94 was £1,451, reflecting occupancy in the system as a whole of only 68 per cent. With improved occupancy, the projected figure for 1994–95 is £1,232.

  Greyhound Racing
  Mr. McKelvey
  To ask the Secretary of State for the Home Department what plans he has to consult interested parties about the proposals to deregulate the controls on betting on greyhound racing.

  Mr. Michael Forsyth
  We have today issued a consultation document which gives details of the proposed changes to the law controlling betting on greyhound racing. These will give consumers a wider range of betting opportunities and remove the outdated restrictions governing betting on the sport. At the same time we shall ensure that sufficient safeguards are maintained to protect consumers.

  One of the key benefits is the proposed introduction of a new system of inter-track tote betting. Customers will have the freedom to bet into large linked pools on races at other licensed tracks. There will be provision for local authorities to oversee the operation of inter-track betting.

  The other deregulatory measures, such as removal of the requirement for an accountant to be present whenever totes are operated, represent sensible improvements in the current controls. Such changes will not, in the view of those representatives of local authorities previously consulted, interfere with the proper supervision of tote betting at greyhound tracks.

  Subject to the outcome of the consultation process, we propose to bring forward these changes by means of a draft order under the Deregulation and Contracting Out

  701
  Act 1984. Copies of the consultation document have been placed in the Libraries.

  Secret Files
  Mr. Byers
  To ask the Secretary of State for the Home Department how many(a) top secret and (b) secret files his Department holds.

  Mr. Howard
  As at 31 December 1993, the Home Office held 707 top secret and 86,049 secret files, representing 0.015 per cent. and 1.8 per cent. respectively of the approximate total—4.8 million—of the Department's files at that time.

TRADE AND INDUSTRY

  Mining Licences
  Mr. Hain
  To ask the President of the Board of Trade what arrangements are being implemented for existing licenses mine owners to renew their licences; and if he will make a statement.

  Mr. Charles Wardle
  This is a matter for the Coal Authority. I am asking the Coal Authority to write to the hon. Member.

  Nuclear Power Stations
  Mrs. Anne Campbell
  To ask the President of the Board of Trade what are his plans to increase the security of temporary on-site nuclear waste storage facilities at nuclear power stations.

  Mr. Charles Wardle
  The safety of storage facilities for radioactive waste on nuclear power station sites is a matter on which the operator must satisfy the regulatory authorities.

  Post Office
  Dr. Marek
  To ask the President of the Board of Trade how much money has been raised by(a) capital receipts arising from the reductions in the numbers of Crown post offices in the last 15 years and (b) for savings in revenue expenditure consequent on the reductions.

  Mr. Charles Wardle
  The reduction in Crown post offices since April 1989, largely due to the conversion programme of Crown post offices to agency status, had by March 1994 yielded £5.0 million in capital receipts and £20.7 million in annually recurring revenue savings.

  Chemical Weapons Convention
  Mr. Gapes
  To ask the President of the Board of Trade if he will make a statement on the progress towards the entry into force of the chemical weapons convention; and if it remains his policy that the United Kingdom should become an original signatory of the convention.

  Mr. Heseltine
  It remains the Government's policy to ratify the chemical weapons convention as soon as possible. The necessary implementing legislation will be introduced as soon as parliamentary time and other Government legislative priorities permit.

  Life Assurance Companies
  Mr. Denham
  To ask the President of the Board of Trade what sanctions are available to his Department to 702
  bring against the directors of life assurance companies which have been found to be in serious breach of regulations governing the financial service industry.

  Mr. Jonathan Evans
  Under the Insurance Companies Act 1982 the Secretary of State's powers are exercisable in relation to insurance companies rather than in relation to individual directors. However, under that Act the Secretary of State shall not authorise a company to carry on insurance business, and may withdraw an existing authorisation, if it appears to him that any director, controller, manager or main agent of the company is not a fit and proper person to hold the position held by him. The powers of intervention set out in sections 38 and 41 to 45 of the Insurance Companies Act 1982 are also exercisable on these grounds.

  Fraud Investigations
  Mr. Redmond
  To ask the President of the Board of Trade if he will make it his policy that findings of DTI inspectors will continue to be made available to police investigating fraud.

  Mr. Jonathan Evans
  Yes. It is and will remain my Department's policy to do so in appropriate cases.

  Waste Paper and Packaging
  Mr. Gallie
  To ask the President of the Board of Trade what steps are being taken to bring stability to the United Kingdom waste paper and packaging collection market; and if he will make a statement.

  Mr. Charles Wardle
  Stability in the market cannot be guaranteed, since waste paper is an internationally traded commodity, and as such is subject to fluctuating demand and price. I believe, however, that two developments will help bring about greater stability than that experienced in recent months as a result of packaging waste management regulations in other countries.

  The first is the adoption of the proposed EC Directive harmonising member states' regulations in this area, which the Government has supported. I am hopeful that such adoption will occur before the end of 1994. The second is the introduction of industry measures in response to our producer responsibility initiative for packaging. These should lead to co-ordinated recycling activity which is related to demand, and does not trigger the distorting effects of over-collection which have been apparent elsewhere.

  Secret Files
  Mr. Byers
  To ask the President of the Board of Trade how many(a) top secret and (b) secret files his Department holds.

  Mr. Ian Taylor
  No central record is kept by my Department of files marked "top secret" and "secret". Offices throughout the Department may possess in their registries any number of files bearing protective markings. The information requested is therefore not readily available and could only be obtained at disproportionate cost.

  Dounreay
  Mrs. Fyfe
  To ask the President of the Board of Trade on what grounds AEA technology jobs at Dounreay have been privatised.
  703
  Mr. Charles Wardle
  The Government's intention to privatise what is now AEA Technology was announced last February by my hon. Friend the Minister for Industry and Energy, 17 February 1994,Official Report, columns 922–24. The announcement outlined the criteria on which decisions on the form of privatisation will be taken. As announced in the Queen's Speech, a Bill to provide for privatisation will be introduced this Session.

  Scottish Hallmarks
  Dr. Godman
  To ask the President of the Board of Trade what recent representations he has received concerning the continuity of the Scottish hallmark, the lion rampant and Edinburgh castle marks in relation to proposals emanating from the European Commission on hall-marking and assay offices; and if he will make a statement.

  Mr. Ian Taylor
  I have received no specific representations concerning the Scottish marks. The Government are aware of the depth of feeling in the industry at large, in the assay offices, and amongst consumer organisations, that traditional marks, including town marks, should continue to be allowed under the terms of the proposed directive. The Government will continue to argue for their use.

  Life assurance
  Mr. Clifton-Brown
  To ask the President of the Board of Trade if he will make a statement on the implications for unit-linked life assurance policies of the High Court judgement in the case of Fuji v. Aetna

  Mr. Jonathan Evans
  In July this year the Vice Chancellor the right hon. Sir Donald Nicholls gave judgment in the Chancery Division of the High Court on a preliminary point arising in a dispute between a life insurance company and one of its policyholders—Fuji Finance Inc.v. Aetna Life Insurance Ltd. and Another. The Vice Chancellor decided that a particular contract which purported to be a contract of life insurance was not, as a matter of law, a contract of insurance at all. The feature of the contract which led to this conclusion was that there was no difference, once the contract had run for five years, between the amount payable on the death of the life assured at a given time and the amount that could be obtained by surrendering the policy at the same time.

  An appeal has been launched against this judgment, and the outcome of that appeal may obviously affect the position. But on the basis of the judgment it appears possible that other linked policies which offer no greater return on death than on surrender may similarly not be regarded as contracts of insurance. However, the judgment did not express an opinion about policies which, during the majority of their term, carry on somewhat higher additional level of benefit on death, or include some other guarantee in relation to the benefits payable on death but not on surrender.

  The Department of Trade and Industry does not monitor as a matter of course the terms of individual life insurance policies. However, prior to the Vice Chancellor's judgment, the level of additional benefit on death included in a linked policy was not considered by the Department to be critical in determining whether the policy was a contract of insurance. The Department would have taken into account other features of the contract; and it seems likely that, had the question been raised, policies
  704
  of the kind described in the judgment would have been treated by the Department as life assurance policies. I understand that the Financial Services Act regulators and the Inland Revenue have taken a similar view: as, presumably, have life assurance companies and their policyholders. It is understandable, therefore, that the judgment has created some concern in the insurance industry, particularly as it is not yet clear how far it affects contracts that are similar to, but not on all fours with, the particular policy that was considered in this case.

  Companies which have not already done so will wish to take advice upon the legal implications of this judgment for linked policies issued by them. It may however be helpful to them to explain the Government's attitude to certain statutory provisions which appear relevant.

  Section 16 of the Insurance Companies Act 1982 prohibits insurance companies from carrying on activities other than in connection with or for the purposes of their insurance business; and the Act confers upon the DTI certain powers of intervention if there is a failure to comply with that section. The Department has taken the view that the judgment has created sufficient uncertainty about the status of contracts carrying no additional benefit on death that it would wish to know if companies propose to continue to issue any such policies. As regards other policies, the Department does not propose to take any action while the judgment is under appeal. However, when the outcome of the appeal is known, it will clearly need to review the position with a view to ensuring that the terms of the section are met for the future.

  Companies will also need to bear in mind that their authorisation to carry on investment business under Section 22 of the Financial Services Act 1986 relates only to insurance business and other business that can be conducted in accordance with section 16 of the Insurance Companies Act 1982.

  In considering whether to use its enforcement powers in relation to investment business carried on in contravention of section 3 of the FSA, one of the factors which the Securities and Investments Board will take into account, in relation to business carried on prior to the judgment, is that contracts of the kinds likely to be affected have been consistently treated as contracts of insurance. Investors considering whether to take action under section 5 of the FSA will also need to take account of the same factor.

  My right hon. Friend the Financial Secretary to the Treasury is making a separate statement about the tax implications of the judgment.

  Telecommunications Council
  Mr. Clifton-Brown
  To ask the President of the Board of Trade if he will make a statement on the outcome of the Telecommunications Council on 17 November.

  Mr. Ian Taylor
  The Council adopted a resolution setting a date of 1 January 1998 for the liberalisation of the provision of telecommunications infrastructure, with a possibility of five years additional transition period for Portugal, Spain, Ireland and Greece and two years for Luxembourg. The United Kingdom, supported by five other countries, called upon the Commission to submit proposals for an earlier liberalisation of the use of alternative infrastructure for those services already liberalised at the Community level.
  705
  The Council also agreed a common position on a directive on standards for digital television. In addition, the Council agreed, in principle a common position on a decision on guidelines for the development for the integrated services digital networks as a trans-European network. The Council also reached agreement on all the outstanding issues on a decision on interchange of data between Administrations, except funding. The decision was referred back to the Committee of Permanent Representatives for further discussion of the budget. The text of a Council Resolution on access to the space segment and the reform of the international satellite organisations was agreed.

  There was a short debate on the draft directives on mutual recognition of satellite and telecommunications licences. The Commission made presentations on the results of its consultations on the Green Paper on Mobile and Personal Communications and its communication on transport telematics. The Commission also stated that it expected to produce proposals on liberalisation of postal services during the first part of 1995.

  No formal vote was taken at this Council.

  Tile and Sanitary Ware Manufacturing
  Ms Walley
  To ask the President of the Board of Trade what consultation he has had with the United Kingdom tile and sanitary ware manufacturers concerning the implications of granting aid to encourage inward investment; and if he will make a statement.

  Mr. Charles Wardle
  [holding answer 29 November 1994]: I have had no consultation with the United Kingdom tile and sanitary ware manufacturers with regard to the implications for granting aid to encourage inward investment. The United Kingdom industry is not consulted about individual applications for assistance. The likely impact on the United Kingdom industry of assistance towards investment projects is always assessed before decisions are made on whether or not grant should be offered.

  Ms Walley
  To ask the President of the Board of Trade what assistance he has approved for inward investment in Turkish sanitary ware and ceramic tile manufacturing to Merseyside.

  Mr. Charles Wardle
  [holding answer 29 November 1994]: I cannot comment on discussions between companies and the Department which are commercially confidential.

  H. L. Foods Ltd.
  Mr. David Porter
  To ask the President of the Board of Trade how much money H. L. Foods, through its cannery at Wisbech, has been paid from assisted area status funding to purchase equipment; how much of this was spent on purchasing equipment from Hobson plc's former cannery at Lowestoft; and if he will make a statement.

  Mr. Charles Wardle
  [holding answer 28 November 1994]: We do not disclose information on individual cases, which is given on a commercial in confidence basis.

  Capcom Financial Services
  Mr. Madden
  To ask the President of the Board of Trade what representations he has made to appropriate 706
  authorities in the USA concerning the affairs of Capcom Financial Services of London; and if he will make a statement.

  Mr. Jonathan Evans
  [holding answer 29 November 1994]: No representations have been made by me to the appropriate authority in USA concerning the affairs of CAPCOM Financial Services of London.

  Mr. Madden
  To ask the President of the Board of Trade what representations he has received about Capcom Financial Services of London; and if he will make a statement.

  Mr. Jonathan Evans
  [holding answer 29 November 1994]: It is not the practice of the Department to comment on the affairs of individual companies.

  Oil and Gas Exploration
  Mr. Ainger
  To ask the President of the Board of Trade what environmental advice he received on blocks 106/24, 106/25 and 106/30A prior to offering them for tender.

  Mr. Charles Wardle
  [holding answer 28 November 1994]: Those environmental Departments and organisations who provided advice following consultation, both generally for the Round and in respect of blocks 106/24, 106/25 and 106/30a are indicated on the following list.

  Countryside Commission1

  Department of the Environment1

  Department of the Environment for Northern Ireland1

  Dyfed Wildlife Trust1

  Friends of Cardigan Bay2

  Friends of the Earth Cymru2

  Greenpeace1

  Joint Countryside Advisory Service1

  Joint Nature Conservation Committee2

  who in turn consult—

  English Nature

  Countryside Council for Wales

  Royal Society for the Protection of Birds

  Scottish Natural Heritage

  Sea Mammal Research Unit

  North Wales Wildlife Trust2

  The National Trust1

  RSNC Wildlife Trusts Partnership2

  Strangford Lough Management Committee1

  Welsh Office2

  The Wildfowl and Wetlands Trust1

  Wildlife and Countryside Link2

  World Wide Fund for Nature2

  1 Those who provided advice on the Round.

  2 Those who have specifically mentioned blocks 106/24, 106/25 and 106/30a in their advice.

  Coal Industry
  Mr. Byers
  To ask the President of the Board of Trade who much the chairmen and members of the British Coal Authority are to be paid; and, for each member, what other publicly funded posts they hold.

  Mr. Charles Wardle
  [holding answer 28 November 1994]: Sir David White receives a salary of £18,000 a year as part-time Chairman of the Coal Authority. Mr Neville Washington, its full-time chief executive, receives a salary of £55,000 plus pension and a car allowance. He is also eligible for a non-pensionable performance bonus. The other part-time members receive a salary of £5,500 per annum.
  707
  The other paid public appointments held by the members of the Coal Authority are:

  Sir David White: Chairman of the Nottingham health authority;

  Mr. Roy Lynk: Industrial tribunal member in Nottingham; and

  Mr. Leslie Rendell: the retiring director of planning and transport of Warwickshire county council.

HOUSE OF COMMONS

  Fire Certificate
  Mr. Cohen
  To ask the Chairman of the Accommodation and Works Committee what applications were made in the last year for the Houses of Parliament to receive a fire certificate; and if he will make a statement.

  Mr. Ray Powell
  No application has been made for a fire certificate in the last year. Home Office fire inspectors have recently surveyed the Palace of Westminster and are expected to be in a position to issue a fire certificate in 1995.

  Access Passes
  Mr. Madden
  To ask the Chairman of the Administration Committee if he will list those organisations, excluding media organisations, whose employees have, to date, been issued by the House authorities with passes giving access to the House; what are the main criteria which are observed in determining eligibility for passes; and if he will make a statement.

  Mr. Michael J. Martin
  [holding answer 29 November 1994]: As the number of organisations whose employees are issued with passes is very large, I will write to the hon. Member.

PRIME MINISTER

  Welsh Development Agency
  Mr. Redmond
  To ask the Prime Minister what plans he has to order a public inquiry into illegal and improper activities by the Welsh Development Agency.

  The Prime Minister
  None. The mistakes of the past are being thoroughly investigated by the new management team. The chief executive of the agency is keeping the Chairman of the Public Accounts Committee fully informed.

  My right hon. Friend the Secretary of State for Wales has stated clearly that the highest standards should be observed in all the Welsh Development Agency's dealings.

  Ministers' Cars
  Mr. Redmond
  To ask the Prime Minister what rules apply to the marque of official cars used by Ministers.

  The Prime Minister
  Cabinet Ministers are normally given the choice of a Rover Sterling, Rover 827Si or any other vehicle from the Rover 800 series.

  Other Ministers are normally given the choice of a Rover 416, 2-litre Montego, 2-litre Vauxhall Cavalier, 2-litre Ford Mondeo or diesel equivalents.

  Steroids
  Mr. Jim Cunningham
  To ask the Prime Minister (1) if he will set up a public inquiry into the use of steroids in hospitals;

  (2) if he will make a statement on the use of steroids;

  (3) what consideration he is giving, with the Secretary of State for Health, to measures to reassure the public regarding the use of steroids;

  (4) if he will inquire into the case of Mrs. Niven of 11 Alvin close, Binley, Coventry.

  The Prime Minister
  Corticosteroids are long-established medicines which are important in the treatment of many serious illnesses, and their overall benefits to patients outweigh their side-effects. The Department of Health has fully investigated the effects of corticosteroids, given by mouth or injection, on the body's immune system. Advice about patients who are susceptible to chickenpox has been issued to all doctors.

  A public inquiry is not appropriate. It is for doctors to decide the appropriate treatment for their patients with the benefit of advice from their professional bodies. The circumstances surrounding Mrs. Niven's death were fully investigated by the Coventry and Warwick hospital and the outcome discussed with her family.

  The Department of Health has issued a press statement regarding the safety of corticosteroids, advising patients using these medicines who are concerned to see their doctor and not to stop their medication suddenly. As with all licensed medicines, my right hon. Friend, the Secretary of State for Health continues to monitor their safety.

  Secret Files
  Mr. Byers
  To ask the Prime Minister how many(a) top secret and (b) secret files his Department holds.

  The Prime Minister
  Approximately 1 to 2 per cent. of the files held in my office are top secret, approximately five per cent. are secret.

  Citizens Charter (Mr. Purnell)
  Mr. Austin-Walker
  To ask the Prime Minister what representations he has received from Mr. David Hernandez Purnell; and what was his response.

  The Prime Minister
  [holding answer 28 November 1994]: I have received a number of representations. These relate to a specific matter which is the responsibility of the Highways Agency. The agency is giving active consideration to the case.

  Mr. Austin-Walker
  To ask the Prime Minister if he will make a statement regarding the letter of 13 November to the Treasury Solicitor from a constituent of the hon. Member for Woolwich, a copy of which was forwarded to him; and what assessment he has made of the conformity of Her Majesty's Government's action with the spirit of the citizens charter.

  The Prime Minister
  [holding answer 28 November 1994]: I have nothing further to add to the reply that my hon. Friend, the Parliamentary Secretary, Office of Public Service and Science, gave to the hon. Member on 28 November, Official Report, columns 483–84.

FOREIGN AND COMMONWEALTH AFFAIRS

  EU Committee of the Regions
  Mr. Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many meetings of the Committee of the Regions of the European Union have been held since it was established under the Maastricht treaty; what reports have been received from the Committee to date; what responses have been made to these reports; and what has been the cost of United Kingdom required representation to the Committee.

  Mr. David Davis
  There have been five plenary meetings of the EC's Committee of the Regions. The Council has so far received 20 opinions from the Committee. The Council makes no formal response to opinions, but takes them into account during the decision-making process. No attendance is required at Committee meetings. Members receive travel and subsistence allowances for meetings which they do attend. We do not hold information on expenses paid to individual Committee members.

  Short Stay Visas
  Mr. Spellar
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many short stay visas were issued last year; and what were the figures for the 10 main countries of origin.

  Mr. Baldry
  In 1993, 609,297 single entry visit visas, and 12,230 short term multiple entry visas, valid for six months, were issued to people seeking to make visits of six months or less.

  The top countries where these visas were issued—not all were to nationals of the country concerned—were as follows:

  Country

  Number of applications issued

  India

  60,153

  Russia

  58,277

  USA

  39,589

  Pakistan

  36,647

  Turkey

  36,227

  Thailand

  30,606

  Nigeria

  24,470

  Iran

  16,835

  China

  15,687

  The British Trade and Cultural Office in Taipei also processed 51,264 applications during 1993.

  Jonathan Moyle
  Mr. Cohen
  To ask the Secretary of State for Foreign and Commonwealth Affairs what was the outcome of Her Majesty's Government's representation and investigations into the death of Jonathan Moyle.

  Mr. Baldry
  It is for the Chilean authorities to investigate the circumstances of Mr. Moyle's death. We have co-operated with them fully from the outset. On 9 September 1991 a verdict was announced that Mr. Moyle's death was"attributed to third party involvement where the identity of the third party cannot be ascertained".
  710
  The case is being investigated further and a report will be submitted to the Chilean Court of Appeal for consideration. We await the court's findings and in the light of those will consider what further action needs to be taken. An inquest into Mr. Moyle's death is also being conducted by HM coroner for the district of Exeter and East Devon.

  Mutual Defence Agreement
  Mr. Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs when the hon. Member for Blaenau, Gwent may expect a letter on the extension of article III to the Anglo-American mutual defence agreement on atomic matters promised in his answer of 3 November,Official Report, column 1382; and if the letter will be published in the Official Report.

  Mr. David Davies
  I wrote to the hon. Member on 22 November. The text of the letter was as follows:"I promised to write to you in response to your recent Parliamentary Questions on the 1958 UK/US Mutual Defence Agreement.
  As you know, the 1958 Agreement enables the United Kingdom and the United States to co-operate on the use of atomic energy for mutual defence purposes. While the main part of the Agreement is not time-limited, Article III bis, which relates to the two-way exchange of special nuclear materials and other products, requires periodic amendment to ensure its continuing relevance and validity. The most recent amendment to this article, which was ratified in 1984, expires at the end of this year. We and the United States have agreed that there should be a further amendment to enable these exchanges to continue for another ten years.
  Article VI of the Agreement addresses questions of the security and physical protection of the information and materials exchanged. While both the UK and US operate rigorous and effective materials control and accountancy arrangements, we have decided that it would be prudent to acknowledge explicitly the existence of these arrangements in the text of the Agreement. We have therefore agreed that Article VI should be amended accordingly.
  The text of the amendment to the Agreement was agreed in May this year following discussions between officials of the two Governments. The 1994 amendment was laid before Parliament on 21 October. The Ponsonby Rule requires it to remain there for 21 sitting days before it can be ratified".
  I am arranging for a copy of this letter to be placed in the Library of the House.

  Algeria
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what attempts have been made to have an integrated European Union approach to the current political situation in Algeria; and what was the outcome.

  Mr. Douglas Hogg
  On 30 May 1994 the EU ministerial troika visited Algiers. The conclusions of the European Council at Corfu on 24–25 June 1994 included a passage on Algeria. The EU issued a joint statement on Algeria on 26 September 1994.

  Unfortunately the cessation of violence and the dialogue for which the EU has called have not come about.

  Oil Spills, Russia
  Mr. Dalyell
  To ask the Secretary of State for Foreign and Commonwealth Affairs what help is being sent by Her Majesty's Government to Russia for oil spills in the north of Russia.
  711
  Mr. Douglas Hogg
  We stand ready to help, but Russia has made it clear that no international assistance is required for the present.

  Apes
  Mr. Dalyell
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received from the World Society for the Protection of Animals about the killing of the great apes of Africa; and if he will make a statement.

  Mr. Douglas Hogg
  I have received no representations from the World Society for the Protection of Animals about the killing of the great apes of Africa. It is a matter for the individual countries involved to pass the domestic legislation to prevent the killing of their apes. We are, however, always concerned by reports of cruelty to animals and encourage others to adopt our own high standards of animal welfare.

  Secret Files
  Mr. Byers
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many(a) top secret and (b) secret files his Department holds.

  Mr. Baldry
  FCO departments hold as many current files as is necessary for their operational needs. A proportion of these, consistent with security requirements, are top secret and secret. A breakdown of these could be provided only at disproportionate cost.

  Indonesia
  Mr. Corbyn
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations Her Majesty's Government have made to the Government of Indonesia concerning the abuse of human rights; and if he will make a statement.

  Mr. Goodlad
  Our regular discussions with the Indonesians cover a wide range of issues, including human rights. With European Union partners, we have most recently expressed concern about the conviction and sentencing of Mr. Muchtar Pakpahan.

  Science and Technology
  Sir Kenneth Carlisle
  To ask the Secretary of State for Foreign and Commonwealth Affairs what action has been taken to review the work of science and technology sections at British missions overseas to fulfil one of the commitments of the 1993 White Paper, "Realising our Potential: a Strategy for Science, Engineering and Technology".

  Mr. Douglas Hogg
  I am pleased to be able to inform the House that in the first half of this year an interdepartmental team from the Foreign and Commonwealth Office, the Department of Trade and Industry, the Office of Science and Technology and the British Council carried out a major review of science and technology work in diplomatic missions and British Council offices overseas. I have just endorsed the report of this review. It will be published on 1 December 1994. I have arranged for a copy of the report to be deposited in the Library of the House.

  Gibraltar
  Mr. Cox
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with the Chief Minister of Gibraltar on the position of Moroccan workers employed at the British military base who may become redundant in the near future; and if he will make a statement.

  Mr. Soames
  I have been asked to reply.

  During my recent visit to Gibraltar I met the Gibraltar Government Minister for the Environment and Tourism and we discussed the announced reductions in the MOD presence in Gibraltar and the implications for locally entered staff, including Moroccan employees.

OVERSEAS DEVELOPMENT ADMINISTRATION

  Moi University, Kenya
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether it was a condition of the British funding of the Margaret Thatcher library at Moi university in Kenya that there should be academic freedom at the university.

  Mr. Baldry
  The library will make an important contribution to learning and the output of graduates, particularly in science and technology, on which Kenya's development depends. While good government is a criteria in the allocation of United Kingdom aid, no specific condition was made relating to academic freedom when the project was approved in 1987.

  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what was the cost to the British funds of the construction of the Margaret Thatcher library at Moi university in Kenya.

  Mr. Baldry
  Construction costs paid for from the British aid programme, including architects' fees, amounted to £4.44 million. The overall project, including the provision of training and books, will be completed within the total agreed allocation of £8.373 million.

  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs which British firms have benefited from the construction of the Margaret Thatcher library at Moi university in Kenya.

  Mr. Baldry
  Ove Arup and Partners were the project engineers. UBM Overseas Ltd. (UK) supplied the materials. In addition, Triad Architects Planners were involved in the design and supervision work.

  Population Control
  Mr. Alton
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has on countries in which advertising campaigns are portraying those who do not use artificial contraception or choose to have large families as irresponsible or anti-social; if he will list those countries in which such campaigns are run:, and if he classifies such campaigns as coercive.

  Mr. Baldry
  We do not have comprehensive information on advertising campaigns in this area.

  Mr. Alton
  To ask the Secretary of State for Foreign and Commonwealth Affairs what measures his Department takes to monitor population policies in countries in which projects connected with population receive funding from his Department.
  713
  Mr. Baldry
  The Overseas Development Administration, or the relevant multilateral organisations to which it contributes, examine national population policies in the course of the design and management of projects which they fund; they will also seek to contribute, where appropriate, to further development of these policies.

  Mr. Alton
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps his Department takes to ensure that projects funded by his Department do not assist coercive population control strategies in countries where the projects are based.

  Mr. Baldry
  We do not support any population activities in which there is coercion of individuals to practise family planning, or to accept any particular type of contraception. We scrutinise proposals prior to funding and monitor their implementation to ensure that coercive approaches are avoided.

  Mr. Alton
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has regarding countries which tie education, health and development provision to contraceptive use or offer such provision on beneficial terms to contraceptive users; if he will list those countries where he is aware that this occurs; and whether he classifies such practices as coercive.

  Mr. Baldry
  We do not have detailed information. We believe that the use of contraception should be a matter of free individual choice. Governments were discouraged at the international conference on population and development from either the use of incentives or disincentives in promoting contraception use. We strongly supported this recommendation.

  Mr. Alton
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has on projects funded by the core funds of the International Planned Parenthood Federation and the United Nations fund for population activities and what steps his Department takes to monitor these projects.

  Mr. Baldry
  The United Nations Population Fund 1993 inventory of population projects and the International Planned Parenthood Federation 1994 annual report supplement contain details of these organisations' activities. Copies of both these publications are in the Library of the House.

  We regularly assess the policies and programmes of UNFPA and IPPF in relation to our policies.

  Mr. Alton
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether he classifies as coercive methods taken by countries pursuing population policies, where projects are funded by his Department, to create peer pressure to use artificial contraception.

  Mr. Baldry
  We support activities which help people to be more aware of the choices available to them in family planning. We support the exercise of free individual choice and oppose coercive methods.

  Mr. Alton
  To ask the Secretary of State for Foreign and Commonwealth Affairs if the will list all grants for population policies and initiatives, given by his Department to projects, agencies or Governments giving in each case the amount of the grant, the terms of the project and the country in which the project is based.

  Mr. Baldry
  We will place in the Library a list of population and reproductive health projects and programmes supported under the aid programme in calendar year 1993.

  Tanzania
  Sir Thomas Arnold
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the current bilateral aid programme for Tanzania, set out by sector.

  Mr. Baldry
  In 1993–94, we disbursed £20.7 million to Tanzania through the bilateral aid programme. Of this, £10 million was in the form of conditional balance of payments support. The remainder was used to support projects in the following sectors:

  £ million

  Natural resources

  1.9

  Economic infrastructure

  3.8

  Financial sector

  0.2

  Public administration

  0.7

  Education

  1.3

  Health and population

  1.3

  Miscellaneous

  1.5

  Sir Thomas Arnold
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the agreement he has entered into in respect of the modernisation of the port of Tanga, Tanzania.

  Mr. Baldry
  An exchange of letters formalising this project took place on 14 November. Under this agreement, ODA will support rehabilitation and maintenance work at Tanga Port, and provide training and supervision. The cost to the British aid programme will be £4.69 million. The project is expected to be completed in 1997.

EDUCATION

  Bullying
  Mr. David Nicholson
  To ask the Secretary of State for Education what assessment she has made of the extent of bullying of disabled pupils in schools; and what specific guidance she gives to schools and local education authorities on this matter.

  Mr. Forth
  Ofsted's framework for inspection requires inspecting teams to obtain the views of pupils, parents and teachers on the incidence of bullying and the school's response to it. Reports should include an evaluation of the measures taken by the school to prevent and eliminate bullying.

  The Department's anti-bullying pack, "Don't Suffer in Silence", published in September, included practical guidance on strategies that schools can adopt to combat bullying of pupils, including those with special educational needs. In addition, the Department stressed the importance of effective action against bullying in guidance on pupil behaviour and discipline, sent to local education authorities and all maintained schools in May as part of the "Pupils with Problems" series of circulars.

  Disabled People (Access)
  Mr. David Nicholson
  To ask the Secretary of State for Education what is her estimate of the total cost of making 50 per cent., 75 per cent. and 100 per cent. of(a) primary schools and (b) secondary schools fully accessible to disabled people, such accessibility to include the provision of appropriate toilet facilities.
  715
  Mr. Forth
  The best source of cost information is an independent report from Coopers and Lybrand issued in April 1993. These estimates, based on a large sample of schools, indicated that the costs for providing physical access to all primary schools would be about £400 million and to all secondary schools about £1,300 million. The survey estimated that to make 50 per cent. of secondary schools 100 per cent. accessible would be £251 million; it did not include analogous figures for primary schools. It did not provide full figures for 75 per cent. of schools in either sector. These data include the cost of ramps, lifts and disabled toilets. They do not include corner widening, means of escape or specialist furniture.

  Ofsted
  Mr. Blunkett
  To ask the Secretary of State for Education (1) what were the targets for the number of school inspections to be undertaken by Ofsted in(a) 1993–94 and (b) in the current school year; and if she will break the targets down for (i) primary schools, (ii) secondary schools, (iii) special schools and (iv) sixth-form colleges;

  (2) how may (a) primary schools, (b) secondary schools, (c) special schools and (d) sixth-form colleges were inspected by Ofsted in (i) 1993–94 and (ii) in the current school year.

  Mr. Forth
  These are matters for her Majesty's Chief Inspector of Schools, who heads the independent Office for Standards in Education. I have asked Mr. Woodhead to write to the hon. Member.

  Secret Files
  Mr. Byers
  To ask the Secretary of State for Education how many(a) top secret and (b) secret files her Department holds.

  Mr. Boswell
  The Department does not hold any files classified as top secret; 78 of the Department's holding of approximately 265,000 files are classified as secret.

  Student Loans Company
  Mr. Rooker
  To ask the Secretary of State for Education which right hon. and hon. members have visited the headquarters of the Student Loans Company since it was set up.

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

NATIONAL HERITAGE

  Secret Files
  Mr. Byers
  To ask the Secretary of State for National Heritage how many(a) top secret and (b) secret files his Department holds.

  Mr. Dorrell
  My Department currently has in excess of 120,000 files, of which approximately 300 are classified as secret and four top secret.

  Indemnity Undertakings
  Mr. Duncan
  To ask the Secretary of State for National Heritage how many indemnity undertakings were given 716
  by Departments under section 16 of the National Heritage Act 1980 for the six month period ending 30 September 1994; and what is the value of any contingent liabilities in respect such undertakings given at any time which remain outstanding as at 30 September 1994.

  Mr. Dorrell
  The information that my hon. Friend requests is as follows:

  In the six-month period ended 30 September 1994, the following undertakings to indemnify were given by the relevant departments for items on loan to national and non-national institutions:

  Department of National Heritage

  503

  Scottish Office Education Department

  108

  Welsh Office Education Department

  39

  Department of Education for Northern Ireland

  19

  The value of contingent liabilities in respect of such undertakings given at any time and outstanding at 30 September 1994 are:

  £

  Department of National Heritage

  1,730,975,529

  Scottish Office Education Department

  394,655,574

  Welsh Office Education Department

  36,265,802

  Department of Education for Northern Ireland

  4,573,154

  National Lottery
  Mr. Morgan
  To ask the Secretary of State for National Heritage what consultations he has had with the Millennium Fund Commission concerning its powers in relation(a) to the choice of schemes for financial support in Wales, (b) to amending any such schemes which are applicants for assistance and (c) to amending the constitutions and personnel of sponsoring bodies of such applications; and if he will make a statement.

  Mr. Dorrell
  [holding answer 28 November 1994]: The Millennium Commission was consulted on directions issued under section 26(1) of the National Lottery etc. Act 1993 concerning matters to be taken into account when considering applications and, under section 26(3), for securing the proper management and control of lottery proceeds. Within this framework, it is for each distributing body to establish their own processes for handling applications and, in my capacity as Secretary of State, I have had no specific discussions with the commission on any of these matters. As chairman of the commission, however, I am directly involved in the development of its policies and procedures. The Millennium Commission issued detailed guidance for applicants on November 28 which will explain how applications for funding should be prepared and submitted.

  Mr. Alex Carlile
  To ask the Secretary of State for National Heritage if he will make it his policy to ensure an increase of national lottery sales outlets in Montgomeryshire; and if he will make a statement.

  Mr. Dorrell
  [holding answer 29 November 1994]: This is an operational matter for Camelot Group plc. I have therefore asked Peter Davis, the director general of the national lottery, who is responsible for regulating the

  717
  operation of the lottery, to write to the hon. and learned Gentleman, and to place copies his response in the Libraries of the House.

  Open Government
  Mr. Rooker
  To ask the Secretary of State for National Heritage if he will make a statement on the charging policy of his Department and the agencies for which he is responsible in respect of inquiries under the code of practice on access to Government.

  Mr. Dorrell
  [holding answer 22 November 1994]: In line with guidance on charging produced by the Office of Public Service and Science, which recognises the diversity of cost and operational structure across the range of bodies implementing the code, my Department has developed the following scheme of charges for information under the code of practice on access to Government information.

  My Department and the two agencies for which I am responsible make no charge for responding to straightforward enquiries. Charges will, however, be made where the cost of responding to the inquiry would exceed a threshold—currently £100. This will normally represent half of one day's work charged at an average cost for staff undertaking the work.

  Above the £100 threshold, charges may be made according to the average daily rates of the staff undertaking the work. Charges are designed to cover, but not exceed, the cost of processing the request for information and are payable whether or not the request for information can be supplied in full. Where it is proposed to make a charge, the Department and its agencies will write to the inquirer and ask them to pay in advance for the material requested.

  Those responding to inquiries will at all stages keep applicants informed of the likely charges to be made by providing an estimated charge, which is normally payable before further work is undertaken.

EMPLOYMENT

  Christmas Expenditure
  Mr. Bayley
  To ask the Secretary of State for Employment how many official Christmas cards he and his Ministers intend to send in 1994; how much these cards will cost(a) to buy, (b) to post and (c) in staff time to sign, address and place in envelopes; and if he will place in the Library a sample copy of the official Christmas card he intends to send this year.

  Miss Widdecombe
  Ministers intend to send an estimated 480 cards this year. They would cost(a) £330 to buy and (b) £86 to post. The information at (c) is not available. I intend to place a copy of the official card, which supports the Cancer Relief Macmillan Fund, in the Library in the new year.

  Employment of Children
  Mr. Redmond
  To ask the Secretary of State for Employment what plans he has substantially to increase the penalties for employing children or allowing children who are under age to work in factories or businesses.
  718
  Mr. Oppenheim
  Breaches of the Employment of Women, Children and Young Persons Act 1920, which prohibits children from working in factories, already attract a maximum fine of £5,000. Local byelaws which set strict rules on the employment of children provide for a maximum penalty of £1,000.

  Industrial Tribunals
  Mr. Spellar
  To ask the Secretary of State for Employment how many cases before industrial tribunals in the last year have been heard before a chairman alone.

  Mr. Oppenheim
  The Industrial Tribunals (Constitution and Rules of Procedure) Regulations 1993 gave effect as from 16 December 1993 to provisions in the Trade Union Reform and Employment Rights Act 1993 which empower industrial tribunal chairmen to hear certain cases without lay members. From 16 December 1993 until the end of October 1994, 3,148 cases have been heard before chairmen sitting alone.

  Unemployment
  Mrs. Bridget Prentice
  To ask the Secretary of State for Employment how many people between the ages of 16 and 25 years in Lewisham, East(a) are registered unemployed and (b) have been unemployed for 12 months or more; and what are these figures expressed as a percentage in that age group in that area.

  Mr. Oppenheim
  In October 1994 the total number of unemployed claimants aged under 25 years in Lewisham East stood at 1,257 down 6 per cent. on the year, and the number of the latter who were unemployed for over a year stood at 398, down 10 per cent. on the year.

  Claimant unemployment rates by age are only available nationally and are publish in table 2.15 of the Employment Gazette, a copy of which is available in the Library.

  Mrs. Bridget Prentice
  To ask the Secretary of State for Employment how many people between the ages of 16 and 25 years are registered as unemployed in each of the London boroughs; and what the figures are as a percentage of that age group in each borough and in London as a whole; how many have been unemployed for 12 months; and what this figure is expressed as a percentage in that age group in each borough and in London as a whole.

  Mr. Oppenheim
  Claimant unemployment rates by age are only available nationally and are published in table 2.15 of the Employment Gazette. Information on the numbers of claimant unemployed in each London borough, analysed by age and duration of claimant, is available for the months of January, April, July and October and can be obtained from the NOMIS database in the Library.

  Non-EU Employees
  Mr. Robert Ainsworth
  To ask the Secretary of State for Employment how many work permits have been issued in connection with LEAR Seating Corporation in Coventry in the last six months.

  Mr. Oppenheim
  A total of 18 work permits have been issued to Lear Seating (UK) Ltd. within the last six months.

  Mr. Robert Ainsworth
  To ask the Secretary of State for Employment how many work permits were issued to
  719
  residents in the United States of America, Canada and Mexico to undertake temporary work in the United kingdom in each of the last three years.

  Mr. Oppenheim
  The number of work permits issued to nationals of the United States, Canada and Mexico in each of the last three years is shown in the following table:

  Year

  USA

  Canada

  Mexico

  1991

  10,851

  742

  51

  1992

  11,617

  916

  55

  1993

  11,633

  1,004

  75

  Mr. Robert Ainsworth
  To ask the Secretary of State for Employment what representations he has received concerning the need to employ temporary labour from outside the European Union from LEAR Seating Corporation in Coventry.

  Mr. Oppenheim
  I have received no representations concerning this issue other than applications for work permits.

  Secret Files
  Mr. Byers
  To ask the Secretary of State for Employment how many(a) top secret and (b) secret files his Department holds.

  Miss Widdecombe
  The Employment Department group holds(a) 24 top secret files and (b) 1,033 secret files.

ATTORNEY-GENERAL

  Secret Files
  Mr. Byers
  To ask the Attorney-General how many(a) top secret and (b) secret files his Department holds.

  The Attorney-General
  The number of current top secret and secret files held in the Departments for which I am responsible is as follows:

  Top Secret

  Secret

  Legal Secretariat to the Law Officers

  29

  326

  Crown Prosecution Service

  2

  14

  Treasury Solicitor's Department

  10

  101

  Serious Fraud Office

  —

  —

  Pergau Dam
  Mr. Cohen
  To ask the Attorney-General what involvement he had in the Foreign Secretary's defence in the recent Pergau dam court case.

  The Attorney-General
  By convention, the Law Officers do not normally disclose whether they have been asked to advise on a particular issue or the substance of any advice that they may have given.

  Victims Compensation Scheme
  Mr. Cohen
  To ask the Attorney-General what involvement he had in the Home Secretary's defence in the recent victims compensation scheme court case.
  720
  The Attorney-General
  By convention, the Law Officers do not normally disclose whether they have been asked to advise on a particular issue or the substance of any advice that they may have given.

DUCHY OF LANCASTER

  Contracting Out
  Mr. McAllion
  To ask the Chancellor of the Duchy of Lancaster if he will list all those instances where contracting out of a function or service, previously provided in-house, has resulted in an identifiable improvement in the quality of the service provided.

  Mr. Robert G. Hughes
  The following list shows functions contracted out under the competing for quality programme in the period from 1 April 1992 to 31 December 1993 where departments have informed the efficiency unit that an improved quality of service has been specified.

  Ministry of Agriculture, Fisheries and Food

  Document Creation Unit (ADAS)

  Buildings and Estate Management

  Marine Surveillance

  Library

  Recruitment (up to Grade 7)

  Central Office of Information

  Catering

  Office Services—Custody

  Office Services—Cleaning

  Central Statistical Office

  Catering

  HM Customs and Excise

  Staff Restaurant, Queens Dock

  Catering—Custom House, London

  Catering—Dorset House, London

  Catering–Manchester HQ

  Debt Recovery Services

  Vehicle Fleet Management

  Ministry of Defence

  Works Services: Cyprus, Gibraltar, Falklands, Belize

  Harrier Support

  Helicopter Support: Osprey, Heron, Seah

  Tailoring (Northern Ireland)

  Ration Delivery (Northern Ireland)

  Department for Education

  Catering

  Department of Employment

  Travel Services

  Van Service Sheffield-Runcorn

  Estates Maintenance

  ERC Courses for Disabled (Employment Service)

  721
  Department of the Environment

  Planning Inspectorate IT Project Management

  Export Credits Guarantee Department

  IT Operational Support

  Receptionist/Telephonist Services

  Foreign and Commonwealth Office

  Purchasing Services

  Department of Health

  Operation and redevelopment of Hospital Episodes Statistics System

  Office and Building Service London

  Office Services, Quarry House

  HMSO

  Typing Services Publications

  Home Office

  Waste Disposal (Forensic Science Service)

  Estate Management (Forensic Science Service)

  Escort Services

  HM Prison Blakenhurst

  Prison Education

  Inland Revenue

  Writing Training Material

  Reprographic

  IT Services

  Intervention Board

  Travel Service

  HM Land Registry

  Legal Services

  Surveys

  Department of National Heritage

  Hampton Court Garden Maintenance

  Department of National Savings

  Catering Services, Durham

  Press Cuttings

  Northern Ireland Civil Service

  Property Certificate Service

  Date Preparation

  Operating Mainframe Computer

  Office of Public Service and Science

  Reprographics (Chessington Computer Centre)

  Press Relations (Civil Service College)

  Catering and Related (Civil Service College)

  Distribution (Civil Service College)

  London Centre Relocation (Civil Service College)

  Building and Grounds Maintenance (Civil Service College)

  Catering (RAS)

  Reprographics (RAS)

  722
  Ordnance Survey

  Hardware Maintenance

  Bulk Enveloping and Dispatch

  Scottish Office

  Catering, Fire School

  Department of Social Security

  Travel Services (Benefits Agency)

  Facilities Management (HQ)

  Audit (ITSA)

  Department of Trade and Industry

  Database Maintenance

  Stationery Supply

  HM Treasury

  Internal Audit

  Treasury Solicitor's Department

  Security

ENVIRONMENT

  Retailers (Planning Permission)
  Mr. Thomason
  To ask the Secretary of State for the Environment what steps he is taking to make it easier for retailers to get planning permission for new sites in or near town centres.

  Mr. Gummer
  As part of their strategy to revitalise their town centres I have encouraged local authorities to assess the capacity of their town centre for further retail development and to promote retail development in or on the edge of town centres through their development plan.

  Home Renovation Grants
  Mr. O'Hara
  To ask the Secretary of State for the Environment how many home renovation grants were made in 1984, 1989 and the last year for which figures are available.

  Mr. Robert B. Jones
  In 1984 and 1989 local authorities awarded 229,000 and 98,000 home improvement grants respectively. In 1993 90,000 grants were given under the new provisions of part VIII of the Local Government and Housing Act 1989.

  Town Centres
  Mr. Barry Field
  To ask the Secretary of State for the Environment what assessment he has made of the extent to which modern supermarkets in the right place can improve local services and attract new investment to the town centre economy.

  Mr. Gummer
  Retail developments in town centres increase the choice, widen the opportunities available, and add to the attraction of those centres. Supermarkets located in the right place, in or next to town centres, can provide the anchor for other types of retailing, and thus help ensure the viability of town centres.

  Mr. Spring
  To ask the Secretary of State for the Environment what steps are being undertaken to encourage the revitalisation of town centres.
  723
  Mr. Gummer
  I have taken a number of measures, including:issuing guidance to local planning authorities to focus retail development in or next to town centres through policies and proposals in their development plans;
  advising on good practice for local authorities to help them implement this guidance; and
  encouraging positive promotion of town centres and town centre management.

  I intend to consider this matter further, among other issues, at a symposium on quality in town and country which I am hosting on 12 December.

  Mr. Key
  To ask the Secretary of State for the Environment what plans he has to issue new guidance on change of use of buildings in town centres.

  Sir Paul Beresford
  Current planning policy guidance on the change of use of buildings in town centres is contained in planning policy guidance note No. 6, "Town Centres and Retail Developments", issued in July 1993. There are no current proposals to issue new guidance.

  There are, however, proposals to extend permitted development rights so that the use of space above shops can be changed to a single flat or back again without a planning application, provided there is no material alteration to the outside of the building.

  Homelessness
  Mr. Gapes
  To ask the Secretary of State for the Environment how many homeless families there are(a) nationally, (b) in Greater London and (c) in Redbridge; how many there were in 1979; and what plans he has to reduce the numbers.

  Mr. Curry
  During the 12 months ending June this year 128,062 households were accepted as statutorily homeless by local authorities in England, 30,920 by the London boroughs and 586 by the London borough of Redbridge. The equivalent figures for 1979 were 55,530, 16,400 and 311. The number of acceptances over the previous 12 months has now fallen for nine successive quarters.

  Mr. Hendry
  To ask the Secretary of State for the Environment if he will make a statement on the most recent homelessness figures.

  Mr. Curry
  The most recent figures show that for nine quarters in succession English local authorities have accepted fewer households as statutorily homeless than in the same period 12 months previously. Moreover, the number of households in temporary accommodation fell 13 per cent. and the number in bed-and-breakfast hotels went down 27 per cent., compared with 12 months earlier. I find these figures encouraging.

  Mr. Khabra
  To ask the Secretary of State for the Environment when he will make a statement about the Government's plans in respect of homelessness legislation.

  Mr. Robert B. Jones
  As my right hon. Friend the then Minister for Housing, Inner Cities and Construction told the House on 18 July 1994,Official Report, columns 21–23, we intend to introduce legislation when parliamentary time permits.

  Food Retailers
  Mr. Hawkins
  To ask the Secretary of State for the Environment what steps he is taking to encourage genuine competition between different food retailers.

  Mr. Gummer
  My policy is to locate retail development in or near town centres where the proximity of competing businesses facilitates competition from which consumers can benefit.

  The market place remains the main stimulus to competition. Through planning policy guidance notes Nos. 6 and 13, competition is being encouraged to take place in a way that reinforces rather than undermines the vitality and viability of existing town centres.

  Environmental Protection
  Mr. David Shaw
  To ask the Secretary of State for the Environment what progress has been made in environmental protection in the last year.

  Mr. Atkins
  Significant progress has been made over the last twelve months. This will be extensively reported both in my Department's annual report early next year and in the annual White Paper report on the environment which I will publish in spring.

  Environmentally Friendly Transport
  Mr. Robathan
  To ask the Secretary of State for the Environment what discussion he has had with the Secretary of State for Transport to encourage the use of environmentally friendly transport.

  Sir Paul Beresford
  My right hon. Friend regularly discusses matters concerning transport and the environment with our right hon. Friend the Secretary of State for Transport. Most recently, we discussed the Government's initial response to the report on transport produced by the Royal Commission on environmental pollution.

  Council House Sales
  Sir David Knox
  To ask the Secretary of State for the Environment how many council houses have been sold to sitting tenants in England since May 1979.

  Mr. Robert B. Jones
  More than 1.4 million tenants bought their homes from English local authorities and new towns between April 1979 and June 1994.

  Housing Association Rents
  Ms Coffey
  To ask the Secretary of State for the Environment what representations he has received about the current levels of housing association rents.

  Mr. Robert B. Jones
  We have received 230 representations concerning the level of housing association rents since 1 January 1994.

  Mrs. Bridget Prentice
  To ask the Secretary of State for the Environment what has been the percentage increase in rents for new housing association assured tenancies between 1989 and 1994; and what has been the changes in retail prices index over the same period.

  Mr. Robert B. Jones
  Average rents for new housing association assured tenancies increased by 84.5 per cent. between 1989 and the first half of 1994. Over the same period, the proportion of the total housing association stock represented by these lettings rose from 10 per cent. to 14 per cent.
  725
  The retail prices index increased by 24.4 per cent. over the same period.

  Local Government Finance
  Mr. Robert Ainsworth
  To ask the Secretary of State for the Environment what consultations he has had with local authorities on this year's standard spending assessment settlement.

  Mr. Curry
  I have had discussions with the local authority associations in the Consultative Council on Local Government Finance. Ministers have also received delegations from individual local authorities, including one from Coventry city council on 24 November 1994.

  Private Housing Renewal Programmes
  Mr. Rooker
  To ask the Secretary of State for the Environment when he expects to make a statement on the outcome of his consultation on the future of private housing renewal programmes.

  Mr. Robert B. Jones
  I am still considering the options for longer-term changes to the house renovation grant system following last year's public consultation. We will make an announcement in due course.

  River Thames
  Mr. Dunn
  To ask the Secretary of State for the Environment how the River Thames can be put to better use.

  Mr. Gummer
  I refer my hon. Friend to the reply that I gave earlier to my hon. Friend the member for Wimbledon (Dr. Goodson-Wickes).

  Packaging Waste
  Mr. Tredinnick
  To ask the Secretary of State for the Environment what progress has been made recently to increase the percentage of packaging waste recycled.

  Mr. Atkins
  We have challenged the packaging industry to devise an industry-led scheme to substantially increase the recovery and recycling of packaging waste by the year 2000. The industry has published its proposals which would lead to a doubling of packaging value recovery levels to nearly 60 per cent. by the year 2000.

  Local Government Finance
  Mr. Beith
  To ask the Secretary of State for the Environment what representations he has received about the effects on services in Northumberland of the standard spending assessment and capping systems.

  Mr. Curry
  My Department has received a large number of letters on this issue.

  Negative Equity
  Mr. William O'Brien
  To ask the Secretary of State for the Environment what is his latest estimate of the number of people trapped in negative housing equity; and if he will make a statement.

  Mr. Curry
  Estimates of negative equity vary. Based on Department of the Environment house price data, in the third quarter of 1994 an estimated 644,310 households were affected by negative equity. This is a fall of almost 9 per cent. on the second quarter and is 47 per cent. lower than the peak in the fourth quarter of 1992.
  726
  Mr. Milburn
  To ask the Secretary of State for the Environment, pursuant to his answer of 22 November,Official Report, column 66, if he will provide a regional breakdown of households suffering negative equity and an estimate of the sums involved.

  Mr. Robert B Jones
  An estimate of the number of households affected by negative equity and the value of negative equity by region based on Department of the Environment house price data, is as follows:

  Region

  Number of households (thousands)

  Value (millions)

  South East

  346

  -1713

  Greater London

  80

  -248

  South West

  115

  -376

  East Anglia

  51

  -237

  East Midlands

  11

  -16

  West Midlands

  11

  -14

  Wales

  4

  -3

  Yorkshire and Humberside

  17

  -16

  North West

  7

  -3

  North

  1

  —

  Scotland

  —

  —

  Northern Ireland

  1

  -1

  United Kingdom

  644

  -2,628

  Arts, Museums and Libraries
  Mr. Fisher
  To ask the Secretary of State for the Environment what consultations he has had on the effect of local government reorganisation on the funding of arts, museums and libraries by local authorities.

  Mr. Robert B. Jones
  The Local Government Commission consults bodies connected with the arts, museums and library services before making recommendations for the structure of local government. We allow time to receive and consider representations from interested parties on those recommendations before taking decisions on them. My right hon. Friend the Secretary of State for National Heritage is consulting representatives of the local authority associations and expert bodies in these fields with a view to issuing guidance, where necessary, to new authorities.

  Water Pollution
  Mr. Hinchliffe
  To ask the Secretary of State for the Environment what steps he is taking to reduce pollution in rivers.

  Sir Paul Beresford
  We have ensured that the National Rivers Authority has the powers and the resources to maintain and improve the quality of our rivers. Around 90 per cent. of rivers in England and Wales are of good or fair quality.

  Mrs. Anne Campbell
  To ask the Secretary of State for the Environment what information he has about the main sources of(a) pesticides and (b) phosphates in the water supply, given in order of importance with the percentage contribution made by each source.

  Mr. Atkins
  The pesticides most frequently detected in supplies are atrazine, simazine, diuron, isoproturon, mecoprop and chlorotoluron. The first three were mainly used for weed control in non-agricultural situations such as roads, railways and on other hard surfaces. However,
  727
  the approvals for the use of atrazine and simazine in these situations were withdrawn in August 1993. The other three pesticides are almost exclusively used for weed control in cereals. While concentrations of individual pesticides in drinking water sometimes exceed the legal requirement of 0.1 ilg/litre, there is no evidence that any of these contraventions was of such a magnitude or duration as to endanger the health of consumers. Investment is in hand to deal with these exceedances.

  Phosphates can be found in water supplies derived from surface water sources; groundwater sources usually contain insignificant levels. Phosphates originate mainly from sewage effluents, industrial effluents or from agricultural run-off from inorganic fertilisers.

  Figures for the percentage contribution for pesticides and phosphates from each source are not available as the respective amounts vary between rural and urban environments and between ground water and surface water sources and at different times of the year.

  Mrs. Anne Campbell
  To ask the Secretary of State for the Environment what is the cost in the last three years to water and river authorities of making water supplies drinkable.

  Mr. Atkins
  Water industry capital expenditure on the drinking water compliance programme during the period 1990–91 to 1993–94 was around £2.5 billion at 1993–94 prices.

  Mrs. Anne Campbell
  To ask the Secretary of State for the Environment what is the cost of removing(a) pesticides and (b) phosphates from the water supply in each of the last three years.

  Mr. Atkins
  Information is not available in the form requested. However I understand that capital expenditure by water companies in England and Wales on new treatment to remove pesticides from water put into supply was £122 million in 1992–93 and that in 1993–94 and 1994–95 companies were planning to spend £170 million and £207 million respectively. There is not normally a requirement to remove phosphate from water before it is put into supply as drinking water.

  Integrated Pollution Control
  Mr. Brandreth
  To ask the Secretary of State for the Environment what changes are to be made to the scheme of fees and charges for integrated pollution control operated by Her Majesty's inspectorate of pollution.

  Mr. Atkin
  Minor changes to the HMIP Integrated Pollution Control Fees and Charges Scheme 1994–95 take effect from 1 December 1994. They are consequent upon changes in the governing legislation made by Statutory Instruments Nos. 1271—The Environmental Protection (Prescribed Processes and Substances etc.) (Amendment) Regulations 1994, and 1329—The Environmental Protection (Prescribed Processes and Substances etc.) (Amendment) (No. 2) Regulations 1994. Copies of the amendment to the scheme are being placed in the Libraries of both Houses.

  National Association of Citizens Advice Bureaux
  Mr. Cohen
  To ask the Secretary of State for the Environment what response he has made to each recommendation proposed by the National Association of Citizens Advice Bureaux in its document entitled "Taxing 728
  Times, CAB Evidence on the Council Tax", dated September 1994.

  Mr. Robert B. Jones
  My hon. Friend the Minister of State for Local Government, Housing and Urban Regeneration wrote to the chief executive of the national: association on 17 October responding to each recommendation which relates to the policy and legislative framework of the council tax. A copy of his letter has been placed in the Library of the House.

  Air Pollution
  Mr. Cohen
  To ask the Secretary of State for the Environment what proposals he has to tackle severe air pollution, including winter smog.

  Mr. Atkins
  Many measures are already in place to reduce emissions of pollutants into the air. These include catalytic converters, which have been required on all cars since the end of 1992. As a result, the risk of episodes of high pollution is expected to decrease over the next few years. In March, the Government published a consultation paper, "Improving Air Quality", which initiated wide-ranging and constructive debate. The Government intend to publish then proposals shortly.

  Women's Refuges
  Mr. Cohen
  To ask the Secretary of State for the Environment what progress he has made towards achieving a comprehensive network of women's refuge provision; what was the outcome of the consideration by Ministers of the need for improved co-ordination of refuge provision; what information he has about local authorities without a refuge in their area; and if he will make a statement.

  Mr. Robert B. Jones
  The provision of women's refuge is best decided by local authorities and other agencies taking into account issues such as the local supply of housing available for short-term use in emergency situations. The ministerial group on domestic: violence met on 17 May and discussed, among other issues, the need for a centrally co-ordinated policy on refuge provision. The Group agreed to consider this further at its next meeting.

  The Department does not hold information about the: number of local authorities without a refuge in their area.

  Internet
  Mrs. Anne Campbell
  To ask the Secretary of State for the Environment what plans he has to provide: information via Internet; and if he will make a statement.

  Sir Paul Beresford
  Officials have been asked to investigate the feasibility of publishing a range of departmental information through Internet. No firm decision has yet been taken by the Department to use this service.

  Race Bank
  Mr. Morley
  To ask the Secretary of State for the Environment when he intends to publish the Hull university report on the dredging on Race Bank; and if he: will place a copy in the Library.

  Mr. Atkins
  The report was commissioned by the National Rivers Authority and it is up to them to decide
  729
  whether or not to publish it and whether to place a copy in the House Library.

  Rented Housing
  Mrs. Bridget Prentice
  To ask the Secretary of State for the Environment what is his estimate of the total output of rented homes by housing associations and local authorities in the current year; and what the figure was for 1978–79.

  Mr. Robert B. Jones
  I refer the hon. Member to the reply that right hon. Friend the Secretary of State for the Environment gave to the right hon. Member for Manchester, Wythenshawe (Mr. Alfed Morris) on 29 November 1994.

  Construction Industry
  Mr. Simon Coombs
  To ask the Secretary of State for the Environment what action he has taken within his Department to support his sponsorship of the construction industry.

  Mr. Robert B. Jones
  Following a reorganisation of sponsorship activities last year, my Department has undertaken, and is continuing to undertake, an enhanced range of activities to encourage the success and competitiveness of the construction industry both at home and overseas.

  These include:

  Consultation arrangements between the Department and the industry, comprising twice-yearly meetings between the Secretary of State for the Environment and senior industry representatives on strategic issues; regular briefing meetings between the industry representatives and Ministers on specific construction-related topics, thus enabling Ministers to hear industry's views and concerns at first hand; meetings of a consultative group set up to discuss current issues and concerns at official level; a consultative committee on construction industry statistics set up to discuss initiatives on the provision of statistical and market intelligence information; and the publication of "Construction Monitor", a monthly newsletter published with Building magazine, containing European, United Kingdom and statistical information.

  Sponsorship activities, including helping to take forward the implementation of the Latham Report into the construction industry's procurement and contractual arrangements; progressing the practical implementation of the Construction Products Directive; the establishment with the industry of the Construction Procurement Group which aims to help reduce the United Kingdom's excessive trade deficit in construction products; the launch of a Construction Benchmarking Challenge which is providing financial assistance towards the establishment of four benchmarking clubs; carrying out strategic analyses of specific sectors of the industry to identify ways of improving Government support; proposals to promote prompt payment arrangements in Government construction contracts through use of standard contract conditions; provision of an improved range of statistics and other information to help industry decision makers; policy opposition to the use of on-demand bonds; and proposals to reform the Architects' Registration Acts to simplify the current system.

  Research and Innovation initiatives, including the establishment of a whole industry research strategy group
  730
  to develop a joint Government industry strategy for research and innovation; establishment of a construction industry panel under the Government's Technology Foresight programme; increasing the proportion of total research and development spend allocated to collaborative projects funded jointly with industry; the launch of the construction industry European research club with strong DoE encouragement to help the United Kingdom construction industry to increase its participation in European research, and gain increased access to funding; the launch of the LINK/IDAC integration in design and construction programme to encourage improvements in the quality and competitiveness of the United Kingdom construction industry through academic/industry research into the construction process; and support for the Construction Quality Forum which seeks to improve quality in construction through information exchange.

  Export Services, including carrying out six trade missions in 1994, the setting up of a number of building material task forces; the production of a new video to promote the British construction industry around the world; and the organisation of inward visits by overseas clients.

  Ealing Council
  Mr. Harry Greenway
  To ask the Secretary of State for the Environment what were the financial balances of Ealing council in(a) May 1990 and (b) May 1994; and if he will make a statement.

  Mr. Robert B. Jones
  Ealing council reported a deficit in reserves of £12,000 at 1 April 1990 and a surplus in reserves at 1 April 1994 of £40,891,000 (or £43,682,000 including those earmarked for local management of schools).

  Single Regeneration Budget
  Mr. Alfred Morris
  To ask the Secretary of State for the Environment how many bids under the single regeneration budget have been received by his Department; and what is the amount of money that is to be allocated.

  Mr. Curry
  A total of 469 bids were received by Government offices in the regions for funding from the single regeneration budget. A total of £125 million will be allocated to bidders in respect of successful projects in 1995–96, subject to satisfactory performance.

  Mr. Hardy
  To ask the Secretary of State for the Environment what payment will be made to support small businesses under the single regeneration budget in 1995–96; and what is the percentage difference from the provision made for this purpose in the current year.

  Mr. Curry
  Support for small businesses is one of the priorities of the single regeneration budget and commitments from constituents programmes, including the business start-up scheme and regional enterprise grant, will continue to be honoured in 1995–96. The overall level of resources given to support small businesses in 1995–96 will depend upon the outcome of the first bidding round.

  Repossessions
  Mr. Khabra
  To ask the Secretary of State for the Environment what is the latest estimate of the number of
  731
  households likely to lose their home through repossession for mortgage arrears in the next 12 months.

  Mr. Robert B. Jones
  The Department does not make forecasts of the number of households likely to lose their home through repossession for mortgage arrears.

  The latest available figures on mortgage possessions were published by the Council for Mortgage Lenders in July. These showed that in the first half of 1994, 25,020 properties were taken into possession by mortgage lenders, representing 0.24 per cent. of all mortgaged properties. This compared with 31,780 in the first half of 1993, and 26,760 in the second half of 1993.

  The figures for the second half of 1994 and 1994 as a whole will be published by the CML on Wednesday 25 January 1995.

  Dog Fouling
  Mr. Dafis
  To ask the Secretary of State for the Environment if he proposes to act upon the recommendations of the advisory group on litter concerning dog fouling; and if he will make a statement.

  Mr. Atkins
  The period for consultation on the Advisory Group's recommendations ended on 14 October and we have been considering the comments made. The Government's response to the advisory group will be made in due course.

  Secret Files
  Mr. Byers
  To ask the Secretary of State for the Environment how many(a) top secret and (b) secret files his Department holds.

  Mr. Robert B. Jones
  My Department holds 14 top secret and some 1,900 secret files. These represent 0.1 per cent. of all files held.

  Council Rents
  Mr. Corbyn
  To ask the Secretary of State for the Environment if he will publish the average levels of council rent in each London borough at constant prices for each year since 1979.

  Mr. Robert B. Jones
  I have today placed in the Library a table showing the average weekly local

  Total stock at 1 April 1994

  Empty at 1 April 1994

  Empty as percentage of total stock

  Target for reduction of number of empty properties held at 1 April 19941

  Department of Transport

  3,845

  887

  23

  484

  Home Office

  4,5242

  498

  11

  335

  Ministry of Defence

  68,106

  11,006

  16

  3.5503

  Department of Health

  15,0004

  1,8005

  12

  700

  Scottish Office

  1,6016

  158

  10

  60

  Welsh Office

  239

  437

  18

  37

  Notes:

  1 Includes properties to be sold, leased or reoccupied.

  2 Excludes figures for the provincial police authorities.

  3 Targets relate to stock figures at 1 April 1994. More properties will become empty during the year as others are occupied or disposed of.

  4 Most up-to-date figures available are as at 31 December 1992.

  5 Excludes bed-spaces in hostels.

  6 NHS figures included in the stock are as at 1 April 1993.

  7 Excludes properties awaiting demolition or conversion to non-residential use.

  732
  authority rents for each London borough for the financial years 1988–89 to 1994–95, expressed in constant prices. Information for earlier years could be provided only at disproportionate cost.

  Safer Cities
  Mr. Heald
  To ask the Secretary of State for the Environment when he will announce the selection o contractors to manage the next wave of safer cities projects.

  Sir Paul Beresford
  I am pleased to announce that, following a tender competition, contractors have been selected to manage the 20 new safer cities projects which my right hon. Friend the then Minister for Housing, Inner Cities and Construction announced on 15 July 1994.

  After careful evaluation of the tenders, three organisations have been chosen to run the projects: Crime Concern, the National Association for the Care and Resettlement of Offenders and the Society of Voluntary Associates. All three organisations have significant experience in crime prevention, project management, and working with voluntary agencies.

  Crime Concern will manage projects in Bolton, Hackney, Kensington and Chelsea, Portsmouth, Southwark and Westminster.

  NACRO will manage projects in Bournemouth, Brighton, Easington, Great Grimsby, Merseyside, Norwich, Oxford, Sandwell, Scunthorpe, Wansbeck and York.

  SOVA will manage projects in Camden, Lincoln and Newham.

  We expect preliminary work to begin December, and projects will start to come on stream early in the new year.

  Departmental Property
  Mr. Barry Field
  To ask the Secretary of State for the Environment if he will announce targets for the reduction of Government Departments' empty residential property; and if he will make a statement.

  Mr. Robert B. Jones
  In response to the report of the task force on Government Departments' empty houses, the Government undertook to monitor empty residential property owned by Departments and to set annual targets. Targets for reduction in 1994–95 are set out in the table.
  733
  We will monitor performance and publish achievement against these targets at the end of the financial year.

  My Department will shortly issue revised guidance for Government Departments on how to secure better use of their empty residential property. This will reflect the recommendations made by the task force. The Welsh Office will issue similar guidance separately.

  Notes

  1. Includes properties to be sold, leased or reoccupied.

  2. Excludes figures for the provincial police authorities.

  3. Targets relate to stock figures at 1 April 1994. More properties will become empty during the year as others are occupied or disposed of.

  4. Most up-to-date figures available are as at 31 December 1992.

  5. Excludes bed-spaces in hostels.

  6. NHS figures included in the stock are as at 1 April 1993.

  7. Excludes properties awaiting demolition or conversion to non-residential use.

  Countryside Stewardship Scheme
  Mr. Tipping
  To ask the Secretary of State for the Environment if he will list those countryside stewardship scheme sites which have been withdrawn from the scheme for allowing additional public access, the grounds on which each decision was taken, the date when payments ceased and whether the Government will seek repayment of moneys already spent for which the contracted services or public access was not satisfactorily delivered.

  Mr. Atkins
  [holding answer 23 November 1994]: Information about countryside stewardship agreements with access elements, which have been either terminated or amended through the removal of the access element, is given below. There are various reasons for the termination or amendment of agreements, including the sale of the property, the death or bankruptcy of the scheme participant, or non-compliance with the conditions of the agreement. Payments under the scheme are made annually in arrears and in eight cases payments had not been made before the agreements came to an end or were amended. In other cases, payments were withdrawn. In no case was repayment of grant required. The management of the scheme, including the negotiation of agreements with scheme participants, is a matter for the Countryside Commission.

  Region

  Year of agreement

  Number of agreements terminated or where access element removed

  South West

  1991

  5

  1992

  2

  Eastern

  1991

  2

  1992

  1

  1993

  1

  North West

  1992

  1

  Midland

  1991

  5

  1992

  2

  Yorkshire and Humberside

  1991

  1

  South East

  1991

  4

  Northern

  1991

  1

SCOTLAND

  GP Fundholders
  Mr. Milburn
  To ask the Secretary of State for Scotland if she will list the management allowances payments made to general practitioner fund-holding practices and practices preparing to be fundholders(a) by value and (b) in total for each (i) family health services authority and (ii) region.

  Lord James Douglas-Hamilton
  The information requested is given in the table. GP fundholding has delivered many improvements in quality of care for patients. The costs of the management allowance—at about 2 per cent. of budgets set presents excellent value for money. These figures are only available for those years for which audited health board accounts have been completed.

  Health Board

  1990–91 £000

  1991–92 £000

  1992–93 £000

  Argyll and Clyde

  16

  59

  134

  Ayrshire and Arran

  —

  —

  77

  Borders

  —

  —

  26

  Dumfries and Galloway

  —

  —

  —

  Fife

  —

  27

  36

  Forth Valley

  —

  23

  86

  Grampian

  —

  85

  539

  Greater Glasgow

  —

  35

  90

  Highland

  —

  —

  32

  Lanarkshire

  —

  —

  178

  Lothian

  16

  33

  119

  Ork

  —

  —

  —

  ney

  —

  —

  —

  Shetland

  —

  —

  —

  Tayside

  5

  44

  193

  Western Isle

  —

  —

  —

  Scotland

  37

  306

  1,510

  (1) The expenditure includes both revenue and capital components.

  Highlands and Islands Objective/Status
  Mr. Charles Kennedy
  To ask the Secretary of State for Scotland if he will make a statement on progress towards the implementation of agricultural measures under Highlands and Islands objective 1 status, following his Department's consultation process which ended on 31 May; if he will indicate the number and range of responses received; and if he will make a statement.

  Sir Hector Monro
  The Department received 17 responses earlier this year to its consultation paper on the proposed Highlands and Islands Agricultural Programme from local authorities, agricultural and wildlife organisations, and a range of other public and private bodies. Most of the responses broadly welcomed the proposals. The Highlands and Islands agricultural programme, modified in the light of comments received and discussions with the European Commission, was approved for European Community funding on 29 July. The approved programme has three elements: the agricultural business improvement scheme, which is expected to open for applications towards the end of December; the crofting township development scheme, which should start next January; and the marketing scheme, which should come into operation next spring.

  Health Care International
  Mr. Worthington
  To ask the Secretary of State for Scotland what was the rough estimate of the cost of adapting the Health Care International hospital for use as an NHS hospital, referred to in his answer of 31 October,Official Report, column 964.

  Lord James Douglas-Hamilton
  The very rough estimate given was at least £25 million. The actual figure would of course depend on the specification.

  Special Advisers
  Mr. Vaz
  To ask the Secretary of State for Scotland if he will make a statement concerning the cost to public funds of employing ministerial special advisers in his Department.

  Mr. Lang
  My Department employs two special advisers, although one post is presently vacant.

  Salaries for special advisers are negotiated individually in relation to their previous earnings, and are confidential. They are, however, normally paid on a special advisers' salary spine of 34 points, which starts at £19,503. Appointments are non-pensionable, and the salary spine reflects this.

  Rent Acts
  Mrs. Ewing
  To ask the Secretary of State for Scotland if he will consider extending the amendment of the definition of residential occupier in terms of section 22(5) of the Rent (Scotland) Act 1984, in relation to any premises to a person occupying such premises and willing to make payment of a rental in respect thereof who has been denied security of tenure by his or her landlord for the express object of eviction.

  Lord James Douglas-Hamilton
  There are no plans at present to change the definition of residential occupier.

  Glasgow North Ltd.
  Mr. Michael J. Martin
  To ask the Secretary of State for Scotland (1) what is the most recent deficit of Glasgow North Ltd.;

  (2) how many staff are currently employed by Glasgow North Ltd.; and if he will place a list of their grades in the Library;

  (3) what amounts have been given to date in interest free loans to the staff of Glasgow North Ltd.;

  (4) how many senior officials of Glasgow North Ltd. resigned in the last two weeks;

  (5) how many visits (a) to the United States of America and (b) elsewhere abroad representatives of Glasgow North Ltd. made in the past two years; and what was the cost per person and duration of such trips.

  Lord James Douglas-Hamilton
  These are matters for Glasgow North Limited. The Secretary of State has no locus in the management of the company.

  Mr. Michael J. Martin
  To ask the Secretary of State for Scotland if he will place in the Library a list of the urban aid projects for which Glasgow North Ltd. has responsibility and also indicating(a) how many staff have been allocated to each project and (b) the capital and revenue costs for each.

  Lords James Douglas-Hamilton
  The information is as follows:736

  Urban programme projects currently managed by Glasgow North Ltd.

  Project title

  Number of staff

  Capital costs £

  Annual revenue costs (for four years) £

  Regeneration through reskilling

  9

  12,900

  222,800

  Community economic development project

  3

  4,160

  71,000

  Rosemount business start-up units

  2

  44,500

  43,940

  Information technology bus

  2

  90,000

  71,300

  Jobs from construction

  2

  4,900

  120,400

  Three initiatives (development of local regeneration strategies)

  7

  122,900

  201,1C0

  Access to training opportunities resource

  —

  —

  1106,000

  Child care employment and development projects

  2

  13,500

  127,200

  1 Funding is used to provide job specific training packages to enable individuals to compete more favourably in the labour market.

  Mr. Michael J. Martin
  To ask the Secretary of Stale for Scotland what was the budget submitted for the IT Bus project owned by Glasgow North Ltd.; and what was the eventual cost.

  Lord James Douglas-Hamilton
  The costs submitted for the IT bus project in the 1993–94 urban programme competition were as follows:

  £

  Capital expenditure

  90,000

  Annual revenue expenditure (for four years)

  71,300

  I understand from Glasgow district council, the sponsoring local authority, that the level of urban programme capital funds expended on the project was within budget.

  Mr. Michael J. Martin
  To ask the Secretary of State for Scotland what urban aid projects have been awarded to Glasgow North Ltd. in the years(a) 1992–93 and (b) 1993–94; and if he will give the value of these projects.

  Lord James Douglas-Hamilton
  The information is as follows:

  Project title

  Capital cost £

  Annual revenue cost (for four years)£

  1992–93

  Community economic development project

  4,160

  71,000

  1993–94

  Rosemount business start-up units

  44,500

  43,940

  Information technology bus

  90,000

  71,300

  Internet
  Mrs. Anne Campbell
  To ask the Secretary of State for Scotland what plans he has to provide information via Internet; and if he will make a statement.

  Mr. Lang
  My Department's press releases are already available via Internet. My officials are considering the provision of further selected information.

  Historic Scotland
  Mr. Dalyell
  To ask the Secretary of State for Scotland for what reasons Historic Scotland was denied access on payment, to the direct labour force of English Heritage based at Berwick, for work on sites in the Tweed valley.

  National health service patients seen at private hospitals, 1992

  Health board of residence/hospital

  Specialty general surgery

  Orthopaedics

  Cardiothoracic surgery

  Plastic surgery

  Acute mixed

  All specialities

  Argyll and Clyde

  Ross Hall

  —

  70

  19

  —

  —

  89

  Nuffield

  —

  —

  —

  —

  44

  44

  Total

  —

  70

  19

  —

  44

  133

  Ayrshire and Arran

  Ross Hall

  —

  2

  31

  —

  —

  33

  Nuffield

  —

  —

  —

  —

  2

  2

  Total

  —

  2

  31

  —

  2

  35

  Dumfries and Galloway

  Ross Hall

  —

  —

  11

  —

  —

  11

  Total

  —

  —

  11

  —

  11

  Fife

  Ross Hall

  —

  —

  3

  —

  —

  3

  Total

  —

  —

  3

  —

  —

  3

  Forth Valley

  Ross Hall

  —

  —

  19

  —

  —

  19

  Total

  —

  —

  19

  —

  —

  19

  Greater Glasgow

  Bon Secours

  —

  —

  —

  1

  5

  6

  Nuffield

  —

  —

  —

  1

  65

  66

  Ross Hall

  —

  —

  70

  —

  1

  71

  Total

  —

  —

  70

  2

  71

  143

  Lanarkshire

  Ross Hall

  —

  —

  19

  —

  1

  20

  Nuffield

  —

  —

  —

  —

  9

  9

  Total

  —

  —

  19

  —

  10

  29

  Lothian

  Ross Hall

  —

  —

  4

  —

  —

  4

  Nuffield

  —

  —

  —

  —

  1

  1

  Murrayfield

  8

  —

  —

  —

  1

  9

  Total

  8

  —

  4

  —

  2

  14

  Tayside

  Ross Hall

  —

  —

  54

  —

  —

  54

  Total

  —

  —

  54

  —

  —

  54

  Western Isles

  Ross Hall

  —

  —

  1

  —

  —

  1

  Total

  —

  —

  1

  —

  —

  1

  738
  Mr. Lang
  Under the National Heritage Act 1983, English Heritage does not have powers to carry out works on sites situated outside England.

  Private Hospitals
  Mr. Robert Hughes
  To ask the Secretary of State for Scotland which health boards in Scotland have purchased treatment from private sector hospitals; which private hospitals have had such contracts; which medical specialities and what number of patients have been involved; and what is the value of such contracts.

  Mr. Lang
  [holding answer 28 November 1994]: Centrally available information on NHS patients treated in Private Hospitals is shown in the tables. The information shown refers to health board of residence and may include treatments purchased by GP fundholders.
  739

  National health service patients seen at private hospitals, 1992

  Health board of residence/hospital

  Specialty general surgery

  Orthopaedics

  Cardiothoracic surgery

  Plastic surgery

  Acute mixed

  All specialities

  Scotland

  Bon Secours

  —

  —

  —

  1

  5

  6

  Nuffield

  —

  —

  —

  1

  121

  122

  Ross Hall

  —

  72

  231

  —

  2

  305

  Murrayfield

  8

  —

  —

  —

  1

  9

  Total

  8

  72

  231

  2

  129

  442

  National health service patients seen at private hospitals, 1993

  Health board of residence/hospital

  Specialty general surgery

  Plastic surgery

  Acute mixed

  All specialities

  Argyll and Clyde

  Bon Secours

  —

  6

  4

  10

  Nuffield

  —

  4

  94

  98

  Ross Hall

  1

  17

  1

  19

  Total

  1

  27

  99

  127

  Ayrshire and Arran

  Bon Secours

  —

  6

  2

  8

  Nuffield

  —

  1

  9

  10

  Ross Hall

  —

  10

  11

  21

  Total

  —

  17

  17

  Dumfries and Galloway

  Bon Secours

  —

  1

  —

  1

  Ross Hall

  —

  4

  —

  4

  Total

  —

  5

  —

  5

  Fife

  Ross Hall

  —

  1

  —

  1

  Total

  —

  1

  —

  1

  Forth Valley

  Bon Secours

  —

  2

  2

  4

  Nuffield

  —

  —

  1

  1

  Ross Hall

  —

  3

  —

  3

  Total

  —

  5

  3

  8

  Grampian

  Ross Hall

  —

  1

  —

  1

  Total

  —

  1

  —

  1

  Greater Glasgow

  Bon Secours

  —

  33

  59

  92

  Nuffield

  —

  7

  27

  34

  Ross Hall

  17

  33

  —

  50

  Total

  17

  73

  86

  176

  Lanarkshire

  Bon Secours

  —

  23

  11

  34

  Nuffield

  —

  8

  26

  34

  Ross Hall

  —

  3

  —

  3

  Total

  —

  34

  37

  71

  Lothian

  Murrayfield

  —

  —

  1

  1

  Total

  —

  —

  1

  1

  Western Isles

  Nuffield

  —

  1

  1

  2

  Total

  —

  1

  1

  2

  740 741

  National health service patients seen at private hospitals, 1993

  Health board of residence/hospital

  Specialty general surgery

  Plastic surgery

  Acute mixed

  All specialities

  Scotland

  Non Secours

  —

  71

  78

  149

  Nuffleld

  —

  21

  158

  179

  Ross Hall

  18

  72

  1

  91

  Murrayfield

  —

  —

  1

  1

  Total

  18

  164

  238

  420

  Newcastle Disease
  Mr. Morley
  To ask the Secretary of State for Scotland how many cases of Newcastle disease were identified in each year since 1985.

  Sir Hector Monro
  [holding answer 28 November 1994]: There have been no recorded cases of Newcastle disease in Scotland over this period.

  Forests
  Mr. Tipping
  To ask the Secretary of State for Scotland how many and which local authorities have responded to the consultation paper, "Our Forests, the Way Ahead;" and how many and which local authorities have expressed reservations about the proposal to continue with the disposal of woodland and the loss of public access in these woodlands.

  Sir Hector Monro
  [holding answer 28 November 1994]: Four local authorities in Scotland have responded: Highland regional council, Kincardine and Deeside district council, Midlothian district council and Strathclyde regional council. Each of these local authorities has expressed reservations about the proposals for securing public access to woodlands sold by the Forestry Commission, although the sale of woodlands does not, of course, necessarily lead to a loss of public access.

WALES

  Drugs
  Mr. Llwyd
  To ask the Secretary of State for Wales (1) what was the budget for 1992–93 for the education of young people about the effects of substance abuse and drug taking;

  (2) what was the budget for 1993–94 for the education of young people about the effects of substance abuse and drug taking.

  Mr. Richards
  Drug prevention work is undertaken by a number of agencies from both the statutory and voluntary sectors, which receive funds from various sources. In 1992–93 the Welsh Office made available some £200,000 to help fund activities concerned with the prevention of drug misuse. The budget for 1993–94 was nearly £240,000. Funding is also available to local education authorities for health education (including drugs) under the grants for education support and training programme.

  Environmental Protection Agency
  Mr. Dafis
  To ask the Secretary of State for Wales if he will establish a separate environmental protection agency for Wales.
  742
  Mr. Gwilym Jones
  The Government feel that a joint agency will be most effective in addressing current problems, most of which are common to England and Wales.

  Concessionary Travel
  Mr. Llywd
  To ask the Secretary of State for Wales if he will assist local authorities to extend the provision of concessionary travel to pensioners; and if he will make a statement.

  Mr. Gwilym Jones
  Local councils in Wales already provide concessionary fares schemes for pensioners. Money from the taxpayer for such schemes is provided through the local government revenue settlement. It is for individual councils to decide on the financial support that they wish to allocate for this purpose.

  Secret Files
  Mr. Byers
  To ask the Secretary of State for Wales how many(a) top secret and (b) secret files his Department holds.

  Mr. Redwood
  The information is as follows:(a) five (b) 84. These represent 0.008 per cent. of the Department's holding of files.

  Dog Fouling
  Mr. Dafis
  To ask the Secretary of State for Wales if he proposes to act upon the recommendations of the advisory group on litter concerning dog fouling; and if he will make a statement.

  Mr. Gwilym Jones
  I refer the hon. Member to the reply given today by my right hon. Friend the Minister for the Environment and Countryside.

  Housing Finance
  Mr. Sweeney
  To ask the Secretary of State for Wales when he will consult on his housing revenue account subsidy proposals for 1995–96; and what his proposals will be.

  Mr. Gwilym Jones
  The Welsh Office has issued draft housing revenue account subsidy determinations for 1995–96 today. Local authorities and other consultees have been invited to let us have their views by 22 December 1994. I will be placing copies of the draft determinations together with estimates of guideline rents and management and maintenance allowances in the Library of the House. The proposed average guideline rent for 1995–96 is £33.58 a week. Increases range between £1.82 and £2.82 a week according to the estimated capital values of each authority's stock.

  The proposed average management and maintenance allowance per dwelling would increase by 3.75 per cent to £854, an increase of £31. Across Wales the total estimated

  743
  management and maintenance allowances would increase to nearly £177 million. Thirty-two councils would have a higher allowance than in 1994–95 while no authority will have a lower per dwelling allowance than this year.

  These proposals strike a reasonable balance between the need to contain public expenditure and the need to ensure that housing is provided for council tenants at acceptable cost. The overall percentage increase in guideline rents is lower than in 1994–95.

  Local authorities determine their own expenditure and set their own rents, but I hope that they will follow the Government's lead in adopting a balanced approach.

SOCIAL SECURITY

  Christmas Expenditure
  Mr. Bayley
  To ask the Secretary of State for Social Security how much public money will be spent on entertaining, Christmas decorations and other festive activities this Christmas season by his Department and Government agencies answerable to his Department; and of this sum how much will be spent in Ministers' private offices and official residences.

  Mr. Hague
  The cost of decorations, Christmas parties and other festive activities is not normally met out of departmental budgets. For details of total expenditure on official hospitality, I refer the hon. Member to the reply given on 28 October 1994,Official Report, column 857. Disaggregated information of the kind requested is not available.

  Mr. Bayley
  To ask the Secretary of State for Social Security how many official Christmas cards he and his Ministers intend to send in 1994; how much these cards will cost(a) to buy, (b) to post and (c) in staff time to sign, address and place in envelopes; and if he will place in the Library a sample copy of the official Christmas card he intends to send this year.

  Mr. Hague
  Ministers at this Department intend to send 930 official Christmas cards in 1994, at a cost of £384.75, inclusive of value added tax. Postage costs are estimated at a maximum of £176.70. Staff time spent on the process will be minimal.

  Copies of the official Christmas card are on order and so not yet available. Copies will be placed in the Library later.

  Child Support Agency
  Mr. Fisher
  To ask the Secretary of State for Social Security whether he will publish tables to show, for each Child Support Agency office,(a) performance in relation to overall clearance targets, (b) the total number of cases outstanding, (c) the number of people who have requested that their assessments be reviewed due to change of circumstances, (d) the number of cases still outstanding and how many of those have been outstanding for longer than (i) six months and (ii) 12 months and (e) how many appeals are outstanding, and for how long.

  Mr. Burt
  The administration of the Child Support Agency is a matter for Miss Ann Chant, the chief executive. She will write to the hon. Member.
  744
  Letter from Ann Chant to Mr. Mark Fisher, dated 29 November 1994:
  I am replying to your recent Parliamentary Question to the Secretary of State for Social Security about the performance of the Child Support Agency against overall clearance targets and the number and age of change of circumstances reviews and appeals.
  The Agency does not collect all of the information in the format that your require. The information available relates to each Child Support Agency Centre (CSAC) and is shown in the attached tables.
  Prior to August 1994 the Agency did not count the number of reviews requested following a change of circumstance. Since August, the Agency has identified the age of all such outstanding reviews and has monitored the issue of review forms.
  I hope that this reply is of help.

  Time taken to clear cases - between 1 April 1994 and 30 September 1994

  Per cent.

  40 days or less

  38

  More than 40 days and up to 100 days

  10

  More than 100 days

  52

  B) Total cases outstanding at 30 September 1994

  Number

  Dudley

  64,191

  Hastings

  58,569

  Falkirk

  86,344

  Plymouth

  68,520

  Birkenhead

  89,237

  Belfast

  106,953

  Agency

  473,814

  C) Change of circumstance review forms issued

  CSAC

  August

  September

  Total

  Dudley

  480

  305

  785

  Hastings

  598

  466

  1,064

  Falkirk

  174

  124

  298

  Plymouth

  618

  673

  1,291

  Birkenhead

  249

  493

  742

  Belfast

  187

  128

  315

  Agency

  2,306

  2,189

  4,495

  D) Change of circumstance review requests outstanding—by age at 30 September 1994

  CSAC

  0–3 months

  3–6 months

  > 6 months

  Dudley

  1,757

  1,174

  2,072

  Hastings

  3,199

  475

  104

  Falkirk

  1,166

  139

  6

  Plymouth

  N/A

  N/A

  N/A1

  Birkenhead

  761

  188

  191

  Belfast

  513

  281

  130

  Agency2

  7,396

  2,252

  2,503

  1 Figures not available for Plymouth CSAC in this format. Total number of reviews outstanding at Plymouth CSAC = 4,113.

  2 Does not include total figure for Plymouth CSAC.

  E) Appeals outstanding by age at 30 September

  CSAC

  0–3 months

  3–6 months

  >6 months

  Dudley

  284

  14

  —

  Hastings

  137

  131

  88

  Falkirk

  300

  215

  —

  Plymouth

  499

  165

  6

  Birkenhead

  449

  123

  —

  745

  E) Appeals outstanding by age at 30 September

  CSAC

  0–3 months

  3–6 months

  > 6 months

  Belfast

  204

  143

  51

  Agency

  1,873

  791

  145

  Special Advisers
  Mr. Vaz
  To ask the Secretary of State for Social Security if he will make a statement concerning the cost to public funds of employing ministerial special advisers in his Department.

  Mr. Hague
  This Department employs one special adviser.

  Table a. Housing Benefit and Council Tax Benefit for employed people

  Standard Statistical Regions

  May 1989

  May 1990

  Housing Benefit (thousands) May 1991

  May 1992

  May 1993

  Council Tax Benefit (thousands) May 1993

  North (including Cumbria)

  12

  11

  16

  14

  18

  25

  Yorkshire and Humberside

  14

  26

  16

  24

  21

  33

  East Midlands

  11

  13

  14

  17

  17

  25

  East Anglia

  9

  8

  8

  9

  11

  13

  London

  33

  34

  42

  44

  47

  30

  South East (excluding London)

  28

  32

  43

  41

  46

  43

  South West

  18

  21

  22

  22

  24

  28

  West Midlands

  24

  24

  24

  25

  24

  29

  North West (excluding Cumbria)

  30

  21

  29

  29

  35

  54

  Wales

  11

  15

  12

  11

  13

  11

  Scotland

  36

  32

  30

  31

  32

  31

  Great Britain

  226

  236

  255

  268

  288

  321

  Source:

  The Housing Benefit and Council Tax Benefit Management Information System annual 1 per cent. sample enquiry taken at the end of May for each year.

  Notes:

  1. For Housing Benefit, comparable figures, including the regional analysis, are not available prior to 1989.

  2. Council Tax Benefit was introduced in April 1993. Figures for Community Charge Benefit are not comparable.

  3. The figures given are those cases without Income Support who have earnings, which may be part-time or full time.

  4. The figures are for benefit units, not individuals. A benefit unit may be a couple or a single person.

  5. The figures have been rounded to the nearest thousand. Therefore the sum of the regions may not equal the total for Great Britain.

  Table b. Family Cridit

  Family Credit Thousands

  DSS administrative regions

  May 1989

  May 1990

  May 1991

  May 1992

  May 1993

  Northern

  54

  56

  62

  72

  88

  Midlands

  54

  58

  66

  74

  91

  London north

  32

  35

  39

  45

  57

  London south

  27

  28

  31

  38

  48

  Wales and south west

  46

  47

  49

  57

  68

  North western

  53

  53

  59

  65

  79

  Scotland

  37

  38

  42

  47

  57

  Great Britain

  303

  315

  347

  397

  489

  Source:

  Figures are based on a 5 per cent. sample of awards as at the end of May each year.

  Note:

  1. Family Credit replaced Family Income Supplement in April 1988.

  2. Figures relate to families. A family includes at least one person in employment as an employee or self employed.

  3. In April 1992, the qualifying hours for Family Credit were reduced from 24 to 16.
  746
  Salaries for special advisers are negotiated individually in relation to their previous earnings and are confidential. They are, however, normally paid on a special advisers' salary spine of 34 points, ranging from £19,503 to £67,609. Appointments are non-pensionable and the salary spine reflects this.

  Benefits
  Mr. McCartney
  To ask the Secretary of State for Social Security if he will provide comparable figures both regionally and nationally on the number of employed people claiming(a) housing benefit, (b) council tax benefit and (c) family credit in each year since 1979.

  Mr. Roger Evans
  The available information is set out in the tables.

  4. The figures are shown by DSS administrative region, as a breakdown by standard statistical region is not available.

  5. The figures have been rounded to the nearest thousand. Therefore the sum of the regions may not equal the total for Great Britain.

  Income Support
  Mr. McCartney
  To ask the Secretary of State for Social Security what are the most recent figures to date, and over the most recently available 12-month period, of those couples who are eligible under the current £15 earnings disregard rule; and, where the claimant has been unemployed for two years or more,(a) how many have declared earnings from part-time employment of less than £15 per week and (b) how many have had their income support payments abated because their earnings from part-time employment have exceeded £15 per week.

  Mr. Roger Evans
  The information is not available in the form requested. The number of couples who are eligible for the £15 disregard is in the table:
  747

  All cases

  No disability premium in payment

  Disability premium in payment

  All Cases

  31,000

  25,000

  6,000

  Joint Part Time Earnings for: up to £15.00

  11,000

  9,000

  2,000

  Over £15.00

  20,000

  16,000

  4,000

  Source:

  Income Support Quarterly Statistical Enquiry - February 1994.

  Habitual Residence Test
  Mr. Gapes
  To ask the Secretary of State for Social Security how many of those refused benefits under the habitual residence test have appealed against the decision.

  Mr. Roger Evans
  I am informed by the president of the Independent Tribunal Service, His Honour Judge Bassingthwaigthe, that this information is not collected centrally and could be obtained only at disproportionate cost.

  Mr. Gapes
  To ask the Secretary of State for Social Security if it is Government policy that all those refused income support under the habitual residence test should also be refused social fund grants, social fund loans and crisis loans regardless of their circumstances.

  Mr. Roger Evans
  Social fund applicants must be in receipt of income support to be eligible for a community care grant or budgeting loan. Crisis loans are available to applicants who are not in receipt of benefit and may be paid to those who fail the habitual residence test.

  Attendance Allowance
  Mr. Flynn
  To ask the Secretary of State for Social Security (1) how many new claims for attendance allowance have been made to each disability benefit centre in each month since April 1992 which have either(a) resulted in an award or (b) been rejected; and, in each case, whether (i) examining medical practitioner evidence was provided, (ii) general practitioner factual reports were provided or (iii) the claim was decided solely on the statement of evidence provided by the claimant;

  (2) how many new claims for attendance allowance have been refused, broken down by reason for refusal, in each month since April 1992 at each disability benefit centre and for the country as a whole.

  Mr. Hague
  The administration of attendance allowance is a matter for Mr. Michael Bichard, the chief executive of the Benefits Agency. He will write to the hon. Member shortly.

  Letter from Michael Bichard to Mr. Paul Flynn, dated 29 November 1994:
  The Secretary of State for Social Security has asked me to reply to your recent Parliamentary Question asking for information about Attendance Allowance (AA) claims at each Disability Benefit Centre (DBC).
  I apologise for the delay in providing you with this information.
  Information in respect of reasons for refusal of AA claims is not available. However, the information that is available has been enclosed and a copy has been placed in the Library.
  It should be noted that the figures given may not accurately reflect new claims received within each month at each DBC because relevant statistics are compiled at the date a claim is cleared rather than the date it is received.
  I hope you find this reply helpful

  Social Fund
  Mr. Corbyn
  To ask the Secretary of State for Social Security what is the annual administrative cost of the social fund; and how many complaints there have been from customers and their representatives in each region in relation to their applications in the last year for which figures are available.

  Mr. Roger Evans
  The administration cost of the social fund in 1992–93, the most recent year for which figures are available, was £208 million. This amount includes expenditure on information technology development and capital costs of £17 million, including the investment costs of introducing the improved social fund computer system.

  Information concerning complaints about the social fund is not readily available and could be obtained only at disproportionate cost. An applicant for a discretionary payment who is dissatisfied with the decision has the right to have the application reconsidered by applying for a review. Information on the review process and details of the number of social fund review applications are given in the Secretary of State's annual report on the social fund for 1993–94. A copy for the report is in the Library.

  Widow's Benefit
  Mr. Frank Field
  To ask the Secretary of State for Social Security how many(a) widows and (b) war widows ceased to claim widow's benefit on re-marriage in each of the last five years.

  Mr. Arbuthnot
  For(a) information for the period 1 April 1989 to 31 September 1992 is not available and could be obtained only at disproportionate cost. Provisional figures for the period since then are as follows:

  1 October 1992 to 31 March 1993 = 990

  1 April 1993 to 31 March 1994 = 2,050

  1 April 1994 to 30 September 1994 = 1,060

  Information on the number of widows who ceased on re-marriage to claim war widows pension is as follows:

  1990–60

  1991–48

  1992–32

  1993–34

  1994–411

  1January to October 1994 inclusive.

  Mr. Corbyn
  To ask the Secretary of State for Social Security how many social fund applications which have been turned down went to appeal in each region in each year since the establishment of the fund; and how many appeals were successful.

  Mr. Roger Evans
  The information requested, which is for the regulated social fund system, is set out in the
  749
  table below. A comprehensive and independent review system is available for those customers who are

  Social Fund—Sothern Territory

  Year

  Benefit

  Lodged appeals

  Appeals heard and decided

  Appeals heard and decided in appellants favour

  1987–88

  Funeral payments

  104

  55

  16

  Maternity payments

  145

  70

  14

  1988–89

  Funeral payments

  206

  159

  38

  Maternity payments

  178

  148

  35

  1989–90

  Funeral payments

  336

  191

  43

  Maternity payments

  257

  124

  19

  1990–91

  Funeral payments

  400

  232

  39

  Maternity payments

  240

  108

  18

  1991–92

  Funeral Payments

  433

  262

  70

  Maternity Payments

  220

  103

  25

  1992–93

  Funeral payments

  466

  247

  56

  Maternity payments

  168

  79

  29

  1993–94

  Funeral payments

  356

  211

  44

  Maternity payments

  144

  59

  13

  Social Fund Appleals—Wales and Central Territory

  Year

  Benefit

  Lodged appeals

  Appeals heard and decided

  Appeals heard and decided in appellants favour

  1987–88

  Funeral payments

  100

  29

  9

  Maternity payments

  249

  83

  5

  1988–89

  Funeral payments

  203

  164

  28

  Maternity payments

  264

  242

  28

  1989–90

  Funeral payments

  250

  198

  37

  Maternity payments

  232

  110

  14

  1990–91

  Funeral payments

  296

  214

  43

  Maternity payments

  138

  81

  12

  1991–92

  Funeral payments

  312

  195

  42

  Maternity payments

  151

  82

  16

  1992–93

  Funeral payments

  269

  155

  34

  Maternity payments

  173

  84

  15

  1993–94

  Funeral payments

  295

  155

  26

  Maternity payments

  132

  63

  14

  Social Fund Appleals—Scotland and Northern Territory

  Year

  Benefit

  Lodged appeals

  Appeals heard and decided

  Appeals heard and decided in appellants favour

  1987–88

  Funeral payments

  88

  26

  0

  Maternity payments

  176

  37

  6

  1988–89

  Funeral payments

  180

  126

  24

  Maternity payments

  305

  254

  39

  1989–90

  Funeral payments

  192

  154

  21

  Maternity payments

  187

  107

  17

  1990–91

  Funeral payments

  200

  116

  19

  Maternity payments

  141

  59

  12

  1991–92

  Funeral Payments

  245

  131

  23

  Maternity Payments

  149

  70

  6

  1992–93

  Funeral payments

  368

  195

  39

  Maternity payments

  195

  85

  14

  1993–94

  Funeral payment

  337

  162

  39

  Maternitypayments

  137

  53

  12

  Internet
  Mrs. Anne Campbell
  To ask the Secretary of State for Social Security what plans he has to provide information via Internet; and if he will make a statement.
  750
  dissatisfied with a decision arising out of applications to the discretionary social fund.

  Mr. Hague
  Department of Social Security press releases issued electronically through the Central Office of Information are already accessible to users of the Internet. CCTA1's Government information service,

  751
  launched last week, will help Departments make information more widely available and the Department is considering how to make best use of this new service to expand the range of information provided electronically.
  Note1: CCTA, now the Government Centre for Information Systems, is part of the Office of Public Service and Science.

  Child Benefit
  Mr. Corbyn
  To ask the Secretary of State for Social Security what is the current take up rate for child benefit; what is the annual administrative cost for child benefit; and how many complaints there have been from customers in each region over the past year in relation to their application.

  Mr. Roger Evans
  Child benefit take-up is estimated to be nearly 100 per cent. The administrative cost for Child Benefit in 1992–93—the latest available—was £136.4 million. Information is not readily available to identify customer complaints by region and could be obtained only at disproportionate cost.

  Incapacity Benefit
  Mr. Garrett
  To ask the Secretary of State for Social Security when he proposes to issue the incapacity benefit rules.

  Uprating Date

  ICA Standard Rate (£)

  Average gross weekly earnings (£)

  ICA as percentage of average earnings

  July 1976

  7.90

  68.38

  11.6

  November 1976

  9.20

  70.18

  13.1

  November 1977

  10.50

  76.19

  13.8

  November 1978

  11.70

  86.34

  13.6

  November 1979

  14.0

  102.82

  13.6

  November 1980

  16.30

  121.86

  13.4

  November 1981

  17.75

  135.87

  13.1

  November 1982

  19.70

  147.23

  13.4

  November 1983

  20.45

  158.05

  12.9

  November 1984

  21.50

  168.14

  12.8

  November 1985

  23.00

  182.51

  12.6

  July 1986

  23.25

  194.05

  12.0

  April 1987

  23.75

  202.16

  11.7

  April 1988

  24.75

  219.34

  11.3

  April 1989

  26.20

  240.55

  10.9

  April 1990

  28.20

  263.10

  10.7

  April 1991

  31.25

  285.65

  10.9

  April 1992

  32.55

  303.37

  10.7

  April 1993

  33.70

  315.45

  10.7

  April 1994

  34.50

  326.46

  10.6

  Notes:

  Average weekly earnings are those for all full-time adults employees.

  The table relates to standard rate ICA only. Information about dependency increases is not included.

  Mr. Burden
  To ask the Secretary of State for Social Security what basis and what calculations are used to determine the level of(a) invalid care allowance and (b) carer premium.

  Mr. Hague
  The answers are as follows:

  (a) The standard rate of invalid care allowance is based on 60 per cent. of the standard retirement pension, and is uprated annually.

  (b) A carer premium of £10 a week was introduced in 1990 to provide some additional help in income support, housing benefit and council tax benefit, for carers. This too has been uprated annually.

  752
  Mr. Hague
  Regulations setting out the detailed provisions of incapacity benefit were laid before Parliament on 24 November 1994. Notes on these regulations are due to be placed in the Library on 1 December 1994.

  Invalidity Benefit
  Dr. Godman
  To ask the Secretary of State for Social Security when he expects the European Court of Justice to deal with the referral concerning the payment of invalidity benefit to women aged 60 to 65 years in the test case of Mrs. Graham; and if he will make a statement.

  Mr. Hague
  A ruling by the European Court of Justice is not expected before July 1995 at the earliest.

  Invalid Care Allowance
  Mr. Burden
  To ask the Secretary of State for Social Security what percentage of national average earnings invalid care allowance has been in each year since the benefit was introduced.

  Mr. Hague
  Invalid care allowance was never intended to be a wage for carers; some carers may also be in employment and benefit from the earnings limit.

  The information requested is in the table.

  Secret Files
  Mr. Byers
  To ask the Secretary of State for Social Security how many(a) top secret and (b) secret files his Department holds.

  Mr. Hague
  The Department of Social Security holds approximately 200 top secret or secret files out of a total of approximately 500,000 files.

  Housing Benefit
  Mr. Hall
  To ask the Secretary of State for Social Security what is the current proportion of local authority
  753
  and housing association tenants who receive housing benefit.

  Mr. Roger Evans
  The proportions of local authority and housing association tenants who were receiving housing benefit at the end of 1993 were 65 per cent. and 53 per cent. respectively.

  Data Sources:
  The housing benefit management information systems quarterly caseload count at the end of November 1993.
  Housing and construction statistics December 1993, the latest date for which information is available.

  Mr. Coe
  To ask the Secretary of State for Social Security if he intends to make changes to ensure that rent officers have sole jurisdiction for determining market rents for housing benefit purposes in the de-regulated private rented sector; and what implications this will have for rent assessment committees.

  Mr. Roger Evans
  We intend, as soon as practicable, to amend regulations so that decisions by rent assessment committees will no longer bind local authorities when dealing with housing benefit claims. The only determinations to which local authorities will have to have regard for housing benefit purposes—for tenants in the de-regulated private rented sector—will be those made by the rent officer service. The proposed change would not remove existing rights to seek a determination from rent assessment committees on contractual rent levels. We will consult with the local authority associations in the normal way.

TREASURY

  Construction Industry
  Mr. Matthew Banks
  To ask the Chancellor of the Exchequer what measures will be included in the 1995 Finance Bill to take forward the proposed changes to the construction industry tax deduction scheme.

  Sir George Young
  The 1995 Finance Bill will contain legislation providing for changes to the construction industry tax deduction scheme in accordance with the Government's announcement on 10 February 1994,Official Report, column 382.

  Life Assurance
  Mr. Matthew Banks
  To ask the Chancellor of the Exchequer if he will make a statement about the taxation of unit-linked life insurance policies in the light of the High Court judgement in the case of Fuji v Aetna.

  Sir George Young
  My hon. Friend the Parliamentary Under-Secretary of State for Corporate Affairs has today made a statement about the regulatory implications of this judgment.

  The uncertainty of the judgment has created about the tax position is also of concern to the Government, because of the volume of policyholders' money invested in policies which may be affected. In our view it is clearly in the interests of those policyholders that uncertainty should, so far as possible, be removed. It is also right that the tax treatment of policies already sold should follow the common understanding, at the time of their sale, that they were indeed insurance contracts. This understanding was shared by the insurers, their policyholders, and the Inland Revenue. We shall, if necessary, propose legislation to this effect.
  754
  We shall not be able to decide on the details of the legislation that may be required until the outcome of the appeal is known, but our broad intention would be to provide that where a contract which was not, as a matter of law, a contract of insurance has been entered into by a life insurance company of a friendly society on the basis that it was a contract of life insurance, with the consequence that it formed part of the long-term business of the insurer, then the contract would be treated, for all tax purposes, as though it were a contract of life insurance. We would propose to introduce provisions having analogous effect in relation to the reinsurance of such policies, and in relation to policies written outside the United Kingdom. We shall also consider, in the light of the final decision in the case, whether it is appropriate to propose similar legislation in relation to capital redemption contracts.

  The proposed legislation would apply to policies written at any time in the past, in relation to both past and future direct tax liabilities, except that tax liabilities which have already become final on a different basis will not be disturbed. In addition, where an assessment to income tax or capital gains tax that relates to a particular contract has been made on a taxpayer on the basis that the contract was not one of insurance, and become final, the proposed legislation will not apply to any other assessment to either of those taxes made on the same taxpayer, or on their personal representatives, in relation to the same contract. I should also emphasise that the effect of the legislation would simply be to re-characterise the contracts in question as contracts of life insurance, and would not otherwise affect their status for tax purposes. In general, the proposed legislation would not affect contracts to be written in the future, but we will consider the matter in the light of the final judgement in the Fuji case.

  Inland Revenue Powers
  Mr. Matthew Banks
  To ask the Chancellor of the Exchequer if the Government intends to publish the report of the independent inquiry by Mr. Philip Ely into the powers of the Board of Inland Revenue to call for the papers of tax accountants; and how the Government intend to proceed on the matter.

  Sir George Young
  I have asked the Inland Revenue to arrange for early publication of Mr. Ely's report, and to consult with the main representative bodies to seek the best way of implementing the report's recommendations with a view to further legislation.

  Unemployment Costs
  Mr. McCartney
  To ask the Chancellor of the Exchequer what is his latest estimate of the cost of a registered unemployed person to the Exchequer in lost taxes and in unemployment related benefits.

  Mr. Aitken
  Information on the total cost of unemployment related benefits for Great Britain is given by the Department of Social Security in its annual report. In 1993–94 this is estimated to amount to £9,720 million. The average level of unemployment in 1993–94 was 2,750,000. The implied cost of an unemployed person is £3,535.

  Estimates of tax revenues forgone involve estimating the indirect and direct taxes unemployed people would pay in employment. Any attempt to estimate these figures would depend on a large number of assumptions. Such

  755
  assumptions are inevitably arbitrary and any estimate of the cost of lost taxes is subject to a high degree of uncertainty.

  Mr. McCartney
  To ask the Chancellor of the Exchequer what has been the total cost to the Exchequer since 1979 to date of(a) lost taxes and (b) unemployment related benefits due to the levels of registered unemployment.

  Mr. Aitken
  The amount of lost taxes as a result of unemployment cannot be estimated reliably. Estimating the indirect and direct taxes an unemployed person would pay in employment depends on a large number of assumptions. Such assumptions are inevitably arbitrary.

  Information on the total cost of unemployment related benefits for Great Britain is given by the Department of Social Security in its annual report. Information for the years since 1978–79 is as follows:

  Year

  Total £million

  1978–79

  1,321

  1979–80

  1,409

  1980–81

  2,387

  1981–82

  3,666

  1982–83

  4,552

  1983–84

  5,671

  1984–85

  6,290

  1985–86

  6,936

  1986–87

  7,134

  1987–88

  6,381

  1988–89

  5,240

  1989–90

  4,310

  1990–91

  5,070

  1991–92

  7,530

  1992–93

  9,110

  1993–94

  9,720

  The figures are in cash terms, unadjusted for inflation.

  Mr. McCartney
  To ask the Chancellor of the Exchequer if he can provide an estimate of net savings to the Exchequer if there was a one million reduction in the unemployment total.

  Mr. Aitken
  The Department of Social Security estimates that a 100,000 fall in unemployment in 1994–95 would reduce expenditure on unemployment-related benefits by £365 million. The implied savings for a 1 million fall in the unemployment total is £3,650 million.

  Tax Fraud
  Mr. Redmond
  To ask the Chancellor of the Exchequer what was the expenditure and return on tax fraud investigations in the financial year 1993–94.

  Sir George Young
  Inland Revenue investigations into possible or actual tax fraud cost £137 million, with a potential return of £1,310 million.

  Royal Household (Audit)
  Mr. Redmond
  To ask the Chancellor of the Exchequer what plans he has to ensure that all the accounts of the royal household funded from the public purse are audited by the National Audit Office.

  Sir George Young
  All public money administered by the royal household are fully and professionally audited. The majority relates to the Department of National Heritage grant-in-aid for property services in the English 756
  occupied royal palaces, which is audited by the National Audit Office. The remainder is civil list expenditure, which is audited by the Treasury under the Civil List Audit Act 1816. The Government have no plans to change these arrangements.

  Civil Servants
  Mr. Campbell-Savours
  To ask the Chancellor of the Exchequer what is(a) the annual salary and (b) the cost to public funds of benefits in kind of (i) the head of the home civil service, (ii) the secretary to the Cabinet, (iii) the head of the foreign civil service and (iv) permanent secretaries and deputy secretaries in each department of Government.

  Sir George Young
  The annual salary of the head of the Home Civil Service, who is also Secretary of the Cabinet, is £118,179 with effect from 1 April 1994. The annual salary of the head of the diplomatic service with effect from 1 April 1994 is £110,563.

  Annual salaries for permanent secretaries, now grade 1 or grade 1A, and Deputy Secretaries, now grade 2, are listed in the table and are with effect from 1 April 1994.

  Central records of the cost of non-cash benefits for these staff are not maintained. Information on the entitlement to such benefits is contained in the civil service management code, a copy of which is in the Library.

  £

  Permanent Secretary to the Treasury

  Flat rate

  110,563

  Grade 1

  Flat rate

  95,051

  Grade 1A

  Flat rate

  87,435

  Grade 2

  Range maximum

  79,396

  Range minimum

  65,990

  Privatisation
  Mr. Gordon Prentice
  To ask the Chancellor of the Exchequer if he will list each company privatised since 1979 with the total share issue in each case.

  Sir George Young
  It is not practical to list all companies that have been privatised as many were subsidiaries of nationalised industries and were sold by the parent body, not the Government; consequently, information is not held centrally for all such sales. The table shows the companies privatised by Government and the major subsidiaries sold by their parent body. For each, the equity proceeds accruing are also given.

  Major privatisations

  Company

  Year of sale1

  Gross equity proceeds2£million

  BP3

  1977

  8,334

  Fairey

  1980

  15

  British Aerospace

  1981

  700

  Cable and Wireless

  1981

  1,432

  Amersham International

  1982

  71

  NFC

  1982

  54

  Britoil

  1982

  998

  Associated British Ports

  1983

  100

  International Aeradio

  1983

  60

  Victaulic

  1983

  8

  Enterprise Oil

  1984

  392

  757

  Major privatisations

  Company

  Year of sale1

  Gross equity proceeds2 £million

  Jaguar

  1984

  297

  Sealink

  1984

  66

  BT

  1984

  14,654

  VSEL

  1986

  60

  British International Helicopters

  1986

  14

  National Bus Company (62 separate subsidiaries)

  1986

  7—

  British Gas

  1986

  5,584

  Leyland Bus

  1987

  4

  Unipart

  1987

  30

  British Airways

  1987

  892

  Royal Ordnance

  1987

  190

  DAB

  1987

  7

  Rolls-Royce

  1987

  1,348

  Istel

  1987

  48

  BAA

  1987

  1,225

  British Transport Advertising

  1987

  40

  National Seed Development Organisation

  1987

  66

  Rover Group3

  1988

  150

  Professional and Executive Recruitment

  1988

  6

  British Steel

  1988

  2,500

  Travellers Fare

  1988

  12

  British Rail Engineering (BREL)

  1989

  14

  General Practice Finance Corporation

  1989

  145

  Harland and Wolff

  1989

  8

  Short Brothers

  1989

  30

  10 water and sewerage companies

  1989

  5,113

  Giroleasing

  1990

  33

  Girobank

  1990

  112

  Scottish Bus Group (10 separate subsidiaries)

  1990

  7—

  12 regional electricity companies

  1990

  45,182

  National Power/PowerGen

  1991

  52,228

  Scottish Power/Scottish Hydro-Electric

  1991

  2,918

  National Transcommunications

  1991

  48

  Insurance Services Group

  1991

  70

  Trust ports

  1992

  8

  BTG

  1992

  628

  Northern Ireland generating companies

  1992

  356

  PSA projects

  1992

  +44

  Northern Ireland Electricity (distribution company)

  1993

  348

  5 PSA building management companies

  1993

  10

  DVOIT

  1993

  5

  Londoon Buses (10 separate sales to date)

  1994

  7—

  Forward

  1994

  5

  DTELs

  1994

  7

  Belfast International Airport

  1994

  33

  1 Year of the first sale. There may have been secondary offers or the first sale may have been one of a suite of sales of subsidiaries.

  2 There may in addition have been proceeds from the redemption of debt.

  3 Technically not a privatisation as the company was already classified to the private sector.

  4 Including the national grid which was owned by the regional electricity companies.

  5 The Government retain about 40 per cent. of each company.

  6 Includes dividends extracted pre-sale.

  7 Proceeds of individual sales initially retained by the parent body.

  8 Proceeds were split between the relevant port authorities and the Government.

  Taxes and Incomes
  Mr. Matthew Banks
  To ask the Chancellor of the Exchequer what is the average impact on households in 1995–96 of(a) direct and indirect tax measures announced in the Budget and (b) all tax-related measures taking effect between 29 November 1994 and November 1995; and what has been the rise in real household disposable income per head since 1979.

  Sir George Young
  Real household disposable income per head has risen by nearly 50 per cent. since 1979. The impact on households of tax-related measures taking effect over the next year is shown in the table. After taking account of tax and inflation, real personal disposable income is forecast to rise by 1½ per cent. in 1995.

  Impact on households of main tax-related measures in 1995–96.Impact of main direct and indirect tax changes affecting households relative to indexation and net of VAT compensation.

  November 1994 Budget measures (1)

  All measures (2)

  Households:

  Average

  0.30

  -2.80

  Pensioners

  0.50

  -0.50

  £ per week to nearest 5p

  Gain (+)/ loss (-)

  (1) Figures for new Budget measures (column (1)) show the impact of the main tax measures directly affecting households announced in the November 1994 Budget. Figures for all measures (column (2)) show the impact on households of new and pipeline tax-related measures taking effect over the next year, including measures announced in the November 1994, November 1993 and March 1993 Budgets

  (2) Estimates are taken from an analysis of the 1990–92 Family Expenditure Surveys uprated to 1995–96 earnings and price levels.

  Civil Servants
  Mr. Matthew Banks
  To ask the Chancellor of the Exchequer what was the number of staff in post in central Government Departments at 1 October 1994.

  Mr. Aitken
  On 1 October 1994 there were 523,981 permanent staff in post in central Government, the lowest for 55 years. This is a decrease of 9,370 during the last six months and more than 40,000 since April 1992.

  An analysis showing staff in post by Department has been placed in the Library.

  Inheritance Tax Exemptions
  Mr. Tipping
  To ask the Chancellor of the Exchequer if he will list the countryside sites where public access has been granted by the landowner in return for exemption from inheritance tax, the amount of inheritance tax forgone in return for granting this access for each year for the past 10 years, the number of sites involved for that year for the past 10 years, and the steps that have been taken to publicise the access to these sites.

  Sir George Young
  [holding answer 28 November 1994]: The normal rules of taxpayers confidentiality prevent me from giving details of individual cases where conditional exemption from inheritance tax has been granted.

  The annual average cost of conditions exemption from inheritance tax, or its predecessor capital transfer tax, for

  759
  land and buildings is estimated to have been between £5 million and £10 million over the period 1984–85 to 1993–94.

  There have been 133 designations of land for additional exemption from inheritance tax or capital transfer tax in England. Figures for designations of land on a year by year basis are not available at acceptable cost.

  The owner of land which is conditionally exempt from inheritance tax is required to publicise the agreed public access arrangements. The heritage advisory agencies will discuss with each owner the appropriate level of publicity. Each case is considered individually and all relevant factors, including the existing level of publicity, are taken into account. Although the extent of public access may already be widely known, for example where substantial public access is already given, the owner will generally be required to take specific steps to publicise the public access arrangements, for example by advertising the access arrangements in a local tourist office or town hall. For new designations of scenic land in England, owners are required to display at all points of entry onto their land map boards showing the agreed public access.

TRANSPORT

  Highways Agency
  Mr. Gareth Wardell
  To ask the Secretary of State for Transport what assessment he has made of the adequacy of the arrangements made for the composition of the Highways Agency.

  Mr. Watts
  I consider that the arrangements are working well.

  Yugoslav Airlines
  Mr. Elletson
  To ask the Secretary of State for Transport if he will list the restrictions currently preventing Yugoslav Airlines from flying into London Heathrow airport; what action is being taken to allow such flights; and if he will make a statement.

  Mr. Norris
  Following the suspension of certain sanctions imposed in the Security Council of the United Nations, which permits passenger services to operate to and from Belgrade for an initial period, JAT Yugoslav Airlines has applied to my Department for permission to fly to Heathrow. The United Kingdom normally expects countries whose airlines fly here to be signatories to the Chicago convention on international civil aviation, which binds airlines to minimum safety standards in respect of maintenance of aircraft and flight operations and their oversight by the state's regulatory authorities. The federal republic of Yugoslavia is not a signatory to the convention, and we are discussing with it how we can be assured that international safety standards are being met before we permit JAT to operate to London.

  M11 Link Road
  Mr. Cohen
  To ask the Secretary of State for Transport what statutory procedure was used for constructing the M11 link road.

  Mr. Norris
  This is an operational matter for the Highways Agency. I have asked the chief executive to write to the hon. Member.
  760
  Letter from Lawrie Haynes to Mr. Harry Cohen, dated 30 November 1994:
  The Secretary of State for Transport has asked me to write to you in response to your Parliamentary Question about the Al2 Hackney Wick to M11 Link Road since its construction is now an operational matter for the Highways Agency.
  The statutory procedures followed were contained in the Highways Act 1980 and Acquisition of Land Act 1981.

  Trains (Black Boxes)
  Mr. Redmond
  To ask the Secretary of State for Transport if he will list by British Rail region the percentage of train stock currently fitted with a black box; and if he will make a statement.

  Mr. Watts
  The information is not available in the form requested. Data recorders are fitted as standard to all new locomotives and electric or diesel multiple passenger units, and to those already in service that are expected to have a long residual life. There are currently 610 locomotives or multiple units fitted with data recorders. This figure includes passenger and freight locomotives and multiple units comprising two, three and four car units.

  Rail Services
  Mr Redmond
  To ask the Secretary of State for Transport if he will list for each British Rail region since 1 August the number of services that have been affected by low ground adhesion; and if he will make a statement.

  Mr. Watts
  This information is reported by Railtrack only if a notifiable accident results from low adhesion. The Health and Safety Executive's railway inspectorate is investigating two such cases.

  Station Safety
  Mr. Austin-Walker
  To ask the Secretary of State for Transport how many stations within the Network SouthEast operating region are unstaffed after 6 pm and at weekends; and if he will provide comparable figures for 1979.

  Mr. Watts
  [holding answer 25 November 1994]: The information requested is not available in the form requested. A comparison with 1979 would in any event not be possible as Network SouthEast was not created until 1986.

  However, I refer the hon. Member to the reply given by my right hon. Friend the Member for Kettering (Mr. Freeman) on 14 March 1994, Official Report, column 508. The figures in that reply are still current.

  Mr. Chidgey
  To ask the Secretary of State for Transport how many permanently unmanned train stations there were throughout the United Kingdom in each year since 1991.

  Mr. Watts
  Of about 2,500 stations on the Railtrack network, some 1,000 or 40 per cent. are currently permanently unmanned. Since the number of unmanned station varies throughout the year, no definitive figures can be given for any previous year, but the overall number has been of the same order since 1991.

  Rural Communities
  Sir David Steel
  To ask the Secretary of State for Transport what assessment he has made of the
  761
  relationship between a petrol price increase and the opportunities for mobility in rural communities.

  Mr. Norris
  Higher fuel prices play an important part in meeting the threat of global warming by encouraging people to reduce their fuel consumption in a variety of ways. One is by purchasing smaller, more fuel—efficient cars and another is by driving less through making shorter or less frequent journeys or switching to other less polluting modes of transport. A further way is by adopting a sensible driving technique and keeping vehicles properly tuned and maintained.

  There is less scope for switching to other modes, which is more likely in rural areas, but we would expect individuals to place more emphasis on the fuel efficiency of their vehicles. Statistics reveal that rural motorists currently achieve fewer miles per gallon than their urban counterparts. This flexibility of response illustrates the benefits of fuel price increases over other mechanisms for reducing fuel use, such as vehicle regulation.

  Cycling, London
  Mr. Corbyn
  To ask the Secretary of State for Transport what is his estimate of the number of daily cycle journeys in London for each year since 1983; what plans he has for increasing cycle routes in London; and if he will make a statement.

  Mr. Norris
  The estimated number of daily cycle journeys by Londoners is shown in the table for the years for which data are available:

  1989: 290,000

  1990: 240,000

  1991: 240,000

  1992: 240,000

  1993: 220,000

  The Department is currently considering a co-ordinated did from all 33 London local authorities for funds to implement the London cycle network. A decision on this will be announced shortly.

  Mr. Cox
  To ask the Secretary of State for Transport what funding has been given during the last 12 months to London councils to encourage cycling; and if he will list the funding to each London council.

  Mr. Norris
  Capital support has been available to assist London local authorities' general transport projects, including safety schemes. For 1995–96, a London cycle network "package" bid has been received on behalf of all 33 authorities. A decision on this will be announced shortly.

  Meldon Quarry
  Mr. Gunnell
  To ask the Secretary of State for Transport what income was received from the sale by British Rail of Meldon quarry, Somerset; and what percentage of receipts from privatisation since the passage of the Railway Act 1993 this represents.

  Mr. Watts
  The receipts from the sale by British Rail of Meldon quarry and other sales are the subject of confidentiality undertakings between British Rail and its bidders.

  Choice
  Mr. David Evans
  To ask the Secretary of State for Transport if it is his policy that people should be able to 762
  exercise a choice in their means of transport wherever practicable.

  Mr. Norris
  Yes.

  Lockerbie
  Mr. Dalyell
  To ask the Secretary of State for Transport what are the responsibilities of his Department in following up the crash of the Pan Am 103 at Lockerbie.

  Mr. Norris
  My Department deals with the United Kingdom national aviation security programme. Our responsibilities following the disaster have included thoroughly reviewing the programme and making substantial improvements to it in the light of what happened on 21 December 1988.

  My Department also had responsibility through the air accidents investigation branch for conducting the technical investigation into the circumstances of the disaster.

  Aircraft Noise
  Mr. Jim Cunningham
  To ask the Secretary of State for Transport (1) if he will make a statement about aircraft noise; and what proposal he has in relation to noise at small airports;

  (2) when he proposes to implement the recommendations of the review of air noise legislation contained in his latest report;

  (3) what interim proposals he has to deal with aircraft noise;

  (4) what assessment he has made of the local weakness in present planning legislation used by local authorities to deal with aircraft noise.

  Mr. Norris
  Airports can bring substantial economic and social benefits to their surrounding areas, but aircraft noise can also cause annoyance. It is important therefore, that aerodrome and aircraft operators minimise the disturbance to local communities caused by their operations, so far as is practicable and reasonable. All larger aerodromes and many smaller ones already take measures to reduce noise disturbance.

  Aerodromes are also subject to planning legislation in the usual way, and it is for the local planning authority to assess all the relevant factors when considering planning applications. It is possible to exercise a measure of control over aircraft noise by way of conditions attached to planning permissions. Because aerodromes vary greatly in size, types of operation, and in their local circumstances, measure to minimise noise nuisance are best developed and monitored locally.

  In March last year, following extensive consultation, the Government published their conclusions on new measures to control aircraft noise. The Government announced their intention—Official Report, 25 March 1993, column 706–7—to introduce new legislation to give aerodromes powers to prepare and enforce noise amelioration schemes. These arrangements would build on the existing, mainly voluntary system of control. The Government will introduce the new legislation at a suitable parliamentary opportunity. There are no plans to

  763
  introduce interim measures, but consideration is being given to producing national guidance on mitigating aircraft noise.

  Mr. Jim Cunningham
  To ask the Secretary of State for Transport when he proposes to introduce restrictions on aircraft engine noise requirements on airports.

  Mr. Norris
  Under existing legislation, all civil jet aircraft operating into all United Kingdom airports must carry a noise certificate demonstrating compliance with standards agreed by the International Civil Aviation Organisation. Civil propeller-driven aircraft certificated after 6 October 1977 are also required to comply with such standards. These standards are included in The Air Navigation (Noise Certification) Order 1990.

  Mr. Jim Cunningham
  To ask the Secretary of State for Transport what requests he has had from(a) airport authorities and (b) members of the public for noise mitigation schemes.

  Mr. Norris
  The information requested can be obtained only at disproportionate cost.

  Mr. Jim Cunningham
  To ask the Secretary of State for Transport when he plans to introduce legislation to outlaw old aircraft.

  Mr. Norris
  The Government have no plans to prevent aircraft from flying purely on the grounds of their age. The United Kingdom has, however, implemented directive 92/14/EEC, which requires older, noisier jets, the so called "chapter 2" types, to be phased out between 1995 and 2002. This legislation builds on earlier action to ban non-noise certificated jets and to prevent the addition of chapter 2 types to the United Kingdom register.

  Secret Files
  Mr. Byers
  To ask the Secretary of State for Transport how many(a) top secret and (b) secret files his Department holds.

  Mr. Norris
  The information is as follows:

  (a) 25

  (b) 12,000.

  Traffic Priority Route, London
  Mr. Corbyn
  To ask the Secretary of State for Transport when he expects the next traffic priority route to be introduced in London.

  Mr. Norris
  Early in the new year.

  London Underground
  Mr. Corbyn
  To ask the Secretary of State for Transport what action he has taken to improve services and usage of the Barking to Gospel Oak line.

  Mr. Watts
  The provision of services on the Barking to Gospel Oak line is a matter for North London Railways, one of British Rail's train operating units.

NORTHERN IRELAND

  NHS Trusts
  Mr. Milburn
  To ask the Secretary of State for Northern Ireland how many general and senior managers were employed by NHS trusts in each year since 1991–2, by region.
  764
  Mr. Moss
  In Northern Ireland, trusts became operational from 1 April 1993. The information is as follows:

  From 1 April 1993 (figures are at September 1993)

  Trust

  General manager/chief executives

  Senior managers

  Royal Group of Hospitals and Dental Hospital HSS Trust

  1.00

  27.00

  Belfast City Hospital HSS Trust

  1.00

  22.00

  Greenpark HSS Trust

  1.00

  13.00

  Ambulance Service HSS Trust

  1.00

  4.00

  Ulster, North Down and Ards HSS Trust

  1.00

  1300

  Craigavon Area Hospital Group HSS Trust

  1.00

  1100

  From 1 April 1994 (figures are at September 1994)

  Trust

  General manager/ chief executives

  Senior managers

  Royal Group of Hospitals and Dental Hospital HSS Trust

  1.00

  39.00

  Belfast City Hospital HSS Trust

  1.00

  22.00

  Greenpark HSS Trust

  1.00

  13.00

  Ambulance Service HSS Trust

  1.00

  5.00

  Ulster, North Down and Ards HSS Trust

  1.00

  14.00

  North Down and Ards Community Trust

  1.00

  30.00

  North and West Belfast Community HSS Trust

  1.00

  30.00

  South and East Belfast Community HSS Trust

  1.00

  31.00

  Down and Lisburn HSS Trust

  1.00

  28.00

  Mater Infirmorum Hospital HSS Trust

  1.00

  6.00

  Craigavon Area Hospital Group HSS Trust

  1.00

  12.00

  Craigavon and Banbridge Community HSS Trust

  1.00

  21.00

  Newry and Mourne HSS Trust

  1.00

  13.00

  All figures expressed are WTE (Whole Time Equivalent). Figures from 1 April 1993 are from PIMS (Personnel Information Management System) and figures from 1 April 1994 are extracted from Corporate Monitoring Returns.

  Roads
  Mr. Maginnis
  To ask the Secretary of State for Northern Ireland what is the annual roads service budget for minor works in each of(a) Fermanagh, (b) Dungannon, (c) Omagh, (d) Strabane district council areas and (e) Deny city council area.

  Mr. Moss
  In 1994–95 the estimated minor works expenditure for the district council areas in question is as follows:
  765

  District council area

  Expenditure in £000s

  Derry

  587

  Dungannon

  333

  Fermanagh

  555

  Omagh

  521

  Strabane

  415

  Mr. Maginnis
  To ask the Secretary of State for Northern Ireland what are the current major road works schemes being undertaken in the Fermanagh, Dungannon, Omagh and Strabane council areas; and what is their total value

  Mr. Moss
  Work is currently being undertaken on Omagh through-pass stage 2A and over a period 1994 to 1999 it is planned to undertake major road schemes at Anne street/Thomas street, Dungannon, on the A29 at Carland bridge, on the A5 at Burndennett, Leckpatrick, Magheramason and Garvaghy and on the next stage of the Omagh through-pass. The total estimated cost of these schemes is approximately £9.4 million.

  Technical Training Centres
  Rev. Martin Smyth
  To ask the Secretary of State for Northern Ireland (1) what factors led to the decision to close the Boucher Road technical training centre in south Belfast and to build a new centre two miles away at Springvale;

  (2) if he will list the number of students attending courses at each of the technical training centres in the Greater Belfast area in each of the past three years;

  (3) if he will list the locations, student capacity and catchment area of technical training centres in the Greater Belfast area;

  (4) what plans he has made to provide technical training for students from south Belfast once the Boucher Road training centre is closed;

  (5) what will be the cost of the construction of the new technical training centre at Springvale in west Belfast; and what are the projected annual running cost;

  (6) what are the annual running costs of Boucher Road technical centre in south Belfast.

  Mr. Ancram
  Responsibility for the subject in question has been delegated to the Training and Employment Agency under its chief executive, Mr. Julien Crozier. I have asked him to arrange for a reply to be given.

  Technical training centres and catchment area

  Capacity

  1991–92

  1992–93

  1993–94

  Occupancy 1994–95 to date

  Boucher Road

  Largely west Belfast—small minority from north and south Belfast and

  Lisburn district council areas.

  240

  152

  131

  177

  159

  Dundonald

  East Belfast and Ards, Castlereagh and North Down district council areas.

  One course, contractors plant, draws trainees from all over Northern Ireland due to its specialised nature.

  240

  189

  176

  222

  166

  766
  Letter from J.S. Crozier to Rev. Martin Smyth dated 28 November 1994:
  You have asked the Secretary of State for Northern Ireland six questions, all of which are concerned with the planned closure of Boucher Road Training Centre in 1996 and the provision of a new facility at Springvale.
  The Secretary of State has asked me as Chief Executive of the Training and Employment Agency, which has responsibility for these matters, to reply. I will deal ;with all of your questions under a number of main headings.

  Bouchewr Road
  The decision to close Boucher Road was taken in the light of cost, existing capacity and demand, principally the latter. Boucher Road has a target capacity of 240 and currently has 185 trainees, of whom 80 per cent. come from Catholic West Belfast, and some 2 per cent. from South Belfast.
  There are already sufficient YTP and adult training places in the catchment area of Boucher Road. The continuation of that centre, together with the arrival of a new Springvale facility, would result in considerable over provision in the West Belfast area.
  The total running cost of Boucher Road for the last financial year was £1.25 million for a capacity of 240 places.

  Training Centres in Greater Belfast
  Details of Training Centre provision in the greater Belfast area are in the attached annex.

  South Belfast
  Given the low numbers involved there is ample provision in the other Belfast and Lisburn Training Centre for anyone from South Belfast who does not wish to travel to Springvale. However, if at any time in the future we were experiencing significantly increased demand from that area, we would consider how best to meet that demand.

  Springvale Training
  In 1990 a review of the organisation of training in the Springfield/Lower Falls area of Belfast was carried out by consultants. The main recommendation was that a new training organisation should be established in the area which would embrace both adults and young people, promote complementarity and avoid duplication. In order to develop such a capacity in the heart of that area and to provide a community focus in the re-development of the old Mackies' site at Springfield Road the Agency, along with Making Belfast Work is to provide a new hitech skills training facility.
  Springvale, which will be a private non-profit making company, plans to provide enhanced opportunities for individuals from the area to develop their skills in the manufacturing and engineering industries. This in turn is aimed at attracting inward investment to that area.
  The project is being funded through the Making Belfast Work Initiative and will cost in total some £4.5 million. Estimated annual running costs for the first 3 years fall within the following ranges for a planned capacity of 350 places:

  Year 1: £841,000–£ 917,000

  Year 2: £1,029,000–£1,133,000

  Year 3: £1,136,000–£1,287,000

  I hope that you will find this information helpful.
  767

  Technical training centres and catchment area

  Capacity

  1991–92

  1992–93

  1993–94

  Occupancy 1994–95 to date

  Felden

  North and west Belfast and Newtonabbey and Carrickfergus district council area. Small minority from Antrim and Larne areas. One course, heavy vehicle repair, draws trainees from all over Northern Ireland due to its specialised nature.

  260

  162

  195

  263

  251

  Lisburn

  South Belfast and Lisburn district council area. Small minority from Banbridge and Antrim areas. Lisburn has a number of specialised courses, mainly at technician level, and these draw trainees from all over Northern Ireland.

  150

  117

  131

  128

  108

  Commissioner for the Holding Centres
  Mr. Corbyn
  To ask the Secretary of State for Northern Ireland if he will provide(a) the annual remuneration paid to the Independent Commissioner for the Holding Centres in Northern Ireland and that of the Staff under his supervision, (b) the total annual cost to the public purse of the office of the Independent Commissioner for the Holding Centres in Northern Ireland and (c) a list of any meetings, conferences or functions outside of the United Kingdom which the commissioner has attended in his official capacity since taking up office.

  Sir John Wheeler
  The information is as follows:

  (a)The annual remuneration paid to the Independent Commissioner for the Holding Centres in Northern Ireland is £30,000; that for his Deputy is £10,000. The support staff comprise two civil servants on secondment who also serve the independent assessor of military complaints procedures from the same office premises. The portion of annual remuneration specific to their support work for the independent commissioner totals £24,000.

  (b)The total annual cost to the public purse of the office of the Commissioner in Northern Ireland is £107,000.

  (c)Since his appointment in December 1992, the independent commissioner has, to date, made three visits in that capacity outside the United Kingdom.

  Health Service
  Mr. Redmond
  To ask the Secretary of State for Northern Ireland what was the number of health authorities and trusts as at 30 September.

  Mr. Moss
  As at 30 September 1994 there were four health and social services boards and 13 health and social services trusts in Northern Ireland.

  Council for Voluntary Action
  Mr. Maginnis
  To ask the Secretary of State for Northern Ireland what was the nature and scope of the work carried out by Phelim Hamill, during his employment with the Northern Ireland Council for Voluntary Action; and if he will make a statement.

  Mr. Moss
  I understand that Mr. Hamill was an information officer with the Northern Ireland Council for Voluntary Action.

  Mr. Maginnis
  To ask the Secretary of State for Northern Ireland to what security or other socially sensitive information Phelim Hamill had access during his 768
  period of employment with the Northern Ireland Council for Voluntary Action; and if he intends to carry out an inquiry.

  Mr. Moss
  None.

  Mr. Maginnis
  To ask the Secretary of State for Northern Ireland whether the present chairman of Northern Ireland Council for Voluntary Action was in office during the period when Phelim Hamill was employed; and what other public appointments the NICVA chairman holds in Northern Ireland or within any other jurisdiction.

  Mr. Moss
  No. The present chairman is a non-executive director of the Craigavon and Banbridge health and social services trust.

  Mr. Maginnis
  : To ask the Secretary of State for Northern Ireland what is the role of the Northern Ireland Council for Voluntary Action; and what are the sources and amount of its funding.

  Mr. Moss
  The Northern Ireland Council for Voluntary Action is a leading voluntary organisation in Northern Ireland which provides support and training for other voluntary organisations, and which also represents and articulates the views of the wider voluntary sector on matters of common concern. Full details of income are contained in the annual accounts for 1993–94, which are available from the council.

  Disability Living Allowance
  Mr. Mallon
  To ask the Secretary of State for Northern Ireland (1) what is the average period of time taken to process an appeal in respect of an application for disability living allowance;

  (2) what is the average period of time taken to process an application for disability living allowance;

  (3) how many appeals have been lodged in respect of disability living allowance claims; and, of these, how many are (a) successful, (b) unsuccessful and (c) outstanding.

  Mr. Moss
  Responsibility for the subject in question has been delegated to the Social Security Agency under its chief executive, Mr. Alec Wylie. I have asked him to arrange for replies to be given.

  Letters from Alec Wylie to Mr. Seamus Mallon, dated 25 November 1994:
  I have been asked to reply to your recent Parliamentary Question about the average period of time taken to process an appeal in respect of Disability Living Allowance (DLA) applications.
  769
  The average number of days taken to process an appeal from the date of receipt of the letter of appeal until the date the case is sent to the Independent Tribunal Service (ITS) is 86 days for the period April 1994 to October 1994. Additional staff have been deployed and overtime is being worked to improve the clearance time. The arrangements for hearing appeals is the responsibility of the President of the ITS and I have passed a copy of your question to him.
  I have been asked to reply to your recent Parliamentary question about the average period of time taken to process an application for Disability Living Allowance (DLA).
  Information on the processing of DLA claims is not available in the "average period" format that you have requested but is available in terms of the percentage of claims cleared within time limits set by the Minister. For the 1994–95 year these time limits/targets are 68 per cent. to be cleared in 30 days and 85 per cent. to be cleared in 53 days.
  For the period April 1994 to October 1994, 55 per cent. of claims were cleared within 30 days and 82 per cent. within 53 days. Performance over the last few months has shown a marked improvement as a result of measures taken earlier in the year to deal with some identified problems and in October, 74 per cent. of claims were being cleared within 30 days and 92 per cent. within 53 days.
  I have been asked to reply to your recent Parliamentary question about the number and outcome of appeals lodged in respect of Disability Living Allowance (DLA).
  Since the introduction of DLA in April 1992 to the end of October 1994 there have been 2321 review decisions appealed. Of these, 601 have been successful and 857 have been unsuccessful. There were 608 appeals awaiting preparation of submissions to the Independent

  Numbers of DLA claims received, allowed, disallowed, withdrawn and outstanding from April 1993 to date.

  Month

  Received

  Allowed

  Disallowed

  Withdrawn

  Outstanding

  April 1993

  3,187

  2,799

  1,769

  21

  5,316

  May

  3,878

  2,643

  1,611

  12

  4,891

  June

  4,349

  2,788

  1,659

  24

  4,744

  July

  3,054

  2,746

  1,852

  13

  3,150

  August

  3,026

  1,925

  1,376

  12

  2,851

  September

  3,663

  1,809

  1,386

  18

  3,292

  October

  3,708

  1,562

  1,660

  15

  3,750

  November

  3,591

  1,566

  1,714

  11

  4,038

  December

  2,256

  1,006

  1,307

  17

  3,959

  January 1994

  2,625

  1,188

  1,422

  35

  3,933

  February

  2,986

  929

  1,333

  17

  4,618

  March

  3,629

  1,578

  1,843

  14

  4,789

  April

  2,883

  990

  1,032

  12

  5,627

  May

  3,038

  1,769

  1,444

  12

  5,422

  June

  3,604

  2,132

  1,843

  25

  5,001

  July

  2,467

  2,043

  1,906

  13

  3,491

  August

  2,955

  1,562

  1,668

  11

  3,179

  September

  3,995

  1,810

  1,690

  23

  3,609

  October

  3,779

  1,629

  1,980

  11

  3,734

  Loans and Grants
  Mr. Mallon
  To ask the Secretary of State for Northern Ireland how many applications for(a) community care grants, (b) budgeting loans and (c) crisis loans were received by each office of the Social Security Agency in each month since January 1993; and if he will break down the figures for applications which were (i) approved and (ii) refused.

  Mr. Moss
  Responsibility for the subject in question has been delegated to the Social Security Agency under its chief executive, Mr. Alec Wylie. I have asked him to arrange for a reply to be given, but as the tabular material is exceptionally lengthy I have arranged for it to be placed in the Library.
  770
  Tribunal Service (ITS) and around 250 are with the ITS for hearings to be arranged.

  Mr. Mallon
  To ask the Secretary of State for Northern Ireland what plans there are to review the operation of the disability living allowance scheme.

  Mr. Moss
  There are no immediate plans to review policy on the disability living allowance scheme.

  Mr. Mallon
  To ask the Secretary of State for Northern Ireland how many applications for disability living allowance were received in each month since the introduction of this benefit; and if he will give, for each month, details of applications that are(a) approved, (b) refused, (c) withdrawn and (d) outstanding.

  Mr. Moss
  Responsibility for the subject in question has been delegated to the Social Security Agency under its chief executive, Mr. Alex Wylie. I have asked him to arrange for a reply to be given.

  Letter from Alec Wylie to Mr. Seamus Mallon, dated 28 November 1994:
  I have been asked to reply to your recent Parliamentary Question about the numbers and outcome of Disability Living Allowance (DLA) applications received since its introduction.
  I am sorry that data for the period February 1992 to March 1993 is not readily available in the form you requested. Work has started on extracting the data and I will write to you when this becomes available. I can however supply you with the information for the period April 1993 to October 1994 and this is set out in the table below. I hope you will find this helpful.

  Letter from Alec Wylie to Mr. Seamus Mallon, dated 28 November 1994:
  I have been asked to reply to your recent Parliamentary Question requesting information about the number of applications for Community Care Grants, Budgeting and Crisis Loans.
  I am sorry that information is not held in precisely the format you have requested but I have set out the available data in the attached tables. As the Social Fund has been managed on a District basis from April 1991, it is not possible to provide details for each Social Security Office. I am therefore providing information by District but I have also included an annex to show which Social Security Offices make up each District. I should also explain that the number of awards made is the total of all awards made in each month, including those made as a result of a review, and the refusals information is the number of initial decisions to refuse as a percentage of all decisions made in that particular month. While, therefore, there is no direct correlation between the figures in each column in the table,

  771
  the information as set out fairly reflects the general position on social fund applications.

  Population Statistics
  Mr. Mallon
  To ask the Secretary of State for Northern Ireland what is the current population of each ward in Northern Ireland.

  Mr. Ancram
  The Northern Ireland census 1991 summary report, published in January 1992, contains at table 4, pages 4 to 13, the population of each District Council ward. Copies of this report are available in the House of Commons library.

  If, however, the hon. Gentleman is referring to the current electorate of each ward, this information is contained in the 1994 electoral register, copies of which were forwarded to the main political parties in January 1994 by the Chief Electoral Officer for Northern Ireland.

  Deprivation
  Mr. Mallon
  To ask the Secretary of State for Northern Ireland if he will publish the indices of deprivation used by his Department; and if he will list the electoral wards of Northern Ireland in order of the degree of deprivation.

  Sir John Wheeler
  A general index of relative multiple deprivation was published in September 1994 by the Department of Finance and Personnel in a report entitled "Relative Deprivation in Northern Ireland", policy planning and research unit occasional paper no. 28, a copy of which is in the Library. The report lists the 26 district councils, 566 wards and 3,729 enumeration districts in Northern Ireland ranked in order of their degree of deprivation. Where appropriate, Departments may use this research to target programmes in accordance with their own needs and priorities.

  Exchequer Spending
  Mr. Mallon
  To ask the Secretary of State for Northern Ireland (1) what was the total Exchequer expenditure voted for Northern Ireland in each of the past five years; and what is the latest estimate of Exchequer spending over the next five years;

  (2) if he will take steps to ensure that there is no reduction in the level of Exchequer expenditure, in real terms, in the incoming financial year;

  (3) what Exchequer savings are expected to result from the recent end to violence; and what steps will be taken to ensure that such savings are invested in Northern Ireland.

  Sir John Wheeler
  The total public expenditure in Northern Ireland in the past five years is given in the table below. My right hon. Friend the Chancellor of the Exchequer in his unified Budget Statement announced the public expenditure totals for Northern Ireland for 1995–96 to 1997–98 and these are also shown. My right hon. and learned Friend the Secretary of State for Northern Ireland will shortly be making a statement on the allocation of those totals to individual programmes within Northern Ireland. Estimates for 1998–99 and 1999–2000 are not available.
  772

  £ millions

  1989–90

  5,395

  1990–91

  5,525

  1991–92

  6,018

  1992–93

  6,580

  1993–94

  7,086

  1994–95

  7,492

  1995–96

  7,716

  1996–97

  17,880

  1997–98

  18,020

  1 Rounded to the nearest £10 million.

  The Northern Ireland total is mainly the result of the application of the comparability principle which automatically adjusts the NI total in line with movements in comparable GB programmes in proportion to relative population. Full account has been taken of Northern Ireland's special needs in setting its overall public expenditure total.

  The peace process is still at an early stage and it would not be helpful to speculate on the likely quantum of savings. In setting public expenditure totals for Northern Ireland full account will be taken of Northern Ireland's special needs.

  Secret Files
  Mr. Byers
  To ask the Secretary of State for Northern Ireland how many(a) top secret and (b) secret files his Department holds.

  Sir John Wheeler
  Of the number of files held centrally in the Northern Ireland Office and Northern Ireland Departments, 57 are top secret and 4,661 are secret.

  Textile Industry
  Mr. Nicholas Winterton
  To ask the Secretary of State for Northern Ireland what information he has concerning interests of the chairman of the Northern Ireland industrial development board in the textile industry; and what assessment he has made of the objectivity of the consideration given by the board to the application by the Hualon Corporation for a grant of £61 million for new textile facilities in Northern Ireland.

  Mr. Ancram
  [holding answer 24 November 1994]: All members of the Industrial Development Board are required to register interests which could impinge on their work as Board Members. The chairman has registered interests in two Northern Ireland clothing companies, Cooneen Textiles Ltd. and Regatta Fashions Ltd. My right hon. and learned Friend the Secretary of State has the fullest confidence in the objectivity of the advice given by the board to officials and Ministers on this and all other cases.

  Industrial Development Board
  Mr. Nicholas Winterton
  To ask the Secretary of State for Northern Ireland what steps have been undertaken by his Department to examine the propriety of links between the chairman of the Northern Ireland industrial development board and the Hualon Corporation.

  Mr. Ancram
  [holding answer 24 November 1994]: Neither my right hon. and learned Friend nor the chairman of the Industrial Development Board is aware of any links which should be investigated. Mr. McGuckian has met

  773
  Hualon on three occasions, supported by officials, in his capacity as chairman, which is the full extent of his contacts with the corporation.

  Forum for Peace and Reconciliation
  Mr. Nicholas Winterton
  To ask the Secretary of State for Northern Ireland if he will make it his policy to oppose the appointment of Mr. John McGuckian to the chairmanship of the Forum for Peace and Reconciliation; and if he will make a statement.

  Mr. Ancram
  [holding answer 24 November 1994]: The Forum for Peace and Reconciliation is entirely a matter for the Irish Government. The chairman is Judge Catherine McGuinness.

  Hualon Corporation
  Mr. Nicholas Winterton
  To ask the Secretary of State for Northern Ireland if the Hualon Corporation has to date honoured all commitments relating to the payment of monies into its Northern Ireland subsidiary in connection with the projects for which the Northern Ireland Industrial Development Board has approved the payment of a £61 million grant; if he will specify what those commitments were and the date by which they should have been and were honoured; and if he will make a statement.

  Mr. Ancram
  [holding answer 21 November 1994]: Hualon Corporation's commitments to its Northern Ireland project are contained in the agreement with the Industrial Development Board, the details of which are commercially confidential.

  Mr. Nicholas Winterton
  To ask the Secretary of State for Northern Ireland if he will identify every occasion upon which members of the Northern Ireland Industrial Development Board(a) met, and (b) received hospitality from individuals associated with the Hualon group.

  Mr. Ancram
  [holding answer 21 November 1994]: Over the five-year period during which discussions with Hualon have been conducted, the chairman of the Industrial Development Board, has met with executives of the Hualon Corporation on three occasions. On two of these occasions, during visits to a number of locations in Asia, discussions with Hualon executives in Malaysia extended over dinner provided by the company. On the other occasion, in Northern Ireland, IDB hosted a working dinner.

  Tourist Board
  Mr. Nicholas Winterton
  To ask the Secretary of State for Northern Ireland during what period Lord O'Neill served as chairman of the Northern Ireland tourist board; by whom he was appointed; and what were his given reasons for resigning.

  Mr. Ancram
  Lord O'Neill was appointed chairman of the Northern Ireland tourist board on 1 October 1975 by the Department of Commerce. He served until 30 June 1980, when his term of office expired.

DEFENCE

  Canadian Forces Base, Suffield
  Mr. Home Robertson
  To ask the Secretary of State for Defence how many United Kingdom service personnel 774
  were (a) killed and (b) injured at the Canadian forces base, Suffield in each year since 1972; what was the cause of death or injury; and whether a board of inquiry was held in each case.

  Mr. Soames
  My noble Friend the Parliamentary Under-Secretary of State for Defence will write to the hon. member.

  Mr. Home Robertson
  To ask the Secretary of State for Defence on how many occasions since 1972 the safety procedures of the British Army training unit at the Canadian forces base, Suffield have been reviewed; and if he will make a statement.

  Mr. Soames
  All aspects of safety at the British Army training unit, Suffield are kept under constant review. The range safety inspection team conducted a review earlier this year, in keeping with this continuous process. In addition, particular attention is paid to any recommendations for the improvement of safety procedures which may arise from inquiries into specific incidents.

  Latham Report
  Mr. Cox
  To ask the Secretary of State for Defence what discussions he is having, and with whom, on the possible effects of the Latham report on his Department; and if he will make a statement.

  Mr. Soames
  My Department is a major customer of the construction industry, and we are keen to pursue any initiatives which may improve the efficiency of the industry and deliver better value for money. Accordingly, my right hon. and learned Friend the Secretary of State for Defence has agreed with Cabinet colleagues that officials from our Department should participate in both the efficiency scrutiny, which the Prime Minister recently announced, and the follow-up work to the Latham report which is being co-ordinated by the Department of the Environment.

  RAF Scampton
  Mr. Leigh
  To ask the Secretary of State for Defence where the joint arms control implementation group, the trade management training school and the Rapier carderisation unit will be moved to if RAF Scampton closes; and what will be the cost of these relocations.

  Mr. Soames
  Details of these moves and the associated costs may be found in the consultative document on the proposed closure of RAF Scampton which was issued on 17 November. A copy has been placed in the Library of the House.

  Indonesia
  Mr. Fisher
  To ask the Secretary of State for Defence what defence matters were discussed when the Chief and Vice Chief of Defence Staff visited Indonesia last year.

  Mr. Soames
  Neither the Chief of the Defence Staff nor the Vice Chief of the Defence Staff visited Indonesia in 1993. The Chief of the Defence Staff visited in October 1994 and the Vice Chief of the Defence Staff visited in February 1994. During their visits, they discussed defence and security matters of mutual interest. As is usual, details of their discussions are confidential.

  Mr. Corbyn
  To ask the Secretary of State for Defence on what date he became aware that talks were taking place
  775
  between the Indonesian armed forces commander and the United Kingdom for Scorpion light tanks.

  Mr. Freeman
  My Department first became aware of Indonesian interest in Scorpion in about August 1992.

  Mr. Cohen
  To ask the Secretary of State for Defence if he will list all current military contracts for military equipment, vehicles and weapons to Indonesia, including the number of such items involved and monetary amounts.

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

  Mr. Corbyn
  To ask the Secretary of State for Defence what training, advice or information have been given to the Indonesian armed forces at any time since 1979.

  Mr. Soames
  The United Kingdom has provided training, including developmental and technical courses, for Indonesian students. Details of training, including the numbers involved, are not normally disclosed as they are regarded as confidential between Governments. Ministers and officials have met representatives of the Government of Indonesia to discuss defence and security matters of mutual interest.

  Aircraft Accidents
  Mr. Redmond
  To ask the Secretary of State for Defence what was the cost of repair to the aircraft which crashed on landing on the island of Islay on 29 June; what percentage was met from public funds; and if he will make a statement.

  Mr. Soames
  The cost of repairs to BAe 146 ZE700 as with all other similar work is commercially confidential. All costs will be met from the Defence budget.

  Mr. Redmond
  To ask the Secretary of State for Defence what was the total cost of the repair work undertaken on Chinook ZA717 following its accident in the Falkland Islands in July 1989; on what date the decision was taken not to complete the repair work; and for what purpose the aircraft is currently being used.

  Mr. Soames
  The damage to the Chinook ZA717 was such that the aircraft was judged, on 4 August 1989, to be beyond economic repair. Since no repairs were initiated, no repair costs were incurred. The aircraft is used at present for battle damage repair instruction.

  Mr. Redmond
  To ask the Secretary of State for Defence if he will list all accidents to Royal Air Force Tornado aircraft in 1994, indicating the damage category in each case; and if he will make a statement on the accident rate in respect of Tornado aircraft in 1994.

  Mr. Soames
  There have been six accidents involving RAF Tornados in 1994, as follows:

  Date

  Damage category

  Tornado F3

  7 June

  Cat 5

  Tornado F3

  8 July

  Cat 5

  Tornado GR1

  19 July

  Cat 5

  Tornado GR1A/GR1

  1 August

  GR1A-Cat 5; GR1-Cat 3

  Tornado GR1A

  1 September

  Cat 5

  Tornado GR1A

  19 September

  Cat 5

  We have had an extremely low loss rate over the Tornado's 19 years of service. The 1994 Tornado accident rate will be published in due course in the 1995 edition
  776
  of United Kingdom Defence statistics along with annual accident rates of other military aircraft.

  Mr. Redmond
  To ask the Secretary of State for Defence if he will list those aircraft types in Royal Air Force service which are fitted with an accident data recorder.

  Mr. Soames
  RAF aircraft fitted with accident data recorders are:

  Andover

  BAe 146

  Harrier GR7

  Hawk

  Nimrod

  Sentry

  Tornado GR1

  Tornado F3

  Tristar

  Tucano

  VC 10 C1

  Defence Export Services Organisation
  Mr. Simpson
  To ask the Secretary of State for Defence what was the total administrative cost of the Defence Export Services Organisation in 1992–93, 1993–94 and projected for 1994–95, both in full and also net of any offsetting administrative arrangements.

  Mr. Freeman
  I refer the hon. Member to the reply I gave to the hon. Member for Leeds, Central (Mr. Fatchett) on 22 November 1994,Official Report, column 139.

  Mr. Simpson
  To ask the Secretary of State for Defence who will be the new head of the Defence Export Services Organisation; what is the duration of his contract; and what is his annual salary.

  Mr. Freeman
  Mr. Charles Masefield took up his appointment as Head of Defence Export Services on 1 September 1994. He joined the Ministry of Defence on secondment from British Aerospace for an initial period of three years, following his selection through an open recruitment competition.

  Mr. Masefield's salary in this appointment is £140,000 per annum and be can earn an additional non-pensionable bonus, subject to performance, up to a maximum of £21,674.

  Mr. Simpson
  To ask the Secretary of State for Defence how many staff are employed within the Defence Export Services Organisation; what is the breakdown of their posts; and how many staff are employed in London.

  Mr. Freeman
  The Defence Export Services Organisation staff allocation for 1994–95 is 708. A total of 414 of these staff are located in London. The breakdown is as follows:

  Marketing assistance

  137

  Military advice

  119

  Export policy and control

  47

  Disposal Sales Agency

  118

  Project management

  287

  Total

  708

  Mr. Simpson
  To ask the Secretary of State for Defence how many members of staff of the Defence Export Services Organisation are seconded from industry; and what functions they perform.
  777
  Mr. Freeman
  Two members of the Defence Export Services Organisation are seconded from industry, one is the head of the organisation, the other is the offset advisor. In addition, the post of international finance adviser is filled by an individual from the private sector on short-term contract with MOD.

  Mr. Simpson
  To ask the Secretary of State for Defence where the overseas offices of the Defence Export Services Organisations are situated; when each office was established; how many staff are currently employed; and what is the annual running cost of each.

  Mr. Freeman
  The information requested is as follows:

  Location

  Staff Numbers

  Estimated cost 1994–95 £000

  Established

  Riyadh

  2

  138

  1984

  Kuwait

  3

  102

  1988

  New Delhi

  6

  86

  1984

  Kuala Lumpur

  5

  197

  1986

  Seoul

  3

  110

  1988

  Canberra

  2

  88

  1989

  Jakarta

  3

  72

  1991

  Bangkok

  3

  101

  1992

  Ankara

  2

  78

  1988

  Mr. Simpson
  To ask the Secretary of State for Defence what are the functions of the RAF air defence advisory team and the British defence advisory team; and if he will indicate in each case their relationship to the Defence Export Services Organisation, when the team was established and its annual budget in each of the last three years.

  Mr. Freeman
  The RAF air defence advisory team—ADAT—was established in 1983, within the Defence Export Services Organisation, to provide advice and assistance on air defence systems, equipments, operations and training to friendly overseas Governments, British defence attaches and British industry. The British defence advisory team—BDAT—is not separately established. It is usually headed by the ADAT leader, and comes together for short periods to provide overseas Governments with on-site studies into single or multi-service roles.

  The annual budget for ADAT in the last three years is: 1992–93 £0.354 million, 1993–94 £0.346 million. The estimate for the present financial year 1994–95 is £0.411 million. BDAT does not have a separate budget.

  VSEL
  Mr. Gallie
  To ask the Secretary of State for Defence if he will make it his policy to use his VSEL golden share to ensure that no company wishing to take over the company could accumulate more than 15 per cent. shareholding until its takeover offer became unconditional.

  Mr. Freeman
  Under the articles of association of VSEL plc, it is for the board of the company to ensure compliance with the present 15 per cent. limitation on individual shareholdings. The relevant provisions of the articles of association cannot be amended without the consent of my right hon. and learned Friend as holder of the special share in VSEL. Amendments to these provisions which would be required in order to permit the acquisition of VSEL by either British Aerospace or GEC have been approved at extraordinary general meetings of 778
  VSEL, but have not yet received the consent of the special shareholder. My Department previously confirmed to both British Aerospace and GEC that the special shareholder would give his consent to these amendments if they were approved by VSEL shareholders, subject to the relevant regulatory approvals and his being satisfied that his order rights as special shareholder would continue to be protected.

  Low Flying
  Mr. Redmond
  To ask the Secretary of State for Defence if the crews of the Italian Air Force Tornados involved in a breach of the Hill House riding school avoidance area on 22 July 1993 were from the same unit as those involved in a breach of the same avoidance area on 17 June 1993.

  Mr. Soames
  No.

  Mr. Redmond
  To ask the Secretary of State for Defence what was the minimum authorised altitude for the flight by two German Navy Tornados which infringed the Midland Gliding Club avoidance area on 16 July 1993; and at what height the aircraft were flying at the time of the breach.

  Mr. Soames
  The aircraft were authorised to operate down to 1,000ft minimum separation distance. The RAF police concluded that it was impossible to establish the exact height of the aircraft as they passed over Long Mynd, but estimated the aircraft to be flying at approximately 900ft above ground level in the complaint area.

  Mr. Redmond
  To ask the Secretary of State for Defence if the crews of helicopters undertaking low flying below 100ft are required to carry 1:50,000 scale maps of the route.

  Mr. Soames
  There is no requirement for military helicopter aircrews to carry 1:50,000 scale maps, although such maps are carried whenever aircrews consider it necessary to do so.

  Mr. Redmond
  To ask the Secretary of State for Defence what was the purpose of the deployment of two United States F-117A aircraft to RAF Lakenheath from 3 to 21 October; how many sorties were flown by the aircraft in the course of their deployment, and how many of these involved use of the United Kingdom low-flying system; how many weapons were dropped by the aircraft, and at which ranges; and how many of the sorties involved use of the Spadeadam range.

  Mr. Soames
  Between 3 and 21 October 1994, two United States F-117A aircraft deployed to RAF' Lakenheath. On 6 October, one of the two F-117As participated in a static display at Soesterberg air base in the Netherlands as part of an official Royal Netherlands Air Force ceremony. In addition, the two F-117As conducted 19 medium-level familiarisation sorties over the United Kingdom. The F-117As did not carry ordnance during these sorties and they did not use either United Kingdom ranges or the United Kingdom low flying system during their deployment.

  Mr. Redmond
  To ask the Secretary of State for Defence if the RAF Police investigation of the breach of the Wildfowl and Wetlands Trust avoidance area at Caerlaverock by three Army helicopters on 8 December 1993 established whether any Army helicopters had booked in to low flying area 16 during the period of the incident.
  779
  Mr. Soames
  The investigation established that Army helicopters were booked into low flying area 16 during the period of the incident; however, the helicopters involved in the breach were not. This was because their crews had not intended to fly at low level; they were forced to do so because of poor weather conditions.

  Mr. Redmond
  To ask the Secretary of State for Defence how many people complained about the seven breaches of the Lockerbie low flying avoidance area during 1993 listed in his Department's evidence to the Defence Select Committee —HC 314 of Session 1993–94 pp. 35–36; and how many other complaints were received during 1993 about low flying within the Lockerbie avoidance area.

  Mr. Soames
  Seven individuals made a total of 12 complaints about the seven breaches during 1993. A further seven complaints were received during 1993 alleging low flying within the avoidance area, but on investigation, these were not substantiated.

  Mr. Redmond
  To ask the Secretary of State for Defence what requests have been received from foreign Governments since 1990 requesting permission for foreign military aircraft to fly over the United Kingdom at less than 250 feet.

  Mr. Soames
  One request has been received since 1990 from the US Government. I refer the hon. Member to the reply given to the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) on 15 December 1993,Official Report, column 475.

  Mr. Redmond
  To ask the Secretary of State for Defence if the Harriers involved in breaches of the Royal Welsh agricultural show low-flying avoidance area on 19 and 21 July 1993 were flown by pilots from(a) the same squadron and (b) the same station; and what were the findings of the RAF Police investigation in relation to the availability of information on the avoidance at the bases concerned.

  Mr. Soames
  The aircraft in question were from both different units and bases. The RAF police found that notification of the temporary avoidance had been received at both bases. At one of these, however, a flaw occurred in their system for presenting details of the notification to aircrew. This has since been rectified.

  Mr. Redmond
  To ask the Secretary of State for Defence what was the minimum authorised altitude for low-level sorties by German Air Force Tornados during its exchange visit to the United States 494 Fighter Squadron at RAF Lakenheath during August.

  Mr. Soames
  One thousand feet minimum separation distance.

  Mr. Redmond
  To ask the Secretary of State for Defence which of the foreign aircraft involved in low-flying avoidance breaches on 17 June 1993, 9, 16 and 22 July 1993, 23 August 1993, 21 September 1993 and 14 December 1993 were operating in company with Royal Air Force aircraft at the time of the breaches.

  Mr. Soames
  None. RAF aircraft took part in the sortie on 21 September 1993 but were not in company with the foreign aircraft at the time of the breach.

  Mr. Redmond
  To ask the Secretary of State for Defence if Royal Air Force Police standing orders governing the conduct of investigations into alleged breaches of low flying regulations require the investigators to interview both members of the air crew 780
  in cases where the aircraft involved in the alleged breach is a two-seat type.

  Mr. Soames
  No.

  Mr. Redmond
  To ask the Secretary of State for Defence if he will make a statement on progress in investigating the low-level overflight of Hope under Dinmore on 23 February 1993 by a Royal Air Force British Aerospace 146 aircraft, as described in evidence to the Defence Select Committee, HC 314 of Session 1993–94, page 44.

  Mr. Soames
  No investigation was initiated since there was no evidence to suggest that any breach of flying regulations had occurred.

  Subsequent inquiries have confirmed that no military BAe 146 aircraft flew in the vicinity of Hope-under-Dinmore on the day in question.

  Murted Air Base
  Mr. Redmond
  To ask the Secretary of State for Defence what was the purpose of the deployment of RAF Tornados to Murted air base, Turkey, in April 1994; how many aircraft took part; how many low-level sorties were carried out; and what was the minimum permitted altitude for these sorties.

  Mr. Soames
  Eight Tornado GR1 aircraft were deployed to Akinci air base, formerly known as Murted Air Base Turkey, from 8 to 21 April 1994, to participate in the NATO exercise Distant Thunder 94.

  The Tornado crews flew 92 low-level sorties at 500ft descending to a minimum of 250ft when engaged in target approach runs.

  Military Aircraft
  Mr. Redmond
  To ask the Secretary of State for Defence what are the minimum separation distances between United Kingdom military separation distances between United Kingdom military aircraft(a) in the same formation and (b) not in the same formation, on the landing approach at military airfields.

  Mr. Soames
  The minimum separation distances between United Kingdom military aircraft on landing approach at military airfields vary according to aircraft type classification. Guidance for RAF aircrew on minimum separation approaches are set out in various RAF instructions.

  School Fees
  Mr. Cox
  To ask the Secretary of State for Defence what ranks serving in the United Kingdom armed forces, are able to claim for school fees for children who are of school age and living within the United Kingdom.

  Mr. Soames
  Boarding school allowance is available to all ranks of the armed forces serving in the United Kingdom or overseas providing that they meet the: eligibility criteria.

  Air Incidents
  Mr. Redmond
  To ask the Secretary of State for Defence what inquiry was held into the near-miss incident
  781
  on 19 August between an Icelandair Boeing 737 and two United States Air Force F15 aircraft off the Humberside coast; and if he will make a statement.

  Mr. Soames
  Investigation of the air traffic control radar recordings showed that standard separation always existed between the aircraft in question, and that there had been no possibility of them colliding. In accordance with normal procedures, the reporting pilot was informed of this and asked if he still wished to file an airmiss. He subsequently withdrew his airmiss report.

  Mr. Redmond
  To ask the Secretary of State for Defence if he will place in the Library a copy of the report of the investigation into a near-miss incident involving a Spanish airliner and two RAF Tornados near Gibraltar on 29 January 1992.

  Mr. Soames
  Incidents which occur in Spanish airspace are matters for investigation by the Spanish authorities. My Department has not received any report on this occurrence.

  Mr. Redmond
  To ask the Secretary of State for Defence if he will place in the Library a copy of the report of the inquiry into the RAF Puma wirestrike incident near Kinlochmoidart on 18 May.

  Mr. Soames
  The incident referred to occurred during a routine troop deployment exercise. The RAF Puma sustained minor damage to the main rotor blades as a result of a wirestrike. Such minor incidents are investigated by a unit inquiry. It is not my Department's practice to place copies of unit inquiries in the Library of the House.

  Flight Authorisations
  Mr. Redmond
  To ask the Secretary of State for Defence if an RAF officer was responsible for checking and authorising the flight from RAF Leuchars by three Danish Air Force F-16s on 14 December 1993.

  Mr. Soames
  No. There was no requirement for RAF officers to check or authorise the flight plans. The Royal Danish Air Force aircrews were, however, provided with comprehensive face-to-face briefing on the United Kingdom low flying system, fighter affiliation and training targets.

  Rwanda
  Mr. Worthington
  To ask the Secretary of State for Defence on what grounds British troops have now been withdrawn from Rwanda; and in what circumstances, relating to the security or humanitarian situation, they will return.

  Mr. Soames
  The Government agreed to a request from the United Nations for a contingent of specialist troops to provide support for a three-month period to fill the gap until the arrival of the commercial company contracted by the UN to undertake the logistics role in Rwanda.

  In the course of their deployment the United Kingdom contingent made a very substantial contribution to the UN operation. Their task has now been completed and they are being withdrawn, apart from a small number of
  782
  headquarters staff officers. Forces from several African and other states are now firmly established as part of the UN force.

  The UN have not sought a further deployment in Rwanda. We would consider any further requests for assistance against our current commitments elsewhere in the world, in the usual way.

  Officer Selection
  Mr. Redmond
  To ask the Secretary of State for Defence what plans he has to introduce the specification requirement of personal integrity for candidates for army officer selection.

  Mr. Soames
  A high level of personal integrity is expected from all Army officers. Assessment of an individual candidate's personal integrity is already undertaken as part of the normal process of Army officer selection and is carried out by various means including reference to the candidate's application form, initial interviews, headmasters' and tutor's reports, school and university liaison officer's reports, referees' reports and further interviews at the regular commission board. There are no plans to introduce further specific measures.

  Arms Sales
  Mr. Worthington
  To ask the Secretary of State for Defence if he will list the current controls on British arms sales by country and type of weaponry.

  Mr. Freeman
  The current export controls are set out in part III group 1 of the Export of Goods (Control) Order 1994 as amended. These define the equipments requiring an export licence and, where the controls are not of a global application, the countries to which they apply. Each export licence application is assessed on a case-by-case basis taking into account, as appropriate, a range of relevant factors including national security, international obligations and humanitarian concerns.

  Conduct after Capture Courses
  Mr. Martlew
  To ask the Secretary of State for Defence what are his Department's guidelines with regard to service personnel attending conduct after capture courses; and if he will make a statement.

  Mr. Soames
  Conduct after capture training is made available to those personnel most vulnerable to capture in time of war or other crises.

  Equality
  Mr. Martlew
  To ask the Secretary of State for Defence if he will place in the Library a copy of the report on equality in the Army prepared by his Department's working party in 1977

  Mr. Soames
  Although no working party report on equality in the Army was prepared in 1977, a working party considering future employment in the Women's Royal Army Corps reported in November 1976 and then again in 1978. It is not my Department's practice, however, to release internal planning documents such as the ones produced on these occasions.

  Industrial Tribunals
  Mr. Martlew
  To ask the Secretary of State for Defence how much money has been spent by his Department on legal representation in the industrial tribunal cases regarding the dismissal of pregnant service women.

  Mr. Soames
  About £1,000,000.

  Secret Files
  Mr. Byers
  To ask the Secretary of State for Defence how many(a) top secret and (b) secret files his Department holds.

  Mr. Soames
  The information requested could be provided only at disproportionate cost.

  Telephone Bills (Security Service)
  Dr. David Clark
  To ask the Secretary of State for Defence if his departmental budget includes a contribution for the telephone bills of the Security Service.

  Mr. Soames
  No.

  Study Contracts
  Dr. David Clark
  To ask the Secretary of State for Defence (1) what is his policy concerning study contracts offered by his Department for risk-reduction work in defence contracts;

  (2) when his Department first introduced the policy of study contracts for risk-reduction work in defence contracts; and if he will make a statement.

  Mr. Freeman
  My Department's phased approach to procurement projects has been applied since the 1960s and aims at the progressive reduction of risk. This includes the use of risk reduction study contracts where judged necessary. Risk management has been reinforced by the introduction of an initiative in the late 1980s which ensures that the MOD applies explicit risk management techniques to all equipment projects.

  Procurement
  Dr. David Clark
  To ask the Secretary of State for Defence what changes there have been in his Department's procurement policy in the past six months.

  Mr. Freeman
  My Department's procurement policy is continually being refined to ensure that the needs of the armed forces are met at minimum overall cost to the defence budget. In the past six months, procurement policy and practices were reviewed as part of "Front Line First". The outcome was reported in July in my Department's publication on the Defence costs study.

  Royal Dockyards
  Dr. David Clark
  To ask the Secretary of State for Defence what is his policy on the privatisation of the royal dockyards.

  Mr. Freeman
  I refer the hon. Member to the answer I gave the hon. Member for Plymouth, Sutton (Mr. Streeter) on 23 November 1994,Official Report, column 146. Privatisation on the right terms remains the Government's preferred option.

HEALTH

  Commissioning Agencies
  Mr. Milburn
  To ask the Secretary of State for Health if she will provide a list of health commissioning agencies, the health authorities they cover and when they came into being.

  Mr. Malone
  The term "health commissioning agency" has no statutory basis. Details of joint working between district and family health services authorities are determined by local circumstance. By the beginning of October 1994, there were 55 appointments of joint chief executive. There were a further seven sets of joint management arrangements, without a joint chief executive. A list of authorities concerned will be placed in the Library. Information has not been collected centrally about when the arrangements came into being.

  Lysergic Acid Diethymide
  Mr. Purchase
  To ask the Secretary of State for Health how many patients were involved and to what extent lysergic acid diethymide was tested on national health service psychiatric patients; and what long-term monitoring of its effects has been carried out.

  Mr. Bowis
  Lysergic acid diethymide is not currently used in the treatment of national health service psychiatric patients and we have no evidence that it has been used in recent years.

  Benzodiazepines
  Mr. Cousins
  To ask the Secretary of State for Health how many deaths in each of the last three years were attributable to the overuse or abuse of(a) temazepam, (b) zopiclone and (c) all other benzodiazepines.

  Mr. Sackville
  The table shows the number of deaths in 1990–1992 in which there was a mention of abuse of temazepam, other unspecified benzodiazapines, or zopiclone, with or without other drugs.

  1990

  1991

  1992

  Temazepam

  12

  18

  16

  Other Unspecified Benzodiazapines

  10

  17

  17

  Zopiclone

  —

  —

  —

  In 1991 there were, in addition, two drug deaths recorded with mention of both temazepam, diazepam and morphine which are not included in these figures.

  Dental Health (Children)
  Mr. Thurnham
  To ask the Secretary of State for Health what action her Department is taking to encourage children to brush their teeth.

  Mr. Malone
  The Department has published an oral health strategy for England which sets a number of objectives relating to the further reduction in caries in children. Carrying forward dental health education is a matter for health authorities. Copies of the strategy are available in the Library.

  The Department has made available £1 million for oral health education for 1994–95. Thirty-six proposals have been approved. A second tranche is currently being considered.

  Burnley Healthcare NHS Trust
  Mr. Gordon Prentice
  To ask the Secretary of State for Health how much Maggie Aikman received on her resignation as chief executive of Burnley Healthcare NHS Trust.

  Mr. Malone
  Mrs. Aikman received £135,750 net when her contract with Burnley Health Care National Health Service Trust was terminated on 28 October.

  Asthma
  Mr. Cousins
  To ask the Secretary of State for Health if she will place in the Library the cost per head in each family health services authority based on the figures in her answer of 1 November to the hon. Member for Truro (Mr. Taylor),Official Report, columns 1076–78 for (a) the net ingredient costs of asthma preparations in 1993, (b) the net costs of corticosteroids in each year since 1984 and (c) the other net ingredient costs in each year since 1989; and if she will also express the figures in table 2 for the number of prescription items for exempt children in 1992 and 1993 as items per head in each family health service authority.

  Mr. Malone
  The available information has been placed in the Library. The data for exempt children by family health services authorities could only be provided at disproportionate cost.

  NHS Trusts
  Mr. Cohen
  To ask the Secretary of State for Health what assistance she is giving to London NHS trusts and district health authorities to help them resolve their debt problems.

  Mr. Malone
  All national health service bodies are expected to operate within their income. However the two Thames regions are responsible for monitoring the financial performance of health authorities and NHS trusts in London and can provide short-term financial assistance where justified. The London implementation group also provides transitional support to NHS trusts in inner London.

  The hon. Member may wish to contact Sir William Staveley, chairman of North Thames region, and Mr. William Wells, chairman of South Thames region for further information.

  Mr. Redmond
  To ask the Secretary of State for Health what action she is taking to control the re-employment in the NHS or by NHS trusts staff dismissed by previous NHS or NHS trust employers.

  Mr. Malone
  The responsibility for recruitment and selection of staff is a matter for national health service employers. They are expected to follow good recruitment practices which include interviews, appropriate questioning about previous employment and career gaps, and taking up of references.

  Mr. Redmond
  To ask the Secretary of State for Health what limitations are placed on non-executive directors of NHS trusts obtaining top management posts in the same trust.

  Mr. Malone
  Under Regulation 11(1)(e) of the National Health Service Trusts (Membership and Procedure) Regulations 1990, employees of any health service body are disqualified for appointment as chairman or non-executive director of an NHS trust.
  786
  Mr. Cohen
  To ask the Secretary of State for Health if she will list the figures for debt or surplus for each London NHS trust and district health authority at the end of the last financial year.

  Mr. Sackville
  Information on relevant health authorities is shown in the table. The information requested for national health service trusts will be available in December and placed in the Library.

  Surplus/Deficit London District Health Authorities 1993–94

  £000

  Barnet DHA

  756

  Hillingdon DHA

  (185)

  Brent and Harrow DHA

  (560)

  Ealing, Hammersmith and Hounslow DHA

  3,653

  Kensington, Chelsea and Westminster DHA

  (2,331)

  Barking and Havering DHA

  (1,777)

  Redbridge and Waltham Forest DHA

  (535)

  East London and the City DHA

  2,084

  New River DHA

  1,140

  Camden and Islington DHA

  1,479

  Bexley DHA

  5,101

  Greenwich DHA

  (682)

  Bromley DHA

  (10)

  South East London DHA

  15

  Croydon Health CA

  669

  Wandsworth DHA

  2,093

  Merton and Sutton DHA

  (77)

  Kingston and Richmond DHA

  232

  Source:

  Health Authority Annual Accounts.

  Note:

  (i) Figures include Surplus/Deficit of Directly Managed Units and Common Services Agencies.

  (ii) Figures are provisional.

  (iii) Bracketed figures indicate deficits.

  Mr. Redmond
  To ask the Secretary of State for Health what are the regulations on payments to NHS staff(a) in the case of redundancy (b) in the case of health retirements and (c) for dismissal; and what controls she plans to exercise over the behaviour of NHS trusts in similar circumstances.

  Mr. Malone
  Redundancy payments for national health service staff employed on national terms and conditions of service are governed by section 45 of the General Whitley Council handbook, copies of which are available in the Library. For staff employed on NHS trust terms and conditions of service redundancy payments are covered by their contractual terms.

  Retirement on grounds of ill-health, for staff who are members of the NHS pension scheme, is governed by the NHS (Superannuation) Regulations.

  Any payments for dismissal on grounds other than redundancy would be determined by the courts and industrial tribunals.

  Guidance on the making of termination settlements to general and senior managers on short-term rolling contracts was given to health authorities in HSG(94)18 and to trusts in TEL(94)3, copies of which are available in the Library.

  NHS trusts are free, under the terms of paragraph 16(1)(d) of schedule 2 to the National Health Service and Community Care Act 1990, to employ staff on such terms as they think fit.

  Prescription Pricing Authority
  Mr. Cousins
  To ask the Secretary of State for Health what is the current market-testing programme agreed with the Prescription Pricing Authority; and, for each of the elements of the programme, what is the point in the process so far achieved and the target date for completion.

  Mr. Malone
  The current market-testing programme for the Prescription Pricing Authority includes prescription processing; management and maintenance of the authority's estate; mainframe computer support; security, portering, catering and central administrative services; and information division processing support. Market testing of the prescription processing service and information division processing, which together employ 1,500 staff, is well advanced. Contracts will be in place by 1 May 1995. Work on remaining elements of the programme will begin shortly, with completion anticipated by 31 March 1996.

  Cardiac Services
  Mr. Cohen
  To ask the Secretary of State for Health what is his estimate of the number of people each year in the Waltham Forest area who need(a) pacemakers and (b) cardiac catheterisation; and if she will make funds specifically available for these operations to be carried out at Whipps Cross Hospital.

  Mr. Sackville
  It is the responsibility of Redbridge and Waltham Forest health authority to assess the level of need for cardiac services and to purchase these as appropriate. The hon. Member may wish to contact Miss Delva Patman, chairman of the authority, for details.

  Ambulance Services
  Mr. Redmond
  To ask the Secretary of State for Health if she will introduce legislation to ensure that community health councils are invited to take up observer status on the board of new providers of ambulance services not normally within their competence; and if she will make a statement.

  Mr. Malone
  The Government do not believe that it is necessary to extend the statutory powers of community health councils in this way.

  EL(94)4, copies of which are available in the Library, makes it clear that all trusts should agree arrangements for liaison and access with community health councils. This applies equally to ambulance service trusts. Where community health councils are not invited to board meetings, trusts should offer alternative regular liaison opportunities.

  Internet
  Mrs. Anne Campbell
  To ask the Secretary of State for Health what plans she has to provide information via the Internet; and if she will make a statement.

  Mr. Sackville
  Use of the Internet as an additional method of disseminating information to the public is under active consideration by the Department in line with the Government's commitment to make more information available to the public and to make innovative use of telecommunications. Officials from the Department and the Office of Population Censuses and Surveys are also working with the Central Statistical Office and other 788
  Government Departments to see what use can be made of the Internet to disseminate Government statistics.

  Breast Cancer
  Mr. Redmond
  To ask the Secretary of State for Health what comparative studies she has made of survival rates for breast cancer for(a) females and (b) males between the United Kingdom and other developed countries; if she will facilitate the universal use of best practice protocols for the treatment of this condition; and if she will make a statement.

  Mr. Sackville
  None. The Chief Medical Officers' of England and Wales consultation document "A Policy Framework for Commissioning Cancer Services" recommends that all patients should have access to a uniformly high quality of care wherever they live to ensure the maximum possible cure rates and best quality of life. Where professional bodies have produced best practice protocols we support their use in the national health service. Copies of the consultation document are available in the Library.

  Appointments, Doncaster
  Mr. Redmond
  To ask the Secretary of State for Health (1) how many people were(a) considered for appointment as chairman of the Doncaster royal infirmary and Montagn Hospital NHS trust and (b) shortlisted; and who selected (i) the shortlist and (ii) the chairman;

  (2) on whose advice she decided not to reappoint Mr. Graham Smith as chairman of Doncaster health authority.

  Mr. Malone
  Recommendations to Ministers for the chairmanships of health authorities and national health service trusts are made by chairmen of regional health authorities. Ministers are responsible for making the final decision. The then Minister of Health, my right hon. Friend the Member for Peterborough (Dr. Mawhinney), appointed Mr. Keith Jones as chairman of Doncaster district health authority. I made the decision to appoint Mr. Raymond Tonkinson as chairman of the Doncaster Royal Infirmary and Montagu Hospital NHS trust. Details of unsuccessful candidates are confidential.

  Mrs. Maggie Aikman
  Mr. Redmond
  To ask the Secretary of State for Health if she approved of the pay-off of £250,000 made by the Burnley NHS trust to Mrs. Maggie Aikman.

  Mr. Malone
  My right hon. Friend the Secretary of State is not required to approve severance settlements for trust chief executives.

  Prescription Pricing Authority
  Mr. Cousins
  To ask the Secretary of State for Health if she will place the Touche Ross report on the Prescription Pricing Authority in the Library.

  Mr. Malone
  No. As part of the market testing process, a number of reports have been prepared for the Prescription Pricing Authority by Touche Ross and others. Those reports contain information which is commercially sensitive.

  Regional Health Authorities
  Mr. Redmond
  To ask the Secretary of State for Health is she will order a public inquiry into the maladministration
  789
  of Wessex, West Midlands and Trent regional health authorities.

  Mr. Malone
  No.

  Patients Charter
  Mr. Redmond
  To ask the Secretary of State for Health what is the current patients' charter standard for waiting for attention on an out-patient visit; and how such waiting time standards are measured.

  Mr. Malone
  The patients charter national standard requires that a patient be given a specific appointment time and be seen within 30 minutes of that time. Monitoring of this standard is done locally using guidance issued by the Department, copies of which will be placed in the Library. The waiting time to be measured is from the time of the appointment to the time the patient is actually seen for the main consultation.

  Hip Replacements
  Ms Gordon
  To ask the Secretary of State for Health how many hip replacement operations have been carried out in each year from 1983 to 1993 in England, Wales and Scotland.

  Mr. Sackville
  Information for England for the years 1983 to 1991–92, the latest available, is shown in the table. Data for the year 1987–88 are not available. Figures for Scotland and Wales are matters for my right hon. Friends the Secretaries of State for Scotland and for Wales.

  Hip replacements and other arthroplasty operations of the hip

  Year

  Thousands

  1983

  36.2

  1984

  36.9

  1985

  36.5

  1986

  41.0

  1988–89

  46.5

  1989–90

  50.8

  1990–91

  50.7

  1991–92

  55.6

  Source:

  Hospital Activity Analysis 1983 to 1986: Health Episode Statistics 1988–89 to date.

  Horizontal Management Course
  Mr. Redmond
  To ask the Secretary of State for Health on what grounds NHS funds were used to support managers attending a three-day course in June 1994 at the Hyde Park Hotel on Horizontal Management; what was the cost; and how many managers attended the course.

  Mr. Malone
  It is a matter for individual national health service trusts and health authorities to determine their training needs. This information is not therefore available centrally.

  Cancer
  Mr. Redmond
  To ask the Secretary of State for Health how many people in the United Kingdom have cancer; what are the projected figures for 2015; and if she will make a statement.

  Mr. Sackville
  The information is not available in the form requested. It has been estimated, using data from the general household survey, that the prevalence of cancer in 790
  the adult population is of the order of 1 per cent. In 1989, latest available figures, there were 190,590 registrations of newly diagnosed cases of cancer in England, excluding non-melanoma skin cancers. Projections for 2015 are not available and could be provided only at disproportionate cost.

  Information relating to Wales, Scotland and Northern Ireland are matters for my right hon. Friends the Secretaries of State for Wales and for Scotland and my right hon. and learned Friend the Secretary of State for Northern Ireland.

  NHS Executive
  Mr. Redmond
  To ask the Secretary of State for Health if she will instruct the NHS executive to change its purchasing system so that all patients are treated equally according to clinical need by(a) having a separate budget for accident and emergency costs, to ensure that unexpected increases do not have to be absorbed by the district health authority, (b) allocating the cost of more expensive and long-term treatments so that general practitioner fundholders pay an appropriate amount, (c) investigation the merits of bringing all general practitioners into the purchasing system as equal partners with district health authorities and (d) investigating the merits of providing all general practitioners with funds for routine treatments; and if she will make a statement.

  Mr. Malone
  The aim of budget setting in the national health service is to give both health authorities and fundholding general practitioners a fair share of NHS resources to meet their patients' needs. In the case of health authorities, this includes funding to secure accident and emergency services for the whole of their local population. EL(94)79 recently announced a significant expansion of fundholding options to enable all GPs to become directly involved in purchasing and managing funds on their patients' behalf.

  Copies of EL(94)79, "Developing NHS purchasing and GP fundholding", EL(94)84, "General Practice Fundholding: guidance on setting budgets for 1995–96" and FDL (94)68, "Revenue allocations 1995–96" are available in the Library.

  GP Contracts
  Mr. Redmond
  To ask the Secretary of State for Health if she will consider making changes to general practitioners' contracts so as to ensure that if a parent chooses to deregister their child for health surveillance with their general practitioner, the money is then transferred to the health authority to provide an alternative community service; and if she will make a statement.

  Mr. Malone
  In purchasing community child health surveillance, district health authorities take account of the needs of all children who are not registered for child health surveillance with general practitioners. No transfer of money is required to ensure this.

  Patient Advocacy Service
  Mr. Redmond
  To ask the Secretary of State for Health (1) if she will set up a working party to examine and report to the House within the next 12 months on the feasibility of introducing a properly funded and independent advocacy service for all national health service complainants; and if she will make a statement;
  791
  (2) if she will ensure (a) that a full range of appropriate independent advocacy services based on existing local interest groups are available to all national health service patients who require such a service with support from joint finance and (b) that it is a statutory duty of regional and district health authorities to have strategies supporting independent advocacy initiatives and financially support advocacy services; and if she will make a statement.

  Mr. Malone
  The Government welcome the initiative of those national health service authorities and trusts which have already set up their own patient advocacy and patient friend schemes to encourage and support patients including those who are not able to represent themselves in pursuing complaints, making suggestions about and seeking NHS services. "Being Heard", copies of which are available in the Library, the report of the Wilson committee on NHS complaints procedures, recognised the importance of providing support to complainants and the role of community health councils in doing so. We are currently considering the responses to the consultation exercise on the report and will make an announcement on our decisions in due course.

  Pharmaceutical Regulations
  Mr. Redmond
  To ask the Secretary of State for Health if her Department will undertake a review of the national health services (Pharmaceutical Services) Regulations 1992 to take account of patients' needs; and if she will make a statement.

  Mr. Malone
  The Department continues to keep under review the operation of the pharmaceutical regulations and the need for any change.

  Vegetarians
  Mr. Cohen
  To ask the Secretary of State for Health what surveys her Department has commissioned which indicate that vegetarians tend to be more healthy than meat-eaters; and if she will make a statement.

  Mr. Sackville
  The Department has not commissioned any surveys specifically of the diet, nutritional status and health of vegetarians. A variety of studies have shown that vegetarians as a group tend to be healthier than non-vegetarians, but the many other differences in their diet and in other aspects of their lifestyle may be just as important as the avoidance of meat.

  Redundancies and Early Retirements
  Mrs. Bridget Prentice
  To ask the Secretary of State for Health what are the total costs of redundancy and early retirement payments to(a) midwife teachers, (b) nurse teachers and (c) senior midwife managers for each of the last three years including 1994 to date.

  Mr. Malone
  The information is not available centrally.

  Mr. Rod Simms
  Mr. Redmond
  To ask the Secretary of State for Health if she will make a statement on the circumstances leading up to the dismissal of Mr. Rod Simms, facilities manager, Royal Bethlem hospital trust.

  Mr. Sackville
  This is a matter for the Royal Bethlem and Maudsley national health service trust. The hon 792
  Member may wish to contact Bernard Williams, chairman of the trust, for details.

  Computer Centres
  Mrs. Bridget Prentice
  To ask the Secretary of State for Health what is her policy in respect of marketing testing or selling national health service computer centres; and if she will make a statement.

  Mr. Sackville
  A number of regional computer centres serving the national health service have been sold off or contracted out for a number of years. Others, which remain in-house, have been reviewing their options in the light of the planned abolition of the parent regional health authorities in 1996. The aim is to secure best long-term value for money for the NHS and to maximise the use of existing management and financial resources on the core statutory function of improved health care. Options, which are for local determination, include;Closure without replacement
  Market testing to identify a new supplier or suppliers
  Transfer to another owner within the NHS at manageable risk
  Sale by competition to an owner outside the NHS (which might include a bid from a Management buy-out)

  Guidelines to assist health authorities and trusts in their consideration of future arrangements for NHS trading agencies generally will be issued shortly.

  Trent Regional Health Authority
  Mr. Redmond
  To ask the Secretary of State for Health if she will publish in full the district auditor's report relating to Trent regional health authority.

  Mr. Sackville
  Trent regional health authority received a report from the district auditor at the public meeting of the authority held on 11 July 1994. This related to the transfer of services to the private sector between 1988 arid 1992. Copies of the report are available on request from the RHA.

  GP Fundholders
  Mr. Redmond
  To ask the Secretary of State for Health if she will amend legislation on general practitioner fundholding to require any savings generated by fundholding practices to be paid to the local district health authority to be used for the development of health care against identified needs within a broad and publicly accountable health strategy; and if she will make a statement.

  Mr. Malone
  No.

  NHS Complaints Authority
  Mr. Redmond
  To ask the Secretary of State for Health if she will set up an NHS complaints authority on the lines of the Police Complaints Authority.

  Mr. Malone
  The report of the Wilson committee on national health service complaints procedures recommended that the Government should consider a number of options put forward for reviewing complaints in the NHS, including a national complaints commission. We are currently considering the responses to the consultation exercise on the report and will make an announcement of our decisions in due course.

  Trainee Nurses
  Mr. Redmond
  To ask the Secretary of State for Health how many trainee nurses there were(a) in 1988 and (b) in 1992; and if she will make a statement.

  Mr. Sackville
  The information is shown in the table.

  In training population—England. Years ended 31 March 1988 and 31 March 1992.

  1988

  1992

  Pre-registration

  58,901

  51,901

  Post-registration

  6,485

  4,049

  Total pre and post registration

  65,386

  55,950

  Source:

  English National Board for nursing, midwifery and health visiting.

  The level of qualified nursing and midwifery staff in post has remained virtually static over this period, thus reducing the overall demand for newly qualified staff.

  "Cashing in on Independence"
  Mr. Alfred Morris
  To ask the Secretary of State for Health what consideration her Department has given to the research report, commissioned by the British Council of Organisations of Disabled People, entitled "Cashing in on Independence".

  Mr. Bowis
  We have read the report "Cashing in on Independence" with interest.

  Disabled People (Cash Payments)
  Mr. Alfred Morris
  To ask the Secretary of State for Health when she now expects direct cash payments by local authorities to disabled people to become legally available; and if she will make a statement.

  Mr. Bowis
  My right hon. Friend the Secretary of State for Health made an announcement about direct payments on 24 November and I refer the hon. Member to the reply that my right hon. Friend gave my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth) on 24 November,Official Report, columns 332–33.

  Chronically Sick and Disabled Persons Act
  Mr. Alfred Morris
  To ask the Secretary of State for Health what steps she is taking to ensure full compliance by local authorities with the legal duties imposed by section 2 of the Chronically Sick and Disabled Persons Act 1970; and if she will make a statement on cases known to her Department of failure to comply with these duties.

  Mr. Bowis
  Local authorities are aware of their duties under section 2 of the Chronically Sick and Disabled Persons Act 1970. Most cases of alleged breach of statutory duties are resolved by means of local authority complaints procedures, established for this purpose. The Department, of course, follows up any cases brought to its attention and issues guidance as necessary.

  Secret Files
  Mr. Byers
  To ask the Secretary of State for Health how many(a) top secret and (b) secret files her Department holds.

  Mr. Sackville
  The Department of Health holds approximately 400 top secret or secret files. However, many of these were created several years ago, before the 794
  revised protective markings were introduced earlier this year, and are therefore not in active use. Since October 1992, no top secret, and only 13 secret, files have been created.

  Exeter Protocol
  Mr. Steen
  To ask the Secretary of State for Health when she hopes to make a decision on the continued operation of the Exeter protocol.

  Mr. Sackville
  We understand that the Royal Devon and Exeter trust ceased elective ventilation following receipt of legal advice. The Department has recently issued guidance—HSG(94)41—copies of which are available in the Library, setting out the legal position on ventilation of potential organ donors. Where clinicians believe there may be some benefit, however slight, to the patient, ventilation remains lawful.

  Camden and Islington Health Authority
  Mr. Corbyn
  To ask the Secretary of State for Health what analysis she has undertaken of the effectiveness of health care in Camden and Islington and the adequacy of the funding of the Camden and Islington health authority.

  Mr. Sackville
  It is the responsibility of the Camden and Islington health authority to obtain effective health care using available resources. The hon. member may wish to contact Roland Everington, chairman of Camden and Islington health authority, for further information.

  Mobile Telephones
  Mr. Nicholas Brown
  To ask the Secretary of State for Health what is the total budget for mobile telephones in the national health service; and how many are held by(a) medical staff and (b) administrators.

  Mr. Sackville
  Financial responsibility for mobile telephones rests with individual users or their employers. From a limited expenditure survey of users, as part of a national initiative to minimise expenditure on telecommunications, total expenditure is estimated to be of the order of £24 million per year. Estimates of the number of mobile telephones held by various national health service groups are shown in the table.

  Group

  Number

  Clinical Staff

  30,000

  Other Hospital Staff

  19,500

  Ambulance Services

  500

  1 Includes a variety of technical, clinical and non-clinical staff; administrators were not identified separately. The NHS Executive have recently negotiated substantial discounts with a number of suppliers. These offer individual user savings of between 8 per cent. and 19 per cent. and should provide an overall reduction in the NHS bill of 10 per cent. by 1997.

  Respiratory Infections
  Mrs. Ewing
  To ask the Secretary of State for Health how many hospital admissions there were for each month in 1991, 1992 and 1993 for(a) acute respiratory complaints and (b) bronchitis; and if she will provide a breakdown by (i) United Kingdom nation and region and (ii) local health authority or trust.

  Mr. Sackville
  [holding answer 24 November 1994]: Tables setting out the number of finished consultant

  795
  episodes for respiratory oinfections including acute bronchitis and bronchiolitis—ICD 460–466—and acute bronchitis—ICD 466—by month of admission, in England, for each national health service region, will be placed in the Library. Information for individual health authorities and NHS trusts is not available. Information relating to Scotland, Wales and Northern Ireland are matters for my right hon. Friends the Secretaries of State
  796
  for Scotland and for Wales and my right hon. and learned Friend the Secretary of State for Northern Ireland.

  Mr. Milburn
  To ask the Secretary of State for Health what has been the turnover of each national health service trust in each year since its inception.

  Mr. Sackville
  I refer the hon. Member to the reply I gave him on 11 July,Official Report, column 419. The information requested for 1993–94 will become available in December.

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Newcastle.
Lord Cottesloe— Sat first in Parliament after the death of his father.

EC Directives: Implementation
Lord Peyton of Yeovil Lord Peyton of Yeovil asked Her Majesty's Government:
Whether it is their policy to encourage government departments to add to, improve and generally embellish directives emanating from Brussels.
The Earl of Arran: My Lords, the President of the Board of Trade last year commissioned an efficiency scrutiny into the implementation and enforcement of EC law in the United Kingdom. The efficiency scrutiny found little evidence that the United Kingdom deliberately over-implements directives emanating from Brussels.
Lord Peyton of Yeovil: My Lords, while I mildly agree with my noble friend's Answer, does he understand that there is considerable anxiety that government departments in this country, in pursuance of that well-known love of charity for which they are famous, unnecessarily add to the burdens which the Commission intended to impose both by directives and regulations?
The Earl of Arran: My Lords, of course I would be glad and, indeed, grateful for even half of such gratification from my noble friend. However, I have several points to make in response. First, EC law is very often implemented by means of existing national legislation. The efficiency scrutiny report revealed that existing UK legislation often has much wider scope and tougher penalties than that of other member states. All EC proposals which may impose a burden are subject to what is termed a "compliance cost assessment" at the earliest possible stage of the EC scrutiny process. But I can say that we are pressing for the Commission to improve its business impact assessment system in order to ensure that all proposals for EC legislation are effectively assessed and, more than that, justified before they are tabled.
Lord Stoddart of Swindon: My Lords, is the noble Earl aware that, although his noble friend may be "mildly" satisfied with the Answer given, there are many other people who will not be at all satisfied? Is the noble Earl also aware that some people believe that many good businesses have gone to the wall, including many abattoirs—indeed, I understand that 250 of them have done so—as a result of government embellishment
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of EC directives and over-embellishment by British officials? Will the noble Earl comment on that and also on the book by Mr. Booker and Mr. North entitled The Mad Officials?
The Earl of Arran: My Lords, the noble Lord may take that line, but I can certainly reassure him and say, again, that it is not our policy to over-embellish EC law; indeed, we are encouraging Community efforts to reduce EC directives. When implementing EC directives, it is certainly our policy to ensure that only the minimum necessary burdens are imposed upon businesses in this country.
Lord Harmar-Nicholls: My Lords, when my noble friend says that they do not over-embellish, is he really saying that, to some extent, they do embellish such directives? If one examines the meaning of words, that is the only message that I could get from my noble friend's official reply.
The Earl of Arran: My Lords, I thought that I had made it clear in my original reply that it is not our policy to over-embellish EC law.
Earl Russell: My Lords, can the Minister remember an Answer on Europe which did satisfy the noble Lord, Lord Stoddart of Swindon?
Lord Stoddart of Swindon: I cannot help that if the answers are bad!
The Earl of Arran: My Lords, I think I have to say that I cannot.
Lord Weatherill: My Lords, is there any truth in the rumour that while it is legal to order a pint of beer and a pint of cider it will no longer be legal to order a pint of shandy? Is there any truth in this directive?
The Earl of Arran: My Lords, it would be somewhat invidious to examine individually each of the over 230 directives which have come out of Europe since 1st January 1992; not only would it be invidious, it might be rather time consuming.
Lord Boyd-Carpenter: My Lords, can my noble friend say how one embellishes a directive?
The Earl of Arran: My Lords, I think we are going into semantics here. What I am really trying to say is that we are determined to ensure that, when implementing directives, businesses have the least necessary burdens imposed upon them.
Lord Bruce of Donington: My Lords, is the noble Earl aware that a perusal of the European Community's official journal reveals that there is no diminution in the flood of regulations emanating from Brussels? Will the noble Earl give the House an undertaking that the explanatory notes issued by ministries in regard to proposed legislation are actually read by the Ministers who sign them?
The Earl of Arran: My Lords, I believe that all Ministers read everything that is put in front of them before they put their signature at the bottom.
The Earl of Lauderdale: My Lords, will my noble friend return to his original Answer? He referred to

595
over-embellishment; surely over-embellishment includes embellishment? The question is whether embellishment takes place.
The Earl of Arran: My Lords, as I said before, the whole point as regards embellishment is that we do not over-embellish EC law. We are saying that we try to impose the least possible restrictions upon businesses in the United Kingdom. I hope that what I have already said is clear.
Lord Clinton-Davis: My Lords, does not the Minister agree that to speak in terms of efficiency scrutiny in the context of this Government's policy is a massive contradiction in terms? When he refers to embellishment, is he aware that embellishment means a dressing up, a distortion, just as much as other things?
The Earl of Arran: My Lords, I was under a different impression. I thought that embellishment meant the beautification and the beautifying thereof.
Lord Shepherd: My Lords, I should like to put a useful suggestion, perhaps to the noble Lord the Leader of the House. I think there has been genuine anxiety about the way in which legislation that we bring forward through Parliament in response to directives or otherwise from another place seems to be more stringent than in the rest of the Community. Could we not consider sending the proposed legislation to one of our committees which could examine it before it is taken on the Floor of the House, and consider how other members of the Community have themselves implemented it to see whether there is at least a genuine playing field between the various countries in the way domestic legislation has been changed as a consequence of directives from the European Community?
The Earl of Arran: My Lords, again I go back to the point that I hoped I had made clear; that all EC proposals which may impose a burden are subjected to compliance cost assessment at the earliest possible stage in order to see that there is no unnecessary imposition. That is in the interest of all those whom it affects. Deregulation is an equally important matter, not only in this country. It is important to make quite sure that deregulation occurs in Europe as much as it does here and that it is clearly understood and embodied in policy thinking.
Lord Rippon of Hexham: My Lords, whatever the advantages or disadvantages of compliance cost assessment, the Government's attempts to produce a policy, or the meaning of embellishment, I hope the Minister clearly understands that on all sides of the House—I find myself with rather strange allies today—there are grave anxieties of the sort expressed by my noble friend Lord Peyton. Can we have a clear assurance
596
that the Government will in no circumstances permit an imposition on the British people of something which is not required under a directive?
The Earl of Arran: My Lords, we have constantly this in mind; we are continually looking at it. The answer to my noble friend's question is yes.
Lord Peyton of Yeovil: My Lords, perhaps my noble friend will examine the arrangements for comparing the construction put upon regulations and directives by other countries with that carried out here.
The Earl of Arran: My Lords, I understand the point my noble friend is making.

NHS: Specialist Units
2.48 p.m.
Baroness Masham of Ilton Baroness Masham of Ilton asked Her Majesty's Government:
Whether patients can be assured of receiving specialist treatment not available in local hospitals, and whether research will continue in the specialist units.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): Yes, my Lords, within the usual constraints.
Baroness Masham of Ilton: My Lords, I thank the Minister for that reply. Is she aware that some health authorities are not sending patients on tertiary referral to a specialised unit when they consider that to be for research? How can clinical research for rare conditions progress if such units do not have patients to work on?
Baroness Cumberlege: My Lords, referrals are a matter for the consultants or the GPs concerned. With regard to tertiary referrals, which are referrals from one hospital to another, no prior agreement is necessary and those are dealt with as the patient's need requires and on the opinion of the clinical doctor involved.
Lord Walton of Detchant: My Lords, does the Minister agree that one of the greatest strengths of British medical research is the ability to carry out multi-centre clinical trials, often involving the treatment of rare diseases? Does she accept that there is now an increasing reluctance on the part of some district hospital managers to refer patients because of the need for extra-contractual referrals to centres of excellence? If the Culyer working party report is to be implemented by government, how do the Government propose to protect the position of these important tertiary referrals to major research centres?
Baroness Cumberlege: My Lords, the Culyer report has been accepted by my right honourable friend the Secretary of State for Health. We believe that it will safeguard and promote the very high reputation this country already has in medical research.
With regard to extra-contractual referrals, we believe that the Culyer report will address many of the issues. It will safeguard the funding for research and

597
development, which I believe will please this House which has had such a very strong influence on the future of medical research in this country.
Baroness Robson of Kiddington: My Lords, can the Minister assure us that there are sufficient funds in local authority hospitals and in National Health Service trusts for extra-contractual referrals?
Baroness Cumberlege: Yes, my Lords. Such referrals are a tiny percentage of the total budgets of health authorities, amounting to between 1.5 and 3 per cent. Therefore, it is a very small sum of money. Usually these referrals are very important. Of course, all emergencies are dealt with immediately, but for extra-contractual referrals we no longer require prior approval before a patient is treated or even seen. That is much simpler.
With regard to resources, your Lordships will know that every year we put more funding into the National Health Service, as indeed the Chancellor did yesterday in the Budget.
Baroness Jay of Paddington: My Lords, can the Minister tell us whether the number of extra-contractual referrals across the country is going up or down? Is it not the case that the NHS market has almost created a Catch-22 situation in which, if the number of extra-contractual referrals goes down, the number of patients receiving specialist care is reduced, but if it goes up the ability of purchasing health authorities to keep within their budgets is also reduced?
Baroness Cumberlege: My Lords, for the very highly specialised units which in the past have had to rely on extra-contractual referrals we have instructed health authorities and regions that in future they should not use that system but should co-operate with one another so that there is a critical mass which is large enough to support these highly specialised units. Therefore, we are working away from the present system of extra-contractual referrals.
The Countess of Mar: My Lords, is the noble Baroness aware that in the case of people who are or who believe they are suffering from organophosphate poisoning there are particular difficulties? Is she aware that they are being refused extra-contractual referrals because they are told there is no treatment for the problems they are suffering from, and as the referral is for tests and research only they are not allowed to have them?
Baroness Cumberlege: My Lords, I appreciate that this is a very special need, which has recently emerged. As with many other new clinical conditions which may develop, it takes time to develop services.
Baroness Jay of Paddington: My Lords, I apologise for coming back and pressing the Minister on the point, but is it the case that the number of referrals is going up or going down at present? As I said, is it not therefore
598
the case that, whatever the Government's intention in respect of moving away from the system, we are at the moment in a Catch-22 situation?
Baroness Cumberlege: My Lords, I think I answered that point fairly clearly. I said that we are trying to move away from extra-contractual referrals. Indeed, we have required regions to monitor the situation and ensure that there is a different way of purchasing these services.
Lord McIntosh of Haringey: My Lords, the Minister was asked a very simple question: is the number of extra-contractual referrals going up or down?
Baroness Cumberlege: My Lords, they will reduce in time.
Lord Monkswell: My Lords, is the Minister aware that public perception of referral for specialist treatment is that it is based on clinical need, which may be constrained by waiting lists? In her earlier Answer the noble Baroness referred to the "usual constraints". Apart from the points that I made about clinical need and waiting lists, are there any other usual constraints which the public should be aware of?
Baroness Cumberlege: My Lords, we are talking about very specialised services dealing with extremely rare diseases and conditions. They require a high degree of expertise. Sometimes that will also be a constraint in that that expertise will not be available.
Baroness Darcy (de Knayth): My Lords, does the Minister agree that delayed referral, for instance in the case of spinal injuries, can lead to many complications which will not only retard rehabilitation but also lead to frequent return visits to hospital, which is not only bad for the person concerned but also economically bad for the National Health Service? Can the Minister say whether there is anything she can do to encourage early referral to specialist units?
Baroness Cumberlege: My Lords, those are clinical matters. It is up to the doctors concerned to decide when somebody should be referred to a specialist unit. However, it is the duty of the regional health authorities to ensure that the facilities are available to meet those particular needs.
Baroness Masham of Ilton: My Lords, will the Department of Health take on the monitoring once regions disappear in one or two years' time?
Baroness Cumberlege: Yes, my Lords.

Iraq: Northern No-Fly Zone
2.56 p.m.
Lord Archer of Weston-Super-Mare Lord Archer of Weston-Super-Mare asked Her Majesty's Government:
Whether they can confirm that the no-fly zone over northern Iraq will be extended by the allies beyond December for a further six months.
The Earl of Arran: My Lords, the Government of Turkey are expected to discuss in December the extension of the basing agreement for aircraft patrolling

599
the northern no-fly zone in Iraq. We have made clear that we attach importance to the continuation of the northern no-fly zone for as long as Saddam Hussein poses a threat to that area.
Lord Archer of Weston-Super-Mare: My Lords, I thank the Minister for that reply. Does he accept that Saddam Hussein would have crossed the border into Kuwait a second time if it had not been for fear of reprisal from the allies? Does he agree that exactly the same situation exists in northern Iraq and that, if he has no fear of reprisals, then Iraq will cross that border—I refer to the 36th parallel—and will kill the Kurds? Will my noble friend therefore ensure that he fights as hard as he can to ensure that the no-fly zone continues for another six months?
The Earl of Arran: My Lords, of course my noble friend is quite right. We can never rule out further threats from Saddam Hussein. We continue to watch the situation extremely carefully. We must maintain no-fly zones while the threat of repression remains. Operation Provide Comfort, which I am sure my noble friend knows well and which is based in southern Turkey, is crucial to the security and stability of northern Iraq. We strongly hope that the Turkish Government will agree to the extension of the operation when it expires at the end of December.
Lord Molloy: My Lords, is the noble Earl aware that the Kuwaiti people now believe that they live in reasonable safety with the protection of, primarily, the British and the Americans? Can he say that that protection will be forthcoming and that in no way will we take any risk that will allow Saddam Hussein to attempt to obliterate Kuwait as he did before?
The Earl of Arran: My Lords, I can give that assurance too. I am also glad to be able to inform the noble Lord, Lord Molloy, that the Speaker of the Kuwaiti Parliament is in London at this very moment. That is another symbol of the closeness of our bilateral relationship.
Baroness Blackstone: My Lords, can the Minister comment on reports that the UN Special Commission on the Disarmament of Iraq is so short of funds that it has begun contingency planning to close its operations? Does he agree that that is entirely unacceptable? Can he tell the House what action the UK Government are taking to rectify that situation?
The Earl of Arran: My Lords, I am not aware of that particular situation. I have not heard that rumour. On investigation, whatever information I come across, I can assure the noble Baroness that she will receive a prompt reply from me.
Lord Archer of Weston-Super-Mare: My Lords, will the Minister be kind enough to express to the
600
Turkish Ambassador the appreciation of the Kurdish people in northern Iraq, especially remembering the unpleasantness they have received from the PKK?
The Earl of Arran: My Lords, I know that the Turks are well aware of our appreciation of their co-operation over Operation Provide Comfort.
Lord Kilbracken: My Lords, were the Turks to refuse permission for the flights to continue, is there any reason why they should not continue from some other base or country in the Eastern Mediterranean?
The Earl of Arran: My Lords, it would be idle speculation to make any comment on that. We have strongly intimated the necessity to the Turkish Government that the agreement should remain for a further six months. We very much hope that that will be the case.

Welsh Local Government: Issue of Guidance
3 p.m.
Lord Hooson Lord Hooson asked Her Majesty's Government:
When they intend to fulfil the undertakings given by and on behalf of the Secretary of State for Wales during the passage through Parliament of the Local Government (Wales) Act 1994 to issue "guidance" under Section 27(ii) with respect to the proportion and content of decentralisation schemes.
The Lord Advocate (Lord Rodger of Earlsferry): My Lords, the Welsh Office has established a working group of officials, including officers of both county and district councils, to consider issues relating to the preparation of decentralisation schemes and to help prepare guidance for the new unitary authorities. My right honourable friend the Secretary of State for Wales hopes to issue the draft guidance for consultation in February and substantive guidance before the new authorities are in place.
Lord Hooson: My Lords, does the noble and learned Lord appreciate—I am sure that personally he does—that time is important? The draft guidance was issued last January. During the debates promises were made that general guidance would be issued. The transition committees are now meeting but have no general guidance from the Government. Is there any reason for the delay, save that a party—it may be some parties —to the committee to which he has referred is dragging its feet?
Lord Rodger of Earlsferry: My Lords, we all recognise the importance of the guidance being issued. As the noble Lord said, during the passage of the Bill draft guidance was made available and Members of this House were able to consider it. That guidance has also been available to those considering their options over the period.
Nonetheless, a committee was set up. It was difficult to get that under way because, it has to be said, after Royal Assent the county councils operated their boycott until August. It was only after that period that the

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committee was able to set to work. It has met twice. It will meet again in the first half of December; it will have a further meeting in January. At that stage it is hoped to issue a further, more final draft. We shall certainly have the final version available before the new authorities are in place next April.
Lord Prys-Davies: My Lords, first, I thank the noble and learned Lord for the information that he has given the House. Did I hear him say that the working group has met only twice since the Bill received Royal Assent in July? Secondly, is there an awareness at the Welsh Office that the effect of that very tight timetable to which he referred is severely to weaken the capacity of the unitary authorities to construct workable schemes of decentralisation? Such schemes would have to be put together in a rushed fashion, possibly without adequate thought and without adequate consultation.
Lord Rodger of Earlsferry: My Lords, it is correct to say that the body has met on only two occasions. That is not to say that work has not continued between the meetings of the body, nor that it will not continue between the other meetings envisaged. As I explained, the structures in the Act are already available for consideration. Since earlier this year draft guidance has also been available. Many who are involved and interested in those matters are represented on the working party and are therefore aware of the issues under discussion. It is also true to say that the matters will have to be finalised within a relatively short timescale. However, applications for the decentralisation schemes can be made until the end of the year.
Lord Cledwyn of Penrhos: My Lords, the noble and learned Lord properly stated that draft guidance was available during the passage of the Bill through the House. Will there be a significant difference between the final guidance and the draft guidance? Why does not the Secretary of State for Wales take a more urgent interest in the matter? Is it because he seeks guidance from other sources?
Lord Rodger of Earlsferry: My Lords, I do not know to what extent the guidance will be radically different at the end of the day. However, it will take account of the many practical issues being raised by representatives of the county councils and the district councils who are therefore able to put more practical flesh on the bones than was perhaps available at an earlier stage. It is precisely in order to gain the input from those councils that such a committee was set up. Therefore we would expect the guidance to be more useful at the end of the day.
Lord Harmar-Nicholls: My Lords, is my noble and learned friend aware, as will be anyone who attends this House regularly, that the Welsh point of view will always be put forward so long as we have present the noble Lords, Lord Cledwyn of Penrhos and Lord Prys-Davies, who have the parliamentary means of so doing?
Lord Rodger of Earlsferry: My Lords, although I particularly appreciate the contribution often made by the noble Lord, Lord Cledwyn, many other noble
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Lords—the noble Lord, Lord Callaghan, is present—when appropriate, put forward the Welsh point of view; and we welcome it.
Baroness Hamwee: My Lords, does the noble and learned Lord accept that, knowing the penalties that the Government can impose when, having set an impossible timetable, the local authorities do not act in quite the way that they wish, the English local authorities sympathise with the Welsh local authorities?
Lord Rodger of Earlsferry: My Lords, I am not informed whether the English local authorities sympathise with the Welsh local authorities. All I can say is that the work is being taken forward in an appropriate way.
Lord Hooson: My Lords, while we are grateful to the noble and learned Lord for his efforts as a temporary, naturalised Welshman on behalf of the Secretary of State, will he please convey to his right honourable friend the great concern in Wales that after the months have gone by no guidance has been issued? An undertaking was given that what was said in debates would be considered; and here we are with no guidance. A transition committee is sitting on which there are representatives of the county councils and district councils. It has no guidance from the Government. The matter should surely be remedied sooner than next February.
Lord Rodger of Earlsferry: My Lords, of course one welcomes the work being done by the transition committee. However, as the noble Lord knows, the decisions on whether to have any such decentralisation scheme, and, if so, which model, will be for the new authorities. I stress that the guidance will be available before those authorities take up their office.
Baroness White: My Lords, is the noble and learned Lord aware that many important schemes and proposals are being held up because the Welsh local authorities have no idea what the position will be 12 months from now?
Lord Rodger of Earlsferry: My Lords, on that specific matter, the authorities will have plenty of guidance before they have to take the necessary decisions.

Business
Lord Strathclyde: My Lords, after the debate on health and social services and before the debate on occupational and other pension schemes, my noble friend Lord Mackay of Ardbrecknish will, with the leave of the House, repeat a Statement that is to be made in another place on social security.

Long-Term Care: Financing
3.9 p.m.
Lord Ashley of Stoke Lord Ashley of Stoke rose to call attention to the uncertainties within the health and social services concerning the financing of long-term care; and to move for Papers.
The noble Lord said: My Lords, I very much regret that I shall be unable to stay for the whole of the debate because I am in some discomfort which requires attention. Of course, no discourtesy is intended and I apologise to noble Lords. I shall return if I am able, but in any case I shall read avidly the speeches in Hansard on this important subject.
The central theme of the debate is the failure of the Government to deal with the health and community care problems of some of Britain's most vulnerable people: those who need long-term health care. At a time when such people need reassurance and dignity, they are faced with anxiety and distress. Today we are concerned with people whom doctors simply cannot help yet whose health is such that they need continuing care which is often nursing care.
Our aim in the debate is to seek constructive solutions. I have no doubt that the aim of the noble Baroness, Lady Cumberlege, is the same, because she always tries to be helpful. Nevertheless, it is urgently necessary to explain the ways in which the Government have created uncertainty, confusion and even despair.
The basic principle of health care is that it is funded largely by taxation and is free at the point of delivery, whereas personal care services are provided by local authorities, are means-tested and are charged at the point of delivery. The significance of that distinction is absolutely crucial, especially in view of the reduced number of NHS continuing care beds and the movement of funds from social security to community care.
The facts are staggering. In the past three years the number of NHS beds for continuing care has dropped dramatically from 73,000 to 59,000. The reassuring open-ended social security funding for people in homes has been replaced by rigid, cash-limited community care budgets. So it is no surprise that, trapped in this web of inadequacy, both district health authorities and local authority social service departments have become involved in squabbles—undignified squabbles, but squabbles nevertheless—about who is responsible. That is damaging to everyone concerned. I believe those squabbles damage the relationships between the district health authorities and the social service departments. But they damage the interests of the patients even more. There are frequent reports of patients actually being forced out of National Health Service beds. The sad case of the brain-damaged man who was ejected from a Leeds hospital led to an inquiry by the ombudsman. The question is how far that very sad and distressing case was an isolated one or how typical it was of others.
The recent draft guidance from the National Health Executive, presumably supported by the Minister and her colleagues, failed either to clarify issues or to ease the growing tension. Instead, what it actually did—although it sought to disguise it—was to introduce significant changes of emphasis and of policy. It has been widely criticised. The criticism has provoked Ministers in this House and elsewhere into claiming, with an air of injured innocence, "No, nothing has changed".
Well, let us have a look at the assertion. The House is entitled to examine rather dogmatic insistences that nothing has changed. For a start, the guidance- is ambivalent. I trust that the Minister has it on her knee. She will notice that on page 1 is trumpeted the reassuring message:
"The National Health Service remains responsible for meeting … the needs of people who require long term physical or mental health care".
That is fine; there is no ambiguity. It is a clear statement of fact. However, if the Minister turns to page 2, she will see that,
"the expectation will be that the significant majority of people who require continuing care in a nursing home setting are likely to have their needs met through social services".
Not the National Health Service, but social services! We have already seen the distinction between the two: one where you pay and one where you do not, with a great variety between them. So it seems that, according to the official document backed by the Government, you choose your page and then you make your choice.
The guidance has even more tricks tucked away in the text. After reassuring us that the NHS remains responsible, it slips in the phrase "within available resources". That is a significant point for the Government to make about the National Health Service which we have always assumed to be free at the point of delivery.
The Association of Directors of Social Services has observed that the comment is in marked contrast to the guidance issued to local authorities before the implementation of community care. That indicated that once eligibility for a service had been established budgetary constraints could not be a consideration in the provision of a service. That is a very important statement. In other words, the local authority service was a right, but continuing care on the National Health Service is now conditional on money which may or may not be available. It is a very different health service that we see unfolding, judged by the guidance of various authorities.
If the Government really want to clarify their policies, they should define their concepts. As the Minister will see in the guidelines, one of the most important sentences is:
"For some people, and certainly those with complex or multiple health care needs who will require, on a long or short term basis, continuing and specialist medical or nursing supervision, the NHS should be responsible".
Yes, of course it should. Apart from the clumsy phraseology, may I ask what is meant by the phrase,
"complex or multiple health care needs",
or the phrase,
"specialist medical or nursing provision"?
I know that the Minister will try to be helpful. I invite her to give a clear and specific explanation when she replies to the debate.
The caring organisations are very concerned that no precise meaning has been attached to the words. Many are very anxious indeed; in fact, all those to whom I have spoken are anxious because on those words,

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definitions and precise meanings hangs the positioning of the future care of thousands of individuals together with major financial implications.
So it is no small issue. It affects the whole of the financing of vital services for thousands of people. That is why I press the Government for clear, categorical and specific answers. Without national definitions, national criteria, we shall have increasing conflict and growing variation as local bodies make definitions to suit themselves. The present mish-mash of decision-making is causing undignified bickering, angry conflict and deep misunderstanding. It is eroding, even destroying, the equitable provision which is the real strength of our proud National Health Service. If that equitable provision goes, it is no longer the National Health Service all of us have cherished.
There is an overwhelming need for national criteria for National Health Service provision of continuing care. The Government should take steps to provide such criteria. If they do not—and millions of people will listen to the reply to this debate—the reasoned and reasonable presumption, the moderate presumption, is that the Government are working towards relinquishing National Health Service responsibility for continuing care. That, to put it very mildly, would be deplorable.
The issue of hospital discharges is a sensitive and distressing one. Here again, the Government are ambivalent. Most people, I assume, in this House, and certainly millions of people outside, have long assumed that no National Health Service patient should be placed in a private nursing home against his or her wishes if he, she or a relative is unwilling to be responsible for the home charges. After all, that is what the current guidance on hospital discharges says. It is in black and white. It is official; it comes from the Government. That is why millions of people believe it. That is fair enough.
But the new guidance, which the Minister has on her knee, disingenuously omits that stipulation. It speaks merely about "taking account" of the person's and the family's wishes. I could take account of the philosophy of Genghis Khan, but it does not mean that I take it very seriously. The Government can take account of these issues; it does not mean that they have to take them seriously. The previous guidance made the commitment mandatory; the present guidance wriggles out of that. It avoids and evades it. This is a matter to which Members of this House and of another place should give very careful scrutiny and in relation to which they should insist on clear government answers.
The guidance goes on to say that although,
"Every effort should be made … to meet the … wishes of the patient",
if a person has been assessed as not requiring NHS long-term care the question of how long the person can stay in an NHS bed depends on,
"the needs of other patients".
It does not depend on that patient; it depends on the needs of other patients. I suggest—it is only a suggestion—that bed needs are winning when they conflict with the patient's wishes to retain a National Health Service bed.
The Association of Directors of Social Services, a very responsible body, says that there is increasing evidence—not hearsay—that in a substantial number of local authorities there has been a significant increase in elderly people who die shortly after having to leave hospital to go into a nursing home.
What a situation to have to consider! The Minister can always contradict me if I am wrong. This is only my interpretation, not that of the association. But apparently the harsh message is: if you are dying but the shortage of beds means that your bed is needed, you must leave hospital to die; if you are a man, while you are dying your wife may have to use all the proceeds of your occupational pension scheme to pay the fees for a private nursing home; and if you linger too long before you die, nearly all of your joint savings may have to go too.
I believe that to be the correct interpretation of the present situation. To put it mildly, it is shocking and disgraceful. Without national definitions and criteria, we shall have increasing conflict and growing variations as local bodies make definitions to suit themselves. We have to be very, very careful indeed about this matter.
I shall draw my remarks to a conclusion as I am afraid I have spoken for far too long. I emphasise that in no way do I criticise the hospitals or their dedicated staffs of doctors and nurses for any of these enormously complex and difficult problems. The staff are in no way to blame. They do a marvellous and dedicated job. They are struggling to meet new obligations and to provide for people from money that has not been made available to the required extent. The fault—I wish to emphasise this—lies not with the hospitals or the doctors. It lies with the Government.
Ministers have a clear responsibility to ensure that vulnerable people who are in difficulty and distress suffer no additional burden. The Government should reconsider their policies. They should make sure that those policies are clear and constructive and that they rest on the criteria I have mentioned. They should act speedily, sensitively and generously.
My Lords, I beg to move for Papers.
3.27 p.m.
Baroness Seccombe: My Lords, first, I ask the indulgence of the House. I am afraid that I am unable to observe the convention of the House in remaining in the Chamber for the entire debate. I have a long-standing commitment so I shall have to leave early. I have apologised to the closing speakers, and especially to my noble friend the Minister.
The debate on continuing care is part of a wider debate on community care in general, which affects many stages of our lives. This afternoon, however, I shall concentrate on care for the elderly. I start by addressing two common misconceptions.
First, community care is not a new concept. For many years and in many circumstances care has been provided for people in their own homes, or in homely surroundings in the community. But it has increasingly been recognised that long-term institutional provision, particularly in geriatric wards in hospital, may often be

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degrading and dehumanising. Providing appropriate care for elderly people in the community, properly financed and properly organised, is, I am sure, an ideal towards which all of us would wish to aim. We live in a compassionate country where we value choice for our elderly relatives. Living in their own home or in homely surroundings is, for many, vitally important.
Secondly, when care is provided in the community that does not exclude the possibility of it being provided by the health service free of charge where there is a need for health care. The 42,000 NHS community nurses working across the country would, I am sure, confirm this; as would the 1½ million elderly people who are treated by those community nurses every year and the many who receive health care in a residential setting.
As noble Lords will be aware, earlier this year the Government published draft guidance on continuing care. This made it clear that the NHS has, within available resources, an ongoing responsibility to meet long-term health care needs—including the needs of people who require continuing care from the NHS in a residential setting or in the community rather than in a hospital.
Clearly, people's individual needs for care differ, but their general requirements remain the same. In each case, they require a full assessment of their needs. They need a clear decision on whether they require continuing NHS care —a decision based on a clinical judgment—or whether they require social care. Also, they require information and advice on discharge procedures and on options for long term care. These requirements were set out in the recent guidance. It stressed the need for health authorities and local authorities to work closely together. Contrary to general belief, it did not change the responsibilities of the NHS to provide continuing care, but sought to reinforce and clarify existing responsibilities. Indeed, I understand that working relationships between health authorities and local authorities have already improved recently, as a result of the agreements which have been negotiated between them as part of the community care reforms.
Nevertheless, the distinction between health care, which is provided free of charge by the NHS, and social care, provided according to means, has been in existence since the foundation of the welfare state. The House may be aware—certainly noble Lords opposite must be aware—that it was a distinction recently endorsed in principle by Labour's Social Justice Commission.
But there is also a third sector which provides care for elderly people: the voluntary sector. Many of us throughout our lives are conscious of the great kindness and support given to those who live near and are in need of a helping hand one way or another. I should like to pay tribute to those who give so generously of their time and love.
I have been deeply impressed by the very valuable work done by young people, who are often still at school; and more and more retired people care for a parent in their 80s or 90s. But many elderly people reach a stage where more formalised care is necessary and
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this is where residential care plays its part. Clearly, it is essential that their needs are assessed without the ethos of care becoming lost in bureaucracy.
Local authority social service departments have willingly grasped the nettle of organising such assessments and arranging for services to be provided. In most cases good progress has been made. But, as in the case of any new initiative, some local authorities may have faced a few teething problems.
I have recent experience of looking after an elderly relative. I found the rigidity of the system a little difficult; for example, those requiring help with getting ready for bed may be forced to accept it at any time between 6.30 p.m. and 10.30 p.m. In such circumstances nothing can be arranged for the evening, which consequently can be lonely and miserable. Clearly, greater flexibility may be required.
There has been much publicity over funding for community care. Some local authorities claim that they have exhausted their funds at this stage of the financial year. I read that with some amazement. The amount available for social services spending in this financial year, including community care, is £6.4 billion, which is nearly double the amount available four years ago and an increase of 48 per cent. in real terms. No other area of local government spending has increased nearly so rapidly. It is up to local authorities themselves to discharge effectively their new responsibilities—responsibilities for which they have long campaigned.
However, I am confident that in working with the health service and the independent sector they will be able to move us towards the "seamless service" of health and social care, provided according to individual need, which we all seek.
3.35 p.m.
Baroness Hamwee: My Lords, I thank the noble Lord, Lord Ashley of Stoke, for introducing this very timely debate. I am glad to have the opportunity to look at what care in the community should mean and how it can be paid for. I believe that it should mean encouraging independent living, where that is practical, and particularly facilitating an informed choice for users. I include carers among the users. It should mean enhancing the development of communities, so that the designation "care in the community" can be given real substance. It is a concept that we on these Benches support.
It is ironic that so much effort was put into debating whether or not community care budgets should be ring-fenced. Would that the cash were there and that it were now a material issue. The noble Baroness, Lady Seccombe, spoke of social services departments "claiming" to have exhausted budgets. The claim is a very real one.
I too see the matter somewhat from the viewpoint of social services. Like the noble Baroness, I believe that the provision should be a seamless provision—both health and social services—and that the right perspective is the perspective of the user. We know of ministerial statements that there are no changes in policy but we must all also have encountered the wide perception that in fact health care boundaries are

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shifting, leading to greatly increased demands on local authorities. The reduction in waiting lists, day surgery, the management of performance related to throughput and contracts concerning the volume of patients must all have their effect.
If there is to be less structural cohesion between health and social services—by that I mean the use of the local authority structure to bring health services into local democratic control and locally accountable—then various issues must be addressed: issues about defining the boundaries of responsibility; issues of quality, such as where very ill people want to be; and there must be the maximum of openness and clarity with patients and carers on the services that they can expect and the financial contributions that will be required of them. It seems to me that one of the tragedies of the current situation is that the relationship between the NHS and social services departments must tend to be less collaborative without enormous efforts to be more so.
The debate is about financing. That includes financing by individuals. There is an increasing tendency of the NHS to define its boundaries as relating to those who are acutely ill. As the noble Lord explained, costs going to local authorities means the covert—I do not use that word with any sense of malice but it defines one of the hidden effects —withdrawal of free health services and in their place a charged means-tested service. I accept that care at home or care in a nursing home—many nursing homes are homes—is often more acceptable than care in hospital; but that care should be accessible.
It seems to me from a local authority perspective that increasingly services provided by local authorities are not necessarily provided most cost-effectively or appropriately. Let me mention domiciliary care. Too often those who provide domiciliary care—those at the sharp end—were originally home helps. They have had a little training but the strain on them in undertaking what is increasingly a nursing function must be enormous. Of itself, that will lead to a vicious spiral in recruitment. On the other hand, nurses are trained not just to give direct health care but to diffuse emotion and counsel when there is a bereavement. We need to review the use of our resources overall.
Over the past few days I have asked colleagues what might come positively from the current crisis. Sadly, I have not found any real, positive, constructive ideas—and this is a crisis. Indeed, the only sentiment that I can identify is that, among the public, who think that local authorities should put all their efforts into picking up litter and dealing with other important but perhaps more minor matters, there may be a greater understanding of the emphasis that local authorities will have to put on social services care.
I conclude with a thought that was put to me at a meeting last week by a representative of a carers' organisation. Among those for whom we need to care—not all, but a part of the client group—are elderly people. They come from a generation who thought that their national insurance contributions would fund their care; who fought the last world war or are the widows of people who fought the last world war. This year we
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commemorated the Normandy landings; next year we shall commemorate VE Day. The Royal British Legion act of remembrance ends,
"We will not break faith with you".
Let us not do so.
3.40 p.m.
The Countess of Mar: My Lords, if ever there was an occasion when noble Lords could justifiably turn to the Government and say, "We told you so", this is it. They will recall their struggle to persuade the Government that funds allocated to local authorities for community care should be ring-fenced. Sadly, that battle was lost and we are now finding that many local authorities, especially those shire counties in the south-west of England, are having to make very painful decisions on behalf of their vulnerable and elderly clients.
I believe that local authorities approached the introduction of care in the community constructively and responsibly. The fact that central government allocation of funds is strictly cash limited has ensured that the rapidly escalating expenditure under the social security system has been successfully capped. Of course, that is exactly what the Government meant to achieve.
If the provision of community care really is to meet the needs of those for whom it is intended, it must be properly funded. I live in Worcestershire. On 17th November this year the chairman of Hereford and Worcester County Council social services committee announced that the council could be facing a £2.4 million deficit unless stringent measures are taken. She said:
"In this county it is putting staff in an impossible position and some very difficult decisions may have to be made as to who will receive care and who may be left wanting".
The chair of Shropshire County Council policy and resources committee, on 15th November 1994 predicted a shortfall in their community care budget of between £1 million and £1.5 million this year. She said:
"Our figures arise from significantly increased use, particularly of nursing home places, as well as packages of care. The extent of spending was not anticipated in early community care plans which were drawn up for the first time 18 months ago".
Similarly, Gloucestershire County Council is facing a £2.5 million shortfall. A Conservative and Independent member of the council's social services committee is quoted as saying,
"Community care is one of the most important innovations to come from the Conservative Administration. It was working well in this county but it is asking the impossible when £2.5 million of grant is suddenly removed from us and similar or larger sums from the other shire counties. It puts our staff in an impossible position".
Why is it that social services departments in those local authorities are suddenly finding themselves in an untenable position? There are two main reasons. First, after a slow start, demand for home care and residential and nursing home care has greatly exceeded early estimates. In Hereford and Worcester community care workers are having to deal with 1,000 extra referrals a month; requests for home care are up by 20 per cent. on last year's figures, and the number of children in local

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authority homes has also escalated. In Gloucestershire there has been an increase of 40 per cent. in clients being assessed. Perhaps the Government's publicity machine worked too well!
The other reason for the shortfalls is the sudden and arbitrary decision of the Government in December 1993 to redistribute their allocation of the special transitional grants between local authorities. The shire counties lost nearly £80 million, while the metropolitan districts and inner and outer London authorities gained that amount. Will the Minister please explain why so much money was taken away from the shire counties so suddenly? They had drawn up their budgets on the basis of funds promised by central Government only to find that, without any prior discussion, those promises have been broken.
What is the result of that combination? The director of Gloucestershire Social Services wisely says,
"this is not a budget crisis, as managers within the Department have a responsibility to maintain expenditure within their budgets. They can only do this however, by applying much tighter criteria for the delivery of services. This will have severe implications for users and carers in the county".
The reports I received from Hereford and Worcester and from Shropshire are similar. They are not profligate local authorities. Their staff are prepared to cut their coats according to the cloth, but they must make painful decisions. In some cases services will have to be refused and in others they will be withdrawn if clients do not fall within the priority categories. Services will inevitably be reduced and rationed to people who are at risk and there will be extended waiting times for services.
Time does not allow me to expand upon the impact that those strictures will have upon clients and their carers. I simply say that we should not be surprised to hear a catalogue of horror stories similar to those which prompted Her Majesty's Government to develop a community care strategy in the first place. I am extremely grateful to the noble Lord, Lord Ashley of Stoke, for enabling us to debate this subject this afternoon.
3.45 p.m.
Baroness Macleod of Borve: My Lords, the noble Lord, Lord Ashley, introduced the debate with his usual eloquence, which we have come to expect. Unfortunately he is suffering from a badly trapped nerve which must cause him a lot of pain. However, I congratulate him in his absence on the way in which he introduced the debate.
I want to concentrate on widows and the elderly—and I must declare an interest in both. When I was young our sell-by date was three score years and ten. Following advances in medicine, science and the experience of doctors, it has now become three score years and twenty. In declaring my interest your Lordships may like to know that I am very near three score years and twenty and feel therefore that I can speak for a few minutes this afternoon.
During the time of the present Government—the past 15 years—enormous help has been provided for the elderly. All sorts of things have been introduced to
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enable them to live better, to work if they are not too old, to be happy, to be surrounded by as much comfort as we are able to give them and, with any luck, to allow them not to have to worry too much about the future financially. We have come a long way, perhaps further than with any other part of our society.
If we look around we can see what various boroughs are doing to help the elderly. This morning I rang my own borough of Enfield, which is where my late husband and I lived and worked for many years. It is doing an enormous amount to help people stay in their own homes, with in many cases the help of carers and government finance. I can say to the Minister that we should be proud of what we are doing for our old people.
It is estimated that over 800,000 UK citizens are over 85 years of age, of which 60 per cent. are infirm. If one is infirm one needs specialist care. It is not enough for someone to come in occasionally and make a cup of coffee. Carers cannot look after infirm patients and it is a large number of people to cater for in their own homes. However, there are now many more purpose-built homes which cater for local authority people, private residents and those who have a limited amount of money—under £3,000—to go towards their keep. That is a help, but it is a drop in the ocean of the enormous costs involved.
We are a very ageing population. However, not all the widows whom I meet are elderly. One can be a widow from the age of 19 to 99. Many widows need help and consideration from carers in the community. I should like to pay tribute to the carers and to the inspiration behind the carers. They are very specialised people, or perhaps I should say very special people. They go into other people's homes to help them. They are not necessarily there all day. Sometimes each carer will have three different patients per day and she goes round from house to house. I pay tribute to the inspiration behind the carers.
As always with the elderly, lack of money is the dread. Very few of us, even in your Lordships' Chamber, are not worried about getting old and all the costs involved, which leads me to one very difficult subject. I refer to funerals. I do not know whether noble Lords are aware of how much a funeral will cost anyone who is left behind, but it is way over £1,000. Fairly recently—about eight years ago—the Government provided a grant of £1,000, which is of enormous help. That can be paid by the social services at once. But if the funeral itself costs way over £1,000, then money is very tight in many families.
I have a very great interest in the children as well. However, so many noble Lords will be talking about the children that I thought I would leave that subject to those who have perhaps more up-to-date knowledge than my three score years and twenty allow.
3.52 p.m.
Lord Brimelow: My Lords, the noble Lord, Lord Ashley, has thrust a very powerful light into the shadowy uncertainties surrounding the financing of long-term care. The previous speakers in the debate—so far I have agreed with everything that has been said—

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have adopted a rather broadbrush approach and have tended to describe what is instead of concentrating on the uncertainties. I wish to focus a very modest hand-torch on a limited subject; what is actually going on at the moment in the health area of Islington and Camden, where I live.
I am very worried about the future of district nurses in Camden but I am also very uncertain about how discussions at present in progress will turn out. Perhaps I should explain the background. Not all long-term care ends with death in an institution or in hospital. As the noble Baroness, Lady Macleod of Borve, has stressed, there is a great deal of care at home which has been very well rendered hitherto. The uncertainty is in regard to the future.
In the health area of Camden and Islington the provision of community services, including district nursing, is in the hands of the Camden and Islington Community Services NHS Trust. The trust is under pressure to effect economies. The current two-year contract between the trust and the Camden and Islington health purchasing authority calls for a reduction in costs over the next two years of 7 per cent. As part of its search for economies, the trust is proposing to reorganise district nursing. It proposes to establish within the Camden and Islington area 29 nursing teams, each headed by a nursing sister—technically a G-grade nurse. Acceptance of this proposal would mean the disestablishment of 32 G-grade district nurses—more than half of the present complement. My understanding is that the posts of head of team and deputy head of team will be open to competition.
The trust says that there will be no compulsory redundancies, but among the district nurses there is anxiety that those who fail to secure appointment as head of team may be offered posts of lower grading, with presumably a reduction of pay. They are worried and uncertain about their future. They also fear that, if they turn down a post offered, they may be held to have made themselves redundant. The district nurses are now working to see whether they can find an alternative system whereby the economies imposed on the trust can be achieved. They are uncertain whether they will succeed in finding such an alternative system. The prevailing uncertainty is worrying quite a number of general practitioners.
I have read the job description of the G-grade sister who will be the head of a team. In my opinion, it is not a job description suitable for a district nurse engaged in nursing. It is a job description of an administrator. In it the word "nursing" is not even mentioned. It is all about co-ordination. I fear that we may be moving towards a bureaucratic system in which actual nursing is done by smaller numbers of lower qualified nurses; in other words, a service which is likely to be inferior to what we at present have. My fear may prove to be unfounded, but I am uncertain about the future.
The present system is flexible and not bureaucratic. For terminal care, and terminal care in the community for people who have been cared for over a long period in hospitals or other institutions but who for one reason or another wish to leave or have to leave, the sisters attached to the health centre nearest to where I live are
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quite splendid. They are well qualified, but, much more important, they have the tactful understanding which comes from long years of dealing with people who are about to die. I speak from personal knowledge.
I fear that we may be about to lose something excellent for something less good, but I am not certain. With the devolution of authority to trusts and to local health authorities, I am not certain who is really in control of developments as a whole. The Departments of Health and of Social Security may not even know in detail what is happening. They may be glad not to know. The Government have told us that the NHS is safe in their hands, but how much of the local administration within the departments—
The Countess of Mar: My Lords, order. The noble Lord has now had eight minutes.
Lord Brimelow: My Lords, I beg your Lordships' pardon.
4 p.m.
Baroness Masham of Ilton: My Lords, I thank the noble Lord, Lord Ashley of Stoke, for initiating this debate which I hope will bring to the Government's attention some of our concerns over the grey areas of health and social services. There are two great differences between health and social services. Health provision is free at the point of delivery while the provision of social services is being means-tested.
To illustrate what a dangerous situation long-term disabled people can find themselves in I shall tell your Lordships of a case history which ended in tragedy this summer. In North Yorkshire a paraplegic woman, who was one of the most uncomplaining and splendid of people who gave much of her time to helping others, became ill. She had two separate attacks of pneumonia and diarrhoea. She lived at home with her brother who had an alcohol problem and a terminal condition. He was not adequate to help her in any way. She was the organiser at home. Two of her friends and neighbours felt that she should be in hospital. A trainee doctor visited, but did not send her to hospital. Her friends, neither of whom could give her a bath because of back problems, kept requesting help. A district nurse called, saying that she could have help with a bath only once every two weeks. With diarrhoea and being weak as a paraplegic, is that adequate?
The case was passed to the social services. This is the grey area: what is "health" in such a case and what is "social services"? Her friends became more and more concerned, bringing her food and trying their best. Her doctor came back from three weeks' holiday and admitted her to hospital. She was by this time very ill and dehydrated. In the early hours, she fell out of bed. The next day she died of an undiagnosed perforated ulcer. Care in the community had let her down. The community had lost a good member. Her friends, who were her carers, were devastated.
As president of the Spinal Injuries Association, I can assure your Lordships that when severely disabled people become ill they are very much more at risk. They do not need less help. They need constant monitoring and attention. When feeling is non-existent or partial,

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very careful diagnosis is needed. When the Minister replies, I hope that she can give some assurances and say that there should be safeguards, not vacant spaces, in the care system.
People who have lived carefully, who have worked and saved, always seem to be the ones who get little, help when they need it. Buying in care, be it privately or paying the social services, can leave them without enough to live on. Is there not some way in which they could buy their care and have some tax relief?
Much is going on in the strategic development of primary health care, but much has to be done to improve the system. Family health services authorities and health authorities are working closely together. Many have joint executive officers in preparation for merging. The continual change within NHS structures costs a great deal in terms of time, work and uncertainty, but there is still a great deal of good will. Local communities and voluntary bodies are keen to be involved. Everybody wants to see improvements in the equity and effectiveness of the services.
One area of concern is the shortage of doctors now going into general practice. I should like to ask the Minister what is the reason for that. With so much more health care taking place in the community, doctors need to be trained and resourced for the job to a high standard.
Everyone, I am sure, wants to see patients receive the care that they need safely and in the place that best suits their needs and wishes. Patients and GPs need quick and helpful access, when needed, to a consultant, and health workers and patients need to have confidence that hospitals will be there when needed. It must not be forgotten that in rural areas there are extra expenses in terms of time and travel when providing care in the community.
Alcohol and drug detoxification centres and treatments are examples of the need for health and social services to work jointly. Incontinence is another aspect which can fall between two stools, with the Department of Health providing some care and social services the rest. There need to be national explicit criteria clarifying National Health Service responsibilities. When social services carry out an assessment, there needs to be the provision of care if necessary.
The big "in" word at the moment is "assessment". I end by asking the Minister: Is there a time limit on how long people have to wait? Are there enough occupational therapists to do the job?
4.6 p.m.
Lord Jenkin of Roding: My Lords, I welcome the opportunity that has been provided by the noble Lord, Lord Ashley of Stoke, to say a few words on this subject. It is in the nature of a debate on such a subject that one hears more about the failures and shortcomings of the system than about its successes. No noble Lord has questioned the rightness of the policy of community care. Indeed, as my noble friend Lady Seccombe said, there is nothing new about community care.
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In the field of mental health, it was Enoch Powell who nearly 40 years ago sounded the death knell of the old, remote mental hospitals. The process is steadily proceeding whereby the great majority of such patients can be cared for in the community. I remember that it fell to me to open many of the new community facilities that were provided under the Worcester Project, as it was called, when the Powick Hospital closed and a whole range of community facilities were provided. Since then, great strides have been made. The milestone was what is sometimes called "Griffiths II", which placed a very firm and continuing responsibility on local authorities for patients being cared for in the community.
I should have liked to follow many of the points that were made by the noble Lord, Lord Ashley, but time is inevitably limited, so I shall address just one aspect. I refer to a point that was picked up by my noble friend Lady Masham; that is, the importance of collaboration between all the various agencies involved. I see it from the point of view of an NHS trust, which is not only a hospital trust but an integrated trust having responsibility for community health services in the area. The Forest Health Care Trust covers an area surrounding Whipp's Cross Hospital in the north-east of London. We are heavily involved in various aspects of community care. I should like to give the House some examples of what is being done to make good community care a reality. It will not surprise noble Lords that much of that depends on partnership, on working with others and on ensuring that we are all working towards the same end.
The noble Lord, Lord Brimelow, mentioned the district nursing service. We attach enormous importance to expanding and developing the district nursing service to ensure that as much care as possible can be delivered to people in their own homes, in residential care or wherever they may be. Having abolished the hospital door, as it were, because we manage on the basis of client care groups, we find as an integrated trust that providing such care comes completely naturally as one moves services out into the community and works alongside the other agencies and voluntary bodies that are involved in the same area.
We are building up the local GPs—and here again I agree with my noble friend Lady Masham—by the establishment of primary health care teams, involving a wide range of disciplines including the community psychiatric nursing service, which is something of enormous value. We are increasing the outreach of physiotherapists and occupational therapists to make sure that services can be delivered in people's homes and that they do not need to go into hospital.
I should like to draw your Lordships' attention to three specific projects. We have a joint project, jointly funded by the trust and by Waltham Forest social services. It is managed by Age Concern and it enables quicker and more appropriate discharge of elderly patients from hospital care. The project aims to supply an after-care service to elderly people who are discharged from hospital but perceived by hospital staff as not requiring statutory services as part of the discharge plan. It also helps other patients prior to admission when they have been in receipt of social

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services care and who are also visited as part of the aftercare project to ensure that all is well on discharge and that the social services have started efficiently.
It is actually filling a gap in the service provision on discharge from hospital and testing the criteria for the need for social care, as perceived by ward-based professionals and with the help of their social service colleagues. It is in its early stages and we shall have an evaluation coming to my board in February. I hope that we are going to be able to show that this is a very specific model of collaborative care that is making a reality of community care.
To take another example, we have what is called the Larkshall Young Disabled Unit. It offers specialist health provision to highly dependent, younger and physically disabled patients. It has a highly skilled specialist nursing workforce and they offer a valuable contribution towards multi-agency assessment of need for highly dependent younger disabled people, following trauma or medical conditions such as severe strokes, who wish to remain in the community and do not want to be in an institution. A lot of the work involves confidence building among users and carers who are in touch with the service, empowering patients to live independent lives in the community.
There are obviously facilities for respite care and so on. Here again, this involves a great deal of collaboration between all the various agencies which are involved and which can make a reality of community care. We have a proposal coming before us for a primary intervention service —sometimes called a hospital at home—which is being developed jointly with the primary health district nursing service, with the services for the elderly with social services, with the general practitioners and with the residential home owners. This is to enable the health trust to be able to deliver health packages to those living in the community and who can be helped to maintain an alternative to hospital admission. In some cases, we would expect this help actually to avoid the need for hospital admissions for selected acutely ill episodes.
Here again, we are working very closely with Waltham Forest social services, interested local home-owners, and with one general practitioner practice to research the possible extension of the hospital at home scheme into the residential care home environment. Again, a pilot scheme will be set up; it will be monitored, evaluated and eventually reported. I suppose the point that I should like to make on this, and then I must sit down, is that this is possible in an integrated trust. I think we are going to be able to demonstrate that that is actually a very good model for the delivery of care.
4.14 p.m.
Baroness Nicol: My Lords, I am sorry that my noble friend Lord Ashley was unable to stay until the end of what is proving to be a most interesting debate. I want to concentrate my few minutes emphasising the value of, and the pressures on, carers—all carers, but in particular those who care for a relative, a friend, or in many cases a child, from love or a sense of duty, and who are in that position for 24 hours a day.
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It is estimated that some 6 million women and men in the United Kingdom act as full-time or part-time carers for those in need of support. Many of them struggle in difficult situations without help and even without recognition. About 1 million of our fellow citizens are caring full-time for a disabled elderly or mentally ill person. The National Federation of Women's Institutes estimates that one in three carers do not receive any support. Some may be helped by local services, but whether they receive support or not many have to carry the burden of responsibility of caring for someone who cannot manage alone for 24 hours a day, seven days a week, with all the ongoing strain involved.
All too often the carer has had to abandon any attempt to follow his or her career and is unable to maintain any separate personal life. Even when some outside work can be undertaken it is part-time and therefore mostly low paid. So financial problems are added to an already stressful situation. It is not unusual to find that when a carer is finally released from his or her responsibility, re-entry into the job market is difficult, and the loss of job and pension prospects can never be recovered. Yet carers save the taxpayer billions of pounds. It has been estimated that if they all had to be paid the going rate of £5.80 per hour the average annual cost would be of the order of £30 billion. It therefore makes good economic sense as well as good social sense to make sure that the support services are good enough to keep the carers going.
Perhaps the most desired and the most immediate relief is that mentioned by the noble Lord, Lord Jenkin of Roding: respite care. I think he has been alone in mentioning it. To be given a break from the daily pressure can be a life-saver. Some voluntary organisations and local support organisations do a splendid job in providing respite care for carers, but there is not nearly enough and, geographically, it is patchy. It is not unusual for a carer to find that there is no one within the kind of reach that makes it easy to come and go.
My party has produced a consultation paper called Making Carers Count. It gives valuable information on the background to the problems of carers and makes many useful suggestions for improvement. There is not time to read all of them, particularly as I have a question to put to the Minister. I wish, however, to mention one or two. We suggest that local charters for carers should set out clearly the services available in the area. It is surprising how little some carers know about what is available to them. We need a charter in which carers can find all the information they need. I understand that a scheme in Leeds has been very successful.
All carers should have an opportunity for separate assessment of their needs. That will obviously require visits from the professionals but it is important that carers should know exactly what they are up against and what is available to them.
Carers should have access to flexible and affordable respite care. That is always available if you can pay for it, but it is not an option which is open to many people, particularly if the problem has gone on for any length of time. As the noble Lord, Lord Jenkin, who has now abandoned us, said, it should be done by way of

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partnerships involving local authorities, the private sector and voluntary organisations. This is something the Labour Party supports.
The noble Baronesses, Lady Seccombe and Lady Macleod, mentioned young carers. They should have particular attention paid to their needs. In some cases they should be identified as "children in need" under the Children Act, and be supported as such. There are obvious difficulties for young carers who have not the mental experience to cope with many situations they find themselves in. But many of them battle on regardless.
I would be grateful to hear that the Government have identified the area of concern of carers generally and that they will encourage actively some solutions. We all want care in the community to work. Carers are the essential ingredient in any plan and should have all the help we can give them.
I wish to put to the Minister one question. The matter has been worrying me since I heard about it. An elderly couple, one of whom has had to go into a private nursing home, have had to pay part of the fees. Is it the case, when their savings run out, that the family home has to be sold to meet the costs of the private nursing home and that only when that sum has been reduced to about £8,000 is other help forthcoming? That creates an enormous anxiety for elderly couples. I hope that the Minister can lay it to rest.
4.20 p.m.
Lord Thurlow: My Lords, the subject of the debate finds us all in the same boat. It is not a partisan matter. If at some future date we have a change of government they will have the same problems, including that of financial constraints, on their plate. The debate has illustrated the enormous breadth of problems. None in your Lordships' House would question the broad policy objectives of community care that the Government introduced when they decided to implement the Griffiths Report. That was a revolution, and all revolutions cause problems, especially over timing. I am one of those who regrets that the implementation was not done over a longer timespan. The Government delayed introduction for over a year, when it was manifestly impossible for local authorities to take on their responsibilities. I am sorry that the delay was not longer, but that is history.
I shall confine my remarks to two aspects of the subject. The first relates to monitoring and the other to the revolving door syndrome issue to which the noble Baroness, Lady Robson, referred during the debate on the Address. The noble Lord, Lord Brimelow, questioned whether the Department of Health knows what is going on. I should not be surprised were the answer to be that it cannot know everything that is going on because it is part and parcel of the system of delegated responsibility that statistics, and so on, are fragmented. Nevertheless, the NHS, as it acknowledges, is responsible. It has the final and continuing responsibility for medical treatment and medical care. It cannot delegate that beyond a certain point. It is a fundamental responsibility.
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I should like to refer, as evidence of the problem, to what happened some time ago now when a commercial residential nursing home in, I think, Oxford, had a case of homicide which has received a great deal of publicity. Before the implementation of Griffiths the home had catered mainly for homeless people and not sick people. At that time the home was staffed by a young volunteer who was making a social contribution before going up to Oxford. He was on duty by himself for 24 hours with 10 or 11 residents. A schizophrenic patient had been introduced to the home after those responsible for that commercial project became aware that there was a slice of cake to be had from operating in the mentally ill field. During the night that unfortunate schizophrenic patient stabbed the young volunteer who, incidentally, had received no specialised training in looking after the mentally ill.
I have no doubt that in that case corrective action was taken. The point is that that was a residential home responsible for providing difficult care for the mentally ill. It ignored the Department of Health's guidelines on staffing and training. When confronted with the fact that it was ignoring the guidelines, it said calmly that the guidelines were not legally mandatory. I should like the Minister to ensure that in future the guidelines are given greater legal mandatory force. I hope that that will be one of the objects of the legislation to which we look forward.
On the revolving door syndrome, the public perception is—rightly or wrongly—that with the run down of the big mental hospitals and the reduction in the number of acute beds, there is no longer an assurance that those requiring treatment after discharge can always obtain it. I am a parent who has benefited from the past arrangements with big hospitals under which our schizophrenic son could always go back through the revolving door, and I am greatly concerned that there is no longer an absolute assurance that a bed will be available wherever and whenever it is wanted. We should be pleased to have the maximum transparency in this area.
4.28 p.m.
Baroness Gardner of Parkes: My Lords, this has been a most interesting debate, but the only distinction too many speakers have drawn between the NHS and community care is that one pays for one and not for the other. That is a false distinction as the NHS has not been entirely free since 1950 when the Labour Government introduced the first charges for the NHS. People tend to think of the NHS as a hospital service, and that is free, but there are many other aspects of the health service for which patients are means tested and for which charges are made. Priority cases, of course, are still treated free. That point needs to be put to make it clear that that is not the only distinction. There are much greater distinctions to be drawn between the NHS and community care.
Baroness Jay of Paddington: My Lords, I apologise for interrupting the noble Baroness, but surely what we

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are discussing this afternoon is continuing care, and the distinction there is between the free continuing care in the health service and means-tested social services.
Baroness Gardner of Parkes: My Lords, I am sorry that the noble Baroness interrupted, because that is not the usual custom when a debate is time limited. Even so, I could argue about that point because the new dental contract provides for continuing care for two years whereas that did not apply before. There are many points of discussion, but I cannot spare any more time to respond to that point.
The underlying principles of community care are that the care should be patient-focused, not in the self interest of the people providing the care but in the interests of those receiving it. I take into account the points that have been made about carers, who are relevant too. However, as regards community care, the prime consideration is the patient who is receiving that care. The individuals who do not require hospital care should be cared for in their own community. The social services are correctly the fulcrum for the co-ordination of an individual's full range of longer-term needs.
The National Health Service and Community Care Act provides a framework for translating these principles into specific benefits for individuals. At the strategy level, community care plans provide the mechanism for bringing the plans and policies of health services, social services, other local authority services and voluntary and community groups into a coherent strategy. At the level of the individual, case management and assessment procedures, referred to by the noble Baroness, Lady Masham, ensure that the needs of the individual, and not the separate interests of the service providers, drive the delivery of care.
That has led to the development of innovative collaborative arrangements to secure flexible care packages; that is, meeting the needs of the individual, including the carer. Respite care is a most essential and valuable way of ensuring that more patients and carers obtain relief. The philosophy of community care has been embraced by health service providers which have sought to develop new approaches to delivering health care in the community; for example, home dialysis, palliative care teams for the terminally ill and discharge teams. They are examples of collaboration between the health service and community care.
The National Health Service and Community Care Act created a single unified budget to cover the costs of social care. By transferring to social services departments the social security payments for people in residential or nursing homes the perverse incentives for moving people out of their homes and into residential care were removed. The financial flexibility that the Government have provided has promoted the innovative flexibility in the delivery of care.
However, with the level of need in the community and an increasingly older population, there will always be pressure on resources. The community care framework enables individual needs to be identified and provides the flexibility for resources to be deployed in a manner that is responsive to those needs. There has been a great deal of talk about people being asked to
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contribute to their social care. I believe that that is correct and that it should be done on a means-tested basis. Those well able to afford their own care should do their best to do so. Those most in need of financial help should receive it.
I was interested to hear the noble Lord, Lord Brimelow, refer to community care in Camden because my NHS trust is in that area. Today I read the current edition of HealthCare Today which states that the Camden and Islington Community Health Services NHS Trust has a staff of 2,500, a budget of nearly £90 million and serves the communities of Camden and Islington from nearly 100 sites. That was interesting to read because most of us regard community care as a small operation. In fact, it is large and largely successful.
The noble Baroness, Lady Seccombe, said that she was amazed that local authorities had spent their budgets. That does not amaze me because the community care Act has revealed the need that exists. Local authorities in central London had no idea of the vast demands. They were unknown and unmet. No government can afford to meet the financial demands that lie ahead. There must be a need to look at how best to use the resources. I believe that there is an opportunity to use volunteers. The noble Baroness, Lady Lockwood, the noble Lord, Lord Murray, and I are members of the Advisory Council of the Retired Senior Volunteer Programme (RSVP). Recently retired people are keen to carry on working and to fulfil their lives helping others. They can meet a need that cannot be fully met because no government can provide the amount of money that is required to meet every demand that is put on them. I wish to see the gradual use of more volunteers in community care because that would benefit both the patients and the carers.
4.35 p.m.
Lord Hollick: My Lords, I wish to apologise to the House because a prior engagement prevents me from staying to the end of the debate. Today's debate is timely because there is a rising anxiety about the provision of continuing care. There is a financial crises among various local authorities and that will prevent them from meeting their requirements in the current year. There is also a rising anxiety about the diminution in the number of continuing care beds within the health service.
My experience of the problem has been gained from working with sufferers of Alzheimer's disease. As your Lordships know, that is an extremely sad disease. It is a slow journey into an abyss of unknowing and darkness. There is, however, a journey through a "Kafkaesque" world of administration and bureaucracy. The noble Lord, Lord Ashley, vividly mentioned some of the words used in the guidelines and government publications. At a time when carers and Alzheimer sufferers are seeking to deal with a terrible disease—it is usually at the end of their lives —they are also having to find their way through a maze of bureaucracy and administrative chaos.
The journey that I have described begins with the diagnosis of the disease, after which the patient must spend time at home. The carer—the unsung hero of our

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story—looks after that person. Rapidly the time comes when, because no hospital bed is available, the carer is put into a nasty and serious financial position. As a result, the carer's health suffers and his or her future is at the mercy of the social services, which are inadequately funded. As regards the individual, we see the beginning of a war of financial attrition.
That comes as a surprise and a shock to sufferers and carers because, naturally, they expect that having paid their national insurance contributions they are entitled to free health care, particularly at the end of their lives. The Patient's Charter confirms that they are to receive health care on the basis of clinical need, regardless of ability to pay. However, many sufferers find those words to be hollow.
On 15th April the Secretary of State said:
"The NHS provides services for everybody on the basis of their clinical need and regardless of their ability to pay",
thus confirming the Patient's Charter. She continued:
"There are no exceptions to that rule whatever the age of the patient".
The words "clinical need" must be weighed carefully. It is the view of the Royal College of Nursing that continuing care is nursing intensive; in other words, there is a clinical need.
The August guidelines, published by the NHS Executive, confirm that the NHS remains responsible for meeting the needs of people within available resources. However, the words "where appropriate" are then inserted. That condition is causing so many problems and difficulties. The particular problem is that there is no nationally accepted definition that ensures that everyone throughout the country receives the same care and attention. There are examples of some local authorities and health trusts ejecting people from hospital into the care of social services while in neighbouring authorities patients are cared for within the NHS. I suggest that that is unacceptable.
I believe that that muddle is avoidable if there are proper definitions. What we need to do—the August guidelines call for it; and I welcome that fact—is to devise national eligibility criteria to ensure that there is a consistent approach and that it ceases to be a regional lottery. There is also a need for the Government to monitor health authorities to ensure that they are living up to the promise made on their behalf by the Secretary of State.
My concern is that there is no central monitoring of the need for continuing care. I have asked several questions of Ministers about the number of continuing care beds. I have to say that I have been given a number of unsatisfactory answers; indeed, if I were being unkind I would say that I have been fobbed off. I am always told that such information is not collected centrally. The noble Lord, Lord Thurlow, mentioned the difficulty of collecting it. But it is possible to do so. In fact, this very day, I saw an extremely good National Health Service-designed software system which gathers together information centrally about such matters. Therefore, it is possible for the NHS to have that information centrally and then to know whether or not
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the needs and requirements of the community and patients will be met. Without that sort of database, I am afraid that we shall continue in the present muddle.
I have a suspicion that the Government—and, certainly, some local authorities and health trusts—are in fact turning a blind eye to the problem. They are perfectly happy to see people and patients (sufferers) leave hospital and go into community care. By doing that, they know that they avoid the financial responsibility which I believe is rightly theirs.
In my view, it is fair to characterise some of the developments within the National Health Service on continuing care as effectively privatisation by the back door of this part of the health service which affects people at the most vulnerable time of their lives, and at a time when many of them simply do not have the financial resources to pay for it out of their own pockets.
4.42 p.m.
Lord Mottistone: My Lords, I, too, should like to congratulate the noble Lord, Lord Ashley of Stoke, on his introduction of the debate. I am so sorry that he is unwell; I trust that he will get better soon. The timing of today's debate is especially apt for me as Governor of the Isle of Wight. Some noble Lords may have heard from the media recently that we have a real crisis in my island over the financing of our community care. Sadly, that sort of thing, though especially urgent, is not new to the Isle of Wight. It stems from a continuing lack of understanding by officials in all English government departments of the special peculiarities of islands in particular and also, it seems, of authorities with small communities.
I, and successive Members of Parliament for the Isle of Wight, have been grappling with that ignorance for over 20 years. The late Lord Ross of Newport nearly got an important understanding of the problem accepted by Mr. Peter Shore when he was Secretary of State for the Environment in 1979, but the Government fell before the understanding could be reached. I have had two or three similar near misses since with Conservative ministerial friends.
The particular problem is simple to describe. In October 1992 the Secretary of State for Health promulgated a plan for transferring the distribution of moneys for community care from social security to the local authority-run social services, with transitional grants over a four-year period and specified increases year by year over that period. All counties, including the Isle of Wight, made plans accordingly. In October 1993, the then Minister for Health, Dr. Mawhinney, made a statement which indicated that there would be no change in the plan.
However, on 2nd December 1993, almost exactly a year ago, for the Isle of Wight—and, as we now know, for other counties—a bomb was dropped. The Department of Health announced a revised method of calculating for the grant for 1994–95 (the current year) which slashed the Isle of Wight's expected grant by over half. The Isle of Wight County Council and its social services director reacted sharply. They wrote within a week to officials of the Department of Health saying that such a large, damaging, downward change could

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not be handled and repeated those letters in January. My honourable friend, Mr. Barry Field, the Isle of Wight MP, arranged a meeting with my honourable friend Mr. John Bowis, the responsible Minister, just before Christmas last year.
There was no response to the letters and no helpful outcome of the meeting until February when an official of the Department of Health wrote to say that, inevitably, a change in distribution mechanism involved both winners and losers. Some authorities, like the Isle of Wight, would be losers. Effectively, that letter said, "Bad luck old boy, better luck next time". Just how callous can you get? There was no thought for the effect on the old people of the Isle of Wight who were those principally affected.
The grumbles continued throughout the year; I shall not bore your Lordships with the details. But at no stage did the Government do anything to show that they recognised the acute problem of the Isle of Wight and propose some way of alleviating it. So, in mid-November, in exasperation, the Isle of Wight County Council announced to the press that it had only three weeks of community care money remaining as it had warned the Government a year before and throughout the year thereafter. I was gravely distressed by that publicity and told my county council friends so. Inevitably, the effect was to frighten seriously some of the old people of the island. I received letters from the clergy telling me that their parishioners were seriously worried about what might happen.
So what then to do? The Isle of Wight County Council has had a clean bill of health from the district auditor on the spending of its community care money to date. For the future up to March, it has arranged to transfer as much money from other resources as it dares—fewer road repairs for example. Let us hope that there is no snow this winter. It has asked the district auditor to report on all its expenditure during the past year so as to show the Government that it has acted as wisely as it knows how.
The problem is that small communities do not have so much money to reallocate when they get surprises. I expect several of the new unitary authorities—like, as I have discovered, the smaller London boroughs, which have populations not terribly dissimilar to the Isle of Wight—will discover that. Moreover, islands have their own special problems. For example, our fire brigade cannot expect support from adjacent authorities in dealing with major fires. My noble friend Lord Ferrers, when at the Home Office and responsible for fire brigades, had a long and enduring battle with the Department of the Environment to persuade those concerned that our arguments made sense. He was terribly frustrated and never finished the argument; for look where he is now.
What is needed is a quick, fresh look at the Isle of Wight's special problems by the Department of Health and action before Christmas to adjust the transitional grant for this financial year upwards by as much as is necessary. There is need also to ensure that next year's grant is enough. I suggest that anything less would be a grave dereliction of duty on the part of my noble friends responsible for that part of the world. I tried to get a
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warning through to my noble friend the Minister who is to reply to the debate that I intended to say such things. I hope that she will be able to give me some reassurance that something will happen between now and Christmas.
4.50 p.m.
Lady Kinloss: My Lords, I should like to thank the noble Lord, Lord Ashley of Stoke, for introducing this debate today. In 1988, a report to the then Secretary of State for social services by the late Sir Roy Griffiths was first published entitled, Community Care, Agenda for Action. Since then questions have been asked and the subject has been debated, and six years later we are still discussing the best means of ensuring that care in the community is working.
Age Concern fears that some local authorities appear to be defining the need to enter institutional care on the basis of the cost of the care package which would be required at home. They say they are unclear how this apparent move towards resource-led assessments fits in with the underlying theme of Caring for People: Community Care in the Next Decade and Beyond, published in 1989, which suggests that assessments should be needs-led and not resource-led.
The Association of Directors of Social Services welcomes the opportunity to comment on the draft guidance issued by the NHS Executive in August 1994 and welcomes the recognition that there is a need for guidance in clarifying responsibilities for long-term health care. Surely it is vital to decide which authority is responsible for which need, as this is necessarily a cause of financial concern and possibly a cause for confusion and worry for not only those trying to provide services but those on the receiving end. It would surely help those supplying different needs if it could be defined more precisely what constitutes continuing and specialist medical or nursing supervision and in what circumstances these definitions apply.
In the draft guidelines, Health Service Guidelines, the paragraphs dealing with hospital discharges of people with long-term health and social care needs worry families who are unsure of what they are entitled to in the way of help. Patients and their families need to be fully informed about how the procedure will work, and whom to ask about their needs. Can the Minister say whether any local authority or health authority has produced a small pamphlet explaining what is available for long-term care, whether in a nursing home or residential care home, which should also include information of the financial implications of each option? Perhaps the social services and health authorities should produce a small, easily understood pamphlet with guidance on what one can have and where to ask for the information.
The Alzheimer's Disease Society has found that there are about 17,000 younger people with Alzheimer's disease in Britain today. It is extremely rare for it to occur in young people under the age of 30. It is increasing, though, in people under pensionable age. The greatest worry seems to me to be those developing it in their 40s and 50s, who have young families, and who see their parent with this disease. It must frighten children when the parent gets progressively worse. A

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survey reckons there are 17,000 younger people under 60 out of 635,000 people who have the disease. There is only one consultant who has a special responsibility for younger people, and he resides in Liverpool.
The Alzheimer's Disease Society says there is a likelihood of between 50 and 100 younger people in every health district who have Alzheimer's disease. I ask the Minister to look into this apparent lack of focus on this most important aspect of care in the community, because of its knock-on effect on young families. Even those in their late teens will be affected by it. Will the Minister also ask health authorities to assess the needs in their districts of these younger sufferers from Alzheimer's disease? Does the Minister agree that there seems to be a need for more consultant specialists in this field, and not just one?
The noble Lord, Lord Ashley of Stoke, spoke of people being discharged from hospital and only living for a few weeks. Often they would wish to stay in hospital which represents a safe and caring place for them to stay, where they are looked after and may die in dignity. If a patient's wishes are to be considered, surely this is a small but very important consideration for the happiness of those who may not have long to live. I hope that one day community care will work as the late Sir Roy Griffiths hoped.
4.54 p.m.
Baroness Eccles of Moulton: My Lords, society's responsibility for organising appropriate care for the growing number of elderly people is a major policy issue confronting all countries of western Europe. It can rightly be seen as one of the yardsticks by which a civilised society can be judged. I am grateful to the noble Lord, Lord Ashley of Stoke, for giving us an opportunity to debate this important subject today. I am sorry that he is in pain and is unable to be with us.
Since the 1980s there has been a dramatic increase in the level of funding provided by the Government for long-term care generally and for elderly people in particular. This is reflected in the substantial growth of the nursing home sector, and as a result the number of beds run directly by local authorities and health authorities has declined.
Over the past decade the growing number of elderly people needing nursing home care have felt enormous benefit from this change in delivering services through the voluntary and independent sectors rather than through local government and health authorities. However, although the running of these services has now moved predominantly into the independent sector, it is important to emphasise that this remains an area of care mainly funded from the public purse. As my noble friend Lady Gardner of Parkes has already mentioned, contributions from those who can afford it have been a longstanding feature of our system, not a recent phenomenon.
In turning to the more recent history of community care, I would like to pay tribute to the foresight and tenacity with which the late Sir Roy Griffiths worked with the Government to introduce the new arrangements. In April 1993 the progressive transfer of
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funding from central Government (that is, the Social Security fund) to local government began. When the transitional funding period of four years is completed, the budgets of social services departments in local authorities will have been increased by about 40 per cent.
The health authority of which I am chairman—here I must declare an interest—is coterminous with three London boroughs—Ealing, Hounslow, and Hammersmith and Fulham. All three boroughs have taken on these additional responsibilities with enthusiasm and commitment. In the 18 months since the new arrangements came into being the number of patients in hospital awaiting transfer to nursing homes has reduced.
These developments in the care provided for elderly people have produced many visible benefits and we can take great pride in them. However, I believe that there is a need for a stronger regulatory framework. Local authorities and health authorities need effective powers to make sure that the standards of care provided in the independent and voluntary sectors are those that you and I would wish to see for our own elderly relatives. The current registration and inspection regulations, while allowing health and local authorities to exert considerable control over the physical standards of such homes, are at present relatively ineffective in ensuring that adequate standards of care are provided by staff.
Another important area is being considered at present through a draft circular issued for consultation by the Department of Health. This circular is not the one to which the noble Lord, Lord Ashley of Stoke, particularly referred; it is a second circular which is out at the same time. This circular discusses the financial framework within which health and local authorities operate. At present we are relying on financial arrangements drawn up in two Acts dating from 1968 and 1977.
In response to consultation on this draft circular my authority has taken the view that new financial arrangements are needed which will allow local government and health authorities to reflect the reality of the care that so many elderly people need, which is a combination of health and social care. Furthermore, the same elderly person may, over time, require different proportions of the costs of his or her care to be met by local and health authorities. In many cases on admission to a nursing home it is appropriate for costs to be met by the local authority. However, towards the end of the person's life the health service should in many instances be providing a good deal of the care and meeting the costs.
We recognise that inevitably the boundaries of the NHS have been changing ever since it was created nearly 50 years ago. Community care policies have resulted in better care for elderly people, albeit now predominantly provided outside the NHS. At the same time funding in the NHS has increased dramatically over the years and there are many areas where the boundaries of the NHS have expanded. If I had time, I would have liked to have cited some of those. The concept of the next generation contributing to the costs of caring for their elderly relatives is being faced by many European

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countries. So too is the issue of how far individuals should make financial provision to allow for the cost of their own long-term care to be met through insurance or other arrangements.
In conclusion, I believe that we can be proud of the developments in community care which have taken place in recent years and which now provide, still it must be emphasised mainly through public funds, far higher standards of care and infinitely improved physical facilities. However, like all great social issues, it needs periodic reassessment. I believe that we have a particular responsibility to inform and guide the development of policy in this fundamentally important area of life. I very much hope that the new guidance referred to earlier, in its final version, will not miss the opportunity to provide a financial framework which matches the excellent multi-disciplinary service which we are committed to delivering.
5 p.m.
Baroness Farrington of Ribbleton: My Lords, I am grateful to my noble friend Lord Ashley for introducing this subject and providing the opportunity to discuss the very real problem which people face.
I agree with the noble Lord, Lord Jenkin, that it would be possible to debate at great length the many examples of success in the field of care in the community. I am particularly grateful to those who have referred to the fact that we are not speaking about an additional amount of public expenditure but a switch of resources from one public expenditure head to another, a transfer of funding from social security into care in the community through the local authorities.
It is extremely important that in this debate we recognise that care in the community could only ever be a success were it to be conducted against a background of the recognition of need and not against a background of a reduction in public expenditure. In addition, for there to be faith between the partners who were to work together, it was essential that the Government recognised that when local authorities told them that in the current financial year the sum that was needed was £1.2 billion to be told that £0.7 billion was all that was available, leaving more than a 40 per cent. shortfall, would inevitably lead to the problems to which the noble Lord, Lord Mottistone, referred.
In the current year an additional problem has been faced by some authorities. Because of a late switch, without consultation, which was mentioned by the noble Lord, Lord Mottistone, the money which was expected by some local authorities was suddenly cut dramatically. The authority of which I am a member—Lancashire County Council—was in that position. A late decision, announced without consultation, left only £6.5 million for new demands during the current year.
It is against that background of not being able to meet new demands that we must view the problem of the blurring of the distinction between that which is clinically determined to be health care and that which is rightly the province and the responsibility of the local authority social services departments.
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As a new Member of your Lordships' House I listened very carefully to all the expressions that have been used. The one that causes me gravest concern is the constant reference by Members on the Government Benches to "having regard to resources". We are discussing people who are clinically determined to be ill and in need of health care. The decision as to whether that health care can be provided by the health authorities free of charge within a different setting from the hospital is to be governed by judgments about resources and not clinical judgment.
I remember when care in the community was first discussed. I happened to be with a friend who is older than I am, whose husband was in a long-stay mental hospital suffering from Alzheimer's disease. To my surprise and distress, she burst into tears. I asked what the problem was. Her prediction was that the hospitals would be closed down without alternative provision being made. She predicted that the government of the day would use the resources from the sale of assets of the long-stay psychiatric hospitals, in one of which her husband was a patient, to fund other policies, and there would not be a clear and distinct switch of that money into funding for other services.
My friend feared that she would see the day when she would be forced to give up her small savings and her ownership of her home in order to help to fund the cost of caring for her husband were he not in a hospital. Her ultimate distress was her fear that she was asking for her husband to be kept in a place which was not the most appropriate because she could not cope with the changes that she feared.
I worry because I reassured my friend that there would never be a question of curtailing resources for patients with Alzheimer's disease and there would never be an attempt to place a charge on their families in order to fund their care, either in the community or in alternative residential accommodation other than a long-stay hospital. Her husband is now dead, but if I were to give advice to someone else in that position today I might be more constrained in my enthusiasm.
We do not face the future with hope in those authorities which are struggling to find the resources necessary to make care in the community work. Gloucestershire, Lancashire, Hereford and Worcester, Bury, Bradford and all the authorities on the Isle of Wight have problems. The noble Lord, Lord Mottistone, was so right when he referred to the problems of the Isle of Wight. I ask the noble Baroness not to say, in answering the debate, that it is a matter of local authorities using their judgment in respect of their own resources.
The Isle of Wight has been challenged by a Government Minister for underspending on education against its SSA. It has been told by the Home Office—the noble Earl, Lord Ferrers, was mentioned—that it must spend more than its SSA on fire services. Now, doubtless it will be told that if only it switched funding from somewhere else it could cope with this unexpected

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pressure on its social services. It is critically important that the Government recognise the need to fund care in the community.
5.7 p.m.
Lord Ashbourne: My Lords, I have been asked by the noble Baroness, Lady Ryder of Warsaw, to speak on behalf of the Sue Ryder Homes this afternoon as the noble Baroness is unfortunately unable to be in your Lordships' House in person this afternoon owing to a series of previous engagements. She has asked me to thank the noble Lord, Lord Ashley of Stoke, for putting down today's Motion and for giving your Lordships an opportunity to discuss these critical matters.
The nub of the matter is that the noble Baroness is greatly distressed by the effect that the implementation of the National Health Service and Community Care Act, which came into force on 1st April 1993, is having on the finances of the Sue Ryder Homes. Perhaps I may refer to one of the Sue Ryder Homes budget reports. It states:
"The income from fees is only marginally above that of 1993 despite intensive negotiations with Social Services and Health Authorities. The Home has 35 residents which receive only basic income support which cannot be increased. This arises because the residents have been in the Home for some time and are not affected by the new regulations … Consequently it is not possible to obtain top-up payments from Social Services or Health Authorities or from the Department of Social Security. In most of these cases, the amount received is £356.95 per week, but some are only £290. Since these have been long-term residents, the majority require substantial nursing and would be clearly in the middle or upper fee band—£500 or £575 per week. The shortfall of income over expenditure is therefore approximately £350,000 in a year, so in this Home of 35 residents, about £10,000 per resident".
I apologise for the length of that quote, but it seemed important that the Minister had the information in some detail so that she can reply. I understand that out of 24 Sue Ryder Homes in Britain, this affects 14 of them. Consequently the average deficit amounts to £120,000 per Sue Ryder Home.
It has been estimated that the losses resulting from the Government's decision only to partly fund those patients who were in Sue Ryder Homes before April 1993 currently amount to £1.7 million per annum. That figure is likely to increase in future years as the disabilities of those patients increase and government funding is frozen.
Potential residents of Sue Ryder Homes are either being kept in acute hospital beds, or at home, without nursing care, rather than going into Sue Ryder Homes where the basic social services funding is insufficient to cover the costs. With the finances of social services in many counties being overstretched, it will not be long before the welfare and wishes of potential residents are ignored in favour of the cheaper option. For example, Cambridge social services are forecasting an overspend of approximately £3 million and have started to cut back on funding, including for respite beds which are urgently needed by desperate patients whose families or neighbours simply cannot cope any more.
As I was unable to give the Minister more than the most cursory notice of those concerns and questions perhaps she will write to the noble Baroness, Lady
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Ryder, and myself giving the Government's views on the multiplicity of problems which affect the Sue Ryder Homes.
5.12 p.m.
Baroness Robson of Kiddington: My Lords, I, too, wish to thank the noble Lord, Lord Ashley, for introducing the debate. I add my best wishes for his recovery from his present problem.
We have had 17 speeches. Those speeches leave no one in any doubt that confusion exists about who is responsible for providing long-term community care in our society. In the past, we have asked the Government for guidelines. They have now issued guidelines. However, in my view those guidelines have done little, if anything, to clarify the situation.
I regret the lack of specific national guidelines. It means that access to long-term care now depends on where one happens to live, not on what one needs. It also means that standards vary enormously between different authorities. The guidelines seem even to encourage different standards. On page 2, the guidelines state:
"Different models of care may be appropriate in different parts of the country".
I can understand that. But they also provide the escape clause that, because one cannot afford it, one does not have to keep up to the national standards laid down by the Government.
When we changed the emphasis from hospital to community care, most of us agreed that it was the right move to make. We have since moved away from the principle of an NHS which is free at the point of need. The noble Lord, Lord Ashley, referred to the large decline in numbers of long-term care beds in the NHS. In 1990 the figure was 73,000; in 1993 it was 59,600. Before the implementation of the community care legislation, large numbers of elderly people were transferred to private nursing homes. Many of them have now become the responsibility of their local authority. At the risk of being boring, I wish to emphasise yet again that we should have introduced the community care legislation before we started the reform of the NHS so that we did not run the risk of a large number of people being without adequate support. Perhaps I may plead with the Minister that there should be no further reductions in hospital beds or long-term care until the problem has been resolved.
The final paragraph on page 2 of the guidelines refers to the need for hospitals to take account of the needs of other patients in deciding how long a patient can stay in an NHS bed. Of course, one can understand that if and when the number of beds is reduced to such an extent that there are not enough, long-term patients may have to be given alternative accommodation. But that is because we have failed to provide them with long-term beds in the NHS.
Some long-term patients in the NHS regard such a place as their home. How does the removal of patients from the place in which they are presently being looked after fit in with previous guidelines which stated that,

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"no NHS patient should be placed in a private nursing home, or residential care home against their wishes if it means that they or a relative will be personally responsible for the home's charges".
A large number of elderly people are cared for at home by relatives or friends. When they require greater care than can be provided in their homes and are referred to a nursing home—almost all of them now private homes—those elderly people are means tested to see what they can afford to pay. It is not only what they can afford to pay, but what their relatives can afford to pay. Occasionally the result is the sale of the patient's home. The former carer —in many cases someone aged between 70 and 80—who has lived in that home all his life, stands the risk of losing it. Some private nursing homes have helped patients to stay without forcing the sale of the house. However, when the patient dies there is frequently an enforced sale of the home in order to pay off the debt incurred in the nursing home. Those are earth-shattering experiences for people. We must do something to solve the problem.
The guidelines, under the heading "Action" state:
"Health authorities, and … GP Fundholders, are required to review, in consultation with local authorities … their policies for meeting long term health care needs".
That is right. They are the people who look after those in the community who need long term care. But up to the present time GP fundholders have not had any responsibility for residential nursing care, although they have responsibility for district nursing service care. If GP fundholders are to be made responsible for the provision of residential nursing care they will need to have their budgets increased. Without that they will be unable to perform their duty.
I began by saying that guidelines must contain nationally determined criteria about who is eligible for NHS continuing care to avoid discrepancies in care between areas. Above all, the Government must acknowledge that increased finance will be necessary because the number of people who require continuing care is increasing year by year. The funds must be made available.
Yesterday, we had an announcement of an increase in funding for the National Health Service. That is very welcome. I plead with the Minister that a large part of that funding should be devoted to long term care in the community, whether provided by the NHS or by local authorities.
5.21 p.m.
Baroness Jay of Paddington: My Lords, I should like to give my particular thanks to my noble friend Lord Ashley for his great personal courage in introducing the debate on this crucially important subject this afternoon. I am sure I am joined by noble Lords all round the House in wishing him a speedy recovery.
In his powerful opening speech, my noble friend showed his customary deep concern for vulnerable people—and vulnerable people is what this debate is about. Although the words on the Order Paper could suggest that we are discussing rather arcane complexities of local and health authority finance, what in fact my noble friend and many other speakers have
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vividly demonstrated is that the Motion reflects the considerable alarm felt, certainly on these Benches and I think all around the country, at the way in which those who are most in need in our society are being treated following the changes in the NHS and community care. The fear is that we are seeing what has been described by the Association of Metropolitan Authorities as,
"the stealthy withdrawal of free health care".
My noble friend Lord Hollick repeated the quotation from the remarks of the Secretary of State for Health on 15th April this year:
"The NHS provides services for everybody, on the basis of their clinical need and regardless of their ability to pay. There are no exceptions to that rule".
The problem is that what the Government have done is simply to redefine words like "services" and "clinical need" to suit their new legislation. As we have heard from several speakers, health authorities and social services are now required to differentiate, on what often seems an almost arbitrary basis, between health and social care, and, as we have also heard, that has serious financial implications.
We had another Labour debate on community care in your Lordships' House earlier this year and we predicted that there would be an acute crisis as social service departments literally ran out of money to finance their new responsibilities. My honourable friend Mr. David Hinchliffe tabled an Early Day Motion in another place just recently on the Government's failure to fund the new social responsibility adequately. I should like to thank my noble friend Lady Farrington and the noble Lord, Lord Mottistone, for highlighting the problem so authoritatively and cogently in your Lordships' House today.
The fundamental uncertainties which we are discussing are caused by the Government's determination to see the essentials of service provision and finance resolved exclusively at a local level. Ministers argue that this is an appropriate devolution of powers and the way to ensure that local needs are met most effectively. On these Benches, we see this more as the Government abrogating their national responsibilities and creating a situation where cost-shunting between individual health authorities and social service agencies leads to patchy provision and considerable inequity.
As the noble Baroness, Lady Robson, has just pointed out, the quality of long-term continuing care now depends on where you live and not on what you need. We could have no clearer evidence that the nationwide security of the National Health Service is disintegrating and, in my view, being replaced by the small business ethics of local hospital trusts and independent providers, many of them in the private sector.
There have been many demands for the Department of Health at least to set national standards for continuing care and, as several speakers have mentioned this afternoon, we have now seen new draft guidelines from the department which were issued this summer. The consultation period has now closed and the responses from both the voluntary and the statutory sectors must make gloomy reading at the Department of Health. The

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general tone of the response is summarised by one London health authority, and I quote the chief executive's written reply:
"The guidance claims to clarify but in our view, it leads to greater confusion".
I make no apology for going over some of the details of that guidance again this afternoon and the main points raised about those guidelines during the consultation. I hope that when the Minister replies she may be able to answer some of the very practical concerns which have been raised by organisations outside your Lordships' House and echoed in contributions this afternoon.
As my noble friend Lord Ashley stated at the beginning of the debate, the guidelines state:
"The NHS remains responsible for meeting"—
with this extraordinary caveat—
"within available resources, the needs of people who require long term physical or mental health care".
As he also said, superficially this seems to restate the basic understandings about NHS responsibilities. But the alarming caveat about "within available resources" suggests that decisions about individuals will be driven more by financial priorities than by clinical needs.
In the next paragraph the document produces another caveat:
"Different models of care may be appropriate in different parts of the country".
As the noble Baroness, Lady Robson, has just mentioned, that could lead to local flexibility. But Age Concern and other organisations have argued in their response that:
"to include matters such as local circumstances and resources in the guidelines makes it likely that decisions about care will be dominated by the concerns of managers and not by medical judgements".
The problems about precisely defining those who require physical and mental care are, of course, central. Several noble Lords pointed out that the guidelines do nothing to help.
How does the Department of Health define,
"those with complex or multiple care needs"?
Who do we say will qualify for,
"continuing and specialist medical or nursing supervision"?
Surely to be of any use at all the guidelines must, as several speakers have said, give specific national eligibility criteria which can be applied by every purchasing health authority, every social services department and every provider in the country. I should be grateful if the Minister could elucidate some of the definitions in her reply and also explain the force of the provisos in the guidelines about "local circumstances" and "resource contraints".
The other major area of concern which again has been much referred to this afternoon is about hospital discharge, about how decisions are taken to discharge any patient from health service care into means-tested social care and, very importantly, what rights and choices a patient and his or her relatives have when
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those decisions are taken. Once more, the draft guidelines are frankly bald and unhelpful, and I quote from page 2:
"Where a person, in the view of the consultant … no longer requires acute treatment but is likely to need intensive long term support, including the possibility of nursing home or residential care, they should be eligible for a multi-disciplinary assessment of their needs".
Rightly, the British Medical Association and the Royal College of Nursing are unhappy that the paragraph seems to suggest that "acute treatment" can be properly defined as medical care appropriate for an NHS hospital, but that, "intensive long-term support", possibly in a nursing home, is seen as social care. Frankly, once more the problem is one of inexact definition, with all the ensuing and important complications of free versus means-tested treatment.
Under the same heading, "Hospital discharge", the guidelines raise but do not answer the difficult question of patients who refuse options for care outside the health service. Again, I do not apologise for repeating the quotation that was given by my noble friend Lord Ashley; namely, that,
"the health authority and hospital will need to take account of the needs of other patients in determining how long the person can continue to occupy an NHS bed".
Again, there are no eligibility criteria, and, as many of those who have been consulted have pointed out, there is an implication that patients could be forced to leave an NHS bed against their will.
Very importantly, there appears to be a contradiction between these draft guidelines and a previous circular which was issued five years ago—HSG (89/5)—which I understand is still in force and which states that:
"No NHS patient should be placed in a private nursing or residential care home against his/her wishes if it means that he/she or a relative will be personally responsible for the home's charges".
When the Minister replies perhaps she can tell us whether that circular is to be withdrawn and whether the new guidelines in their final form will be clear about the choices that are available to patients and their relatives.
Overall, I can only echo the views of the AMA, the purchasing health authorities, Age Concern, the BMA and RCN, the Alzheimer's society, the Association of County Councils and many others that the new guidelines have simply added to the confusions about long-term health care which were created by the new Acts. The UK Central Council for Nursing, Midwifery and Health Visiting has gone slightly further. It has written to the Department of Health urging that a completely new text be prepared for further consultation. Perhaps the Minister will tell us this afternoon if that is what will happen.
It is possible to establish clear eligibility criteria for continuing NHS care, and I am pleased to report that the health authority of which I am a member has successfully done that in conjunction with our local social services departments. Clinicians, social services assessment staff and care managers were involved in developing a written statement which is based on using the so-called Bartell indices of physical and mental capacities. If you qualify on those grounds, you are eligible for NHS continuing care facilities. It has been

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pointed out to me that the success of this system is not based just on the formal protocols, but on strong, practical day-by-day working relationships, with regular meetings on individual assessments. It has meant that the health authority and the social services departments have not had to use the agreed arbitration procedures at all in the past 18 months.
When I asked the chief executive of the health authority for his views on that model, he told me that he had no doubt that it could be of much wider application; and interestingly, the Health Services Journal annual awards have just given a commendation to that initiative as one that could be worked on a national basis. It seems to me that it can only be dogma about local autonomy or, perhaps more sinisterly, about undermining the national quality of the health service which prevents the Government insisting on similar criteria across the country.
At the Conservative conference in October, the Prime Minister defended his support for a comprehensive NHS by asking,
"Is it likely that I would take away the security of mind that was of such value to my parents?".
Sadly, that is precisely what is happening. On Monday of this week, the Association of Directors of Social Services held a national conference which it called "From the Cradle Almost to the Grave". If that is not to be a true description of all our care services, the Government must act quickly and decisively—not only to help health and social service professionals but, most importantly, to restore security of mind to our most vulnerable citizens.
5.34 p.m.
Baroness Cumberlege: My Lords I am very grateful, too, to the noble Lord, Lord Ashley, for raising this very important subject for debate this afternoon. Like the noble Baroness, Lady Jay, and other noble Lords here this afternoon I hope that his courage will be rewarded and that he makes a speedy recovery. I am also very grateful for the very thoughtful contributions that were made by many of your Lordships who I know have personal expertise and experience in this particular field. I will try to respond to the various points which have been raised.
The noble Lord, Lord Ashley, is right in highlighting that, ever since the creation of the welfare state, there has been a division in responsibility between the National Health Service and local authority social services—a division between people who need medical and nursing expertise and those who need support and help with everyday activities. Ever since the creation of the welfare state, people who have been cared for by the NHS have received clinical care free at the point of delivery, while social services have been able to seek contributions towards the cost of care, and have done so, from the people who can afford it.
As my noble friend Lady Seccombe reminded us with her usual clarity, this boundary between health and social care is not new. It has been well recognised and has been part of our system since 1948. Although sometimes difficult to define, it is recognised by those responsible for planning, purchasing and delivering
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care. It has been recognised, too, by governments and by other commentators. Indeed the recently published report of the Social Justice Commission established by the Labour Party with some Liberal Democrat membership states that:
"Although the dividing lines between treatment and care can be difficult to agree, the distinction offers the basis for a clearer approach to funding."
And it goes on to say:
"Given the many demands on resources, however, it is not feasible to extend the founding principle of the NHS—that treatment should be free at the point of use—to the comprehensive provision of care and help with everyday activities."
While a boundary in the division of responsibilities between the NHS and social services is necessary, it need not jeopardise a sensible and comprehensive service to individuals. Many people will need both health and social care and will want to move from hospital into a nursing or residential home or indeed, with enough support, return to their own familiar home with friends and relatives around them. It has always been a challenge, both for governments and for agencies, to improve collaboration between health and social services and to ensure that people benefit from a seamless service. Local health authorities working closely with social services and the private and independent sectors have achieved some notable successes—as was outlined by some noble Lords here this afternoon—but only in some parts of the country. In others, we know, there has been room for improvement.
The need to strengthen local collaboration has been a central feature of the community care arrangements. Local authorities have been given the lead responsibility and it is essential that they work closely with the NHS and other agencies such as housing, in planning and commissioning services, in assessing individuals needs and in arranging the support necessary to meet those needs.
We have strengthened the incentives for close working by requiring local authorities, as a precondition to receiving the Community Care Special Transitional Grant, to reach agreement with their local health authorities, not only in the arrangements for hospital discharge but also in clarifying their responsibilities for long-term care.
It was only 18 months ago that the new community care arrangements were introduced, and we have been encouraged by the progress already made. This is a view endorsed by the Association of Directors of Social Services, which has repeatedly declared the first year of community care to have been a success. My noble friend Lady Macleod of Borve was absolutely right. It is clear that people are being offered more choice and appropriate support. She is also right in saying that more people are choosing to stay in their own homes.
Not only are more people being cared for in their own homes, but 10 per cent. of people who would have gone into a care home under the old arrangements are now being supported in their own home. Health and local authorities are working together to offer more imaginative support which is tailored to meet the needs of individuals and their families and carers. We are witnessing schemes which involve arranging for

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someone chosen by the dependent person to visit in the morning to get them up, to cook meals during the day or to help with gardening or shopping—whatever is needed to help preserve a person's independence and allow them to stay at home. These schemes are flexible. As my noble friend Lady Gardner of Parkes advocated, some involve volunteers; others are funded by local authorities.
My noble friend Lord Jenkin of Roding is also right when he says that we should not underestimate the work and effort which has been invested by local social services departments and health authorities to achieve these changes. His view is endorsed by the independent Audit Commission and the Association of Directors of Social Services, as well as the department's Social Services Inspectorate and the National Health Service Executive. They have all confirmed that the careful preparatory work undertaken prior to the Act coming into force has meant a sound start in most places.
The noble Countess, Lady Mar, suggested that the community care Act was not welcomed. That was not so.
The Countess of Mar: My Lords, I am sorry to interrupt the noble Baroness. I did not mean to imply that the Act was not welcomed. It is very welcome and working well in a great many parts of the country. Just a few are not getting the funds to meet their liabilities.
Baroness Cumberlege: I am grateful to the noble Countess. I misunderstood her. I thought she said that it was a question of, "We told you so". Clearly I misrepresented it. I shall look it up in Hansard. It is a policy that has been widely welcomed from many quarters.
The noble Countess suggested that the community care grant was not ring-fenced. It is ring-fenced. She also highlighted the difficulties in some shire counties which are experiencing some of these problems. I should like to issue a word of warning here to local government. I feel that local government needs to be careful. There is a body of opinion in this country which does not want local government to be responsible for community care. It is not a view that I share. I spent 28 years in local government and I know its value, especially when an authority is well run. But, if people lose confidence in local government's ability to deliver services, especially within increased resources, the temptation to review its new responsibilities will be very great. I for one would be sorry if community care were thought to be an inappropriate responsibility for local government.
Turning to resources, local authorities have been well funded to meet their new responsibilities. Over £1.2 billion has been made available this year, which includes £20 million extra for respite and home care. Next year the budget will be over £1.8 billion for community care alone, which will include an extra £30 million allocated for home and respite care. Those are substantial increases by anybody's standards. They mean that since 1990–91 the total resources for social services, including community care, will have gone up
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from £3.6 to £6.4 billion, an increase of 48 per cent. after allowing for inflation. There is no local authority which has not had increased resources.
No one hearing those figures could doubt the Government's commitment to resource community care fairly. The noble Baroness, Lady Farrington, will know from her close connections that local authorities fought hard for those new responsibilities. They now have the task of carrying them out successfully. The vast majority are doing so and as a result are making a tangible difference to the quality of some very dependent people's lives. But one or two are finding it difficult to cope with the range of their new responsibilities and the need to plan their spending over a full year taking into account the build-up in the numbers of people whom they are supporting.
The noble Lord, Lord Ashley, was right to highlight the damaging effect of squabbles between agencies. My noble friend Lord Jenkin also reminded us of what can be achieved when people are imaginative and determined and work effectively together. When that does not happen, it can be disastrous, as the Health Service Commissioner's report concerning the Leeds case illustrated. The Government took that report very seriously. The commissioner was critical of the fact that the health authority failed to secure long-term health care and inappropriately discharged a very severely incapacitated man who had had a stroke. Although the health authority's action took place before the introduction of the community care reforms, we considered that the report raised wider issues. In the summer we issued draft guidance for consultation which reminded health authorities of their responsibilities for securing long-term care, an issue which has been widely discussed this afternoon.
The draft guidance, as we hoped, stimulated debate— a national debate. We received many thoughtful replies to our consultation paper, which will influence the final version of the guidance. But there have been some misunderstandings and misinterpretations of the guidance and I should like to take this opportunity to correct them.
First, I can assure the noble Baroness, Lady Jay, that it was not our intention to change the responsibilities of the NHS for long-term health care but to reinforce them. We are clear that health authorities do have a responsibility, which includes long-term in-patient care, whether in an NHS hospital or funded by the NHS in the independent or private sector. Following this guidance, all health authorities will be required to review their arrangements and to ensure they are securing adequate provision. If they are not, then we shall insist that they make the necessary reinvestment. I understand the dilemma which the noble Baroness, Lady Robson of Kiddington, and the noble Lord, Lord Hollick, outlined in terms of standards.
Secondly, we are setting a clear framework at the centre, but it must be right that health and local authorities, working closely together, should determine precisely where local responsibilities lie and who will fulfil them.

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Local services will always vary depending on the facilities available. For instance, in some areas services have been centred around an old long-stay hospital; in other areas such a facility has never existed. In some areas the independent sector is well developed; in others it is almost non-existent. It is right, therefore, that local people, who know the strengths and weaknesses of their communities, should decide in close partnership with the populations that they serve what is provided and where. That is the whole principle of population needs assessment.
Thirdly, we are interested in transparency, an issue that was raised by the noble Baroness, Lady Hamwee, and the noble Lord, Lord Thurlow. After local policies have been developed in consultation with local interests—local authorities, providers of services, GPs, voluntary organisations and other representatives of users and carers —the draft guidance states that a clear statement must be published by them which offers local people an explanation. We agree with the noble Lord that people need to know on what basis doctors and other professionals involved in individual cases will take decisions. They need to know the eligibility criteria for long-term care.
Finally, the draft guidance emphasises the need for clear policies in hospital discharge. For many patients, leaving hospital is a straightforward event involving, probably, an out-patient appointment and a follow-up visit with their GP. That is not the case if people are not able to support themselves at home. They may need to be cared for in a residential or nursing home, or require a range of services in their own home for a long period of time. Those decisions are important and far-reaching. They need to be made not only by the vulnerable person concerned but by their family and their carers.
We have required health and local authorities to reach agreement on integrating hospital discharge with local authority procedures. Recently, we have produced and issued widely the practical Hospital Discharge Workbook, which sets out ways in which arrangements for hospital discharge can be reviewed and improved, recognising the key roles of different agencies and the need to take full account of the needs of patients and their families. In addition, the draft guidance reinforces a number of issues for health authorities and hospitals which must be taken into account. Finally, we shall continue to look at this area closely in our monitoring of the new community care arrangements. In the light of the national debate we want to finalise this guidance soon. I can assure your Lordships that the views expressed this afternoon will be taken into account. In an attempt to answer specific questions, I feel that it would be wrong for me to pre-empt the final document, but I do not believe that it will be possible to give my noble friend Lady Eccles the assurances that she seeks in the light of it requiring new legislation.
The noble Lord, Lord Brimelow, raised the issue of Camden and Islington district nursing services. I am always very reluctant to comment on individual reorganisations unless I have had the opportunity to talk to those involved, both staff and their managers. Whether the current workforce is of the right capacity in terms of numbers or of the right level of skill is
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impossible for me to judge. I shall certainly write to the noble Lord. I am sure that he will also be interested in the views of my noble friends Lady Gardner and Lord Jenkin of Roding, who have experience of these issues.
The noble Baroness, Lady Masham, after giving a very moving account of a particular case—I am pleased to say that such a case is very unusual—raised the issue of time limits for assessing individuals. We recognise that in some areas there are lengthy waiting times for assessments, especially by occupational therapists. We take that matter seriously and the Minister for Health, my honourable friend Mr. Malone, has already started a round of talks with interested groups, including local authorities and the College of Occupational Therapists, as to how we can make some improvements speedily.
The noble Baroness, Lady Nicol, and my noble friends Lady Macleod and Lady Seccombe were right to focus our minds on the carers and their crucial contribution to community care. I can reassure them that they are at the very heart of our policy. The noble Baroness, Lady Nicol, asked also about the sale of property to fund nursing home and residential care, as did the noble Baroness, Lady Robson. Though local authorities must look at the value of a resident's property —in most cases it is their former home—they must ignore it if it is still occupied by the resident's partner, a relative who is 60 or over or who is incapacitated, or a child under the age of 16. Local authorities have discretion to ignore the value of the property in any other circumstances where someone is still living there and it would be reasonable for them to do so, for example, when a former carer continues to live there. A resident cannot be forced to sell their property without a court order. However, in most cases local authorities put a charge on the property so that when it is eventually sold they may recoup what they have paid in fees on behalf of the resident.
The noble Baroness, Lady Robson, asked about the opportunity that people have to refuse to be placed in a private nursing home. Patients can refuse to be placed in a nursing home or residential care home where there is a charge. In such cases social services and the health authority should try to find a satisfactory alternative, such as a range of services to support them at home. Patients never had a right to stay indefinitely in a hospital bed when doctors and others decide that they do not need continuing in-patient care.
My noble friend Lord Mottistone raised the issue of funding in the Isle of Wight. Since 1st April 1993 the total resources for social services on the Isle of Wight have increased by 12.5 per cent; from £14.3 million to £16.1 million. Since 1991 the increase in total social services resources on the island has been 90 per cent. Those are substantial sums which demonstrate the Government's commitment to community care and social services generally. Though I accept that the increase in the grant this year is not as large as the council had hoped, it is its responsibility to manage those increased resources carefully and effectively.
My noble friend Lord Ashbourne spoke of the difficulties faced by some of the Sue Ryder homes. Last summer I had discussions with the noble Baroness, Lady

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Ryder of Warsaw, and I am disappointed that the issues have not been resolved. I shall certainly write to my noble friend and to the noble Baroness.
This has been an important debate. The provision made for the care of the elderly, frail and disabled people in our society is of crucial significance to us all. The community care reforms, widely seen as the most ambitious legislation in social care since 1948, are beginning to take shape. After only 18 months there is clear evidence that things are beginning to change for the better. But there is still a long way to go. These changes were not meant to happen overnight: it is a programme for the next 10 years. But your Lordships can rest assured that this Government are committed to ensuring that the full benefits will be delivered and a seamless service given.
Lady Kinloss: My Lords, before the noble Baroness sits down, perhaps she can say whether or not she will look into the case for more consultants for younger people suffering from dementia.
Baroness Cumberlege: My Lords, I apologise to the noble Lady. I shall certainly do that. I shall also take up her point regarding the leaflets for long-term care. They are around and I shall ensure that the noble Lady receives copies.
5.54 p.m.
Baroness Jay of Paddington: My Lords, with the leave of the House, I thank the Minister on behalf of my noble friend Lord Ashley of Stoke for her detailed and careful reply. On his behalf also I thank all noble Lords for taking part in what has been an authoritative if somewhat disturbing debate. Knowing the deep concern of my noble friend in this regard, he may want to return to some of the issues raised this afternoon. In the meantime, I beg leave to withdraw the Motion.
Motion for Papers by leave, withdrawn.

Social Security: Spending Plans
5.55 p.m.
The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, with the leave of the House I should like to repeat a Statement made earlier today in another place by my right honourable friend the Secretary of State for Social Security. The Statement is as follows:
"With permission, Madam Speaker, I should like to make a Statement on social security following from my right honourable friend's Budget Statement. Last year at this time I announced that social security spending would reach £88 billion next year and £92 billion the year after. Now I can announce that spending plans for those years have been reduced to £86½ billion next year and £90 billion the year after. This is the first time since records have been kept that social security spending plans have been scaled down. This reflects the impact, not just of lower unemployment and lower inflation, but also of my social security reforms. Nonetheless, social security
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on average now costs every working person £15 every working day. I am therefore announcing today further measures to curb the growth of expenditure and to help people off benefit.
"As my right honourable friend the Chancellor announced yesterday, we will implement in full the second stage of help with VAT as we promised last year. From April 1995, pensions will incorporate up to £52 for single pensioners and £73 for pensioner couples specifically to help with VAT on fuel. We will be letting people know about the extra help with VAT on fuel by means of a special notice in order books. We will increase help with cold weather payments and insulation grants beyond that previously planned. From this month payments for cold weather rise from £6 to £7 a week. They were to go up to £7.50 next November. But I shall in fact raise them to £8.50. We are also spending a further £45 million—£10 million more than I announced last year —to help insulate homes and improve fuel efficiency. It will provide grants for more than 60,000 extra households next year.
"A key aim of my fundamental review of social security is to improve work incentives. To help people out of dependency it is vital to do four things: to make work more rewarding than benefit; to help people with the transition from benefit to work; to persuade employers to hire the long-term unemployed; and to help create more jobs for the less skilled. I can announce a £600 million package, which addresses all four tasks.
"Family credit helps nearly 600,000 families in work. In October, I introduced a child care allowance which over time should help 150,000 parents with their child care costs. But the more people earn the less family credit they receive. Consequently, the incentive to move from part-time to full-time work is limited. So I am introducing a £10 a week supplement to family credit for those working 30 hours or more a week. And the least well off receiving housing benefit and council tax benefit will get the full value of the increase. This will cost £200 million and should help about 345,000 families. Family credit has proved its worth in helping families into work. But most unemployed people do not have children, so they are not entitled to family credit. But an in-work benefit might help them into jobs, too. I therefore propose to test run such a benefit through pilot schemes covering 20,000 claimants. If the pilots are successful we will consider introducing a national scheme.
"Many people who want to work are hesitant about accepting a job because of uncertainties about the size and timing of family credit payments, so I intend to speed up payments of family credit so that all new claims are dealt with in five days. Other people fear loss of help with their rent or council tax. So I shall let people who take a job after six months out of work keep housing benefit at their existing rate for four weeks, regardless of their earnings. And we will consult the local authority associations to ensure that entitlements to housing benefit and council tax benefit are revised speedily so that payments follow on seamlessly after the fourth week. The new back to

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work bonus, which I announced in October, will be of particular help for people who want full-time work. It will enable people working part-time on Jobseeker's Allowance or income support to accumulate a bonus of up to £1,000 payable on return to full-time work. This bonus will be tax-free.
"I am also giving employers an incentive to take on unemployed people. Any employer who takes on someone previously unemployed for two years will receive a one-year holiday from the employer's national insurance contribution. This change requires legislation so it will come in from April 1996. Assuming employers take on 120,000 people a year, they will benefit by £45 million.
"The greater the costs companies incur when they employ people, the less they can afford to pay or the fewer people they will take on. I particularly want to help less skilled people to get jobs. So I shall be reducing employers' national insurance contributions a further 0.6 per cent. for lower paid employees from next April; and I will raise all the earnings bands used to calculate employers' national insurance contributions by £5. To help companies concerned about high levels of sickness I can also announce that we will reimburse statutory sick pay in full where costs exceed 13 per cent. of a company's monthly national insurance bill.
"Housing benefit and income support for mortgage interest combined now amount to £11 billion. They have doubled since they were introduced in 1988. The UK is almost alone in paying 100 per cent of rents through benefit. As a result, tenants have no incentive to choose the less expensive of two dwellings nor to negotiate over the rent level. And landlords may be tempted to push up rents for those on benefit. Rent officers determine whether rents are within reasonable market levels and help is not normally available above that. But in many areas the market level is largely determined by those on housing benefit. The average private rent in the deregulated sector is around £75 per week. But housing benefit meets rents of over £350 per week. Taxpayers on modest incomes, meeting their own housing costs, resent subsidising rents higher than they can afford for themselves. And people on housing benefit should have similar incentives to those paying their own rents when deciding what they can afford.
"I shall introduce a new scheme next October. New claimants and those moving home will be entitled to housing benefit for the full rent up to the average rent for similar properties in the area. Housing benefit will only cover 50 per cent. of the portion of rent above that. Existing claimants in their current tenancy will continue to receive full housing benefit as at present. Local authorities will be given funds to be able to reimburse more than 50 per cent. of the rent above the average in cases where they think there is special need.
"Prospective tenants will want to know how much housing benefit is payable before they agree a tenancy. So we will consult the local authority associations and the Institute of Rent Officers about how to produce this information. At present people
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who are away can claim housing benefit for up to a year, even if their home is empty. In future, we will limit this period to 13 weeks except for people with exceptional reasons, such as those in hospital.
"Taxpayers pay the mortgage interest of people on income support. Since 1979, this expenditure has risen from £31 million to over £1 billion. And the scheme has major drawbacks. First, until I imposed a cap, it covered any size of mortgage, from cottages to castles. Next April I intend to reduce that cap to £100,000. Secondly, the generosity of the scheme for those out of work can create huge disincentives to move back into work. But to extend help with mortgages to people in work would be immensely costly. Thirdly, since income support cover is paid direct to lenders, the scheme is simply bailing them out from their bad lending practices. Lastly, the present system discourages individuals from taking out private insurance and stops lenders insuring all their loans. Nonetheless, private insurance has spread significantly. I believe that insurance of mortgages should become the norm. So for anyone taking out a loan after 1st October 1995 we will pay income support mortgage interest only after the first nine months. I believe that insurance for this nine month period will be readily available. Indeed, I expect that many lenders will incorporate it in their loans at very modest cost.
"Existing mortgage holders qualify at present for 50 per cent. of their interest payments for the first 16 weeks. But as this money is paid to borrowers, it is not always passed on. In practice, most people who lose their job and are unable to meet their mortgage payments return to work within a few months. And most private policies make no payments in respect of the first few weeks. As a result, lenders rarely repossess, even where the borrower is not covered by income support. I therefore propose that no payments will be made for existing mortgage holders, who start an income support claim, for the first two months. For the next four months, the payment of 50 per cent. of mortgage interest, currently made to the borrower, will be made direct to the lender. Thereafter, mortgage interest will be paid in full, as at present. We will consult the Social Security Advisory Committee, mortgage lenders and insurers about circumstances which cannot be covered by insurance. I am confident that the insurance market will respond, that lenders will behave responsibly, and that sound lending will ultimately contribute to a healthier market.
"The fight against benefit fraud remains a top priority. Last year our crackdown saved a record £654 million and caught a record 300,000 cheats. But prevention is better than detection. We want to stop fraud happening in the first place. That requires a secure system of payment. We are working with the Post Office to create an automated system of payment, probably involving a payment card, dramatically to reduce fraud involving pension books and girocheques. We are seeking private sector finance for this major initiative which will strengthen the whole Post Office network; although the system

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we choose must be easy and acceptable to use, especially for pensioners. Nine companies and consortia have put forward proposals to be prime contractors for a system which could be in use in 1996.
"However, most fraud involves people giving false information about their earnings and circumstances, so we will be making more checks on circumstances. We will be doing more home visits. And we are piloting a scheme in London so that local authorities can cross-check information about their housing benefit claimants. This will cost £100 million a year, but it should save over £2.5 billion over three years. I am also tightening some rules.
"I have already acted against avoidance of national insurance contributions by employers who pay earnings in various non-cash forms. It undermines the whole basis of the NI scheme. Such practices are devious. I have already put a stop to fine wine wage packets, precious stone salaries and a number of other ruses. I give due warning that I will take further action as and when required.
"Separately, I will be limiting the grant paid through the social fund for funeral payments. The level of payments for funerals through the social fund has grown by 6 per cent. a year above inflation. Costs have risen from £18 million in 1988–89 to £61 million this year—a more than three-fold increase. Funeral payments cover the whole cost, so funeral directors can force up cost to customers on social fund knowing they are unlikely to obtain better quotes. I have taken action to stop families claiming via remote relatives on income support. I propose next April to limit the maximum payment to £875, which is the average payment last year.
"Madam Speaker, the measures I have announced today mark a further radical step in my reforms of social security. My aim is: to improve incentives, to focus help on those most in need, and to stop social security outstripping the nation's ability to pay. I have set out a £600 million programme to help people out of dependency and into work. I have fulfilled our promise to help pensioners and others cope with VAT on fuel, at a far more generous level than anything suggested by the Opposition. And I have put forward sensible plans to tackle the rapid growth in housing benefit. Any party which shrinks from these problems is unworthy of government. This Government have the courage to tackle them. I commend these measures to the House."
My Lords, that concludes the Statement.
6.10 p.m.
Baroness Hollis of Heigham: My Lords, I thank the Minister for that Statement. We agree with much in it. Clearly, fraud must be tackled and clearly we must use benefits to encourage people into work rather than bar them from it.
I should like to make a general point before coming to the three more important issues that were raised in the Minister's Statement. I think that we all agree—we must —that the problems are very difficult, but in my
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view they are made much worse because the policies of the Department of Social Security, the Department of Employment and the Treasury do not reinforce each other but undermine each other. I shall expand on that.
The Government are seeking to contain DSS expenditure essentially by taking people off contributory non-means-tested benefits—even though they have paid for them—and putting them on to means-tested benefits. The Government are moving people off invalidity benefit and, if they are not eligible for incapacity benefit—and 200,000 people will not be—putting them on to income support.
The Government are also seeking to move people from unemployment benefit, which is a 12-month benefit, and on to the jobseeker's allowance which after six months will be means-tested. They call that "targeting", but it means that for every pound that the claimant might earn (or that his or her partner does earn), the couple loses a pound in benefit. I shall take the example of a couple where the husband is in work and the wife is working part-time. If the husband loses his job, his wife has to stop her part-time work, otherwise her husband will lose benefit. The result is that if one person loses a job, both do; if one person goes on benefit, both do. The family then goes from being work-rich to work-poor, doubling unemployment at a stroke. That is the direct result of means-testing and targeted policies.
Then, as we see in today's Statement, the Department of Employment and the Treasury come along with various fancy schemes, many of which are perfectly welcome in their own right, such as the rolled up bonuses or the 24-hour rules, to coax back into work the same people the DSS has just helped to exclude from work because of the means-tested benefit system that the Government have constructed. That is perverse and costly because once a couple is on benefit, they will need even more benefits to pay their 100 per cent. housing benefit bill, their council tax bill and the lot. That will end up costing more in total benefits than would have been the case if the couple had remained on contributory and non-means-tested benefits in the first place. We ask the Government to start thinking this through because at the moment their policy is not only stupid but undignified and very expensive.
I turn now to the specific proposals in the Statement. The first related to VAT on fuel. We firmly believe that VAT on fuel should not be increased to 17.5 per cent. especially, notwithstanding the Minister's words, as the compensation package is both inadequate and incomplete. The Minister said that he will implement in full the second stage of help with VAT, but that does not mean that that will cover the cost of imposing VAT on fuel.
I say that for three reasons. First, the people it is designed to help are precisely those with the greatest need of heating in their homes, such as the elderly. All the estimates show that the VAT rebate will meet only half the real cost of the imposition of VAT on fuel because those affected are heavy users of heating.
Secondly, those who do get compensation will not, as the Minister seemed to indicate, get a clear increase of 50p for a single pensioner and 70p for a couple; instead

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they will get what remains after the Rossi index has top-sliced their normal uprating—in other words, we estimate that the increase will be 25p for a single pensioner and 30p for a couple. I have to say that the Government's way of presenting the figures must be deliberately misleading pensioners.
Thirdly, those in equally dire financial need, such as the very low paid and, above all, those disabled people who have only the disability living allowance, will not get any compensation at all to cover the added cost of the imposition of VAT on fuel. Therefore, somebody with severe multiple sclerosis or severe rheumatoid arthritis who needs 24-hour heating will face increased heating bills of £2 or £3 a week with no compensation for the VAT. I ask the Minister to defend the Government's position and to say why disabled people receiving only disability living allowance will not have their VAT reimbursed, as will pensioners and other groups, while the chairman of British Gas is at the same time giving himself a pay rise of over £200,000 a year. That is deeply wrong and deeply offensive.
The second proposed change that was announced in the Statement relates to housing benefit. Again, we welcome aspects of it. We welcome the smooth-over of the four-week period. That is right. We welcome the fact that the Minister is proposing that tenants should know their housing benefits in advance. That is right. It is understandable that the Government want to cap housing benefit. But let us be in no doubt about it: like so many other problems, this is a problem of the Government's own making. The Government decontrolled private sector rents in 1988, deciding, as Sir George Young said, to let housing benefit take the strain. That has cost us as taxpayers an additional £7 billion in rent allowances since. However, the Government are now saying that housing benefit will not take the strain and that they will not allow it to finance reasonable market rents but only the average rent in the locality plus 50 per cent. of the difference. That is rent control through the back-door.
The Minister talks glossily about tenants' incentives to choose "cheaper property". What world is he living in? Tenants are in no position to choose; it is a landlord's market. I know that tenants are grateful simply to find somewhere clean, decent and safe. What will now happen? Does the Minister really assume that landlords will reduce their rents to the rent officer's judgment of the average rent in the locality? Already most landlords prefer not to let to tenants on housing benefit. If they have to cut their rent as well, they certainly will not let to such tenants.
What happens then? Tenants on housing benefit will either be unable to take the property and will become homeless; or they will seek to top up their rent out of income support, go into debt and then become homeless; or the local authorities will be expected to pay the 50 per cent. difference, especially if children are involved who might otherwise be taken into care. That will mean either a charge on council tax payers (local authorities may be capped) or on council tenants (who themselves will have to pay higher rents to gain the higher rent allowances and who will therefore need more housing benefit themselves).
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Will the Minister please tell us how much the proposals will save and who or what he now expects to take the strain, if not housing benefit? Will it be the landlord, by cutting the rent? Unlikely. Will it be the tenants who will see their income support top-sliced? Unaffordable. Will it be the local authorities, which are capped? Impossible.
The Government are also introducing new proposals on mortgage insurance about which we are very worried because they are likely to increase homelessness. There are real difficulties here. The Council of Mortgage Lenders says that 57 per cent. of home owners receiving income support help with their mortgage are not in work. They are disabled, single parents or retired. They cannot get insurance. Those who most need insurance will, by definition, be those least able to get it and least able to afford it. Will the Minister please tell us who will take the strain? If private tenants are not going to be able to have access to housing for rent, if council houses are not being built by local authorities and if people are unable to afford to keep up their mortgages, who will meet, face and take the strain of the resulting problem of homelessness which the Government are surely creating?
Finally, the Government have a series of proposals in the Statement on employment and moves back into work. The Government are quite right. The social security system, as at present constructed, produces a double problem. There is the employment trap, that is, getting from benefit into work. And, once in work, there is the poverty trap; that is, of increasing your earnings, once in it.
Clearly, we welcome some of the detailed proposals—the national insurance holiday for the long-term unemployed, which was a Labour Party idea in the first place, the rolled-up bonus, and the work trial schemes. They are intelligent. We also welcome the pilot schemes of work-start. The trouble is that we have little confidence in the Government's ability to deliver. To take Restart, for example, out of 850,000 people who last year were interviewed and counselled only 1.5 per cent. went on to find jobs. Why? The problem is not lack of skills, although that does matter. It is certainly not motivation. It is the absolute lack of jobs in the economy for male manual workers needing full-time work. We have seen our manufacturing industry in dereliction; we have closed down our construction industry; we have capped local authorities, who can no longer provide the infrastructure and public service jobs which such men previously did. It is not surprising.
The Government propose increases in family credit premium for those in work, and that is welcome. They are also considering extending family credit to people without families; that is, single people and couples without children. Can I raise some worries on that? I believe the intentions of the Government are benevolent; I am sure they are. However, the prospects are worrying. What the Government are saying is not that employers should pay a minimum living wage but instead that the rest of us, as taxpayers, should top up a wage below the living wage to make it so. Such a scheme could cost £490 million a year. A similar scheme in the 1790s was called Speenhamland. It is quite perverse. On the one

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hand, the Government are placing burdens on employers such as statutory sick pay, maternity pay and possibly pay for industrial injuries, which should be a national insurance and government responsibility. On the other hand, what should be the responsibility of employers—adequate wage levels—has been taken over by the Government, who will top up wages from your taxes and mine. Far from employees, it will be employers who will be sponging off a dependency culture.
Family credit is sensible if attached to a minimum wage: then it tops up family costs. Instead it is going to be used to top up wages themselves. The implications for public expenditure and the blank cheque it implies for wage levels and for the Treasury are frankly mind boggling. Employers will be able to press wages down even below income support levels, knowing that family credit and tax payers—you and us—will take the strain. I am amazed the Treasury will wear it.
We do not under-estimate the difficulties the Minister faces, but I have to say that they are largely of the Government's own making. The Government decontrolled private rents, and there has been a crisis in housing benefit. The Government have increased means-testing and there is therefore a crisis in employment and poverty traps. The Government have scrapped wages councils and therefore a minimum wage, so we are going to have a crisis over family credit. As for VAT on fuel, I do not believe the Government will be forgiven. In too many fields in this Statement the Government's policies are perverse, uncivilised and costly; they simply will not do.
Earl Russell: My Lords, admirers of the late Sir Alan Herbert will realise that when I refer to the Bishop of Ipswich I am describing an entirely fictional character. I am tempted to greet this Statement with the favourite remark of that character, "Well, it could have been worse". I am pleased to welcome the back-to-work incentives. They embody what is rapidly becoming a three-party consensus. We might argue about which party had these ideas in the first place. I do not think we need bother. What matters is that somebody is thinking and taking action which, on the whole, goes in the right direction. That we cannot but welcome.
I welcome the concession on the employer's national insurance below £205. I welcome the incentive to take on the long-term unemployed although this will clearly need monitoring to make sure that employers do not dismiss people who are not long-term unemployed in order to take on those who are. I am glad to see the Minister nod. I look forward to his further explanation. I welcome the rebate for taking on two-year unemployed. But why is this to come in during 1996 when presumably the Government are hoping that unemployment will be a good deal lower than it is now? It reminds me a little of the schoolboy who was asked which was the more important, the sun or the moon. He said that clearly the moon was more important for the moon gives light when we need it at night and the sun gives light in the day when we do not need it.
I agree with the noble Baroness, Lady Hollis, that some measures the Government are taking may rob others of their effect. I was extremely interested to hear
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what she said. A fact sheet from the Rowntree Trust, which I suspect the noble Baroness also received, said that the most rapid increase in unemployment was among the spouses of the unemployed. The noble Baroness is the first to offer an explanation of that phenomenon, I believe that she has made an academic as well as a political contribution.
I welcome warmly the attempts to ensure more rapid assessment of housing benefit and family credit, the four-week tiding-over period and the attempt to ensure quicker assessment of family credit. However, these proposals will put burdens on staff in benefit offices. The biggest saving thrust of the Statement concerns staffing within the government machine. Last September we had worrying reports of staff shortages in benefit offices. There were reports last week of staff shortages in employment offices in London. I should like to be sure that staff in benefit offices, who are doing their best, are not going to be blamed for failing to do what they have not enough people to deliver. The situation will need watching.
The job finder's grant I welcome, as I did last year. It is an imaginative and practical idea. So far, I believe that there has been a pilot study only. I would be grateful for clarification. Is it now actually being made universally available or is it merely a rather bigger pilot scheme? I have not managed to understand what exactly the Statement is saying about that.
The back-to-work bonus I welcome, and also the fact that it is tax free. I wonder, however, if that is quite enough. It will inevitably be perceived, since this is money that people have earned while on income support, as the Government paying people their own money. The Government will, I think, be asked whether they intend to pay that money with interest or, if not, at the very least, in the phrase of the student loans Act,
"at a zero real rate of interest."
That is a point about which the Government might think.
I welcome, subject to the same reservation as put by the noble Baroness, the in-work family credit for the childless, and the full-time supplement. I will not make my party conference speech about that now. But the point needs thinking about. My main reservation on this section of the Statement is that over and over again we read the word "pilot". In fact, it looks like an airfield after rather a bad raid; it is all pilots and no planes. I would like to think that some planes will be supplied in the fairly near future so that some of these pilots can take off.
It is just not incentives in the benefits system that we need if we are to get people back to work; we need training. I regret totally the cuts in the budgets of the TECs, which are likely to work against the thrust of the welcome concessions contained in the Statement. In that context, and in the hope of saving the cost of severe hardship payments, I should like to ask whether there has been any uprating in the youth training allowance and the youth training bridging allowance, because, if not, the Department of Employment is, as usual, passing its bills over to the DSS. That is a form of recycling which I hope the department will agree is deplorable.

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There are a number of things that the Chancellor and the Secretary of State could have done in the way of making it easier to get back to work, which have not been done. There is no relaxing of the housing benefit tapers; there is no concession to the pressure for a disregard or taper on income support. This summer, at the Liberal summer school, our outside guest was Peter Morgan of the Institute of Directors. He argued at some length that the benefits system discourages enterprise. Your Lordships may imagine that I questioned him closely about what he meant. What he was concerned about was that the total lack of disregard discourages the unemployed from doing small, self-employed jobs such as, for example, window cleaning. I do not agree with his remedies, but he has pinpointed a very real problem. I hope that the Minister will think about it.
Nothing has been done about passported benefits which are one of the big disincentives to getting back to work. Nothing as been done about the costs of travel to work. That can easily be £6 and £7 a week. It forms a tidy hole at income support levels. There is no recognition of the numerous people who cannot go to work unless they have a car. I do not see how someone in that position who does not have a car can ever get back to work. I should like to think that some thought was being given to the problem.
If people are to get back to work, as well as changes in the benefit system they need housing. They need a supply of low-cost housing. Here again, one is tempted to think that the Government have literally got themselves into a situation where their left hand does not let their right hand know what it is doing—the left hand being the Chancellor and the right hand, of course, the Chief Secretary.
The cut in the grant to the Housing Corporation, and the cut in the local authority grant for managing and maintenance will not do anything to encourage low-cost housing. Nor, I think, will the changes in housing benefit. One of them, I welcome. It is one for which I have asked in the past, and therefore I must. That is the arrangement to allow the tenant to be notified of an eligible housing benefit before a tenancy is struck. I wrote to Sir George Young asking for that on 21st December last. I should like, rather belatedly, to give thanks that that has been noticed. On the other hand, I am not happy about the notion of subsidising the average rent only. Every cricketer among us knows that some scores are above average. Not every house on the market can have an average or below average rent. That is in the nature of an average. So some people always must be forced into paying rents above average, with the consequences the noble Baroness outlined.
I ask the Government for one technical concession which it might not be beyond their power to grant. It is that the word "average" should be interpreted as the average rent of houses which are fit for habitation because, as we know, there are a great many which are not. They pull down the average considerably. If we push people into living in those houses, it is the Department of Health which will pick up the bill, and that will not be good for the PSBR.
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I am interested in the proviso about people not receiving housing benefit if they are away from home for more than 13 weeks. I well understand the thinking behind the proviso. The example given in the Statement is that of prisoners. Again, I see the thinking behind the Statement. But the biggest difficulty in the reintegration of ex-prisoners in society is obtaining employment, and not having a home to which to return generally is not a help to obtaining employment. So I wonder whether here the Government may be cutting off their nose to spite their face. Other exceptions which I hope will be considered include seamen and members of the Armed Forces. I hope that there will be consultation about the matter because there is a good deal of thinking to be done.
My greatest misgiving relates to what is being done about mortgage interest. The cap is being reduced to £100,000. I hope that we can be told that that figure will exempt London. If it does not, it will be of little use. We are also told that the first nine months will not be covered. A lot can happen in nine months, including the building up of a very high level of debt. Once again I express my regret that the Government do not keep any figures about the levels of debt among those on benefit. A great many proposals might come out differently if that information were available to them.
The Government suggest that people should use private insurance. I am all in favour of people doing that when they and the insurance market can afford it, but at the moment our insurance market is under some strain. I should not have thought that it was in the national interest to persuade insurers to take on a great many heavy extra risks. I have looked into such insurance myself at various times when the university budget was under some strain. I found that on an academic salary the cost appeared prohibitive. If it is prohibitive on an academic salary, it will be prohibitive to a great many of those with whom we are concerned. They have the choice then of putting a greater strain on housing benefit or of becoming homeless and not working. I do not believe that either of those results are quite what the Government want. We shall have more repossessions. That will depress the housing market. It will diminish the feel-good factor, and that perhaps as much as anything else will lose the Government votes. It will not worry me. It will not worry the noble Baroness. I wonder whether it even worries the Government.
I agree with everything the noble Baroness said about that. It creates yet another poverty trap, and in a future Statement we shall be hearing of measures to relieve that. It makes me say yet once again how serious it is that students have been excluded from the benefits system and therefore excluded from help they need desperately.
Finally, and appropriately, I come to funerals. First, I want to ask the Minister whether the capital limit on the cost of funerals will be uprated every year. If not, it may cause severe hardship within a few years. Secondly, I want to ask the Minister whether he really supposes that the newly bereaved, talking to a funeral director, are, in any classic sense, customers in a free market. Most of us at that moment in our lives just do not regard it as

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decent to haggle and bargain over the price we are paying. So, for that reason, that proposal is not decent. I hope that the Government will withdraw it.
Lord Mackay of Ardbrecknish: My Lords, in so far as some parts of the Statement were welcomed by the noble Baroness and the noble Earl I thank them. They asked me a barrage of questions and I shall do my best to answer them. It is all very well for the noble Baroness to say at the beginning of her remarks that the problems are difficult. Indeed, they are. If in addition to following her questions I had time to click away at my pocket calculator I expect that I should have found that, if one interprets her questions and criticisms as meaning that she would prefer to spend more money in some of these areas, I had clicked the £88 billion towards £90 billion or £100 billion—and all at the expense of the taxpayers. That problem faces any government when they discuss the benefits system.
The noble Baroness began by attacking means-tested benefits in general. I shall read her remarks with interest because the cost of moving to non-means-tested benefits would be considerable and I should probably have to buy a new battery for my calculator.
She rightly agreed with the noble Earl and me about the problem of unemployment and of finding ways of encouraging people back into work and off benefit. She painted a particular scenario about the husband losing his job and the wife giving up work too. In fact, an easement in the jobseeker's allowance will allow a partner to work up to 24 hours per week instead of the present 16 hours and to keep the benefit. We have taken that problem into account.
The noble Baroness and the noble Earl were not pleased with my announcement about the help that will be given to pensioners and others as regards VAT on fuel. Yet on 21st November 1993 her honourable friend Mr. Donald Dewar, who leads for her party in the other place, indicated that the Government must add something to the pension in order to take account of that increase and that they could do so by adding an extra 50p. We added an extra 50p and we are now adding another 50p. The noble Baroness may like to argue about how we arrived at the second 50p, but the simple fact is that there will be £1 more on the pension of a single person and £1.40 on that of a married couple. That would not be available were we not proceeding to help people to meet the extra cost of VAT on fuel. We shall be giving approximately £1.25 billion-worth of help as regards this problem.
The noble Baroness asked whether the receivers of AA and DLA will be compensated. They will, as they were last year, because 90 per cent. of them receive benefits which include compensation. The remainder are likely to be in work or to be better off.
The noble Baroness spoke of housing benefit, as did the noble Earl, and she painted a dismal picture of what she thought would happen. She suggested that the Government's housing policies were to blame because the deregulation in 1988 had caused the escalation. Of course rents have risen, and housing benefit has risen as a result, but we must try to temper that rise. When
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average levels are much closer to £75 per week, taxpayers should not be expected to subsidise those receiving housing benefits on rents such as £350 per week. I read in today's newspaper of such a person paying more than £700 per week. If people choose to live in better quality, more expensive housing they cannot expect the taxpayers, many of whom do not live in such high quality housing, to pick up the Bill.
Of course, to some extent deregulation has caused that problem. However, it has increased the amount of housing for rent by approximately 16 per cent. I believe that reintroducing rent controls would be a retrograde step. The actions that we are now taking will go a long way towards helping those who are living in expensive accommodation. It will not affect people who are living in accommodation that costs up to the average level. Above the average level we shall pay 50 per cent. of the difference. I indicated in the Statement that local authorities will be given money in order to deal with hard cases.
I turn now to our proposals on mortgages. There is a great deal of indication that already a thriving protection insurance market exists and will develop in order to meet the demand that we believe will be placed upon it by the taxpayer withdrawing from the first nine months. Mr. Mark Boleat, the Director General of the ABI, said today that insurance companies will meet the increased demand from new borrowers for this type of insurance, with companies already providing this cover expanding their capacity and possibly new companies entering the market. I understand that today the Abbey National Building Society reported that between 40 and 50 per cent. of new borrowers are taking out a similar type of insurance.
We shall proceed cautiously on that issue and shall consult widely on the package through the Social Security Advisory Committee and directly with the lenders and insurers. I can assure the House that pensioners will be protected. The position of other vulnerable groups will also be considered during the course of the consultation.
The noble Baroness turned to the issue of encouraging people back into work and, understandably, asked whether there was a danger with the NIC holiday that some employers will sack people at the end of the holiday and recruit new people who will also be eligible for the holiday. It will come as no surprise to your Lordships to know that one of the problems in the whole social security field is that when one tries to do good, as we believe we are doing here, a number of identifiable problems crop up. We fully accept that that could be a problem. The detailed monitoring arrangements have yet to be considered but we believe that reputable employers will not do that. If we are right about the need to give such people, most of whom are men, the opportunity to return to full-time work, we hope that, if after a year they prove to be excellent employees, only a foolish employer would go back to the beginning and recruit another employee in order to receive the holiday. Obviously that is a matter that we shall be watching.
The noble Earl asked a number of questions and I suspect that I have covered some of them already. He asked about the staffing of benefits offices. In order to

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speed up the payment of family credit, which we believe is important and is paid from the central unit at North Fylde, extra resources are being provided.
The noble Earl also asked why the holiday will not start until 1996. As I made clear in the Statement, the reason is that we require legislation. He asked whether the back-to-work bonus will incorporate interest accumulated during its accumulation. No, it will not attract interest during that period but it will be tax free when it is paid out, which is important.
The noble Earl made much of a surfeit of pilot schemes. Some of the schemes that I announced today are not pilots. The new premium of £10, the faster payment of family credit and the run-on in four weeks on housing and council tax benefit are not pilot schemes but are being introduced now. The last two schemes are a recognition of the problem that he raised; that is, the expense incurred when people move off benefit and into work. We are aware of that and we hope that those two measures will try to tackle the problem.
On income support hardship payments available to 16 and 17 year-olds and to those waiting for YT or who are unable to work or train, I can tell the noble Earl that they have been uprated in the Statement. I believe that the £815 million spent on YT in Great Britain in 1994–95 represents a considerable investment in our future.
I am pretty certain that I will not have managed to answer every question that I have been asked. However, I believe that what we have here is a package which faces responsibly the problem of looking after those people who need help from the taxpayer and, at the same time, ensures that the cost to the taxpayer does not run out of all proportion to the ability of the taxpayer and the economy to pay.
6.51 p.m.
Lord Boyd-Carpenter: My Lords, I should like, first, to thank my noble friend the Minister not only for reading the Statement but also for the extremely interesting answers that he gave to a very large number of highly complex questions. I know that my noble friend would not for a moment claim that he had dealt with all the points raised. Therefore, the first question that I should like to ask him is whether the Government are proposing to arrange for a full day's debate in your Lordships' House on the Statement and on the proposals therein contained? It is a matter which is of importance to the vast majority of our fellow citizens. It is also a matter upon which your Lordships' House boasts considerable expertise, with a good many people who have served in social security departments who may claim, perhaps, to know a little bit about the subject.
It is most important that we should have an early debate, and a full day's debate—I do not mean one of those short debates—on the matter. I know that my noble friend will not be able to answer me at this time, but I hope that he will convey to his noble friend the Leader of the House the fact that we feel it very necessary indeed that this House should bring its great knowledge and expertise to bear on a subject which, as I said, is of such great importance to so many of our fellow citizens.
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In the meantime, I should like to ask my noble friend a further two questions. First, I turn to what is being done to counter the evil effects of the proposed substantial increase in VAT on domestic fuel. I must confess that I share the view that has been expressed from the Benches opposite; namely, that the whole proposal is a great mistake and that the Government would be much wiser not to proceed to increase VAT on domestic fuel. However, on the basis that the Government are going to do so regardless of the advice they receive, can my noble friend say—I could not quite follow the figures that he gave—whether the proposed compensation offered will in the average case (and obviously cases will vary) fully compensate an unemployed person for the increase in the cost of his fuel, especially if the weather turns out to be cold? It is important for us to gain some idea as to whether the compensation, which in principle is obviously rightly being offered, will really make a substantial difference and seriously reduce, if not eliminate, the hardship which otherwise will undoubtedly be caused by such a very severe increase in taxation on what is a domestic necessity.
Secondly, my noble friend made no reference to the item in the gracious Speech that the Government are proposing to introduce a measure to secure the equalisation of pension ages for the retirement pension. That was not included in the Statement. It will obviously require legislation, but I should like to know whether such legislation is imminent.
Lord Mackay of Ardbrecknish: My Lords, I thank my noble friend for his kind opening remarks. I believe that I am right in saying that he is, perhaps, the longest serving incumbent of the Department of Social Security—although it may not quite have been called that—of anyone around today. I accept that there is a fair amount of knowledge to hand, as there are a number of other people in your Lordships' House who have passed through the Department of Social Security at various times. On the question of a debate, I believe that I would get into deep trouble with the usual channels if I made any comment in that respect, other than to say that I shall, of course, pass on my noble friend's remarks.
As regards VAT and the compensation for cold weather, I must tell my noble friend that clearly it would be impossible to identify and compensate exactly for each individual fuel bill. Therefore, we have to do it the way that we have and take a fairly broad brush approach by putting those extra amounts of money onto certain groups; for example—and I am using the pensioner as the basic starting point—£1 per week for a single pensioner and £1.40 per week for a couple.
I turn now to the problem of cold weather. It is possible that my noble friend did not notice that I mentioned that the cold weather payments, which rose this month from £6 to £7 a week, will in fact rise to £8.50 in 1995. That is £1 more than was originally announced. Perhaps I may also point out that the extra £10 million that I announced for use in insulating houses is a very important way in which people can not only reduce their heating bills but also make their houses a

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great deal more comfortable to live in. I very much hope that people will take up the offer of the money which is available.
I can confirm that there was nothing in the Statement about the equalisation of pension ages. Perhaps if the matter comes to the House in about the year 2010 it may begin to appear in the uprating statements. However, I can tell my noble friend that a Bill will shortly appear on the subject. I have no doubt that we will spend many happy hours discussing it.
Lord Jenkin of Roding: My Lords, I have one very short question to ask. My noble friend referred to a change in statutory sick pay. Do I understand from what he said that the Government have accepted the alternative scheme that was written into the statutory sick pay legislation, which was to be subject to consultation and to a final decision?
Lord Mackay of Ardbrecknish: My Lords, I am happy to confirm to my noble friend Lord Jenkin of Roding that that is indeed the case. Employers will compare their statutory sick pay payments in a tax month with their national insurance contribution liability for the same month. Where the SSP paid exceeds 13 per cent. of their NIC liability, the SSP paid in excess of the percentage threshold will be eligible for reimbursement. I understand that that point was argued by my noble friend when the legislation went through the House. The department consulted widely and I am happy to say that the new scheme has been given a wide welcome by both business and the TUC.
Lord Dean of Harptree: My Lords, can my noble friend the Minister confirm, first, that the Statement fully honours the Government's commitment to restore the real value of pensions and benefit on an annual basis? Secondly, I do not believe that my noble friend mentioned war pensions. Can he confirm that there will be similar increases in war pensions at the same time?
Lord Mackay of Ardbrecknish: My Lords, I can confirm that the uprating part of today's Statement honours the Government's obligation. Uprating is based on the RPI in the month of September. We have fully honoured that commitment. War pensions will, in fact, join the other pensions to which my noble friend referred.

Pension Transfer Schemes
7 p.m.
Lord Haskel Lord Haskel rose to call attention to the consequences for members of occupational and other pension schemes transferring their pensions to private insurance companies and the need for remedies and satisfactory consumer protection in the future; and to move for Papers.
The noble Lord said: My Lords, on 15th June this year my noble friend Lord Jay and other colleagues drew to your Lordships' attention the problems of a large number of pensioners, present and future, caused by the Government's drive towards personal pensions.
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Since that debate we have had the Government's proposals to rectify this damage. I should like to examine these proposals and show that unless regulation is much stronger a lot of the damage will not be rectified and further difficulties will arise resulting in yet more calls on the benefits system.
I wish briefly to remind your Lordships how all this came about. In 1986 the Government decided to encourage people to move from state earnings related pensions, known as SERPS, and occupational pension schemes, to personal pension schemes. The reason given was portability of pensions. The real reason was to move pensions from the public sector to the private sector. Some £14 billion was spent on this exercise. Some £4 billion was spent to fund a 2 per cent. bonus to persuade people to opt out of SERPS. Some £10 billion was spent on National Insurance rebates. A further £1.2 million was spent by the Government on a TV and press advertising campaign to persuade people to move into private personal pensions.
Some of your Lordships may remember the frenzied activity that went on at that time; the advertisements shouting that this was the only time the Government would give you money, and urging people to liberate themselves from the public sector. Of course, the voice of reason was drowned out by the hard sell of the pensions industry, ably abetted by the Government. The Consumers' Association, the National Association of Pension Funds, the CBI and even one or two of the large pension companies all warned of the dangers of people ending up with inadequate income by contributing to a personal pension plan rather than by contributing to a defined benefit scheme.
In the early 90s the warnings began to come true and people started to find that their pensions were in fact inadequate. Some made a fuss and because of this the regulators—one wonders what they were doing all this time—started to investigate and unearthed a whole culture where the mis-selling of pensions, deliberate or negligent, had been allowed to flourish. It is estimated that some 5 million private pensions had been sold during that time, and each one would have to be investigated and where there had been mis-selling the customer would have to be compensated.
The Securities and Investment Board, SIB, decided to split up the 5 million customers into priority groups. The first priority group, consisting of 1.7 million people, are those who are approaching retirement. They will have their personal pensions looked at during the next two years. The steps to be followed have been laid down in great detail. First, the pension provider examines each personal pension plan to see if there has been any loss because of the changeover. If there has been a loss, then the pension provider examines the records to see if there has been any mis-selling. The customer is sent a form to complete to help the pension provider with this work. If there has been any mis-selling, the pension provider calculates the compensation based on certain actuarial assumptions and makes an offer to the customer. If the customer is not satisfied, there is an appeals procedure eventually going to the Pensions Ombudsman.
I am sure that by now your Lordships will be wondering how the customer is going to cope, but do not worry, the SIB has produced a 12-page booklet for the consumer with helpful advice, such as that on page 7 which states that if someone receives an offer of redress, he should read it carefully. It further states,
"you will have to decide whether you agree or disagree with the assumptions",
contained in this offer.
But never mind, there is a telephone help line. The Pensions Hotline is an 0171 number, which means that the caller has to pay, and it is open from 9 a.m. to 5 p.m. Monday to Friday only. Noble Lords may like to compare this with the Cones Hotline to complain about roadworks. This is an 0800 number, which means that it is free to the caller, and it is manned 24 hours a day seven days a week. Obviously roadworks are more important than pensions. A friend of mine telephoned the hotline and was advised to contact the regulator. The regulator said that he was not allowed to comment on compensation and advised my friend to go to an independent financial adviser—perhaps the one who got my friend into the mess in the first place! If the consumer wants true, independent advice from a solicitor or accountant, he will have to pay. Perhaps the Minister will tell us if he is satisfied with this consumer protection.
Sorting all this out is a huge task. Let me remind your Lordships that there are 1.7 million priority cases. There are also lots of hazards in the way. There are missing records; firms which have gone out of business or which are deliberately dragging their feet; and potential disputes between the pension providers and their intermediaries. And there is more to come. The first investigation does not cover SERPS. This is to come in 1995. There also seems to be some trouble looming about the mis-selling of endowment policies, mortgages and investment advice. Nobody knows how many cases will merit compensation in the end, but, in anticipation, the Ombudsman is appointing two assistants and increasing the staff. Who will pay? Most firms and independent financial advisers have professional indemnity insurance, but this usually only covers part of the cost. The rest of the money will have to come from the pension providers or from a levy. At the end, this enormous cost will come from our insurance premiums.
So what lessons should we learn from this sorry mess? First and foremost somebody must look after the consumers' interests and see it through. Can this be the regulator? Not as at present organised. The Personal Investment Authority, or PIA, was set up in June by SIB to raise standards and tighten up on regulation. But it is a kind of hybrid institution. On the one hand it is supervised by SIB, which is in turn responsible to the Treasury. But on the other hand the PIA has to bid for members of the pension industry to join it because without their funding the PIA cannot exist. So it is not pure self-regulation, and neither is it independent regulation. The public must have confidence that the regulator is impartial and detached.
This conflict between the demands of the pensions industry and the demands of public interest will be impossible to resolve. I believe that the self-regulation
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that we had in the 1980s has had its day, and that eventually we must have a system of direct regulation. Meanwhile, I urge the Government to strengthen SIB yet further while an orderly changeover takes place. The regulators will be very unwilling to damage their own paymasters, and so will have every incentive to keep the compensation low.
A second lesson to be learnt from this is how foolish the Government were to rush in and create a false market in personal pension plans. Indeed, because of their advertising and the financial inducements offered, one could fairly say that the original mis-selling was by the Government themselves, but the financial cost of putting this right will eventually fall on all policyholders. Not only were the Government warned of the problems: the data on which they acted were wrong. Their data assumed that all of us would work continuously until aged 60 or 65. This is now manifestly untrue. With the benefit of hindsight we can see that the collective provision of pensions plus the encouragement of personal savings is a far cheaper way than buying annuities out of personal pension plans. Only an independent financial adviser and somebody with a dislike of the public sector, could think otherwise. I hope that the Government have learnt their lesson and, in rectifying the situation, will look at alternatives, such as universal private pension provisions to run alongside the state scheme, or the national pension savings scheme suggested by the Social Justice Commission.
A third lesson to be learnt is that we must keep standards high. During this past year there has been a great deal of euphoria about the joys of deregulation and self-regulation. That has not been shared by pensioners because the private sector is also capable of low standards. It has allowed people to buy private pensions but contribute no more than the contracting out payment. After deduction of commission and charges, virtually no pension is provided. In exactly the same way as some bad employers use the benefits system to supplement low wages, so a low level of pension will have to be supplemented by social security.
It is in the interests of all of us to see that standards are raised, and part of the regulator's duty must be to see that people's pensions are properly funded. Low standards of pension funding now only means a call on the benefits system later.
Looking to the future, I welcome the important step that next year we shall have much more openness about commissions and expenses. That will help the consumer to make more informed decisions. Had that information been available during the 1980s as many of us on these Benches requested, many mis-sold private pensions might well have been avoided.
There are other problems to be dealt with. Both occupational and personal pension schemes have serious drawbacks. The treatment of early leavers in occupational pension schemes and the high administrative costs of personal pension schemes are but two examples. However, the more flexible arrangements regarding the purchase of annuities for those with personal pensions announced yesterday by the Chancellor are a step in the right direction.
The basic state pension does not provide adequate income, and more than 1.5 million pensioners are entitled to income support. One in four do not claim it. The basic state pension is only 15 per cent. of average male earnings. On current calculations, it could be worth just 6 per cent. of average earnings in 40 years' time. That is what makes pensioners the new poor.
I hope that we shall hear from the Minister that the pensions Bill proposed in the gracious Speech will tackle those problems and give your Lordships a further opportunity to debate this important and urgent problem. It is urgent, because, if pensions are not properly funded, a smaller workforce will be paying for a larger retired population. That makes pensions an urgent and major area of welfare reform. If, as a result of this scandal, adequate pension arrangements are made and direct regulation ensures that the quality of advice to consumers is good, then something will have come out of this. I beg to move for Papers.
7.13 p.m.
Lord Jenkin of Roding: My Lords, I have pondered carefully as to whether it would be appropriate for me to take part in the debate. I have to declare an interest immediately. I am chairman of a major mutual insurance company which has sold a large number of pensions. Whether it deserves the obloquies which have been thrown at the industry by the noble Lord remains to be seen. Happily, I believe that the company that I chair has always had extremely high standards.
I have no doubt that we shall discover some cases in which compensation will have to be paid. However, I believe that I shall be able to convince your Lordships that in his speech the noble Lord, Lord Haskel, has fallen into the trap of a great many other commentators who have chosen to jump on the bandwagon of bashing the life insurance industry, of extracting partial information from reports which were leaked before they were completed and of drawing conclusions which will turn out to bear no resemblance to the facts.
Perhaps I may develop my argument and justify my contentions. I agree with the noble Lord in some of what he said. It is very important that, as he put it, we keep standards high. I would have hoped that he would have recognised that standards in the selling of insurance products, including pensions, have increased dramatically in the past five years. I have no hesitation whatever in saying that the system of regulation and monitoring of companies which now exists has played a large part in that. We welcome it. I am not sure that the system is right yet, and if I have time before the clock catches up with me I may be able to offer some possible suggestions.
I also agree with the noble Lord about the disclosure of commission. About four years ago I minuted my chief executive indicating that I thought that the office should be prepared for a system of full commission disclosure. Most of the industry did not accept that and it was resisted. It is now coming, and all the preparations are being made.
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Perhaps the most hopeful sign for the future is that the chairman of the SIB, Andrew Large, is firmly of the view that if we have full commission disclosure it may be possible to dispense with much of the enormously bureaucratic and costly regulation which the industry currently undergoes. When he told me that I said "I will believe that when I see it". However, I hope that the noble Lord, Lord Haskel, is right and that that will make a considerable difference.
The last speech that I made as Secretary of State for Social Services, in July 1981, grappled with the problem of the dismal treatment of early leavers from occupational pension schemes. I warned the pensions and life insurance industry then that unless it dealt with that problem the Government would be forced not only to provide a compulsory measure of protection but to introduce personal pensions. Very little was done about the plight of the early leavers—those who changed jobs regularly during their careers. They end up with substantially reduced pensions. Of course, it is in the interests of a pension scheme to make sure that there are as many people as possible with frozen benefits because that means more for everybody else, and bully for the pension fund manager.
The noble Lord, Lord Haskel, described what happened in 1988. That was six years ago and a great deal has changed since then. The Government recognised that one of the ways to protect early leavers was to allow people to buy money purchase personal pensions rather than surrendering the interest in final salary schemes. That change coincided with the implementation of the Financial Services Act.
The changes in the regulation of the pensions market were at that time regarded favourably. As a result of the advertising which the Government undertook, there was considerable interest among the public in the new portable products. All life offices provided those products, and many independent intermediaries and tied sales forces made a particular sales effort.
Because at that stage regulation under the Financial Services Act was still in its infancy, many of those early sales, it is now widely recognised, were made on the basis of inadequate fact finding. Moreover, it should have been clear—and to some it certainly was clear—that it was unlikely to be good advice for an individual to opt out of a good quality occupational pension scheme and simply leave their pension behind. Schemes such as the teachers' scheme and the National Health Service scheme have been instanced.
However, to have transferred into a personal pension scheme may well have been appropriate. After all, in the economic climate of 1988–89 to ask a person whether he or she was likely to stay in the same job for the whole of his or her career was to invite the answer, "Of course not". The economy was in a state of growth and development. People were moving. There was enormous change. Very few people imagined that they would stay in the same job. In those circumstances, to transfer out of an occupational pension scheme and pay the money into a personal pension plan, in some cases with employers continuing to make contributions to that plan, could very well have been very good advice indeed. At the same time, when people saw the appalling results of

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the Maxwell débâcle, and when it appeared that perhaps the security of occupational pension funds was not so sound as people had thought, it added to the problem.
The noble Lord, Lord Haskel, did not make this point; or if he did so, I hope that he will forgive my having missed it. Where is there mention of responsibility for that situation on those who promoted occupational pension schemes? Of those who said, "I'm leaving; I'm opting out of the scheme," how many were asked, "Wait a minute. Are you really doing the right thing"? Of course they were not, because it suits the actuarial balance of a pension fund to have people opt out. It is a matter to which the Government need to pay attention. As well as being chairman of an insurance company, I am trustee of an occupational pension scheme in another area. I am happy to say that in such circumstances the managers warned people, saying, "You realise what you're leaving behind". We had very few opt-outs from our scheme.
However, the industry remains pretty certain that a relatively small proportion of the people who bought personal pensions were given advice which was flawed, where pensions should not have been sold. As I indicated at the beginning of my remarks, regrettably, owing to a widespread misinterpretation of the original KPMG Peat Marwick report to the SIB, which was the subject of a highly coloured leak before it was ready for publication—the SIB did its best to indicate what the story was—it is widely believed that 90 per cent. of all the people who were sold personal pensions will be entitled to compensation. I suspect that that figure is at the back of the mind of the noble Lord, Lord Haskel: that millions of pensions were sold and that 90 per cent. of the people who bought them will be entitled to compensation.
That belief has been fanned by the press which is ever happy to find a jolly good whip with which to beat one of our institutions. However, one must make some points clearly. First, personal pensions are the right product for many investors. Many, especially the self-employed and those who are changing employment, will continue to find the flexibility of a personal pension the right answer. That is fully acknowledged by the SIB in its report.
Secondly—I shall be interested to hear the remarks of the noble Lord, Lord Peston—all political parties in the UK have long accepted the principle of private pension provision as a means of providing incomes in retirement. The noble Lord, Lord Haskel, referred to the value of the national insurance pension. It is essential that there is a great deal more private provision for pension for old age, and no doubt also for sickness through permanent health insurance and other methods, if we are to float people off dependence on social security. During my noble friend's Statement on social security upratings much was said about dependency. One of the best ways to reduce dependency is for people to make better provision for themselves. I should have thought that that was common ground for us all.
Thirdly, there has been no criticism whatever of personal pensions as a product. What has been criticised is the fact that some people received no advice, or wrong advice, and took out a personal pension when it
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was the wrong thing to do. Therefore, I ask the same question that the noble Lord, Lord Haskel asked: what needs to be done?
First, regulators and firms must seek to speed up the review of the many thousands of cases which they will have to examine in order to identify those where advice was clearly misconceived. I know what a long, time consuming and expensive business that will be. However, we have no option but to do it. To put the matter into context, in my company —having sold perhaps well over 100,000 pensions, many of them involving transfers or opt-outs—we have probably had fewer than 100 direct complaints. We are not expecting many —certainly very few from those schemes sold by our own sales force. We do not yet know about those sold through intermediaries. I shall come to that in a moment.
Secondly, before any compensation can be paid we must have the promised (it is a lovely phrase) prescriptive guidance from the SIB. It will not be an easy task to assess the compensation for those cases in which a pension was mis-sold. It can be stated in principle that the pensioner should be put into the position in which he would have been if the pension scheme had not been so sold. However, there is such a huge range of cases that it will be a difficult task. The sooner we have that guidance, the better. I understand why the matter is taking a little time; it is complicated.
Thirdly, it must be made clear to the public—it has been made clear by SIB and I have had it confirmed by the Government—that the standards of selling which have to be taken into account in deciding whether or not adequate advice was given are the standards which were in force at the time when the policy was sold. That is in the SIB paper. It is accepted by the Government but it is certainly not yet understood by the public. They are judging what they did five or six years ago by the very much higher standards which are now applied by the industry when selling.
Fourthly, and leading on from that, the authorities must move to lower expectations. People believe that hundreds of thousands of individuals are involved. It is unlikely to turn out to be that number.
Fifthly, we must make it clear that there is no redress for people who simply change their minds. They may have believed that they were going to change their jobs and that their decision was right. But come the recession, they did not change their jobs. Those individuals cannot just change their minds. They must take responsibility for their own decisions. There should be no compensation in the absence of evidence of mis-selling.
I hope that the noble Lord, Lord Haskel, agrees with me on this point. Every effort must be made to restore public confidence in the industry. There has been a significant fall of new premium income; and that must be reversed. We all have to work at the issue. The

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industry is thoroughly aware of its responsibilities. I beg people to recognise that expectations have been wildly exaggerated and must be reduced.
7.28 p.m.
Baroness Dean of Thornton-le-Fylde: My Lords, I thank my noble friend Lord Haskel for introducing the debate this evening. It is a debate on an issue which affects us all; it is not the prerogative of any party or group of people. Pensions affect the overwhelming majority of people in Britain today. It is therefore regrettable that we are in the present position. In my industrial experience, one of the successes of the past 20 years has been the growth of occupational pension schemes. For the individuals concerned there is the income support that it will give them during retirement and therefore the confidence to look forward to retirement. They do not have to rely on the state and therefore the taxpayer. That built a confidence around pensions schemes. The reference to the strong arm of the insurance companies protecting the individual was believed by the majority of people. That confidence extended itself to occupational pension schemes.
There is no doubt that for some people occupational pension schemes are the answer. It is equally true that, in the world in which we now live, with changing employment patterns and shorter-term employment guarantees, personal pensions are the answer for many people. It is true that, with both of those, we need to restore the confidence which was there but which has been severely eroded because of the experience of the past few years.
The noble Lord, Lord Jenkin, mentioned the Maxwell fiasco, and I was very closely involved with it. Way back in 1986 when we started to have anxieties about the schemes that he took over with IPC and a number of other companies, we were told when we took professional advice that our anxieties were unnecessary. We could get no further with the inquiries we were making and that definitely created a lack of confidence among people. The exposure of the massive fraud and corruption in those schemes undermined the confidence of many people.
The problem is that the majority of occupational pension schemes in Britain today are well run. They have conditions which are within the proposals of the Goode Report. The effect has been not to drive people out of pension schemes but to start them becoming more involved and questioning the schemes more. That, coupled with the divulgence of the information relating to personal pension schemes to which my noble friend refers in the Motion, has created a tremendous lack of confidence. The issue is important not just because of that but, I suggest, because an occupational pension scheme is one which deals with deferred payment for employees. Apart from buying one's home, the individual personal pension scheme is probably the most important investment that any individual ever makes. So it is absolutely crucial that we have not only strong regulations but effective regulations covering the schemes.
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I shall not dwell on it this evening but great stress is caused by that lack of confidence and there is a need to get to grips with it and to introduce measures that will not only restore confidence but will also put in place strong support which guarantees that the undertakings that are given are met. That is important. It is too late when the horse has bolted from the stable, it is too late when we talk to people—as I had to—in their early 60s who expect to retire at 65 and are confident that they will get a decent pension but whose pension now has a big question mark over it. That creates a mass fear which may be ill founded, but who can blame people who feel like that?
The subject is also important for another reason. We are all living longer; there are far more of us in retirement in the community. The number is 10 million today; in 40 years' time it will have increased to just over 15 million. In pension accumulation terms, 40 years is not a long time and it is important that we have a savings philosophy within our society by which people either join an occupational scheme or provide for a personal pension scheme.
Those are the reasons why I welcome the debate this evening. The measures which have been introduced, such as the disclosure requirements from next year, have been welcomed across the board, from the responsible life assurance companies right the way through to occupational pension schemes. As long as they are effectively enforced, they are to be welcomed. Increased competition and knowing what one is paying for financial advice are crucially important in rebuilding confidence. Training programmes for sales people who sell personal pension schemes are important, as are standards of conduct within the selling of the schemes which are generally accepted and endorsed across the board.
We shall come back to the issue time and time again—and rightly so. We shall have the opportunity next year to discuss the Goode Report and the measures which it proposes, and it will be interesting to see which measures are taken up. Much of the lack of confidence and the lack of a feeling of security about the benefits which people felt they had within pension schemes will be dispelled, in my view, by effective regulation. It will be helped by not making it an ideological issue but a practical one that protects the personal investment which individuals make in their pension. That will be absolutely crucial.
I close my short presentation by offering my deep and sincere apology to the Minister and my noble friend Lord Haskel, as well as to the House. Unfortunately, I have another commitment which I cannot postpone and I shall not be able to stay to the end of this important debate.
7.35 p.m.
The Earl of Clanwilliam: My Lords, I thank the noble Lord, Lord Haskel, for this welcome opportunity. He mentioned at the end of his remarks that the matter would be dealt with in future legislation. That legislation will be able to cover all the problems that have arisen and solve those which the noble Baroness mentioned of the requirement to make proper provision for the future.

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That is one of the greatest problems for the pensions industry. Mis-selling is another matter which has been dealt with tonight.
I should also like to take the opportunity to congratulate the Government on the extension of the use of personal pension plans and the money purchase principle of pension provision. They are the right product for many investors, especially for the self-employed—a point which my noble friend Lord Jenkin has already covered—and those who leave occupational pension schemes. Many people are highly mobile and they will need personal pension schemes so that they do not rush from one lost transfer to another.
The success of the pension schemes is reflected in the number of people involved; I believe that a figure of 8 million has been mentioned since they were recommended, of which 5 million have opted out of SERPS. The 5 million did not all opt wrongly. It was quite a small number, about 500,000, who did. Many people opted into highly successful managed unitised pension funds with an excellent performance record and they are quite content with their lot. However, some were badly advised and they are the subject of today's debate. It is an extremely complex subject, in my view, as is the rather arcane system of many occupational pension schemes.
The noble Lord, Lord Haskel, referred to defined benefits, and many occupational pension schemes are money-purchased too. They are important and should be retained at all costs.
Be that as it may, the Government are to be commended not only for setting up the Pension Law Review Committee but also for their measured, responsible and comprehensive response set out in Volume II of the Secretary of State's document.
One concern is the cost of the actuarial assessment. I was listening the other day to some actuaries at a meeting upstairs in your Lordships' House and they mentioned a figure of an initial charge by them of £200 million before they could get anywhere. That figure is daunting. That there has been mis-selling is painfully obvious and the SIB report will be with us for a long time. No doubt it will take up many hours of your Lordships' House in discussion. I suspect that confusion will be worse confounded by the fact that many insurance companies have no records left of some of the subjects which need to be discussed.
One of the extraordinary factors is the motivation of a member of an occupational pension scheme. Two-thirds of his contribution is paid by the employer, but he suddenly decides to take a personal pension plan. Apparently he forgets that he is getting two-thirds of his pension contribution from his employer and he then has to pay the whole amount himself. How many people are there like that? It is claimed that there are many. Who would leave such a plan? It appears that there are people, including nurses, who did this. It is horrifying to think that people can be so irresponsible with their own money.
The SIB has laid down clear rules and the companies will have to act with all speed as soon as the letters that they have sent to their clients asking them to submit a complaint if they have one are returned. It will take a
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long time before all those letters come in. I am sure that pension companies, such as that mentioned by my noble friend Lord Jenkin of Roding, will perform their task with admirable responsibility. We cannot do much about that. We just have to wait and see what comes out.
It will be disastrous for many of the independent advisers, many of whom stand to be wiped out. They would be a great loss to the industry. There are some rogues and some very good advisers, but it would be extremely unfortunate if they were to be wiped out. Many of them will be unable to make reimbursement as calculated by the actuaries. The question that the noble Lord, Lord Haskel, asked is: who then will pay? I have no answer to that.
Much of the blame will also be levelled at the commission salesmen. Now that there is to be total revealing of all commissions I believe there will be a change in the industry. Because of the considerable up-front charge of a commission-only salesman, it is likely that most salesmen will be put on to a salary. The level of return will still be the same, but it will not be so frightening to the prospective user of a pension plan if he suddenly finds that a large lump of money will go as a prepayment against future premiums to the employee.
As a result of the furore, regulations instituted by Lautro, for instance, require immense detail to be provided and considered by salesmen and by the companies—not necessarily to much avail. The principle of caveat emptor seems to have gone by the board in the welter of regulation. Are estate agents and car salesmen required to ask the client whether he has enough money to buy the car or the house? Is he asked to explain what his income is? No, he is not. But under the new Lautro regulation that is necessary. It seems to me to be quite ridiculous. Certainly, if you are in somebody's private room and you are discussing their personal affairs, you have to discuss the matter in detail. But the six-page documents are only confusing. They are as confusing to the prospective investor as they are to the adviser.
The noble Lord, Lord Jenkin, also mentioned the problem of the occupational pension scheme. The occupational pension scheme trustee should surely have made representations to individuals and should have told them what would be the result of their move out. It seems extraordinary to me that they did not do that. It is also very odd that many of the transfers that were arranged by the actuary were extremely low. The transfers were calculated from a number of notional factors, including the interest rate prevailing at the time of the transfer. That interest rate is quite irrelevant. The only matter that is of interest to the person who will be a pensioner is what the rate will be at the time he retires. So many of the factors that are produced by the actuaries are extremely inaccurate.
Occupational pension schemes were originally invented as a reward for long service and loyalty. They became an anchor, and indeed a threat which inhibited mobility of labour. At the same time, the assets became an important item in the balance sheet. There is no harm

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in that. But it became a major factor in takeover bids, and, as we now know, was a temptation to use the assets as collateral.
That threat does not apply to the money purchase schemes, where policies are in individual names and are unlikely to be acceptable as collateral even if offered. Many excellent occupational pension schemes are run by our greatest companies, which are exemplary. Of course they serve a wonderful purpose for those people who will spend 40 years in one job. But there are not so many of them today. It will no doubt be the job of this House to work out a suitable plan when the pensions Bill is finally brought before us. I have various suggestions to make in that direction.
As I said, many of the occupational pension schemes are based on money purchase, and the money purchase principle is the one that will be most effective. The cost of occupational pension schemes of some 15 to 16 per cent. of salary is ludicrous. If you put that money into a personal pension plan, you would end up with telephone numbers.
I am confident that my noble friend's plans to remedy these problems and faults will be successful. I look forward to hearing his reply.
7.46 p.m.
Lord Desai: My Lords, we are grateful to my noble friend Lord Haskel for bringing this matter before us. It is of some interest that this particular problem of pensions has been discussed again and again lately, more by this side of the House; indeed it is we who initiated the discussion. We discussed the matter last June when my noble friend Lord Jay, who unfortunately is not in his place, initiated a debate.
The reason is that it is quite clear that in occupational schemes and in personal pensions there has been something akin to a disaster over the past few years. That disaster was not only foreseen; it is a manufactured disaster. When we look at the history of how the transfer to personal pensions was encouraged, indeed debated, we see that in a sense not enough care was taken to make sure that what people were being sold was properly vetted and tested.
The enthusiasm for the transfer to personal pensions was such that one almost suspects—one cannot quite allege it —that misinformation was generated: a price distortion. In a free market if you had price distortion and signal distortion wrong decisions would be made. I do not say this lightly. The noble Lord, Lord Jenkin, made a remark about individuals taking responsibility. The nice thing about this episode is that the individuals who were responsible for the disaster have not taken responsibility. Mr. Norman Fowler, who was Secretary 'of State at the time, would seem to be very proud of what he did. In his memoirs, Ministers Decide, he says:
"Yet in many ways the most spectacular success has been the new pension options. Over four million people have taken out personal pensions. Over 800,000 people are now covered by new occupational pension schemes. Contrary to the industry's predictions, existing company schemes have not collapsed. The public have been provided with more choices, and have shown that they want a pension which is theirs by right".
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The estimate of how many people got it wrong is, I agree, perhaps not as high as 83 per cent. That was a false figure. Perhaps it is only as many as 500,000 people.
The noble Lord spoke about selling a car. The context is quite different. The person who sells a car does not have to know whether the buyer has the income to pay for it. But it is irresponsible to sell an unsafe car. That is the problem. The fault does not lie with the purchaser but with the seller.
The noble Lord, Lord Lawson, who at the time was the Chancellor of the Exchequer, wrote in his memoirs:
"First, the tax reliefs enjoyed by occupational pension funds were extended to personal pensions whose promotion had been one of the main purposes of the Fowler reforms. They were taken up on a positively embarrassing scale, partly because Norman had persuaded me to provide, at least on a temporary basis, excessively favourable National Insurance contribution rates for those who contracted out of the State Earnings Related Pension Scheme in order to invest in a personal pension scheme".
The Chancellor of the Exchequer was embarrassed by the concession he had made. Obviously, he made the concession because a propaganda campaign had been mounted, which was close on misinformation, generating anxiety about SERPS.
Noble Lords have spoken about mobility and how, in our great and changing age, many people want to change jobs. While it is true that occupational pension schemes discouraged mobility, SERPS did not do so. If people had been concerned only with mobility, they could have stayed in SERPS.
Let me quote what my noble friend Lord Jay said during the debate on 15th June this year. He offered a quotation from Michael Prowse, one of our better economics correspondents, who wrote in the Financial Times:
"The original SERPS had all the virtues of a good pension scheme. It offered exceptionally low administrative costs, job mobility and maximum security in old age. Nothing in the private sector can match this combination of virtues". —(Official Report, 15/6/94; col. 1750).
That was said in the Financial Times, not in Tribune—and not by me, either.
Let us be clear that SERPS was a good scheme. First, the Government started to undermine the benefits under SERPS; and then they spread the rumour that, because the dependency ratio would change, SERPS would become too expensive. A moment's thought would show that how a society pays for its pensions is a kind of macro-economic point. Those who are in work pay for those who are retired, whether it is a funded or an unfunded scheme. If those who are in work refuse to pay for those in retirement, there will be only inflation and a strain on resources. Basically, in such a transfer between generations—this is a sound economic theory; I know what I am talking about—there needs to be a scheme which comprises low administrative cost, low risk to the taker and good information and is one from which society as a whole can benefit.
I respect the free market. Some of my best friends are free marketeers. However, in the free market lodge, there is a strange contrast between the UK and the USA. In the USA there is a free market but they have zealous regulators. They do not just believe in laissez-faire; they

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believe in competition. They believe in the free market, an open society and transparent information. They believe in thorough regulation. In the UK, especially over the past 10 years, in enthusiasm for the free market we have let these schemes go on and, four or five years later, various people have paid the cost of unregulated free enterprise. In a sense much of the privatisation and deregulation has been an outdoor relief scheme for the City, which has made a lot of money out of it. There was a market failure and no proper regulation. No one was in place to regulate the kind of schemes that insurance companies were selling. It was not even asked whether they had properly trained staff. Staff training for financial operations is only now beginning to occupy the minds of people in the City. There was self-regulation and of course it failed.
Only after some 500,000 people have lost something on their personal pension—that is 10 per cent., which is a high risk factor—and only after occupational schemes have failed do we have a stream of reports: the Goode Report; the Government's response to the Goode Report, in two volumes; and another little response to the Goode Report. There will also be legislation. Why could it not have been seen beforehand that a disaster would be bound to happen if such a huge reform were mounted and it was not checked out whether the seller had the capacity, authority and information to be a good seller—especially if the attractiveness of one asset as against another was being distorted, basically bribing people to buy that asset.
The Government want to have free markets and believe that deregulation means no regulation. Deregulation makes a move from what is perhaps an over-interventionist scheme to one where a proper choice can be made with full information about the costs and benefits of the choice being made. What happened in the case of personal pensions? The SIB said—again, it is not lightly said because the SIB tries to be extremely polite about these matters—
"The City is satisfied from all the information it has that some of the business was done in a materially non-compliant way and some of the investors concerned will be found to have suffered loss as a result of unsuitable advice".
How lovely! Only this afternoon there was a Statement read in this House from the Secretary of State for Social Security. He was pursuing people who were scrounging and defrauding the social services. They were probably defrauding the social services of £10 or £20 each, which is not very much. The suffering of the 500,000 people in those personal pension schemes far exceeds the amount of money which at the next Tory conference the Secretary of State for Social Security will boast about having saved. Nothing has been done to punish the people responsible. No Minister has apologised in public, either in this House or the other place. It is assumed to be due to market failure and the fact that this sort of thing happens. People have to be responsible for what they undertake, and the buyer should beware. But what about the seller? Why does only the buyer have to beware? Why is something not done about the seller? Why are not proper regulations laid down?
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It is very easy to say that it was done "in a materially non-compliant way". More simply, people were lied to. That is what it was. It was mis-selling. I am sorry to say that there has been very little done about mis-selling.
If we are to have a free market, we should adopt the American standard. We have to be aware that free markets fail. The answer often is not intervention but regulation —intelligent regulation. Let us have that. It was a mistake to undermine SERPS. Having lost the one good pension scheme that we had, we have undertaken more expensive ones. I believe that we shall have to spend a lot of time getting back a properly supervised and properly regulated pension scheme in which people will have confidence. To restore confidence in the pensions industry will take a very long time. It will be very costly.
8 p.m.
Lord Meston: My Lords, the first part of the Motion for debate this evening calls attention to the consequences for those who transferred from occupational and other pension schemes. The problem concerns not just those who transferred out of existing schemes—those are people who can be identified —but also those who opted not to join established occupational schemes, who are less easily identified. They will have to be identified as the mess created during the 1980s is cleared up in the course of the 1990s.
It is now clear that the consequences have indeed been serious for a large number of people; just how serious and how many people were affected we shall probably never know precisely. I suggest that there is a heavy onus on the pension companies to try to find out as quickly as possible. It is a truism that existing pension entitlements which were transferred by people in their thousands were hard earned. That looks to the past. For the future, the preservation of the values of accrued pension rights during the 1990s and beyond becomes an all the more important part of everyday life as people live longer and no real job security can be assured.
The activities of those who misadvised and misled people into entering unsuitable pension arrangements with hidden costs have created a large additional measure of anxiety and uncertainty in the lives of those who relied on such people and on their representations. They paid a high price for flexibility and choice, and other slogans which lay behind the move to opt out of schemes to which people already belonged.
The exposure of this disaster—I fear that is not an overstatement of what happened—led to a large amount of finger-pointing and buck-passing. The pension companies and their commission-driven agents must obviously take the main blame and bear the main cost, presumably at the expense of their shareholders and other policyholders. I welcome the remarks of the noble Lord, Lord Jenkin of Roding, in his description of the improvements in the culture of the present pension market. I hope he is right and I hope that the enlightened self-interest of the pension companies will ensure that there is no repetition of this sort of mishap in the future. I cannot help fearing that he may be over optimistic.

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The DSS can be blamed for advertising to encourage people to opt out of occupational schemes in favour of private plans. As the noble Lord, Lord Jenkin, observed, the trustees of existing occupational schemes can be blamed for not advising caution. Employers can perhaps also be blamed for not advising caution in a situation in which they stood to save the cost of their contributions to the existing schemes if employees could be encouraged to go elsewhere. Certainly the SIB can be blamed—as it has been—for not acting faster, thus delaying both relief for investors and increasing the final bill for the pension companies.
As matters stand it seems that people also lay blame on administrators of occupational pension schemes—including the Treasury in respect of public-sector schemes—for putting too high a price on allowing reinstatement into their schemes. Finally, as we heard from the noble Earl, Lord Clanwilliam, among others, individuals themselves may be blamed, particularly if they have to fight for the compensation to which they feel entitled, for allowing themselves to be misled. There is an unattractive prospect of pension companies and their agents and independent advisers arguing that they in fact offered no advice, or no advice which could have been expected to be relied upon by the individuals whose business they were seeking.
The second part of the Motion for debate requires attention to remedies and future protection. It seems that there must be two priorities. The first is to ensure that the victims are identified and are then compensated fully and quickly. Like any other victim of somebody else's culpable acts or omissions, those individuals should be restored to the position in which they would have been had they remained where they were. I entirely accept that that exercise may not be easy and that there may be difficulties of computation and projection. But the Government owe a responsibility to provide publicity corresponding to the publicity which enticed people out of existing schemes in the first place. They have a responsibility also to exert pressure in the appropriate quarters so that victims do not have to cross a legal minefield full of arguments which anyone can see could be levelled about disclaimers, limitation periods and the like. It should not be too much to hope or to expect that pension companies, anxious as they properly are to restore confidence, will accept liability and that in the great majority of cases the only discussion will be about quantum and the method of compensation.
It is also to be hoped that in more difficult cases, where those being offered a compensatory sum can justify the need to have a second opinion on the amount being offered or the method of compensation, the pension companies will, where appropriate, pay for independent actuarial advice. I am afraid that that 'regrettably raises the problem behind the old saying that if you put a question to two actuaries, you are likely to obtain three different answers.
The second priority is to ensure that, so far as possible, this does not happen again. The pension companies will surely be looking at their commission structures; that means not only at the way in which commission forms the major part of the agent's
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remuneration, but also at the way in which commission is higher for some types of product than for others. For example, as I understand, it a lower commission is typically payable for a single premium plan than for an annual premium plan. Obviously that can affect the advice that is given to the individual consumer. In that respect the proposed introduction of a declaration to the consumer of the commission payable to the intermediary or agent is long overdue and we all look forward to the improvements that that will undoubtedly bring about.
I suggest that the Government must take a hard look at the regulatory and statutory framework. I am sure there can be no doubt in anybody's mind that the Financial Services Act would not have left Parliament as it did had the mess now revealed been properly foreseen at the time. The Companies Act 1989 made some changes; but they do not go far enough and there remains a great deal of red tape behind a bewildering array of acronyms.
This is not the time and place to analyse the weaknesses of the present structure with the delegation by the SIB to various SROs. The clear lesson is that the structure involving the SIB providing guidance—and little more than guidance—to SROs, albeit a reduced number of SROs, has not proved adequate. What is now needed is one overall regulator concentrating expertise in a single body and possessing true independence from the financial services industry and from the Treasury; a body willing to defend the consumer and willing to take on the government of the day. If that is not possible in the short term, at the very least the SIB should now be accountable to Parliament and not merely obliged to report as at present. I suggest that the lesson to be learnt is that, unless there are fundamental changes, regrettably something like the disaster described by the noble Lord, Lord Haskel, will happen again.
8.9 p.m.
Lord Peston: My Lords, I congratulate my noble friend Lord Haskel on his clear and cogent introduction to this debate. Perhaps I may also say how much I am looking forward to the speech of the noble Lord, Lord Mackay of Ardbrecknish. Everything he has to say in your Lordships' House is interesting and sometimes it is even convincing. But let me say that I do not remotely regard this topic as being about social security. It is about economics, industry, finance and regulation, which is why I am speaking.
Perhaps I may say a few brief words on the facts. I do not know where the noble Earl, Lord Clanwilliam, got his figure of 500,000 from. The Securities and Investments Board itself has said that nearly 1.5 million people have been wrongly advised in a personal pension plan. Estimates of the compensation bill range from £1 billion to £4 billion. The noble Lord, Lord Jenkin of Roding, used the expression "relatively small proportions". The numbers seem quite large to me. I also have to tell noble Lords that it is always dangerous to discuss matters like this in terms of ratios.
The Earl of Clanwilliam: My Lords, I may be wrong in the figure of 500,000, but the point at issue is that no one is going to know how many have been mis-sold

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until the industry has sent out its letters and replies have been returned. Any figures that are mentioned in the meantime are pure speculation.
Lord Peston: My Lords, I certainly agree with the noble Earl that we need more convincing figures. But I am not convinced that any figures up to now are pure speculation—most certainly not. The main point I wanted to make about ratios per se is that, if you are one of those who has suffered, the only ratio that interests you is 100 per cent.—namely, you. That is what we ought to be concerned with.
Turning to matters of principle, we all accept, I am certain, the vital importance of the pension decision. Unlike most ordinary purchases, a mistake has long-term consequences, and when those consequences are adverse they are extremely difficult, if not impossible, to rectify. Again following the noble Lord, Lord Jenkin of Roding, of course individual people have to take financial decisions, frequently involving pensions. I readily agree that many are capable of doing so sensibly. I myself have done precisely that, taking advantage of the very generous tax concessions which one gets under a Schedule D form of income. But it is known and well established that quite a lot of otherwise rational people blunder when it comes to financial matters. They are naive, they are trusting and they are excessively optimistic. That is why consumer protection is so important. I hasten to add that by "protection" I do not mean compulsion. In the end, while intervention can help, someone who is intent on financial self-destruction cannot be prevented from doing so. But that is not the point. The real point concerns what kind of protection is required.
The point was made by my noble friend Lord Desai that central to any form of protection is information and, if I may add to that, information that is readily comprehensible. Secondly, there really must be much stronger constraints on the hard sell. No one should be allowed to sign a binding contract in this area without a cooling off period of significant length, but that cooling off period should require at the end a positive decision—namely, it is now my decision to go ahead—rather than the negative decision that people like—namely, if you do not hear from me, let it go ahead. That will not do in this case.
Next—and this, I agree, is an extremely difficult matter —all purchasers should have access to advisers with no financial interest whatever in the sale of the pension. All financial products should carry a financial health warning. That should be in large print and not in print smaller than anything else in the advertising or other relevant documents. In terms of pensions, what we are saying is that, at the very least and in very clear terms, all purchasers should have been informed that, while what they are being offered is hoped, even expected, to give them a net benefit compared with what would otherwise be the case, there is a distinct possibility that it will not. In addition—this again has been raised by my noble friend and by other noble Lords—there should be a proper and easy-to-use procedure for the redress of grievances. That is less to protect the foolish and the greedy and more to protect the trusting. That is what has gone wrong here. Those
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people who believed in the probity of our financial institutions—notably in the insurance companies, the pension funds and related financial concerns—have been let down and they should never have been let down. That will simply not do.
Who is to blame? Many noble Lords have asked that question. The Government, initially, were seriously at fault. They were partly seriously at fault because of their antipathy to public expenditure and partly because of an ideological commitment to the market, which I increasingly believe they never had the faintest understanding of. My noble friend Lord Desai has made that very clear. They mouthed the words of the free market but they had no idea of what they were talking about. But—I say this to my near namesake, the noble Lord, Lord Meston—it is not the case that when we were discussing legislation on this matter there were no warnings. The dangers that were involved were made very clear, both in connection with these matters and in connection with financial regulation and self-regulation generally.
There is nothing surprising about what has happened. We are unhappy about it but certainly there were warnings. Therefore, the Government cannot possibly be allowed to wash their hands of any or all of this. What has really emerged —here I echo the remarks made by other noble Lords—is the failure of financial self-regulation.
What worries me—this is a broader question than simply to do with pension mis-selling—is that in all sections of the financial services industry the rules are being consistently and comprehensively flouted. The Consumers' Association has published research confirming that. In several different issues of Which? it has published evidence of bad advice and commission bias among the banks and building societies and among mortgage brokers with regard to mortgage advice. They have given bad investment advice to people who have been made redundant. To say the least, the advice given about life insurance has been mixed. I am certain that the article in the September 1994 issue of Which? would be of some interest to the noble Lord, Lord Jenkin of Roding. I can tell him that it is definitely in the Library. Therefore, what we ought to be saying is that the lessons required here are lessons about regulation. I have to say that I no longer believe that self-regulation is remotely viable. We must have statutory regulation, but of a simple kind.
Coming to my final remarks, the real villains of the piece are the sellers of the pensions themselves. We have to decide whether what we have witnessed is simply senior managerial incompetence—a failure both to set standards and to control the lower level staff—or whether it is much more serious still; namely, whether monetary greed was the root cause, the desire to make a quick buck. I should like to believe—although given this choice, it is not much of a choice—that our insurance companies and pension funds are not greedy: they simply did not do the job properly. Perhaps both factors were at work.
Despite all the talk about these matters being difficult to calculate, that it is difficult to get evidence and that actuaries are not helpful, the fact remains that the

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outcome has been that pensioners have suffered and will continue to suffer unless something is done. Given that, it must also be the case that shareholders and some managements have gained. If those who have suffered are to be compensated—I believe they must be—then those who have gained—the shareholders and managers—must pay. They must bear the cost.
My noble friend Lord Haskel, I assume tongue-in-cheek, suggested that perhaps future buyers of such products would pay with higher premiums. We must distinguish always—economists are very keen to distinguish this—the "will" from the "should". It would not surprise me in the least if those of us who are still buying insurance of various sorts are asked to bear the cost. I think that that may be what various parties will try to make happen. There is not the slightest doubt in my mind, however, that we should not be asked to pay for that. There is no doubt in my mind that the cost must not come from raising insurance premiums. It must come from the shareholders who freely bought the shares, if I may take a free market view, and from the management who freely took those decisions. They must now bear the consequences of their actions.
Finally, because noble Lords will be upset if I do not say this, the Government cannot be allowed to get off the hook. They cannot say that this is a matter for the Securities and Investments Board and the industry. The Government must show some leadership quality and get things done. And in the light of what we have heard today, they must get things done rather quickly.
8.20 p.m.
Lord Mackay of Ardbrecknish: My Lords, as a number of noble Lords have pointed out, choosing a pension is one of the most important financial decisions that most people will ever have to make. I believe that it comes second only to buying a house. I therefore welcome this opportunity to explain what the Government and the regulators are doing to ensure high standards of investor protection and to provide remedies where these standards have not been met.
During the debate, we have heard from noble Lords who have considerable knowledge of the pension industry and involvement in company pensions schemes or in life companies. We have also heard from two economists—we may have heard from more than two, but we have certainly heard from two whom I recognise from our previous debates on financial subjects.
Personal pensions play an important role in the Government's strategy for bringing about a sustained improvement in the general level of income of those who have retired. I doubt whether any noble Lord would disagree with that. The availability of occupational 'pensions and personal pensions widens choice and encourages more people to plan for their retirement and to build a solid base of funded pension provision for the future.
The noble Lord, Lord Haskel, mentioned future problems due to the fact that a smaller working population will be paying for increased provision for a large elderly population. That is precisely why the
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Government took measures in the mid-1980s to widen choice and to give people more ways in which they could make provision for their retirement.
Before we reformed pension law in the 1980s, employers could require people to join their scheme as a condition of employment. Where no employer's scheme was available, people had no option but to contribute to SERPS. We ended compulsory membership of a particular scheme and gave people the freedom to plan for the pension which best suits their needs, whether it be state or non-state, occupational or personal. As my noble friend Lord Jenkin mentioned, before the reforms, no one who changed jobs had the right to move his or her pension. Now everyone has the option of transferring accrued pension rights. Those who chose not to transfer now see their pensions protected against inflation. People also have the right to make top-up payments either to their employer's scheme or by way of free-standing contributions.
By widening choice in this way, the Government have enabled more people to make appropriate provision for their retirement. This strong foundation of privately funded pensions leaves us well placed to face the challenges of the next century.
It is well worth putting the numbers on the record because several noble Lords have referred to the number of people who are involved in making their own pension provision either through occupational pension schemes or through a personal pension scheme. The latest figures that I have available show that 10.7 million people of working age are in occupational pension schemes and that something like 60 per cent. of them are in the private sector. Furthermore, 3 million people of working age have a preserved pension from a former employer and a further 1.5 million people have a preserved pension from a former employer and are now members of their current employer's scheme. Noble Lords can therefore see that a considerable number of people are involved in occupational pension schemes. In addition, 6.5 million people who are retired right now are receiving at least one occupational pension. Currently, 20 million people have rights in an occupational pension scheme.
People with personal pensions are additional to that number. Since June 1988 we have now reached a situation where 7.8 million people are in personal pension schemes. It is well worth saying that it is thought that about 6 per cent. of that population were opt-outs and that about 13 per cent. were non-joiners of their occupational pension scheme. That comes to slightly less than 20 per cent. of the total number of people who have taken out personal pension schemes.
An effort has been made to quantify the number of people who acted after advice from a personal pensions salesman. It would appear that, on opt-outs, about 4 per cent. of the total took such advice. The number amounts to just over 300,000 if my arithmetic is correct. Of non-joiners, the proportion is 7 per cent., which amounts to just over 500,000 people. Those are the figures with which we are dealing.
People will, of course, be willing to save for retirement if they believe that their pension rights will be secure. That means that they must receive the

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information that is required to enable them to make an informed choice. The noble Lords who are economists told us that that was an important part of the operation of the free market. I agree. People have to be able to rely on the highest standards of expert advice. They must be able to have confidence that the regulatory framework will protect their interests against the unscrupulous and the incompetent.
The Securities and Investments Board, the chief investments regulator, has taken a series of steps to ensure that investor confidence is maintained. First, it identified the problem; publishing evidence last December that many sales of personal pensions appeared to have fallen short of the required standards. Then it acted to prevent the recurrence of these problems. Now, with the help of expert advice from the life and pensions industry, SIB is ensuring that remedies are provided where necessary. I believe that that is an example of an effective regulatory regime.
The board's recent statement sets out how compensation should be provided for people who have personal pensions instead of being in an occupational pension scheme and who now face financial loss as a result of bad investment advice. As my noble friend Lord Jenkin of Roding rightly pointed out, that does not mean that anyone who changes his or her mind is entitled to compensation. The question is whether bad advice was given. If anyone with a personal pension is found to face financial damage as a result of mis-selling, he or she will be entitled to redress. The aim will be to restore people to a financial position equivalent to that which they would have had if the mis-selling had not taken place.
There is at present no way of knowing the eventual total cost. I am not a clairvoyant and I shall resist the invitations to speculate. We must all wait for the reviews to be completed. It is, however, clear that there will be a substantial call on the financial services industry. Investors can be reassured that the industry as a whole can and will pay. In cases where the firm responsible has ceased trading, that will entail calling on the industry's compensation scheme.
The SIB statement sets out in detail how firms responsible for sales of personal pensions should review their cases; how they can identify mis-selling and damage to investors caused by it; and, where mis-selling leading to financial damage has occurred, how appropriate redress should be provided. The details of the review process and the formula for redress have been drawn up with the assistance of experts in the life and pensions industry and in the legal and actuarial professions. The regulators will now ensure that firms responsible for past pensions business take the necessary 'steps to review their casebooks. The Personal Investment Authority has set up a pensions unit to examine cases sold by firms which are no longer in business. It has also set up a pensions helpline. I advise the noble Lord, Lord Haskel, that its hours of opening are similar to those of our very successful helplines in the Department of Social Security, so I do not think that his criticism was merited.
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Many people will be contacted by the firm which sold their pension, or by the pensions unit, and asked for information to help decide whether further investigation is required; SIB is distributing an explanatory leaflet, the Investor's Guide, which will also be available from libraries and citizens advice bureaux.
It will take at least two years to carry out the reviews in an appropriately thorough and systematic way as the interests of both personal pension holders and other policyholders require. The first cases to be reviewed will be those where financial damage caused by mis-selling is most likely and where this could have the most immediate impact. These priority groups include the cases of investors who have died, retired or are close to retirement. However, any personal pension investor who seeks it will have his or her case reviewed whether or not he or she is in a priority group.
These reviews will no doubt show that many people who transferred to or opted for a personal pension were given good advice. Where redress is required, its form will depend on the circumstances of the investor. Where possible, it will often be desirable to reinstate people in their occupational schemes. If this cannot he done, the personal pension will usually be topped up.
The action announced by SIB relates to people who bought personal pensions in preference to an occupational scheme. There are many others who would otherwise have been contributing to the State Earnings Related Pension Scheme (SERPS). SIB is also investigating, with the help of DSS, whether there has been mis-selling to people in this position. SIB intends to publish its findings in this further review next year. If a problem is revealed, SIB will prescribe appropriate remedies.
The Government are also taking action to make sure that the arrangements for redress are brought into effect as efficiently as possible. The public service pension schemes, such as those for teachers and nurses, are allowing current employees not only to rejoin for future service but also to have their pension rights for previous service restored at reasonable cost. I very much hope that occupational schemes in the private sector will adopt the same approach.
The Government have also clarified the tax treatment of compensation payments. All the remedies are designed to put the investor in an equivalent financial position to that which would have been the case if the mis-selling had not occurred. The Chancellor intends to introduce legislation in due course to ensure that an investor in that position will have the same tax bill as if there had been no compensation payment for mis-selling.
Some noble Lords have suggested that, as the Government were responsible for the introduction of personal pensions, the taxpayer should provide compensation. There is no case for this. The concerns that have been identified—
Lord Peston: My Lords, I do not think anybody said that today, did they? I may have missed it, but I do not

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think that any of us suggested that the taxpayer should bear this cost. I am sorry to have interrupted the noble Lord.
Lord Mackay of Ardbrecknish: My Lords, perhaps I was rather taking that out of what one or two noble Lords had said: that the Government were responsible and ought to take the blame. I was rather going ahead of myself there, and deducing that that probably meant that the Government should pay compensation. If I jumped to a wrong conclusion, as has been indicated to me, by the shake of his head, by the noble Lord, Lord Desai, then I happily withdraw that suggestion.
Lord Desai: My Lords, perhaps I meant that they should have resigned sooner, but that is all.
Lord Mackay of Ardbrecknish: My Lords, that is nothing new. The noble Lord thinks that the Government should resign every day, and I have no doubt that he will go on for a good many years thinking that the Government should resign. However, perhaps I may say that in 1988 when we launched personal pensions, the main booklet for employees did carry a very clear "health warning", if you like—good company pension schemes may well remain the best choice for most people entitled to join them. My noble friend Lord Clanwilliam made that very point, that some people must have been very foolish to think they could get a better buy by taking themselves out of an occupational pension scheme where their employer contributed a significant amount of money to their retirement package.
Having said that, however, there is no doubt that personal pensions remain a flexible and entirely suitable way of saving to provide a secure income in retirement for a great many people. They can make it possible to maintain a mobile and varied career with a good pension, and also of course those jobs and careers where there is not an occupational pension. These advantages will no doubt ensure that personal pensions will continue to appeal to many people. I have no doubt that they will continue to have a significant role to play in future pension provision.
However, for people to choose personal pensions with confidence, they must be able to rely on high standards of professionalism on the part of those responsible for selling them. They must be able to trust advisers and sales staff to recommend suitable products. That is why SIB defined new and tougher standards for future sales of personal pensions. Everyone who has mentioned it, I think welcomes and approves of things like full commission disclosure. As a result of SIB's new standards, investors choosing between occupational and personal pensions now get a "reason why" letter to explain each personal pension sale, backed by sophisticated analysis of their own personal circumstances.
The regulators are following this up with more intensive supervision of sales. The Department of Social Security has also issued guidance to employers about the advice they may give to any of their employees considering a personal pension. These new standards are backed up by more demanding training and competence
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requirements. Financial services firms are already implementing the new standards. So people making decisions about whether to buy a personal pension instead of belonging to an occupational scheme can have confidence in the quality of the advice they get.
My noble friend Lord Clanwilliam asked me about the SIB's approach to the independent financial advisors, and how many, if any, of them would be driven out of the industry. We recognise the value of independent financial advice in providing customers with additional information and extending choice. Of course we regret any failures among independent financial advisors. However, where they have failed to meet regulatory standards they must accept responsibility for providing a remedy, and, unless investors know that this will happen, they will not have confidence in that sector, or possibly in the industry as a whole.
The noble Lord, Lord Haskel, seemed to feel, as perhaps did the noble Lord, Lord Peston, as well, that there was need for more statutory regulation. However, we believe that we already have regulation enough within the statutory framework and we do not believe that the costs and disruption of a major change to the system would in fact be justified. Both noble Lords suggested that policyholders should not be expected to meet the bill for mis-sold pensions. It will of course be some time before individual companies can assess their exposure and decide how it should be funded. As the prudential regulator, the DTI has written to all life companies setting out the general principles which should be followed when making this decision. Firms with shareholders should consider whether their funds should meet some or all of the cost, while with-profit offices which have sufficient free reserves will be expected to use these funds rather than cutting current policyholders' bonuses. The overall effect will be that policyholders' interests should be protected as far as possible. All policyholders of course do have an interest in knowing that, when investors lose as a result of a firm's failure to comply with the rules, they will receive redress. With-profits policyholders will also benefit from seeing that their company maintains its reputation, restores consumer confidence and so attracts new business.
The noble Lord, Lord Desai, took us down the SERPS trail, if I may call it that, and indicated that perhaps people ought not to have been encouraged to move into private pension provision there. Perhaps I can say to him that, of the 5 million people who have taken out a personal pension in place of SERPS, more than 40 per cent. are making contributions on top of those received from the Department of Social Security to boost their income in retirement: that is new money being invested to provide extra security in old age and money that could not have been paid into SERPs. So I do not think the argument on that score is entirely one-sided.
The noble Lord, Lord Peston, suggested to me that all financial products should carry risk warnings. Could I say to him that the new disclosure regime involves a "key facts" page, which includes risk warnings and this document has been market tested on consumers to

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ensure that we, the consumers, can easily understand it. So I hope that the noble Lord will consider that to be a step forward.
Again, a number of noble Lords "dipped their toe" into the question of occupational pensions, and of course that is going to be the subject of many happy hours of debate, as I described them earlier today, when we come to consider the pensions Bill which will shortly appear. I will say more when we come to that, I have no doubt. Of course we have to tackle that problem—a problem coming from the erosion of confidence caused by Mr. Robert Maxwell. I understand fully the difficulties that the Maxwell pensioners have had, just as I understood some of the difficulties some of my friends had when huge writs were served on them by Mr. Maxwell to try to get them to keep their mouths shut when they dared to criticise someone whom, I regret to say, far too many people considered for many years to be a great man.
Perhaps I may conclude by saying that the regulators' central aim has been to devise a mechanism which ensures that where harm has been done it will be put right. They have sought to do that reasonably and fairly, working with the industry to secure a just outcome as quickly as possible, while minimising administrative costs. Although their approach has been criticised from various, and sometimes contradictory, directions, as is the way with such things, the Government believe that the SIB has acted with commendable thoroughness and independence.
I have no hesitation in concluding that the system of regulation in which the SIB takes the prime role, and which benefits from major practitioner input, is sound, and working effectively to protect investors. The reforms instituted by the SIB review last year are beginning to bear fruit. The financial services industry plays an important and growing role in a sophisticated modern economy such as ours. Increasing affluence means that people will more often have resources available for investment and will want to invest. They must be able to invest with confidence. A clean, well-regulated market is in the interest of consumers and financial services firms alike.
8.41 p.m.
Lord Haskel: My Lords, the hour is much later than we expected and so I shall not detain your Lordships for long. We have had a debate which covered several Government departments: investment and savings; finance and regulations; the benefits system. Noble Lords have spoken on all those aspects, and I thank them for their participation. All noble Lords have shown a concern for the consumer, and many have spoken of the need for better regulation.
The noble Lord, Lord Jenkin, spoke of the need to speed up the review which is in progress, and I heartily agree with that. The noble Earl, Lord Clanwilliam, spoke of the need for caveat emptor, and I repeat the response given to him by my noble friend Lord Desai: in today's world, the seller is responsible for the suitability of the goods that he is selling.
I agree with the noble Lord, Lord Meston, about the importance of pensions at a time of job uncertainty. I thank my noble friend Lord Peston for speaking about
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the need for proper regulation. I agree with him entirely. I was pleased when the Minister told us that he recognises the need for proper regulation, but we shall obviously not agree about how that will be achieved. On this side of the House we are agreed that it will be achieved only if the regulator is not dependent upon those people in the industry who pay to keep him going. What we heard from the Minister about consumers' interest was partly, satisfactory, but we are all agreed that it is necessary for the consumer to be protected adequately, because otherwise the confidence in our financial institutions, which we all agree is important, will not be restored. Unless that is restored, we are all losers.
We shall have another opportunity to debate these matters when the pensions Bill, as promised in the gracious Speech, is before us. In view of that, I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

Maximum Number of Judges Order 1994
8.44 p.m.
The Lord Chancellor (Lord Mackay of Clashfern)The Lord Chancellor (Lord Mackay of Clashfern) rose to move, That the draft order laid before the House on 16th November be approved [1st Report from the Joint Committee].
The noble and learned Lord said: My Lords, the draft order is made under Section 1(1) (a) of the Administration of Justice Act 1968 and Section 2(1) of the Supreme Court Act 1981. It relates both to Lords of Appeal in Ordinary and Lords Justices. The Administration of Justice Act 1968 set the maximum number of Lords of Appeal in Ordinary at 11. The order now proposed will increase that number to 12. The statutory ceiling for Lords Justices in England and Wales was increased from 28 to 29 by the Maximum Number of Judges Order 1993. This order will further increase that number to 32.
I shall speak first of the proposed increase in the number of Lords of Appeal in Ordinary. Lords of Appeal in Ordinary are those Members of your Lordships' House appointed to hear and determine appeals. They also sit regularly in the Judicial Committee of the Privy Council.
In addition to their judicial work, Lords of Appeal in Ordinary are increasingly in demand for important public duties. Your Lordships will know, for example, that my noble and learned friend Lord Woolf is heavily engaged in the committee considering access to justice, and my noble and learned friend Lord Nolan has recently been appointed chairman of the Committee on Standards in Public LIfe. That is likely to occupy him fully for some time. Moreover, the Law Lords also play an important role in maintaining international judicial links both with other common law jurisdictions, particularly the Commonwealth and the United States, and with countries which have different legal traditions, especially our partners in the European Union. Those contacts bring considerable mutual benefit to us and the others concerned, and

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we are finding that an increasing number of other countries wish to learn from the British experience. I regard that work as an essential part of the duties of the Lords of Appeal, although it means that from time to time individual Lords of Appeal are not available to sit.
At the same time, the judicial business of your Lordships' House and the Judicial Committee of the Privy Council shows no sign of abating. Indeed, petitions for leave to appeal to the House of Lords this year have already significantly exceeded the total of petitions presented last year and the indications are that the number of appeals presented will show a marked increase over the level of recent years. Moreover, perhaps surprisingly, the number of appeals to the Judicial Committee of the Privy Council remains buoyant.
There are at present 10 Lords of Appeal in Ordinary. In addition, the Lord Chancellor and Peers who have held high judicial office, often retired Lords of Appeal in Ordinary, may also sit judicially in your Lordships' House, and in the Judicial Committee of the Privy Council. Former Lords Justices and senior overseas judges also sit from time to time in the Judicial Committee of the Privy Council. Because of the commitments of the Lords of Appeal I have already mentioned, and for other reasons such as illness, it is often necessary to rely on retired Lords of Appeal to ensure that the judicial business proceeds with due despatch. I should like to express my gratitude to all those who, although no longer holding full-time judicial office, have sat to assist in the discharge of that business.
Your Lordships will also be aware of the Judicial Pensions and Retirement Act 1993 which is expected to come into force in the course of 1995. That Act will introduce a compulsory retirement age of 70 for all new judges first appointed once the Act is in force. It will also prevent any retired judge, including retired Lords of Appeal in Ordinary, from sitting beyond the age of 75, except for the purposes of completion of proceedings. That will in practical terms have the effect of limiting the number of retired Lords of Appeal and other judges who would then be able to sit on judicial business in this House or in the Judicial Committee of the Privy Council, or, as I shall be describing later, in the Court of Appeal.
The Government are concerned to provide the necessary flexibility to ensure that such senior and important courts continue to work effectively as well as to allow, where appropriate, Lords of Appeal in Ordinary to be available to undertake other duties in the public interest. Accordingly, we propose that two further Lords of Appeal in Ordinary be appointed, bringing the total number up to 12.
As I have said, the Administration of Justice Act 1968 at present provides for a maximum of 11 Lords of Appeal in Ordinary. Arrangements for the appointment of an eleventh Lord of Appeal are already in hand. If approved, the order would permit a twelfth appointment to be made.
I turn now to the Court of Appeal. The court is served by the Lord Chief Justice, the Master of the Rolls and the Lords Justices of Appeal. The President of the Family Division and the Vice-Chancellor also sit there from time to time. The Lords Justices form the main judicial strength of the court, although High Court judges sit with them to hear criminal appeals and other cases. Under the Criminal Justice and Public Order Act 1994 there is also provision for circuit judges to sit in the Court of Appeal in certain circumstances. I hope to be able to bring that provision into effect in January 1995.
Since March 1993 there have been 29 Lords Justices in the Court of Appeal. The purpose of the draft order is to further increase that number by three to 32.
The principal reason for seeking an increase is the growing backlog of appeals and lengthening waiting times in both the criminal and civil divisions of the Court of Appeal. In order to alleviate problems in the criminal division an additional court has been sitting since January 1993 and a second additional court since April 1994. I am pleased to inform the House that, for the first time in a number of years, there has been an overall decrease in the length of time a defendant has to wait to have his appeal heard. The number of outstanding appeals has also been reduced over the last two years by over 900 cases to 2,644.
The overall aim is to reduce waiting times to six months for conviction appeals and to three months for sentence appeals. Despite the commendable progress already made, it may well be another year before the number of courts sitting in that division can return to four without disappointing consequences.
Such progress in the criminal division has been to some extent at the cost of the civil division as additional Lords Justices hearing criminal appeals reduces the number available to hear civil cases. It is, however, inevitable that criminal cases should take priority over other cases given that the liberty of the subject is often at stake.
In his review of the legal year, the Master of the Rolls observed that the difficulties in the civil division were unlikely to be overcome by the repeated enlargement of the court. Other measures have already been taken to stem the rise of unheard appeals in the civil division; for example, retired judiciary regularly augment the numbers of Lords Justices sitting in the Court of Appeal. However, as I explained, the Judicial Pensions and Retirement Act will apply equally to judges who sit in the Court of Appeal as to those who sit in the House of Lords or the Judicial Committee of the Privy Council and there will be a similar limitation preventing any retired judges aged 75 or over being able to hear appeals.
Furthermore, in an effort to prevent meritless appeals reaching a full appeal hearing and thus taking up the time of three Lords Justices, the requirement for obtaining leave to appeal was extended in October 1993 to a number of new classes of case. My officials are currently working together with the Administrative Committee of Lords Justices to identify further categories of case that would prove responsive to a

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further extension of the leave filter. The categories have not yet been finalised, but any firm proposals will be put out to consultation in the usual way before implementation. Other possible methods to reduce waiting times are also being considered, including time limits for oral arguments and the increased use of written submissions.
Such work will inevitably take time and the pressures on the civil division are already acute. Across all the categories of appeals the average delay is around nine months. However, the average figure does not give the full picture. Priority cases, particularly those involving children, can be heard within three months, but other non-priority cases might have to wait up to 22 months. Such a level of delay causes difficulties as parties seek to have their cases moved into priority categories, and thereby expedited, if there is a long wait before their appeal can be heard. It follows that the more expedited cases there are the longer the delay for those appeals which are not in the priority category. According to long-term trends, the number of appeals set down is forecast to rise by around 1.5 per cent. each year. If the number of judges is not increased the backlog as we move into the next century will be approaching 3,000 cases, which equates to delays of around two years. Such delays are clearly unacceptable. Assuming that nothing else were done, the appointment of three additional Lords Justices would hold the backlog to around one year.
After careful consideration of the current and forecast workload of the Court of Appeal, I have concluded that three additional appointments are necessary at this time and will assist in the more efficient dispatch of business of the courts and that the House should further discharge its responsibility by approving the draft order. I commend the order to the House. I beg to move.
Moved, That the draft order laid before the House on 16th November be approved [1st Report from the Joint Committee].—(The Lord Chancellor.)
Lord Graham of Edmonton: My Lords, first, I apologise to the House and to the noble and learned Lord for the inability of my noble friend Lord Irvine of Lairg to be present tonight. He has been unexpectedly delayed. He has taken a deep interest in the matter and has raised it on more than one occasion. No animosity has been involved and I know that when he reads what was said by the noble and learned Lord he will be most pleased.
My noble friend will understand the case. I can listen to it and try to grapple with its intricacies. However, I am certain that the noble and learned Lord, Lord Ackner, will add to the good reception that I have given to the order. He too well understands the situation.
I have learnt from a number of quarters and sources that the noble and learned Lord the Lord Chancellor has met an acute need. That need could be eased only in this manner. I am well aware of protocol and of having to be careful before going overboard. I believe
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that the balance and the timing are right. On behalf of my noble friend Lord Irvine and Members on these Benches, I give the order a warm reception.
Lord Meston: My Lords, I too thank the noble and learned Lord and wish to ask only one question. Is he prepared to lift the veil on the possible categories of appeal that are being considered as candidates for which leave might now be required?
Lord Ackner: My Lords, I too welcome the proposed order, which increases the maximum number of Lords in Appeal in Ordinary to 12 and the Lord Justices in the Court of Appeal to 32. I raise only three points on which I should be grateful for my noble and learned friend's comments. The first relates to the adequacy of the increased number of judges in the Court of Appeal. My noble and learned friend referred to the Court of Appeal (Civil Division) Review for 1993–94, copies of which were circulated to all Lords of Appeal past and present. It makes depressing reading. My first point relates to whether three is an adequate number to cope with the present situation.
In the conclusion, the Master of the Rolls states:
"Over the past three years the figures show a consistent and disturbing trend: a high level of appeals set down; a steady and significant increase in the number of applications set down; and a sharp increase in the backlog of unheard appeals and applications. The trend is disturbing because the delay in hearing appeals is already too long, and is perhaps at the upper limit of what is acceptable. If these trends continue and nothing is done, the delay will be altogether unacceptable and may be seen as a denial of justice".
The Master of the Rolls pays tribute, as has my noble and learned friend the Lord Chancellor, to the considerable assistance of retired Lords Justices in dealing with the situation. In the words of the Master of the Rolls, they have given "valuable service". In his report, the Master of the Rolls identifies those retired Lords Justices. They are nine in number. If and when—and I suppose that it is when—the Judicial Pensions and Retirement Act is brought into force, of those nine, four will be immediately disqualified because they are over the age of 75. Of the remaining five, four are approaching 75; some are a year away, some two or three years, but all are approaching 75.
I appreciate that in due course there will be those who will retire from the Court of Appeal and who will, subject to age, make their services available. However, in view of the disturbing observations made by the Master of the Rolls in his report, and in view of the impact of the Act, when it is brought into force, upon the availability of retired Lords Justices to continue to provide such valuable assistance, I wonder whether three is enough to deal with the present depressing situation.
Secondly, my noble and learned friend referred to the fact that, in addition to increasing the number of judges, obviously thought will be given to reducing the time spent on oral argument. The Master of the Rolls says in his conclusions:
"It appears to be inescapable that in this country, as in other common law jurisdictions, steps will have to be taken to curtail the time allowed for oral argument, with greater reliance on

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written submissions. The saving of time in court will of course be off-set by the need to devote more time to perusal of written materials out of court, but experience elsewhere indicates a saving of time and an increased rate of disposal of business overall".
I now turn to the part of the conclusions that I wish to stress:
"In other common law jurisdictions increased reliance on written materials has demonstrated a need for the judges to receive professional legal assistance, usually obtained (at relatively modest expense) from the ablest young law graduates; this also may prove a desirable, if not a necessary, innovation here".
As my noble and learned friend knows, when I was sitting as a Law Lord my opposite number in the Supreme Court of the United States had three assistants to help him. Indeed, each member of the Supreme Court had three such assistants. I believe that the same applies in Canada and Australia. I do not know whether my noble and learned friend can confirm that serious consideration is now being given to the question of providing legal assistants, especially if we are to move more towards the restriction on oral argument.
My third and last point relates to another disturbing feature of the report. On page 9, there is a reference to "Figure 7", which shows,
"the total number of applications set down in the year under review and, in the lower line, the number of applications made by litigants representing themselves".
The report then continues:
"It will be seen that in 1989–90 scarcely more than one applicant in ten acted in person, whereas in the past year the proportion of such applicants has approached one third of the total".
The Master of the Rolls observes:
"In most instances litigants representing themselves are inevitably unfamiliar with legal procedures and lack the expertise needed to prepare the case for hearing by the Court, to give a clear account of the relevant narrative, to identify the legal issues for decision and to present argument to the Court".
The Master of the Rolls concludes:
"While the staff of the Court do their best to give guidance on procedure, and helpful explanatory leaflets have been prepared, the conduct of cases by personal litigants greatly increases the burden on the lawyers and administrative staff who work in the Civil Appeals Office and on the members of the Court in seeking to elicit the relevant facts and identify the relevant issues".
It must be the case that this, to quite an extent, is the product of the very savage cuts in legal aid. I wonder whether my noble and learned friend will bear that in mind when considering to what extent those cuts can be ameliorated.
9 p.m.
The Lord Chancellor: My Lords, I am grateful for the support from all speakers for the Motion that I have moved. It remains for me to seek to deal with the matters raised. The noble Lord, Lord Meston, raised the question of whether I can give any information about the classes of case being considered as regards the application of a filter. As is known, we have already dealt with one tranche of that.
So far as concerns the second tranche, I am considering it at present with the Administrative Committee of Lords Justices. Indeed, I mentioned that
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my officials have had a meeting with the committee. Whenever we reach a view about what classes of case are appropriate, I shall put out a consultation document which will set them out in detail and ask for views upon them. I shall do so before operating the powers given under the statute to modify the classes of case which require a filter. At the present stage of the discussion, it would be premature to reach any conclusion. In fact, I have not reached any conclusion myself on the matter, as I am still in discussion with the Lords Justices.
My noble and learned friend Lord Ackner raised three questions. I take the view that, so far as concerns the present situation, the increase by three judges is reasonable. We shall of course have to keep the situation in the Court of Appeal under review and the effect of any other action that the court may think it proper to take in relation to the matters with which the Master of the Rolls dealt. The Master of the Rolls made it clear that, in his view, repeated extensions of the size of the court would not be a suitable solution to all the problems experienced by the court. I believe it right at present that we should ask for three judges and then see how matters develop.
Secondly, my noble and learned friend pointed out that the Master of the Rolls raised the question in his report of curtailing oral argument. I have already made arrangements for legally qualified staff to be in the office of the civil division of the Court of Appeal. That was an innovation of a year or two back. Obviously, the precise number of such staff at any time will also be a matter which we shall keep under review.
My noble and learned friend referred to his opposite number in the Supreme Court of the United States when he was a Lord of Appeal in Ordinary, who had three assistants. It is fair to say that the number of cases disposed of by the Supreme Court in the US in a year is rather more, although the method of working is different. I certainly intend to keep under review the legally qualified members of the staff of the civil division in the Court of Appeal in the light of developments that the court may decide upon in relation to the issue of curtailing oral argument.
In so far as the third point is concerned, the Master of the Rolls has pointed to an increase in the proportion of those who represent themselves, as between 1989 and the present day. I do not think that that is attributable to any substantial extent to the changes in eligibility for legal aid which were made last year. I think that this is a tendency which has a number of causes. I certainly intend to keep very closely under review the question of whether or not the legal aid changes have affected this matter. However, one of the complaints that I have heard from the previous holder of the office of Master of the Rolls was that he found from time to time that legal aid was granted too readily for appeals that were not with merit in the Court of Appeal and he wondered about steps to deal with that. It may well be that steps to deal with that have had an effect on the number of people who represent themselves in this manner.

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However, these are all matters that I would wish to keep under review but, in the meantime, the order, the draft of which is before your Lordships, is, I think, agreed on all sides to be an important step in the right direction. I renew my Motion.
On Question, Motion agreed to.

Legal Aid Advisory Committee (Dissolution) Order 1994
9.10 p.m.
The Lord Chancellor The Lord Chancellor rose to move, That the draft order laid before the House on 22nd November be approved [1st Report from the Joint Committee].
The noble and learned Lord said: My Lords, the purpose of this order is to implement the dissolution of the Legal Aid Advisory Committee as provided for under Section 35(6) of the Legal Aid Act 1988.
The Legal Aid Advisory Committee was established in 1949. Its purpose was to comment on the way in which the Law Society administered the legal aid scheme, and to provide advice and recommendations to the Lord Chancellor on legal aid. Following the establishment of the Legal Aid Board in 1989 under the Legal Aid Act 1988 to administer the legal aid scheme, the board being subject to the regulatory regime appropriate to a non-departmental public body, a significant element of the committee's role came to an end. However, I concluded that it would not be right immediately to bring the committee to an end and it was continued in being in order to assess the extent to which there was a continuing useful role for it to play.
I have reviewed developments since 1989 and have concluded that there is no longer a need for a separate Legal Aid Advisory Committee. I am glad to take this opportunity to acknowledge the valuable work the committee has done during the course of its existence. I am grateful to all past and present members for the work they have done.
The situation in the legal aid field has changed very greatly since the establishment of the Legal Aid Advisory Committee. There is now a wide range of bodies and organisations with an interest in, and knowledge and experience of, the operation of the legal aid scheme. I regularly receive comments on developments from these bodies and organisations. I always welcome comments from any quarter on the operation of the scheme.
The Legal Aid Board is required to carry out the objectives set out in the Management Statement I published in January this year. These include the requirement to advise me from time to time on whether the scheme as a whole is meeting my objectives, and whether the way in which it is presently structured leads to the most effective and efficient use of the resources which the Government have allocated to legal aid. The board is also required inter alia regularly to consider whether any structural changes should be made, to review its arrangements for ensuring a quality service at a value-for-money price, and to advise me on any particular problems
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relating to access to justice. This gives the board a remit which is more than wide enough to embrace that previously held by the advisory committee.
I have referred in the past to my intention to extend the programme of research into legal aid matters. The Legal Aid Board is undertaking a number of projects: on methods of delivery; on non-solicitor agencies franchising; on refusals of contributory legal aid; on models predicting likely need for legal services, and on the internal corporate information strategy to support, among other things, strategic planning. The Legal Aid Board is also planning research on outcome measures in franchising and is planning a public opinion survey on priorities for legal aid expenditure and a survey of users of legal aid (applicants and assisted persons) under Citizen's Charter initiatives. This programme demonstrates that the board is already pursuing the kind of work that at one time would have been more appropriate for the advisory committee.
The involvement in legal aid matters of the Home Affairs Select Committee in another place, which has developed in the years since the establishment of the Legal Aid Advisory Committee, provides an additional independent perspective on the operation of the legal aid scheme. Overall, I am satisfied that the advice available to me from independent bodies and organisations, together with that provided by the Legal Aid Board in fulfilment of its objectives, gives me access to the full range of pertinent views and opinions and that there is no longer a need for a separate Legal Aid Advisory Committee.
As I said, I am very grateful to those who have served on the committee over the years. Much of its advice has been extremely valuable. I believe that in the changed circumstances the need for a separate Legal Aid Advisory Committee has come to an end. I beg to move.
Moved, That the draft order laid before the House on 22nd November be approved [1st Report from the Joint Committee]. —(The Lord Chancellor.)
Lord Graham of Edmonton: My Lords, again, I apologise for the absence of my noble friend. As the noble and learned Lord the Lord Chancellor is aware, matters relating to legal aid are not the prerogative exclusively of any particular Bench or any particular experience in the House. They are looked on by all Members of the House as matters in which they have a deep concern.
I listened to what the noble and learned Lord said as a rationale for the move that is proposed. As a layman I can appreciate not only the reason for extinguishing this particular body, but also, in the light of the care that he took to explain the structure which remains in existence and which is capable of doing so much more than I could ever have thought needed to be done, I am satisfied of the sense of what is proposed. Therefore, from these Benches we give the order a warm welcome.
Lord Meston: My Lords, I too should like to thank the noble and learned Lord for his full and careful explanation.

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I also wish to pay tribute to the high quality of the work which has been done by the advisory committee, and to the valuable reports provided by the committee giving insight into the practical operation of the legal aid scheme over many years.
The Lord Chancellor: My Lords, I am grateful to both noble Lords who have spoken for the
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understanding that they have shown. It was not without a good deal of thought that I decided to bring this Motion before your Lordships. I am grateful that, having done so and explained the reasons, your Lordships have been so kind as to express support. I commend the order to the House.
On Question, Motion agreed to.
House adjourned at fifteen minutes past nine o'clock.

  GUATEMALA: POPULATION RESETTLEMENT
  GUATEMALA: POPULATION RESETTLEMENT
  RAOUL WALLENBURG
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  WELSH NON DOMESTIC RATING: TRANSITIONAL ARRANGEMENTS
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  WELSH LOCAL GOVERNMENT FINANCE
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