Sitting of 16 February 1995

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

  CITY OF WESTMINSTER BILL [Lords] (By Order)
  Order for consideration, as amended, read.
  To be considered on Thursday 23 February.

  QUEEN MARY AND WESTFIELD COLLEGE BILL (By Order)
  Order for Second Reading read.
  To be read a Second time on Thursday 23 February.

Oral Answers to Questions
  NORTHERN IRELAND

    Peace Process
    Mr. Barry Field: To ask the Secretary of State for Northern Ireland what proposals he has for hon. Members to assist the peace process in Northern Ireland.
    The Secretary of State for Northern Ireland (Sir Patrick Mayhew): I hope that the Government's sustained efforts to encourage all-party talks on a comprehensive political settlement will continue to he supported in all parts of the House.
    Mr. Field: My right hon. and learned Friend will recall the murder of the Isle of Wight's previous Governor, Lord Louis Mountbatten, so he knows that Conservative Members understand the pain of Ulster. Does he agree that, in the interests of the peace process, when the joint framework document is published all hon. Members should take a considered view of the overall package and not seize on certain elements of it? Will it not be in the best interests of all people in Northern Ireland if all hon. Members who represent parties in Northern Ireland take part in discussions on the contents of the peace document, for surely this is a unique opportunity to give lasting peace a chance?
    Sir Patrick Mayhew: I am grateful to my hon. Friend. We all recall the horrific act of terrorism with which his constituency is associated, as he said. It was reflective of the many, many hundreds that have afflicted the people of Northern Ireland. I agree with the approach which my hon. Friend helpfully suggests to the publication of the joint framework document, if that is agreed, as I hope it will be. I am grateful for my hon. Friend's suggestion.
    Mr. Molyneaux: Is not the hon. Member for Isle of Wight (Mr. Field) unduly optimistic in assuming that Ministers will admit Northern Ireland representatives to any meaningful role in consultation or pay the slightest heed to what they say? Does the Secretary of State accept
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    that it is highly dangerous falsely to allege divisions within parties, although that is not unusual in this House and in other quarters? Is it not even more dangerous to pursue the course of threatening to call the bluff of Northern Ireland elected representatives, a tactic that has failed so miserably and so disastrously in the past?
    Sir Patrick Mayhew: On consultation, as the two Governments seek to use the document to offer a shared understanding of a possible outcome to the talks process, which would be consistent with the joint declaration, obviously—[Interruption.]
    Madam Speaker: Order. The hon. Member for Isle of Wight (Mr. Field), who asked the substantive question, has left the Chamber. Perhaps his colleagues would let him know my view on such matters. I am sorry to interrupt the Secretary of State. Please continue.
    Sir Patrick Mayhew: We have therefore wanted to learn the viewpoints of all parties, including, naturally, the party led by the right hon. Member for Lagan Valley (Mr. Molyneaux). We had reason to believe that we were confident that we knew the views of the Ulster Unionist party, to which we naturally attach importance. It is a question not of calling anybody's bluff but of inviting all the constitutional parties in Northern Ireland to consider the issues that will be addressed in the joint framework document, and to address them together, whether bilaterally or around the table, in a way that was done fruitfully in 1992, and in a way that offered the opportunity—which was taken—for individual parties to table their own papers, whether on position or policy, which were used to great effect.
    Rev. William McCrea: As the question relates to the peace process, will the Secretary of State tell us exactly what peace process we are actually referring to and talking about? Recently, the Prime Minister spoke to the people of the United Kingdom and of Northern Ireland. He said that, for the past five months, the people of Northern Ireland had been living without fear. Does the Secretary of State believe that that is factually correct? During those months, people have been murdered, bodies of young and old have been seriously brutalised by iron bars and clubs with nails, families have been, and are being, removed from their homes in my constituency because of continued intimidation and threat by the IRA, businesses have been bombed, not one pound of Semtex has been surrendered by the IRA, not one AK47 has been given up by the IRA and not one member of the IRA has renounced violence. Surely this is a tactical process rather than a peace process.
    Sir Patrick Mayhew: I suggest that the people whom the hon. Gentleman represents, among the people of Northern Ireland as a whole, reflect on the contrast in their lives between the time before the ceasefires were announced—or whatever one likes to call them—and the past five months. I acknowledge that acts of terrorism have continued; the murder of Mr. Frank Kerr in Newry was a particularly brutal example. I acknowledge that so-called punishment beatings have continued, which are no less political in their purpose than what went before.
    However, my right hon. Friend the Prime Minister was surely alluding to the comparison between life in Northern Ireland before the ceasefires and life after. I stand to be corrected, but I am sure that, by the peace process, most

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    people in Northern Ireland are referring to a process of political discussion which builds on the existing peace and which will create the stability for which that Province has yearned for so long. I believe that that is a real prospect.
    Dr. Hendron: Does the Secretary of State agree that he can help hon. Members to assist the peace process by insisting that the framework document and the Government's own document on strand 1 are published together? Will he tell hon. Members that both documents should be considered together, not separately?
    Sir Patrick Mayhew: Whether it is called the peace process or not, it will certainly assist people to realise that the Government are to be relied on when they say that neither of the documents is intended to be imposed. Neither document is intended as a blueprint. The documents are intended as aids to discussion and negotiation, which is what we hope will ensue.
    Mr. Hunter: To further hon. Members' understanding of the peace process, will my right hon. and learned Friend return to his words a few moments ago? Are we to understand that the framework document is by no means a draft treaty, and is certainly not an exclusive blueprint, but is intended to promote genuine consultation, and that any constitutional party of Northern Ireland is at liberty to produce any alternative suggestion during bilateral talks with the Government?
    Sir Patrick Mayhew: I am happy to confirm that and it cannot be said too frequently. I have already indicated that, during the last talks process, papers were produced by all sides, including the British Government, who played an important part in achieving the contingent agreement which was reached, particularly on strand 1. At the last Northern Ireland Question Time on 19 January, I told my hon. Friend something to the effect that we want to use that document to help get the parties back around the table again—not to make them conform to anything but simply to discuss the issues addressed in that paper. That remains the position. I hope that that will happen and, when it does, I look forward to papers being produced again by all parties.
    Ms Mowlam: At this time of delicate discussions with Dublin, is the Secretary of State aware of the House's disappointment that there will not be a statement today on the appalling behaviour of so-called football fans—they were masquerading as that, but were really fascists—in Dublin? Will he join me in condemning their actions? Will he guarantee to the House that he will not jeopardise progress towards a balanced constitutional settlement for Northern Ireland by allowing any party to enter into pre-emptive negotiations?
    Mr. William Ross: On a point of order, Madam Speaker.
    Madam Speaker: I must take points of order, as usual, at the end of Question Time and after any statements.
    Mr. Ross: Is this Northern Ireland Question Time or Dublin Question Time?
    Madam Speaker: Order. Secretary of State.
    Sir Patrick Mayhew: I will not enter into the question of a statement, because I do not want to blur an expression of feelings which I think is shared by every hon. Member
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    and everyone in the country. I have seen and read of what happened with utter disgust and I feel a sense of personal shame that it was done by people associated with my own country. For that reason, I do not mind saying that, at the next opportunity, I shall offer expressions personally not only of shame but of apology. As for the second matter, I think that we want to get to publication of this document as soon as possible.

    United Kingdom Integrity
    Mr. Jacques Arnold: To ask the Secretary of State for Northern Ireland if it remains Government policy to support the integrity of the United Kingdom based upon the consent of the inhabitants of each of its component parts.
    The Minister of State, Northern Ireland Office (Mr. Michael Ancram): Yes. We wholeheartedly support the Union in its present form. As far as Northern Ireland is concerned, it is, in fact and in law, an integral part of the United Kingdom, and the Government welcome and will support that position so long as it remains the wish of a greater number of the people of Northern Ireland.
    Mr. Arnold: Will my hon. Friend reiterate the fact that, whereas the people of Northern Ireland will have the final say in all this through the referendum, the Conservative and Unionist party feels that membership of the United Kingdom by Northern Ireland is of immense value and that the United Kingdom is of greater value than the mere sum of its four parts?
    Mr. Ancram: I certainly agree with my hon. Friend. I would go further and say that the strongest cement that holds the United Kingdom together is the consent of the majority of the people of each of its component parts, which is something of which we are very much aware.
    Mr. Beggs: Does the Minister agree that, if there is to be acceptance of stated Government policy on the United Kingdom, however neutral on Northern Ireland, there has to be confidence in the integrity of those who speak for the Government? Can he give us one valid reason why we as Ulster Unionists should not question his integrity, that of the Secretary of State and even that of the Prime Minister, in that we feel that we have been not only deceived but betrayed? Does the Minister not understand the depth of Unionist frustration and understand that we perceive that there has been capitulation to pan-nationalism and IRA thugs who threaten to use their guns and Semtex again if their will is not expressed in the Government document?
    Mr. Ancram: I can only state regret at the hon. Gentleman's original remarks about the integrity of myself and that of my right hon. and hon. Friends. I hope that, in due course, he will reconsider his remarks, especially when the joint framework document is published and he is able to see what is in it in relation to the various consultations that have taken place in the past 12 months with, among others, members of his party, the Ulster Unionist party, who were sent to speak to me about the parameters that I should take into account in terms of these negotiations.
    On the second part of the hon. Gentleman's question, I would again ask him to wait to see the joint framework document. If it is to succeed as an aid to negotiation and

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    as a means of bringing parties back into discussion, obviously it has to be balanced. I hope that when the hon. Gentleman sees it, he will accept that it is.
    Mr. Hayes: Will my hon. Friend confirm that the Downing Street declaration, with all its constitutional implications, still stands? Does he agree that the long-suffering people of Northern Ireland deserve a just, genuine and lasting peace and that they will not want to put up with party political shenanigans? Does he further agree that the final arbiters of any framework document will be the people themselves, and no one else?
    Mr. Ancram: I am grateful to my hon. Friend for recalling to the House the Downing Street declaration, because it was a statement of principles. The key principles enunciated in it were those of democracy and consent. Hon. Members will once again, I believe, see when the joint framework document is published, if that is what happens, that it, too, is based on the essential principles of democracy and consent.
    Mr. Stott: The Minister will be aware that when the joint framework document is eventually published as a basis for discussion and negotiation, it will be welcomed by almost everyone in the House. Given the fact that the Secretary of State and the Prime Minister, supported by my hon. Friend the Member for Redcar (Ms Mowlam), have backed the triple-lock process wholly and fully, should not the ordinary people of Northern Ireland expect and demand their elected representatives to engage in meaningful and constructive dialogue with the Government about the future governance of Northern Ireland?
    Mr. Ancram: The House will have heard what the hon. Gentleman has said. I believe that all the parties from Northern Ireland in the House have very strong and genuine arguments to make and very strong and genuine positions to state. I hope that they will take the opportunity of stating those within the context that the joint framework document will make possible, by opening up a situation where negotiations, discussion and dialogue may again take place.

    Water Privatisation
    Mr. William O'Brien: To ask the Secretary of State for Northern Ireland if he intends to proceed with water privatisation in Northern Ireland; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Malcolm Moss): As the then Minister of State made clear to the House in April 1993, privatisation of water and sewerage services will not be possible in the lifetime of this Parliament. The Government intend in the interim to establish the Department of the Environment's water executive as a next steps agency by April 1996.
    Mr. O'Brien: Does the Minister accept that if there is one issue which brings together all the elected members of Northern Ireland, either in this House or in local government, and the peoples of Northern Ireland, it is opposition to the privatisation of water services in Northern Ireland? Does he accept that the people of Northern Ireland, who enjoy the opportunity to pay their water charges with their general rate, will oppose any
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    changes from such a procedure? Does he also accept that many people in Northern Ireland, especially those on low incomes, benefit greatly from assistance with their water charges through the general rate refund and that to take that away from them would be a crime? Will he forget all ideas about privatisation of water services in Northern Ireland and leave them as they are so that people may continue to enjoy that service?
    Mr. Moss: I reiterate what I said a moment ago. There are no proposals to privatise the water services in the lifetime of this Parliament. Ministers have already had discussions with, and received correspondence from, locally elected representatives and others, and the Government are aware of the strong feelings and concerns on the issue. Although I welcome views from interested parties, the Government believe that privatisation will bring benefits to Northern Ireland, as it has done elsewhere.
    Mr. A. Cecil Walker: Is the Minister aware of reports that grazing animals are being allowed access to the periphery areas of reservoirs, thereby causing a risk of pollution? Will the Minister confirm that the filtration processes are working efficiently?
    Mr. Moss: I am happy to confirm that filtration processes are working efficiently. The straying of animals into the water executive's area has not been brought to my attention, but if the hon. Gentleman would care to write to me, I shall look into it in detail.
    Mr. Spellar: Why does the Minister feel it necessary to impose yet another quango on Northern Ireland, which already has 160 with which to deal? Why is he still placing uncertainty over the future of the water industry, even after the next general election? Why does he not accept that water privatisation has proved intensely unpopular in England and Wales and proposals for it are proving unpopular in Scotland?
    Does the Minister also accept that water metering is encountering intense public resistance? Will he give a commitment that that will not be the way in which he tries to charge for water in Northern Ireland and that, in fact, he will stick to a system of property rating, which is far more acceptable and collectable and far better for the health of the people of Northern Ireland? Why does he not depart from dogma and bring some common sense to the issue?
    Mr. Moss: On the first part of the hon. Gentleman's question, experience has shown that agencies enable a better and much more customer-focused service to be provided. They enjoy certain financial and management freedoms which allow them to focus on achieving a more appropriate and cost-effective delivery of service.
    On metering, a number of options for reform of the charging regime for water and sewerage services are being considered. Although the Department of the Environment will continue to meter non-domestic supplies, there are no plans to introduce routine metering for domestic properties in Northern Ireland.

    Framework Document
    Mr. Beith: To ask the Secretary of State for Northern Ireland whether he will make a statement about

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    the progress made towards the publication of a framework document and of the Government's proposals for the internal administration of Northern Ireland.
    Mr. Skinner: To ask the Secretary of State for Northern Ireland what further discussions he has had with representatives of political parties regarding the framework document; and if he will make a statement.
    Mr. Ancram: We hope to publish the joint framework document and the Government's proposals for the internal administration of Northern Ireland as soon as possible. In the course of discussions with the main constitutional parties in Northern Ireland, I have discussed the principles that we would expect to underpin a settlement relating to all three sets of relationships.
    Mr. Beith: Will the Minister state the process by which these documents will fall to be considered by the Northern Ireland political parties? Would it not be hard for people in Great Britain to understand if any of Northern Ireland's political leaders declined to take part in the process of discussion and denied the people of Northern Ireland the opportunity to vote for or against a considered set of proposals?
    Mr. Ancram: Having heard what the right hon. Gentleman said, I should remind him that any referendum would be not on a set of proposals produced by the two Governments but on the outcome of discussions that take place on the basis, as my right hon. and learned Friend the Secretary of State said, of the joint framework document and other views expressed by other interested parties.
    Obviously, the process after publication will have to be considered in the light of circumstances. We have made it clear that the document will be published along with the Government's proposals for discussion on internal institutions within Northern Ireland. The proposals will be public and we hope that, first, all concerned will study them with great care and attention to see precisely what is in them. I hope that we can then begin discussions on the basis of those proposals and, as I have said, possibly on the basis of other positions that may become available at the time.
    In the first place, there may be bilateral discussions; but, at the end of the day, discussions must be around a table, because the whole purpose of the process is to try to come to an agreement between the parties which can then be put to the people of Northern Ireland in a referendum.
    Madam Speaker: I call Mr. Skinner.
    Mr. Skinner: My question is coupled with Question 5.
    Madam Speaker: It is my understanding that Questions 4 and 8 are linked.
    Mr. Ancram: I received a note at the beginning of Question Time informing me that one question had been withdrawn and the questions had been renumbered. I may be wrong.
    Madam Speaker: No. The linked questions are the questions tabled by the right hon. Member for
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    Berwick-upon-Tweed (Mr. Beith) and by the hon. Member for Bolsover (Mr. Skinner)—Nos. 4 and 8—which relate to the framework document.
    Mr. Ancram: I apologise; I was wrongly informed.
    Mr. Skinner: I had a letter saying that my question was linked with Question 8. Then again, the Government do not know whether they are on their head or their backside.
    Madam Speaker: Questions 4 and 8 are linked.
    Mr. Skinner: Is the Minister aware that if ever there was a need for the framework document and a peaceful Irish solution, it was best exemplified by the horrific events at Lansdowne Road last night? Does he also agree that, for the matter to be resolved in the long term, we shall need a Government with a large majority and not a Government who have to depend on temporary pacts and alliances, with support being withdrawn week by week? Long-term resolution of the problem will probably need a Labour Government with a new idea.
    Mr. Ancram: I can only say that, in the light of the present situation, with the future of Northern Ireland very much at the centre of what we should be considering, I do not think that the hon. Gentleman's remarks are exactly constructive or helpful.
    Mr. Barry Porter: Although I am very willing to wait for the publication of that document, it is important to point out to my hon. Friend that that which has seeped out so far, whether intentionally or unintentionally, has given some Conservative Members room for concern. If, indeed, that which has seeped out is what will be in that document, it may well be that some Members who would describe themselves as Unionists will take a less than sanguine view of the contents.
    Mr. Ancram: May I advise my hon. Friend, as I have advised others, that I think that it is important to wait to see precisely what is in the joint framework document, if a joint framework document is agreed? Equally, I would ask him to wait to look at precisely what is in the Government's own proposals on internal institutions to see whether they match the criteria that he would seek for such institutions.
    As part of the consultations that I have held with all the parties, I was seeking out the parameters in which I believed that we could find a basis for discussion and negotiation, and there were certain very firm criteria which had to be met: first, that no joint authority of Dublin and the United Kingdom Government was involved; secondly, that there was no joint sovereignty; and, thirdly, that there was no slippery slope in anything that was proposed. I believe that, when my hon. Friend sees the proposals, he will agree that we are firmly within those criteria.
    Mr. William Ross: Why, whenever Ministers speak of the framework document and the peace process, do they roll the two together? It is an absolutely fundamental error to talk about two separate things as though they were one and the same. In so doing, they leave themselves open to pressure from the IRA under the threat of resumed violence if they do not give the IRA what it wants.
    Mr. Ancram: I do not think that the hon. Gentleman is correct. Certainly, I do not think that he should draw

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    that inference from anything that I have said in answer to this question. What I was saying, which is very important, is that the joint framework document is two legs of a three-legged stool. The third leg of that stool is the Government's proposals for the internal arrangements within Northern Ireland. It is very important that that package is looked at as a whole. I hope that Unionist Members, who have always struck me as people of great reason—I believe that to be the case—will do that.
    Mr. Mallon: As we await the framework document, is it not informative to remind ourselves of what Edward Heath, Margaret Thatcher and John Major have in common? They have all gone ahead of the Unionists, they say; they have all sold out Unionism, they say; and they have all tried to create a united Ireland against the wishes of the people of the north of Ireland, would that it were so. Will the Minister confirm that underlying the framework document will be the principle of consent, that consent by definition requires agreement and that agreement by definition threatens no one except those who get undue pleasure out of threatening and being threatened?
    Mr. Ancram: I personally do not think that the process in which we are engaged is to be assisted by anybody threatening anybody else. The process, as the hon. Gentleman rightly pointed out, is based on consent, and consent requires agreement; but in order to achieve agreement, there has to be dialogue. The purpose of the joint framework document and the document being put forward by the Government on internal arrangements within Northern Ireland has one central purpose: to get the parties back talking to each other again, as the people of Northern Ireland are constantly demanding that the Governments and their elected representatives should do.

    Peace Process
    Mr. Riddick: To ask the Secretary of State for Northern Ireland if he will make a statement on the Northern Ireland peace process.
    Mr. Parry: To ask the Secretary of State for Northern Ireland if he will make a statement on the peace process.
    Sir Patrick Mayhew: Separate exploratory dialogues with Sinn Fein and loyalist parties have been held. It is desirable that they continue.
    Mr. Riddick: Has not the hon. Member for Newry and Armagh (Mr. Mallon) actually said that he does not expect to live in a united Ireland in his lifetime? Does my right hon. and learned Friend think that Ulster Unionists should take some reassurance from the fact that the Conservative party, more than the other two main political parties, is the party of the Union, and that Conservative Members will simply not countenance a united Ireland or all-Ireland bodies coming into place unless it is quite clear that a majority of the people in Northern Ireland themselves actually approve that?
    Sir Patrick Mayhew: Of course that is so, and my hon. Friend and his colleagues will not be put to that test for the very reason that my hon. Friend the Minister of State has just explained: that the heart, core and centre of what the framework document, if agreed, will propose is consent and agreement. The constitutional guarantee of the future status of Northern Ireland is long-standing, and
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    it will be compatible with anything that the British Government are prepared to propose in the joint framework document.
    Mr. Maginnis: Will the Secretary of State tell us frankly and clearly where the Government's working assumption that the IRA is in a permanent ceasefire now stands? Is not it true that dozens of young men have been beaten to a pulp by IRA punishment squads and that 39 families have had to be removed from their homes in the past few months under the Government's special purchase of evacuated dwellings scheme? Does not the IRA delegation—or, as those involved call themselves, the Sinn Fein delegation—which comes to Stormont from time to time refuse to speak on behalf of the IRA, and say that it has nothing to do with the IRA? Is not it true that those involved refuse to talk about the decommissioning of weapons? How long will the Secretary of State head up this charade that is supposed to be a peace process?
    Sir Patrick Mayhew: There are a number of issues in that question. The first part related to the working assumption, which the Prime Minister announced in October and which the Government were prepared to make: that the ceasefire was intended to be for good. That assumption depends on what is done and on what is not done. The hon. Gentleman is absolutely right to point to activities which, as I said to the hon. Member for. Mid-Ulster (Rev. William McCrea) a minute ago, are no less political in their intention than what went before the ceasefire. Those activities put a strain on that working assumption.
    I hope and believe that it is the intention that there shall not be a reversion to violent means of securing political objectives, but we cannot know whether that is the intention. Only those involved can know whether that is their intention. The rest of us have to rely on what is done and what is not done.
    On the exploratory dialogue, most people think that it is better that people should talk and that the parties previously associated with paramilitaries should be exploring the Government's position. Unless they know and fully understand the Government's position, there is a danger that, in that curious world, they could act on a misapprehension. I understand the hon. Gentleman's scepticism, and I know that he has expressed it frequently. Although I see the grounds for it, I do not propose at the moment to give way to it.
    Mr. Peter Bottomley: Has not national backing from successive Governments and the determination not to have the United Kingdom destroyed by the bombs and bullets of the IRA and not to be pushed off course by the turning of women into widows and children into orphans helped to start the peace process? More controversially, might not extreme and fearful Unionism do more to undermine support for the Government's policy than some of the work of the provisional IRA over the years?
    Sir Patrick Mayhew: I thought that this question was going to be helpful. I do not want in any way to suggest that I underestimate the grounds for fear that people on whatever side of the political equation in Northern Ireland have. The history of Northern Ireland provides a ready explanation for the fears, anxieties and suspicions that abound. Of course the unknown is more capable of producing those things than what is known, and that is why I, along with most people in Northern Ireland, look

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    forward very much to having the document published. The sole purpose of the document is to suggest a possible outcome to the resumed talks process, and we shall invite people to come back together to discuss the issues that it addresses. I hope and believe that that will occur.
    Ms Mowlam: Does the Secretary of State agree that the nature of the questions in the House today suggests that there is a need for the speedy publication of the framework document as soon as possible, and that the clear hope of most hon. Members is that everyone will consider the package on the table and make a judgment on all parts of it? I simply add that obviously that is our focus, and understandably the focus of the Government at the moment, but there is growing anxiety on the Opposition Benches that the parallel process to the unfolding framework document is the need for economic regeneration. In meeting after meeting that I have had in Northern Ireland, people have been seriously worried that the Government lack any clear strategic plan about the way in which additional funding for Northern Ireland will be spent to help the process.
    Sir Patrick Mayhew: I think that I have said enough about the joint framework document to be excused from dealing with it once again. I do not find the depression that the hon. Lady apparently meets in her welcome visits to the Province. I find people rejoicing in the fact that unemployment is decreasing on a steadily established trend of more than 1,000 a month. We have better figures now for employment and unemployment than we have had for the past 13 years. I invite the hon. Lady to cheer up.

    Peace Process
    Mr. Dykes: To ask the Secretary of State for Northern Ireland what plans he has to hold discussions with editors and reporters concerning the Northern Ireland peace process.
    Mr.Ancram: My ministerial colleagues and I have frequent contact with representatives of the press and broadcasting organisations at all levels in Northern Ireland and Great Britain. Their questions are wide ranging and cover all aspects of Northern Ireland affairs, including the "peace process". There will be facilities for the media to study the joint framework document if and when it is published, along with our proposals for discussion on internal institutions in Northern Ireland.
    Mr. Dykes: I strongly welcome the Government's determination not to be thrown off course or scared by extreme views and mischief making. Does my hon. Friend have any more information on the recent mischievous press leaks, in The Times and other newspapers, about the draft proposal?
    Mr. Ancram: An official inquiry into the leak is under way, headed by a senior Northern Ireland Office official. It would be inappropriate for me to speculate, pending the outcome of that investigation. I think, however, that it is important, during the process of seeking a settlement to the problems of Northern Ireland, that the media play their part by keeping the public fully informed of what is happening.
    Rev. Martin Smyth: Is it not passing strange that a Government who, allegedly, are defending the Union
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    should, through a Government official, advise a journalist or an editor that their policy is to face down the Unionists? Will the same assiduousness be shown in tracing that official as, apparently, has been shown in tracing those who leaked to The Times?
    Mr. Ancram: If the hon. Gentleman has any specific information to give me or my right hon. and learned Friend about that matter, we should be pleased to hear it.

    Jury Trials
    Mr. Corbyn: To ask the Secretary of State for Northern Ireland what proposals he has to return jury trials to Northern Ireland.
    The Minister of State, Northern Ireland Office (Sir John Wheeler): The majority of trials on indictment in Northern Ireland are already conducted before a jury. As we have made clear in the past, when violence ends, the emergency legislation—which includes provision for non-jury trials—will have served its purpose. As lasting peace becomes firmly established in Northern Ireland, normality can return.
    Mr. Corbyn: Does the Minister agree that now is the time to repeal the emergency legislation and give the right to a jury trial to everyone in Northern Ireland—a right that has been denied to them for nearly 15 years or more? Does he agree that it is a fundamental right of all citizens that they should have an opportunity, if they are indicted on a serious charge, to appear before a jury, not before the fundamentally unfair system of a judge sitting with no jury and making decisions?
    Sir John Wheeler: I refute the suggestion that the Diplock courts are in any way unfair. That is obviously not true. It is equally correct to say that it is the duty of the Government to justify the retention of the emergency legislation, and to keep it firmly under review, which the Government do. The most recent statistics available, for 1993, show that 877 cases were disposed of by the Crown courts in Northern Ireland for indictable offences, of which 256 were scheduled offences dealt with by single-judge courts.
    Mr. Trimble: Does the reduction in the number of trials before the single-judge courts show that there has been a reduction in the number of people being apprehended and charged for terrorism? Is that a reflection of the authorities' failure to investigate and pursue terrorist acts that have occurred in the past? Is that not an example of a de facto amnesty, and consequently a breach of the Government's undertaking that terrorist crimes of the past would continue to be pursued?
    Sir John Wheeler: I firmly reject any suggestion of an amnesty for terrorist offenders. I can assure the House that the police service will pursue all offences with the utmost vigour under the law. The downturn in violence since 31 August, which the House will welcome, has meant that fewer cases coming to the notice of the police and before the courts are related to terrorist crimes. That is an extremely welcome development.

  PRIME MINISTER

    Engagements
    Mrs. Gillan: To ask the Prime Minister if he will list his official engagements for Thursday 16 February.
    The Prime Minister (Mr. John Major): This morning, I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
    Mrs. Gillan: Will my right hon. Friend join me and every other Member of the House in condemning the appalling scenes of violence and vandalism in Dublin last night? Does he agree that those people are a disgrace to the United Kingdom and an affront to football fans? Will he assure the House that he will do everything possible to prevent such behaviour from occurring again either at home or abroad?
    The Prime Minister: I agree that the behaviour of a thuggish minority at the match last evening was a disgrace and a great embarrassment. I do not believe that the people involved are sports fans, nor do I believe that they represent the true face of this country or British sport. The Football Association and the Irish Football Association have launched a full inquiry into exactly what happened and will discover what lessons can be learnt for the future. I have said that we will do everything we can to help to identify the people concerned and ensure that they face due punishment.
    Mr. Blair: May I, first, associate myself entirely with the Prime Minister's comments about the scenes of violence? Those people are not proper football fans, but criminals and thugs and should be treated as such.
    In today's edition of The Daily Telegraph the Chancellor of the Exchequer denied that a single currency was a threat to the nation state. Is that the Prime Minister's view: yes or no?
    The Prime Minister: I think that the right hon. Gentleman would be wise not to misunderstand what my right hon. and learned Friend the Chancellor is saying. If he is so concerned about matters—[Interruption.] I note that the shadow Chancellor is chortling, but I must say to the Leader of the Opposition that his right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) has said:
    "I am not a fan of a single currency"
    and his right hon. Friend the Member for Copeland (Dr. Cunningham) has said:
    "I personally am in favour of a single currency".
    I do not know whether the right hon. Gentleman would care to adjudicate between the two of them.
    Mr. Blair: I am delighted that the Prime Minister keeps asking me questions; it will put him in good practice. Let me make him an offer: instead of the twice weekly Prime Minister's questions, one day a week we will move over to the Government Benches and then the right hon. Gentleman can ask me questions.
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    Let me just bring the right hon. Gentleman back to my question: it is his Chancellor of the Exchequer who has said in clear terms that a single currency is not a threat to the nation state. Does he agree or not?
    The Prime Minister: The right hon. Gentleman—[HON. MEMBERS: "Answer."] I shall answer the right hon. Gentleman in my own way. He would be better advised to address himself to his own party and his own position. The right hon. Gentleman said in his own election address that he was opposed to British membership of the European Union. Then, later, he actually said:
    "I wasn't actually opposed to membership"—
    and he went on to say—
    "I said … within the closed doors of the Labour Party, that I disagreed with that policy on Europe."
    What is the right hon. Gentleman now saying within the closed doors of the Labour party and why will he not say it in public?
    Mr. Blair: I think we can see why the Prime Minister has asked the Cabinet for a vow of silence on this issue. One simple question remains for him to answer: if he cannot trust his Cabinet or his Chancellor on these critical economic and foreign policy issues, why on earth should the people of Britain trust him or the Government to govern the country?
    The Prime Minister: If the right hon. Gentleman is not prepared to say in public what he said in private, why should anybody trust the Opposition? The Government have made it clear that we will decide in the light of the prevailing circumstances whether it is appropriate to join a single currency. The Cabinet is utterly united on that point and it reinforced that unity this morning, as the right hon. Gentleman will be pleased to know.
    Dr. Goodson-Wickes: Does my right hon. Friend agree that the interests of rail passengers, which were enhanced so much by the Government's recent proposals, will be put at risk by the actions of the rail unions? Does he agree that those very unions are threatening to support clause IV against Opposition reformists, and does he have any confidence that the Leader of the Opposition will renounce those unions?
    The Prime Minister: I really do not know what he will do. [Interruption.] The right hon. Member for Sedgefield (Mr. Blair) seems very keen to answer questions. I wish that some day he would try it, because if he did, it would be the first time yet in his career. I think that the aim of rail privatisation will undoubtedly be maintained, and it is to improve the quality of rail service. I hope that the need to improve the rail service does not escape the right hon. Gentleman for Kingston upon Hull, East, who has been summoned to his sponsoring union, the National Union of Rail Maritime and Transport Workers, to explain why the Opposition want to scrap clause IV.
    Mr. Campbell-Savours: Childish.
    The Prime Minister: The hon. Gentleman says that that is rubbish. He says that they do not want to scrap clause IV. It is no wonder that he is sitting on the Back Benches.
    Mr. Watson: To ask the Prime Minister if he will list his official engagements for Thursday 16 February.
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mr. Watson: Given the unambiguous statements yesterday by the President of the European Commission on European Union internal passport controls and the creation of a single European currency, does the Prime Minister still hold to the view that he expressed in Brussels last July that Jacques Santer is the right man in the right place at the right time?
    The Prime Minister: If the hon. Gentleman reads what the President of the European Commission said yesterday, he will find a whole range of specifically British issues, where we have made it perfectly clear that we wish change and where he has indicated the need for change. To that extent the President of the Commission will prove far more amenable to the British position than any of the alternatives.
    Mr. Anthony Coombs: In the light of the recent fall in unemployment, is my right hon. Friend aware of a recent CBI survey that showed that exports from small manufacturing companies in this country are at their best level for 10 years? As they appear not to be having any problems with exchange control or exchange rate risks, is there not a further argument for saying that what Jacques Santer, the President of the European Commission, says about the need for a European single currency by 1997 is undesirable, unrealistic and unnecessary?
    The Prime Minister: I think that, in respect of the first point of my hon. Friend's question, he is quite right to stress the growth in exports. He might have also stressed the extent to which manufacturing exports, in particular, are doing so well, and the fact that manufacturing employment has risen by 37,000 in the quarter to December. That is the fastest quarterly growth in employment in manufacturing at any stage since records began and shows clearly the extent to which manufacturing industry is undergoing a renaissance.
    As far as the latter part of my hon. Friend's question is concerned, I have indicated clearly that I do not think that there is any prospect of a single currency in 1996 or 1997. At a later stage we will look at what is in the national interest in light of the circumstances.
    Mr. Sutcliffe: To ask the Prime Minister if he will list his official engagements for Thursday 16 February.
    The Prime Minister: I refer the hon. Gentleman to the reply I gave some moments ago.
    Mr. Sutcliffe: This year we celebrate the 50th anniversary of the end of the second world war, in which many of today's British pensioners were involved. Why do our pensioners lag behind the rest of Europe when it comes to pensions and benefits? Why have the Government never considered providing a veterans' benefit, which has been introduced elsewhere in Europe?
    The Prime Minister: I think that the hon. Gentleman would do well to look at the reality of what has happened.
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    He would see that, since 1979, benefits to poorer pensioners have risen by 18 per cent. over and above the increase in prices. He would see that benefits to unemployed couples and others in difficulty have risen dramatically above the rate of inflation.
    The hon. Gentleman would also see that, among those people to whom he sometimes refers as the "poorest", there has been a dramatic rise in the possession of consumer durables. That suggests that people have more net disposable income and it suggests also that their living standards are improving, which is demonstrated by every dispassionate survey that we have seen.
    Sir Michael Neubert: To ask the Prime Minister if he will list his official engagements for Thursday 16 February.
    The Prime Minister: I refer my hon. Friend to the reply I gave some moments ago.
    Sir Michael Neubert: When my right hon. Friend is next in touch with Mr. Santer, will he commend him for his words yesterday that, in matters of immigration and asylum, which affect many citizens in their daily lives, the Commission will seek to meet their expectations and to allay their concerns? Will my right hon. Friend tell him that the expectations and concerns of my constituents will best be met by upholding the British border controls that were agreed in Luxembourg 10 years ago?
    The Prime Minister: As I indicated to the House on Tuesday, I am entirely determined to maintain our fair but firm immigration policies, and that means that we shall retain our border controls. European Heads of Government endorsed our right to do so in a formal declaration and we intend to see that it is honoured.
    I hope that we may have the support of the Opposition in this matter. The shadow Home Secretary has indicated that we will have the support of the Opposition on this issue, although he does not appear to have the support of the leader of Labour Members of the European Parliament.
    Mr. Heppell: To ask the Prime Minister if he will list his official engagements for Thursday 16 February.
    The Prime Minister: I refer the hon. Gentleman to the reply I gave some moments ago.
    Mr. Heppell: Even with the small but welcome fall in unemployment, there are still 20,000 long-term unemployed in the Greater Nottingham area. The proposed budget for Greater Nottingham training and enterprise council is such that only 800 or 900 of those 20,000 long-term unemployed can be assisted. Does the Prime Minister think that that is an adequate response to the problems of long-term unemployment?
    The Prime Minister: I think that the hon. Gentleman knows that long-term unemployment—whether that is defined as six months, one year or longer—is falling and has been falling for a long time. I look forward to seeing it fall a good deal further.
    Unemployment, whether long-term or short-term, has dropped by more than 400,000 in the past 12 months. Britain is well on the way to having the lowest level of unemployment in western Europe. Our unemployment rate is substantially below that of other similar countries.

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    In France—the country with the most comparative population size to Britain—unemployment is just below 13 per cent. and static; here, it is 8.5 per cent and falling and there is every indication that there will be further job creation. I hope that that will involve those in the hon. Gentleman's constituency, although he may have mentioned—but neglected to do so—that unemployment in his constituency has already fallen by 11 per cent.
    Mr. Shersby: Has my right hon. Friend had the opportunity to read the excellent report of the National Audit Office on grant-maintained schools? If he has, he will have seen that those schools are performing very well indeed. They are providing an excellent standard of education and many thousands of new governors have been drawn into the process of working with teachers and parents to provide good education for our children.
    The Prime Minister: I entirely agree with my hon. Friend. There is no doubt about the popularity of grant-maintained schools. There is no doubt about the fact that parents who have chosen grant-maintained status are
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    pleased with the choice that they have made, and I think that that choice is exercised among many people, of all political persuasions.
    Mr. Fatchett: To ask the Prime Minister if he will list his official engagements for Thursday 16 February.
    The Prime Minister: I refer the hon. Gentleman to the reply I gave some moments ago.
    Mr. Fatchett: Given the widespread concern about corruption and bribery in sport and the rumours that games have been thrown for money, will the Prime Minister confirm that his regular poor performances at the Dispatch Box against my right hon. Friend the Member for Sedgefield (Mr. Blair) are simply a reflection of his ability and that he has not been bribed by the Labour party?
    The Prime Minister: The expression on the face of the Leader of the Opposition is as expressive as it needs to be and it expresses his view—as mine—of the hon. Gentleman's question.

Madam Speaker's Statement
Madam Speaker: I have a short statement to make. A ceremony is to be held in Westminster Hall to commemorate the 50th anniversary of the end of world war two. Both Houses will attend and addresses will be presented to Her Majesty the Queen.
The date and time of the event is Friday 5 May at noon. It is proposed that a short reception be held in the Hall after the ceremony.
It is the wish of the Lord Chancellor and myself that as many Members of both Houses as possible should participate. It is intended that spouses and other family members will be able to accompany them. Representatives of veterans and other organisations will also receive invitations.
In order to assist with the planning of this event, I shall be writing to all Members of the House in the next few days, asking them to indicate whether they themselves will be attending the ceremony and whether they would like members of their families also to be invited. If demand for places is very high, there may have to be a ballot for families. I shall be asking all recipients of my letter to fill in the reply slip and return it to my office quickly. I know that all Members will wish to co-operate in this and to make the ceremony a memorable one for all who participate.

Business of the House
3.32 pm
Mrs. Ann Taylor: Will the Leader of the House state the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): First, may I say on behalf of the whole House that I am sure that we all welcome your announcement, Madam Speaker, that the House is to commemorate the 50th anniversary of the end of the second world war?
The business for next week will be as follows:
MONDAY 20 FEBRUARY—Opposition Day (7th allotted day). Until about 7 o'clock there will be a debate entitled "The Continuing Crisis of Healthcare in London", followed by a debate entitled "The Future Ownership, Control and Regulation of Regional Electricity Companies". Both debates will arise on Opposition motions.
TUESDAY 21 FEBRUARY—Remaining stages of the Health Authorities Bill.
WEDNESDAY 22 FEBRUARY—Until 2.30 pm, debates on the motion for the Adjournment of the House, then motions on the Value Added Tax (Buildings and Land) Order, the Value Added Tax (Construction of Buildings) Order, the Value Added Tax (Protected Buildings) Order, the Value Added Tax (Input Tax) (Amendment) Order and the Value Added Tax (Payments on Account) (Amendment) Order.
Motion on the Avon (Structural Change) order.
Motions relating to the Education (Mandatory Awards) and the Education (Student Loans) regulations.
THURSDAY 23 FEBRUARY—Debate on the Army, on a motion for the Adjournment of the House.
FRIDAY 24 FEBRuARY—Private Members' Bills.
The House will also wish to know that European Standing Committee B will meet on Wednesday 22 February at 10.30 to consider EC document No. 7854/94 relating to budgetising the European Development Fund.
Hon. Members: "Budgetising"?
Mr. Bryan Davies: It says here.
Mr. Newton: The right hon. Gentleman might well comment. I sometimes wonder who makes these words up.
[Wednesday 22 February:
European Standing Committee B—Relevant European Community document: 7854/94 European Development Fund. Relevant European Legislation Committee Report: HC 48-xxvi (1993–94).]
In the following week, I expect to provide, on Monday 27 February, for the Second Reading of the Criminal Justice (Scotland) Bill [Lords], and, as I told the House last week, to have the annual debate on Welsh affairs on a motion for the Adjournment on the Thursday, which I can confirm is 2 March, not 3 March as I inadvertently said last week.
Mrs. Ann Taylor: First, may I associate myself—and my hon. Friends—with the right hon. Gentleman's comments about the appropriateness of our

1133
taking part in the commemoration of the anniversary of the end of world war two? I cannot associate myself with the word "budgetising"; I am sure that the House would like to be told what it really means on sonic other occasion.
May I ask the Leader of the House three questions? First, has any progress been made in arranging for an Adjournment debate to take place on the last Wednesday morning sitting of each term, to which he will reply? That would be comparable to the arrangements that existed before we embarked on the current experiment. Secondly, will the right hon. Gentleman confirm that the Boundary Commission report on parliamentary constituencies, which was due in December, has not yet been submitted to the Home Secretary? When can we expect the final recommendations to be made, and when will the necessary change to regulations in connection with the new constituencies be put before Parliament?
Thirdly and, perhaps, most important, does the Leader of the House accept that there is much regret and anger in the House about the fact that Ministers have chosen not to make a statement today about last night's events at the England-Ireland football match in Dublin? Will the right hon. Gentleman promise a debate as soon as possible, so that those of us who feel that football was the victim can be assured that those who are guilty of having committed offences in Ireland last night will be subject to exclusion orders barring them from all football grounds in Britain? Such a debate would also enable us to discover what the Government intend to do to support those involved in football who are keen to strengthen security arrangements for Euro '96, and in particular to eradicate the menace of right-wing extremism which is in danger of destroying football?
Mr. Newton: I shall take the hon. Lady's questions in reverse order.
Whether a statement is made on such unhappy incidents as occurred at yesterday's football match is obviously a matter of judgment, but the hon. Lady will know that at least one factor in the making of such judgments is whether a statement in the House would add to the publicity that is often the aim of those who act in this way. I note her concern, however. She will have heard what my right hon. Friend the Prime Minister said a few moments ago at Question Time about the view that the Government take—which I know the Opposition share—on the kind of behaviour about which she is rightly concerned, and the Government's determination to work with the Irish authorities to try to bring those responsible to book. I know that we shall have the hon. Lady's support in that regard. I shall, of course, bear her comments in mind should any similar incident occur in future; obviously, we hope that it will not.
The hon. Lady asked me about the Boundary Commission reports for England. I believe that my right hon. and learned Friend the Home Secretary has not yet received the final report, and I am afraid that I am riot yet in a position to resolve all the uncertainties about timing that the hon. Lady mentioned.
I welcomed the first of the hon. Lady's questions. I thank her—and, indeed, others involved in the usual channels—for the co-operative discussions that have enabled me to say that we propose to table a motion providing for a three-hour debate on the Wednesday morning before each recess, in which hon. Members will
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be able to raise a variety of issues without having to give notice. That restores an opportunity that used to be provided by the motion fixing the dates of recesses. I would expect to be present to answer such debates, as previous Leaders of the House and indeed I have done in the case of the previous procedure.
I am grateful to my right hon. Friend the Member for Honiton (Sir P. Emery), the Chairman of the Procedure Committee, who originally made the suggestion. It is clearly supported by hon. Members on both sides of the House.
Mr. Tim Rathbone: May I ask you, Madam Speaker, through the Leader of the House, whether you would consider extending the invitation that you are sending to all hon. Members to Members of Parliament who served in the House during the second world war? I do not suppose that that would be a large number.
Madam Speaker: Invitations are being sent to them.
Mr. Archy Kirkwood: May I associate my colleagues with the decision to commemorate the second world war ceremonies which you, Madam Speaker, have announced? It is particularly appropriate that we can bring our families to those celebrations. We all appreciate that gesture.
Is the Leader of the House aware of the mounting pressure on the Rail Regulator and rail authorities generally because of the continued uncertainty about a formal consultation process on the proposal to curtail sleeper services to Carlisle and Fort William, and Motorail services north of the border? Given that British Rail is due to publish its spring timetable early in March, will he ask the Secretary of State for Transport to come to the House next week and clear up those matters either in a debate or, more appropriately, a statement announcing a formal consultation process on the proposed closures under the Railways Act 1993?
Mr. Newton: The hon. Gentleman and the House will know that there have recently been several opportunities to discuss matters related to railway privatisation, so I shall resist some of the implications of the hon. Gentleman's question. I shall bring his request to the attention of my right hon. Friend.
Mr. Nick Hawkins: In the light of the Government's continued commitment to cutting red tape, will my right hon. Friend tell the House the reasons for the delay in setting up the Deregulation Committee, about which my hon. Friend the Member for Scarborough (Mr. Sykes) and I, and many other Conservative Members, are so anxious? Will he confirm that Opposition Members are causing that delay? May we have a debate on that matter at the earliest opportunity?
Does my right hon. Friend further agree that we should have a debate on the continuing opposition of Labour Members to the tough law and order penalties that are needed to deal with the football thugs who ruined an international match last night?
Mr. Newton: I am well aware that a number of hon. Members, including my hon. Friend, are anxious to see the Committee under the Deregulation and Contracting Out Act 1994 set up as soon as possible, as are the Government. He will understand that it is not normal practice to refer at length or in detail to discussions in the

1135
usual channels, but I hope that the Opposition will soon be able to say who they wish to nominate for that Committee. At the moment, it would not be appropriate to provide time for a debate.
Mr. Joseph Ashton: Is the Leader of the House aware that we should have an urgent debate on the act of terrorism in Dublin last night, which was carried out by National Front thugs, not football fans, as my hon. Friend the Member for Dewsbury (Mrs. Taylor) said? The football national intelligence unit at Scotland Yard knew the names, addresses, backgrounds and convictions of every thug who was travelling. It knew every item on their records but could not divulge the information because of the Data Protection Act 1988. Will he ask the Home Secretary to come to the House and say why the Data Protection Act stops that information being given to stadiums, clubs and organisers of the game so that they can draw up blacklists? Just as people have their credit cards stopped and are banned from clubs, exclusion orders could be issued against those thugs. Although that information may have been given to the Gardai, it was not given to the people on the ground who could have identified those people with photographs and stopped the trouble at its source. We need a debate to go into those details so that the problem does not arise again.
Mr. Newton: My right hon. Friend the Prime Minister, to whom I have already referred in this context, and my right hon. and learned Friend the Home Secretary have, in various ways, made it clear that they want to do anything possible to bring those people to book and stop that kind of violence happening again. I am sure that they will want to look carefully at any constructive suggestion for securing that.
Sir Ivan Lawrence: Will my right hon. Friend find time for an early debate on border controls, so that our European colleagues know that the strength of feeling on the matter is not confined to the Government, that it is found among all parties in the House, that when the Prime Minister says no, he means no, and that he has the backing of all the British people?
Mr. Newton: Again, I can refer to what my right hon. Friend the Prime Minister and others have said on a number of occasions about our determination to maintain the controls to which my hon. and learned Friend refers.
Mr. Dennis Skinner: If we have a statement or a debate on the events at Lansdowne Road last night, and on the fact that the British police and intelligence authorities were seemingly unable to deal with those right-wing fascists, will the Leader of the House compare that with the fact that in 1984 and 1985, when people were going about their duty in the middle of the pit strike, thousands of police not only collared the pickets, but picked up many people who were in the vicinity? If they could do that in an industrial dispute in 1984 and 1985, when Lady Thatcher called the miners "the enemy within", why could not they deal with those 400 last night?
Mr. Newton: I am slightly puzzled by the hon. Gentleman's point. The incidents took place on the territory of another Government, so his comments seem slightly out of order.
Mr. Bob Dunn: Will the Leader of the House find time for an urgent early debate on the implications of Labour party policy for regional government in the county of Kent, given that that party proposes to extend the boundaries of a new authority of London to the M25? That would mean that my Dartford constituency would be part of London, which is not what the people want.
Mr. Newton: If I could be assured that such a debate would provide an opportunity for the Opposition's policy on these matters to be clarified, I would look favourably on the suggestion.
Mr. D. N. Campbell-Savours: Do not a number of events that have occurred nationally and in Europe in the past few weeks point to the need for a national identity card scheme? If so, why do not we have a debate on the matter?
Mr. Newton: It is highly likely that it may be appropriate to arrange for a debate on that subject, ·as my right hon. and learned Friend the Home Secretary has made it clear that he will introduce a Green Paper on the matter. I am sure that the House will wish to discuss it.
Mr. John Butcher: May I draw my right hon. Friend's attention to the recent comments of Sir Leon Brittan and Geoffrey Garton, the American Secretary of Commerce, and ask for an early debate on trade policy? It appears that those two well-respected gentlemen are opening a dialogue on the possibility of creating a free-trade area between the United States of America and Europe. I am sure that my right hon. Friend would agree that, if we were to decide in such a debate that that initiative should be pursued with the full vigour and support of the House and the country, an opportunity may be turned into a truly historic moment.
Mr. Newton: My hon. Friend makes an interesting point upon which I shall reflect.
Ms Angela Eagle: Will the Leader of the House find time next week for a debate on executive pay, especially as the three directors of MANWEB in the north-west region cashed in £333,000 worth of executive share options yesterday? Values were put up by 54p a share in a day because of speculation in the aftermath of the President of the Board of Trade allowing the Trafalgar House bid for Northern Electric to go ahead without referral to the Monopolies and Mergers Commission.
Mr. Newton: The motion that the Opposition have tabled for the second half of next Monday would allow the hon. Lady, should she catch your eye, Madam Speaker, to make those points. It would be helpful, however, if she could answer the questions put by my hon. Friend the Under-Secretary of State for Corporate Affairs, in replying to the private notice question yesterday. He sought an explanation of the fact that the Labour party is, at one and the same time, complaining about some of the

1137
things that happen in these companies, and seeking to protect them from the ordinary operation of the market in respect of bids, for example.
Mr. John Sykes: It is a shame that we cannot have a debate on deregulation because it is of overwhelming importance to jobs and prosperity in my constituency and many others. Why is the Labour party holding up the Deregulation Committee? Is not it a disgrace that Labour Members complain about joblessness but do nothing about it?
Mr. Newton: With what I will call the beady eye of the Opposition Deputy Chief Whip upon me, I will not go further into the operation of the usual channels. However, I am sure that he will have heard and noted my hon. Friend's plea.
Mr. Gerald Bermingham: Will the Leader of the House initiate a debate on the prison system, bearing in mind Judge Tumim's report on Leeds, which he described as disgraceful, the report on the Wolds prison where things seem to be breaking down, the riot at Everthorpe and numerous other matters? When the prison population is increasing steadily, the number of people employed is decreasing steadily and trouble is everywhere, is not it time that the House debated the subject?
Mr. Newton: This point was put to me a week or two ago when I said that my right hon. and learned Friend the Home Secretary has made several substantial statements on some of the things to which the hon. Gentleman referred and has commissioned some substantial further investigations. When we have the outcome of all those investigations and reports it might be appropriate to consider a debate.
Mr. Matthew Banks: My right hon. Friend will be aware of the strong lead that I have given to ensure that the metropolitan areas in which there is a strong desire for change in the structure of local government should have the opportunity of having their case heard by the Local Government Commission. In view of the assurances given in the House by my right hon. Friend the Secretary of State for the Environment, will my right hon. Friend try to find time for a debate so that we can discuss the matter further and ensure that Southport in particular is referred to the Local Government Commission in 1995?
Mr. Newton: I cannot promise a further debate in that specific respect. I have announced a debate next week on a local authority structural change order for Avon, but I doubt whether my hon. Friend's concerns would be in order there. My hon. Friend will know that my right hon. Friend the Secretary of State for the Environment is looking carefully at all the representations that he receives and I will ensure that his attention is drawn to this further representation from my hon. Friend.
Mr. Peter Hardy: The Leader of the House will have noted that the House was greatly obliged to you, Madam Speaker, for your statement about the second world war. Since history repeats itself, would not it be a good idea for the date to be changed to a little nearer August, when the second world war ended and a Labour Government were in power?
Mr. Newton: I think that you may feel, Madam Speaker, that I was treading on your territory if I went into
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too much detail about the considerations that a number of us have given to this. It is obvious that the House will not be sitting in August—at least I hope that it will not be sitting, and that hope will be shared in other parts of the House—and those of us who have given some thought to the matter believed that the most appropriate time to do it was immediately before the national weekend of events connected with VE day, which begins on 6 May.
Mr. Jacques Arnold: May we have another debate next week on the funding of teachers' pay, because we could then highlight the proposal of the Conservatives on Kent county council to fund in full the teachers' pay increase, which has been opposed by the Labour party and the Liberal Democrats on that council? In the process, we could say that we bitterly resent teachers being bashed for party political purposes at the expense of our schools.
Mr. Newton: Not for the first time, my hon. Friend, like my hon. Friend the Member for Dartford (Mr. Dunn), has made a telling point about the current local governance of Kent.
Mr. Harry Barnes: The Leader of the House will have seen early-day motion 466.
[That this House notes that the second reading of the Civil Rights (Disabled Persons) Bill on Friday 10th February 1995 is an historic opportunity to introduce full citizenship rights for the United Kingdom's 6.5 million people with disabilities; further notes that the Bill has the sponsorship of Right honourable and honourable Members from nine political groups in the House; recognises the support the Bill also has from the Rights Now Consortium, the TUC and many other groups and individuals; welcomes the Bill's inclusion of a Disability Rights Commission so that comprehensive anti-discrimination provisions can be activated and advanced on the same basis as those designed to tackle discrimination on the grounds of gender and race; and further welcomes the Bill's measures aimed at increasing accessibility to voting and to polling stations as the vote is the fundamental building block for the operation of democracy and civil rights.]
A total of 250 hon. Members have signed that motion in support of the Civil Rights (Disabled Persons) Bill, which was carried by 175 votes compared with the Government's alternative Bill, which was carried by only 27 votes. In those circumstances should not the Government be acting as a facilitator to allow the House to decide between the two alternative measures rather than as a persuader for their own position?
Mr. Newton: My hon. Friend the Minister for Social Security and Disabled people made the Government's position quite clear in the debate on Friday. Although the hon. Gentleman has made his points, he will be well aware that significantly more people voted for the Government's Bill than for his Bill.
Mr. Nigel Forman: Both you in your statement, Madam Speaker, and the Leader of the House have made it clear that the very welcome and timely ceremony on 5 May is to commemorate VE day. Taking up the point made by the hon. Member for Wentworth (Mr. Hardy), who is no longer in his place, will my right hon. Friend confirm that due thought has been or will be given to the role of all those who fought

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against the Japanese? I must declare an interest as my father fought against the Japanese for four years in the Burmese jungle. My right hon. Friend will know that many people feel that that was a neglected aspect of second world war heroism and campaigns and that some account should be taken of it in the arrangements.
Mr. Newton: I am beginning to think that you should have made the business statement today, Madam Speaker.
Madam Speaker: The hon. Member did not listen to what I said.
Mr. Newton: Perhaps I might on your behalf, and subject to correction by you, Madam Speaker, make two points. First, there will be national events to mark VJ day, subsequent to those to mark VE day. Secondly—this is the point that you have in mind, Madam Speaker, and I hope that my hon. Friend will note it when he reads your statement in Hansard—you specifically said that the event on 5 May was to commemorate not VE day but the end of world war two. It will certainly be the case that, in addition to those to whom my hon. Friend the Member for Lewes (Mr. Rathbone) referred—hon. Members who contributed to the war effort—many invitations will be sent to a range of ex-service organisations.
Mr. Derek Enright: May I back the proposal made by the hon. Member for Gravesham (Mr. Arnold) that we should have a rerun of the debate on the funding of teachers' pay? While we are about it, can we consider what Jonathan Taylor, the Tory education chairman in Trafford, had to say? He said that it was impossible for local authorities to fund teachers' pay and, indeed, called the Chancellor "smug, complacent and stupid"—and he is a Tory.
Mr. Newton: We have already had one extensive debate and a variety of exchanges on these matters. I certainly do not plan to provide another opportunity in the immediate future.
Mr. Harry Greenway: As a member of the all-party football committee, may I support the call of the hon. Member for Bassetlaw (Mr. Ashton) for a full debate on the disgraceful behaviour of the thugs in Dublin last night? But could the debate be extended to cover plans for the European championship next year so that the House and the country might be assured that there are proper safeguards to ensure that that important competition goes ahead? The whole country is looking forward to it and would be very disappointed if, for any reason, it did not happen.
Mr. Newton: I have already made some reference to this matter, but add simply that, as well as trying to ensure that such violence does not happen anywhere, my right hon. and learned Friend the Home Secretary and, indeed, my right hon. Friend the Secretary of State for National Heritage, will certainly want to examine ways to ensure that it does not in any way inhibit, or occur during, the European championships being held here.
Mr. Denis MacShane: The Leader of the House will be aware that the Confederation of Construction Specialists, which represents some 400 small building firms, is seeking to refer to the Office of Fair Trading the fact that Alfred McAlpine is delaying
1140
payment of its bills. May we have an early debate on the quasi-monopoly position of Alfred McAlpine and the fact that the Office of Fair Trading has to refer the matter to the Monopolies and Mergers Commission whose chairman, until 18 months ago, was the chief executive of Alfred McAlpine? Although Alfred McAlpine has plenty of money for the Conservative party, it has none to pay its sub-contractors for their work. Is not that an example of the sleaze state that is now the hallmark of modern Conservative Britain?
Mr. Newton: The last part of that question is pretty far-fetched. Frankly, it is below the standard that I have come to expect from the hon. Gentleman and it has effectively absolved me from answering the first part of his question.
Dr. Robert Spink: Will my right hon. Friend find time next week for a debate about further education on Canvey island? He may be aware that there are no facilities whatsoever for 16 to 18-year-olds on the island, although there are 36,000 residents. The absence of facilities results in an extremely low staying-on rate among young people, which is betraying not only them but local businesses and industry.
Mr. Newton: Perhaps I should admit to my hon. Friend that since my part of Essex is quite a distance from his, I was not familiar with that situation on Canvey Island. However, I am sure that my right hon. Friend the Secretary of State for Education and, indeed, Essex county council—I hope—will consider carefully what my hon. Friend has said.
Mr. Michael Clapham: In the light of figures recently released by the Department of the Environment which show that the number of construction orders fell by one third in the last three months of 1994 compared with the last three months of 1993, will the Leader of the House ensure that the Secretary of State for the Environment makes a statement on that worrying trend?
Mr. Newton: I cannot undertake that my right hon. Friend will make a statement, but I shall ensure that he is aware of the point that the hon. Gentleman has raised.
Mr. William O'Brien: Will the Leader of the House provide time for an early debate on businesses, especially those in west Yorkshire, which have received rates demands that have increased by between 34 and 40 per cent? The Government have suggested that those businesses should have to pay no more than a 10 per cent. increase in rates. Businesses in west Yorkshire are operating at a competitive disadvantage because they have to pay more rates than businesses in many other parts of the country. Therefore, in fairness to those businesses, especially small businesses, will the Leader of the House arrange an early debate so that we may regularise business rate increases?
Mr. Newton: There seems to be a growing list of points that I need to bring to the attention of my right hon. Friend the Secretary of State for the Environment. I shall add the hon. Gentleman's question to the list.
Mr. Tony Banks: Many people outside the House will find it strange that we have not had a statement on the appalling events in Dublin last night. We need to have an early debate on the issue, if

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only to send a message to the European football authorities, which may at this very moment be considering excluding England from hosting the European championships. We need a debate so that we may discuss the issue and send a message from the House that such thuggish minority behaviour will not be tolerated.
Mr. Newton: I am grateful for and associate myself with, as I am sure would everybody, the comments in the latter part of the hon. Gentleman's remarks. With regard to a statement, I need hardly say that I have noted the many representations that have been made in today's business questions and I shall reflect on them, at the very least, for the future, even if I cannot promise a statement now.
Ms Glenda Jackson: The Leader of the House will be aware of yesterday's lobby of the House by teachers concerned at the proposed reduction in section 11 funding. Could time be found for an early debate on that issue? The threatened cuts impact not only on the education of British children who do not speak English as their first language, but create wider implications of possible social unrest.
Mr. Newton: I am aware of the meetings about section 11 funding to which the hon. Lady refers. She will know that my right hon. Friend the Secretary of State for Education is due to answer questions on Tuesday, which may provide an opportunity for raising the matter. However, I shall also bring the hon. Lady's question to the attention of my other right hon. Friends who are concerned with such matters.
Mr. Alan Simpson: When the Leader of the House has had an opportunity to look at a copy of today's edition of Today and the article concerning comments made by the hon. Member for Twickenham (Mr. Jessel), would he consider arranging an urgent debate on allotments? Even if allotments are not to be the centrepiece of the Government's new economic policies and even though their policies on unemployment have done little more than pour fertiliser over the lives of the unemployed for the past 15 years, many Conservative Members may at least want to dissociate themselves from any suggestion that a solution to poverty would be to encourage the poor and the unemployed to welcome fertiliser and to grow their own vegetables from it.
Mr. Newton: I see that my hon. Friend the Member for Twickenham is in his place, and I suspect that he may produce a reply to the hon. Gentleman by way of a question to me. Let us see.
Madam Speaker: It will have to be by way of a question to the Leader of the House.
Mr. Toby Jessel: Does my right hon. Friend accept that I warmly support the suggestion by the hon. Member for Nottingham, South (Mr. Simpson) that we should have a debate on the value of growing
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vegetables, which is beneficial to health, which is healthy exercise, which provides enjoyment and which is economical? The debate should further include reference to the fact that it is utterly ridiculous for Opposition Members to suggest that it is in any way insensitive or insulting to suggest that people who have time on their hands, whether because they are retired or because they are, unfortunately, unemployed, should devote a few hours a week to this worthwhile activity, which should have the support of the whole House.
Mr. Newton: I hope that you will agree, Madam Speaker, that my hon. Friend, with his customary ingenuity, has devised an answer to the hon. Member for Nottingham, South (Mr. Simpson) in the form of a question. The only point that I shall venture is that I know from constituency experience that nothing causes more trouble than a proposal to build houses on allotments.
Mr. John Hutton: Has the Leader of the House seen reports in today's editions of The Independent and The Guardian highlighting the very close connections between ministerial political advisers and lobbying firms such as Lowe Bell and Ian Greer Associates? Will he arrange for his right hon. Friend the Minister with responsibility for open government, the Chancellor of the Duchy of Lancaster, to come to the House next week to make a statement about this important matter?
Mr. Newton: First, I have seen the reports. Secondly, as I understand it, the suggestion is that this is another matter that the Nolan committee might wish to take into account. Thirdly, the time for statements and possible debates will be when we know what the Nolan committee recommends.
Mr. Andrew Mackinlay: I join other hon. Members in congratulating you, Madam Speaker, and the other House authorities on the preparations and plans to commemorate the victory in Europe. Will further consideration be given to the possibility of the House, on the Adjournment, going to St. Margaret's Westminster, as is traditional, to give thanks? That would be appropriate, not instead of what has been announced, but in addition to it to mark victory over Japan.
May we have an early debate on health and safety at work? There are 150,000 workplace injuries every year. It is time that the House addressed itself to this acute problem, which should exercise hon. Members on both sides.
Mr. Newton: I shall bear in mind the latter part of the hon. Gentleman's question. On the first part, I am sure that you, Madam Speaker, would like to consider the specific suggestion made. I make two points on the matter, one of which, I am afraid, is a repetition. First, the hon. Gentleman described the 5 May event as celebrating the end of the war in Europe. In fact, it is to celebrate the end of world war two, embracing all the events of that war. Secondly, it is expected that the event will include a number of prayers.

Points of Order
4.7 pm
Ms Glenda Jackson: On a point of order, Madam Speaker. Last week, I tabled a question for written answer to the Secretary of State for Transport in which I asked to be furnished with information about the amounts paid by his Department in consultancy fees to 10 named companies during the process of rail privatisation. A similar question was answered in great detail in July 1994. However, the reply that I received was that individual fees to individual companies were a matter of commercial confidentiality. I was furnished only with the information that the grand total was £17.1 million. This is the second time in as many weeks that the Department of Transport has abdicated its responsibility and accountability not only to the House, but to the British taxpayer as it is spending taxpayers' money. I would be grateful for advice on how I might proceed with this matter. Would it be possible for you, Madam Speaker, to raise the issue with the Ministers concerned?
Madam Speaker: First, I tell the hon. Lady that I have no responsibility or authority to raise the matter with the Ministers concerned. It is not my responsibility. I have no influence on the working of Government Departments; that is a matter for Secretaries of State. However, I understand hon. Members' frustration when Government Departments are inconsistent, as I know this one to be, in the method used to answer questions.
Perhaps I may give a little advice to the hon. Lady. I asked her to try to raise an earlier problem on an Adjournment debate. I know that she attempted to do that, but she did not pursue it. I leave that matter with her for the moment. The hon. Lady may also raise the matter with the Table Office staff, who can often be helpful in such matters.
Mr. David Trimble: On a point of order, Madam Speaker. In Northern Ireland Questions this afternoon, we saw another example of what we consider to be the deliberate tactic of both major parties of loading the Order Paper so that it has the effect of pushing Northern Ireland Members' questions virtually off the Order Paper. I know that that is not something with which you can directly deal, Madam Speaker, but I draw your attention to questions 5 and 6, which are virtually identical. I think that I am right in saying that, as originally tabled, there was also another pair of identical questions in the first 12 questions, although, through the withdrawal of one question, that is no longer the case.
I wonder whether it is possible for the Table Office at least to try to restrain hon. Members who ask virtually the same question, so that there would not be so many non-Northern Ireland Members tabling questions and, consequently, a better chance of Northern Ireland
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Members putting questions on the Order Paper in the same way as Scottish and Welsh Members have their questions answered.
Madam Speaker: Let me assure the hon. Gentleman that there is no loading of the Order Paper by any party. There is a ballot for the order of questions. The hon. Gentleman can see that ballot taking place. I understand the hon. Gentleman's frustrations, too, but today, out of eight members of his party who were present, seven, including the hon. Gentleman himself, were called. That is not a bad record.
I was extremely disappointed at the lack of progress that we made in Northern Ireland Questions today. It was particularly poor. We reached only question 8. I want brisker questions to Ministers in that Department and I want brisker answers, too. It is totally unfair that we cannot move faster down the Order Paper at Northern Ireland Questions.
Mr. Neil Gerrard: On a point of order, Madam Speaker. You might not be aware of it, because of your position in the Chamber, but a habit seems to be developing at the beginning of Question Time. When my right hon. Friend the Member for Sedgefield (Mr. Blair) enters the Chamber, a small group of hon. Members hiss as he comes in. Although we accept that there will be some noise and to and fro in debates, that habit is not very pleasant. I hope that you will deprecate it and ask all hon. Members to desist from it.
Madam Speaker: I certainly deprecate such behaviour. I will watch particularly carefully next week. If I see or hear anything untoward happening, I will put a stop to it without delay.
Mr. William Ross: On a point of order, Madam Speaker. In Northern Ireland Question Time, I tried to raise a point of order and ask for your guidance. It was in relation to the fact that the hon. Member for Redcar (Ms Mowlam) referred to football hooligans starting a riot in Dublin. It would have been perfectly in order for the Prime Minister, during Prime Minister's Question Time, or for the Home Secretary to have referred to that matter, but it surely should not have been raised during Northern Ireland Questions, as no one from Northern Ireland, as far as I know, had responsibility for that riot.
Madam Speaker: There is more than a grain of truth in what the hon. Gentleman is saying. That matter certainly did not relate to Northern Ireland Questions; it was a matter for the Prime Minister or for the Home Secretary. I do not know whether the hon. Gentleman was in the Chamber a few minutes ago when I deprecated the fact that we do not move sufficiently speedily through Northern Ireland Questions, and that is because such extraneous matters are often raised at Question Time.

Royal Navy
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Willetts.]
4.13 pm
The Minister of State for Defence Procurement (Mr. Roger Freeman): It is my privilege today to open our annual debate on the Royal Navy. Since I was last a Defence Minister, the cold war has ended and our armed forces—including the Navy—have necessarily been restructured. By 1995–96, the defence budget will be some 25 per cent. smaller than it was in 1985, and that is a position broadly similar to that of other major western nations.
After the inevitable turbulence that followed "Options For Change" and "Front Line First", our armed forces can now look forward to a period of broad stability in funding. The Royal Navy will remain a formidable fighting force with global responsibilities, manned by professional and dedicated personnel to whom I am happy—I am sure the whole House is also happy—to pay tribute today.
In the uncertain and unpredictable world of today, the ultimate guarantee of our nation's security remains our strategic nuclear deterrent. My right hon. and learned Friend the Secretary of State for Defence announced on 19 December last year that HMS Vanguard was on its first operational patrol. Vanguard's deployment marks a key point in the progressive replacement of Polaris by the Trident system, the capabilities of which will ensure that the UK's strategic deterrent will remain effective well into the next century.
I note that the view of the Labour party is divided on Trident, while the view of all Government Members is entirely in one accord in support of Trident. Early-day motion 29 carries the signatures of 40 Opposition Members, of whom two are in their places this afternoon. Those 40 Members are entirely opposed to the introduction of Trident, and would cancel our nuclear submarine programme.
Dr. David Clark: I am sorry to interrupt the Minister so early, but I must make it plain that, as the Minister knows, the Labour party's policy is that we will deploy the Trident system, but we will limit the number of nuclear warheads to the same number as there are on Polaris. I hope that that is clear to everyone concerned.
Mr. Freeman: It is entirely clear that that is the policy of the hon. Gentleman and the Opposition Front Bench. I put it on record that 40 Opposition Members do not agree with that policy, and I must point out that the Labour party is entirely divided on this crucial aspect of defence policy. [Interruption.] The hon. Member for Motherwell, North (Dr. Reid) groans, but it is the truth. That is one reason why, at a general election, the electorate will not trust Labour on defence.
Mr. Andrew F. Bennett: Surely the Minister accepts that even the Government would like to get rid of Trident, on the basis that they would like to have a world where it is not necessary, and therefore the difference is not all that great. It is not a question of whether we should get rid of it, but of how we can get
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rid of it, particularly as it will cost about £30 billion over its lifetime. Surely everyone would like to remove the need for Trident.
Mr. Freeman: The point is that 40 Opposition Members want to get rid of Trident now. It is difficult for anyone who takes this subject seriously—including those on the Opposition Front Bench—to envisage a scenario in the near future where the withdrawal of our nuclear submarine fleet would be possible. That is not a credible defence policy at present.
Dr. John Reid: Every Conservative Member voted for the statement on the defence estimates, which says that the ultimate aim of the Government is to work towards a nuclear-free world. Can we take it that every Conservative Member wants to see a nuclear-free world? Is that not exactly what Labour Members want to see?
Mr. Freeman: The hon. Gentleman knows full well that that is not the case. The difference between the 40 Labour Members and the majority faction of the Labour party is that those hon. Members who signed the early-day motion are calling for the scrapping of Trident now. We all want to work for the reduction and the eventual abolition of nuclear weapons. In the mean time, we believe firmly as a Government—I speak for all my hon. Friends—that we must pursue a sensible and coherent policy to retain the Trident submarine force.
Mr. Michael Colvin: Flow many fingers are there are now on nuclear triggers—despite the non-proliferation treaty—as opposed to during the cold war, when there were not very many?
Mr. Freeman: My hon. Friend is right. A capacity is being developed by a number of countries, of which we should be very wary. One of the main tenets of our policy is that we should retain our nuclear deterrent while any other country in a position to threaten our security possesses a nuclear weapon or the ability to construct a nuclear weapon. That is a clear policy, but there is total division of approach on the Opposition Benches.
Dr. Norman A. Godman rose—
Mr. Freeman: I will seek to make progress.
Dr. Godman: Will the Minister give way on Trident?
Mr. Freeman: I shall return to the subject of Trident, and I shall then give way to the hon. Gentleman.
The Royal Navy has adapted quickly to the post cold war environment, with its new roles and challenges. Its most visible commitment in the past 12 months has been in the Adriatic. The UK task group, led since August by HMS Invincible, the carrier, has the primary task of supporting the North Atlantic Treaty Organisation's Operation Deny Flight, and its Sea Harrier jets help enforce the no-fly zone over Bosnia.
HMS Campbeltown and HMS Cumberland currently contribute to United Nations embargo operations in the Adriatic on Operation Sharp Guard. Sea King helicopters from 845 Naval Air Squadron, based in Split, also continue to provide casualty evacuation and general helicopter support to Commander British Forces.

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In September 1994, the Royal Navy acted in support of UN resolutions by participating in the United States-led Operation Restore Democracy in Haiti. HMS Lancaster, and subsequently HMS Broadsword, were involved in embargo operations, while RFA Oakleaf replenished ships of the international task force. HMS Exeter is currently contributing to the US-led task group in the operation to withdraw peacekeeping forces from Somalia.
In October 1994, as Saddam Hussein's forces once again threatened peace and stability in the Gulf, HMS Cornwall, with her Lynx helicopter, was diverted from the Armilla patrol, and was quickly in position as the first visible allied presence off the Kuwaiti coast; 45 Commando Group Royal Marines also deployed to Kuwait, as the spearhead battalion, and returned home in early December, leaving behind well-prepared defensive positions for use by Kuwaiti forces and having earned universal respect.
In Northern Ireland, 42 Commando Royal Marines are currently the South Armagh roulement battalion, and they continue to demonstrate great professionalism in tackling the new and delicate challenges presented by the peace process.
Back in the Caribbean, HMS Broadsword is currently undertaking West Indies guardship duties. Part of our operational duties involve working with the United States in the fight to combat drug trafficking in the area, a dangerous trade, which increasingly involves drugs destined for the UK market.
The Royal Navy has also played a full part in the process of developing contacts with Russia and central and eastern Europe. In October, HMS Newcastle and RFA Olna took part in Exercise Co-operative Venture in the North sea and Baltic approaches. That was the first joint maritime exercise under NATO's Partnership for Peace initiative. It is a measure of the Royal Navy's global role that, last Christmas, 26 out of a total of more than 100 Royal Navy and Royal Fleet Auxiliary ships were away from their base ports.
I turn now to the equipment programme, and also Trident. To meet those global defence responsibilities, we must ensure that the Royal Navy is properly equipped. We have a major procurement programme for new vessels—one of the largest programmes for many years. We continue to plan for a broad range of capabilities, based around the three core elements of nuclear-powered submarines, aircraft carrier task forces and amphibious forces. We continue to introduce modern, more capable vessels and now have the youngest fleet since the first world war.
I have already mentioned—
Mr. Richard Ottaway rose—
Mr. Freeman: Will my hon. Friend forgive me for a second? I want to mention Trident, and then give way to the hon. Member for Greenock and Port Glasgow (Dr. Godman) first.
I have mentioned the Trident programme. The deployment of HMS Vanguard on her first operational patrol last December met the original in-service date set more than 12 years before. The achievement of such a major and complex project on time is in no small part due
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to the skills and commitment of VSEL, the builders, and many other companies involved, and the contributions of Ministry of Defence staff at all levels.
Dr. Godman: As the Minister well knows, a goodly number of my constituents work at the Trident base on the other side of the firth of Clyde from my constituency, at Coulport and Faslane. I was pleased to receive a letter from his ministerial colleague, saying that 23 more posts were to be created there, but many people are deeply worried about what they perceive as the threat to their terms and conditions of employment in Coulport and Faslane.
Will the Minister give the House an assurance that he is completely confident of the efficacy of the ship lift on the other side of the Clyde from my constituency? Is he confident that it is able to carry out the programme of lifting those vessels out of the water with no threat of safety hazards to the people who work there?
Mr. Freeman: I am confident about that. If the hon. Gentleman has not witnessed a ship lift lifting one of the boats out of the water, I shall arrange for him to do so. One of the reasons for the increased costs of Trident's works was the extra expense of making sure that that facility was as safe as human beings can possibly make such a complicated mechanism—strong enough to withstand a geological fault shock.
As for the contracts of employment of those who work at Coulport and Faslane, those workers have nothing to fear. I have announced that, over the next two years, we will accept the proposals from the civilian work force—to whom I pay particular tribute for what they have achieved—for improvements in efficiency at Faslane. Coulport is not affected. In due course, but not before 1997, we will introduce some market testing for some of the support functions at Faslane. There is no reason, however, for anyone there to feel either threatened or adversely done by.
Mr. Ottaway: I welcome what my right hon. Friend says about providing the nation with a modern fleet. This autumn, I had the good fortune to spend some time on board HMS Illustrious as she was embarking on sea trials before she was deployed to the Adriatic. Although it is an efficient ship, during my time on board I began to sense that probably, together with HMS Invincible and HMS Ark Royal, it is beginning to age.
Those ships were designed in the 1970s, and they are now about 15 years old. Is it not appropriate now to be thinking about the next generation of aircraft carriers, because the lead time for the introduction of an aircraft carrier is about 10 years, which is when the present generation of ships is likely to be becoming worn out and unserviceable?
Mr. Freeman: My hon. Friend anticipates me. We plan to retain three aircraft carriers and modernise their aircraft, including upgrading the Sea Harrier and introducing the new Merlin EH101 anti-submarine warfare helicopter. If we are to retain three aircraft carriers, we must plan for their replacement now. Planning is at an early stage, and I anticipate that we shall have another 10 to 15 years minimum service out of those aircraft carriers. One is in extended refit at the moment—
Dr. Reid: Extended service.
Mr. Freeman: I am grateful to the hon. Gentleman for correcting me. I assure my hon. Friend the Member for Croydon, South (Mr. Ottaway) that planning has begun at an early stage.
Mr. Toby Jessel: Will my right hon. Friend give way?
Mr. Freeman: If my hon. Friend will forgive me, I shall make a little progress. I anticipate what my hon. Friend might be interested in, and I shall give way in a minute.
Development work on Merlin is now largely complete, and it remains on schedule to enter service with the Royal Navy in 1998. I understand that Mr. Alan Jones, the chief executive of Westland, is shortly to move on to BICC. May I say to those who take a close interest in Westland and the current procurement competition for support helicopters, that the move of Mr. Jones and his replacement by Mr. David Wright, for whom I have a high regard, is in no way connected with the continuing negotiations on the support helicopters. I gather that there has been some speculation that there was a connection—there is none.
Mr. Jessel: Apart from the purchase of new ships and the upholding of the best of our existing ships, will the Government give some attention to the preservation of old warships, so that, in 100 years' time, people can see what a ship from the first or second world war looked like? Will my right hon. Friend continue to encourage the work of the Warship Preservation Trust, which was founded and is chaired by our former colleague, Sir Philip Goodhart? Can my right hon. Friend say whether HMS Caroline could be made available for preservation at some suitable location?
Mr. Freeman: I am a supporter of the Warship Preservation Trust, and played some small part almost eight years ago in saving HMS Plymouth. She is now berthed at Birkenhead docks and is a credit to the Royal Navy and its long traditions. HMS Caroline, a light cruiser, is currently berthed in Belfast lough, and I shall certainly consider its future sympathetically. We must preserve and protect the resources of the Ministry of Defence and the Royal Navy, and, sensibly, we will do anything we can to ensure that.
Mr. Andrew Mackinlay: I am grateful to the Minister, because I hope to mention HMS Caroline later on. HMS Caroline is a wonderful time capsule, which all of us interested in naval history wish to see preserved. Belfast city council and others, including myself, believe that, after all the years it has been in Belfast lough, there it should stay, to the advantage of the people of Northern Ireland, who could benefit from it becoming a conference and tourist centre. It could be part and parcel of the new enterprises that will develop in Northern Ireland.
Certainly, as a lad from Essex, I suggest that it should not come to England, but should remain in Belfast for the benefit of the people of Northern Ireland. I hope that the Minister will bear that in mind, rather than give way to some of the bids being put in by people who have no commitment to Northern Ireland.
Mr. Freeman: We continue to plan for a force level of 35 destroyers and frigates from this year, with type 23s
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having replaced older vessels such as Leanders and type 21s, which we have been able to release for sale overseas. There are currently 10 type 23s with the Royal Navy, with a further three under construction. At the end of last year, we issued an invitation to tender for a further batch of up to three frigates.
We demonstrated our commitment to maintaining a highly capable mine counter-measure flotilla for the Royal Navy last July, by placing an order for a further batch of seven Sandown class single-role minehunters.
Mr. Christopher Gill: Will the Minister tell the House over what time scale those minehunters will be delivered to the Royal Navy—and, more to the point, could he confirm that the last one of the seven now ordered will not actually be commissioned until well into the next century?
Mr. Freeman: The work is placed with Vosper Thorneycroft in Southampton, and occupies a good deal of its capacity. I cannot recall the exact delivery schedule, but I shall write to the hon. Gentleman. I am satisfied with the efficiency of the work and the rate of production, and Vosper Thorneycroft is delighted with the order.
The delivery of the last of the batch early in the next century—although I cannot give a precise date—will bring the mine counter-measure force to the 25 vessels announced in the 1993 Defence White Paper. We are also planning a programme of upgrading the 13 dual-role HUNT class minehunters/minesweepers to improve their capability to deal with future threats.
The Royal Navy now operates a 12-boat-strong attack submarine fleet, now entirely nuclear-powered, of the Swiftsure and Trafalgar classes. We issued an invitation to tender last July for the design and build of second batch of the highly successful Trafalgar class SSNs. The batch 2 submarines with which we plan to replace the Swiftsure class will be based closely on the Trafalgar class, and will incorporate the new tactical weapon system which is also being refitted to existing Swiftsure and Trafalgar class boats.
Mr. John Hutton: The Minister was talking about batch 2 Trafalgar class submarine programme. He will know that order is extremely important for the future of VSEL and many thousands of my constituents' jobs. He has confirmed that invitations to tender have been sent out.
Will he also confirm that his right hon. Friend the former Minister for Defence Procurement, now the Chief Secretary to the Treasury, confirmed on 12 May 1992 that the orders for those submarines will be placed in January 1994, and at the earliest that order will not be until the summer of 1996? What is the reason for that two-and-a-half-year delay in ordering the submarines, and what consequences will the delay have for ray constituents?
Mr. Freeman: I am conscious of the need to ensure that, in the interests of the nation, warship building yards such as VSEL have a sensible flow of orders, whether placed by the MOD or abroad. That must make economic sense.
One of the reasons for the delay was our desire to create a competition in the design for the new Trafalgar class submarines. I am glad to say that the competition between VSEL and the consortium, including GEC, will proceed, and will be brought to a conclusion.

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A decision about how to build a nuclear-class patrol submarine is independent from where the bulk of the integration work might take place. I am sure that the hon. Gentleman is right to point out that VSEL has the only submarine construction facilities in Britain—and they are excellent facilities. Therefore, it would not be inconsistent to select a different method of procurement of design development and yet still build the boats at VSEL's yard at Barrow. I hope that we can bring the competition to a conclusion quickly, and get on with placing the orders.
Dr. Godman: I am grateful to the Minister for displaying his characteristic courtesy. With regard to the construction of type 23 frigates, is he in a position to give to the House the names of the yards which have expressed an interest in seeking that work?
Mr. Freeman: I see no reason why I should not do so, as it is obvious to anyone who is interested in the industry that they would include Yarrow, VSEL and Vosper Thornycroft. I have visited its yard, and I assure the House that Vosper Thornycroft has the capability of building a type 23, although it has not built a frigate or a destroyer for many years.
The capability of our SSNs will be further enhanced by the Spearfish torpedo, the most advanced anti-ship and anti-submarine torpedo in the world, whose speed and endurance enables it to outmanoeuvre the fastest and deepest diving targets. As was announced in last year's Defence White Paper, an initial batch of Spearfish torpedoes entered service with the Royal Navy in March 1994.
Following improvements to the weapon's reliability, a main production order for the remainder to be supplied, and for the in-service support of that weapon system, was placed with GEC-Marconi Naval Systems in December. A large measure of the work on Spearfish will take place at the Royal Naval Armament Depot, Beith. The Spearfish torpedo will replace the Tigerfish in all Royal Navy submarines.
We plan to retain a substantial amphibious capability. The "Front Line First" announcement confirmed that we intended to replace the assault ships, HMS Intrepid and HMS Fearless, and an invitation to tender for their replacement was issued last August. I expect orders to be placed around the end of this year, and I am sure that that news will be welcomed by all hon. Members on both sides of the House. Good progress continues to be made on the design and construction of the new helicopter carrier, which was ordered in 1993, and which will form the cornerstone of our future amphibious capability.
We recognise the importance of specialist hydrographic vessels and personnel. We continue to plan for the upgrading of the capability of the hydrographic service by procuring four new vessels—including a new-build ocean survey vessel, an order for which was placed last month.
Mr. David Nicholson: My right hon. Friend knows of my interest in the hydrographic service whose offices have been located at Taunton for more than 50 years. In its bicentenary year, will he send his congratulations and best wishes to all those who work in that service on their excellent quality work, which I believe is still unparalleled throughout the world—not only in the area of military and naval surveying and
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research, but in a growing amount of civil research which will be extremely valuable to this country in the future. Will my right hon. Friend do all that he can to ensure that that work is continued and bettered in the future?
Mr. Freeman: I am grateful to my hon. Friend for reminding me about the bicentenary, and I send my best wishes to all of those who are involved in that vital work. I will be grateful if my hon. Friend will convey that message to his constituents, and, indeed, to all of those who work at the centre. We have decided to name the new ocean survey vessel after the great Antarctic explorer, Scott, and that vessel will do valuable work for the hydrographic service, as will the other vessels that we intend to order in due course.
We also recognise the importance of modern, capable support ships. Since last year's Royal Navy debate, two auxiliary oilers, Fort George and Fort Victoria, have entered service with the Royal Fleet Auxiliary. As part of the defence costs study, we announced in July last year that we are exploring the possibility of fitting our submarines with conventionally armed Tomahawk land attack missiles procured from the United States. Feasibility studies were launched in the autumn.
Mr. Mackinlay: How long was HMS Fort Victoria under construction? How much overspend was involved in that construction, and how late was the vessel delivered?
Mr. Freeman: I try to carry as much information as I can in my head, but I do not know the answers to the hon. Gentleman's questions. I will write to him, and put a copy of my reply in the Library of the House.
To enable us to maintain and enhance the fighting capabilities of the front line, we have sought major efficiency savings in the support area—not least in the recent defence costs study "Front Line First". Naval support has been largely a civilian operation since Samuel Pepys was secretary of the admiralty. "Front Line First" has successfully identified ways in which administrative and support functions could be carried out more cost-effectively, and I acknowledge the significant impact that those plans will have for a very loyal civilian work force.
A number of decisions have been taken in recent weeks that affect naval infrastructure. I announced last December our intention to redeploy minor war vessels from Rosyth. Work is proceeding to schedule and, when achieved, will represent a significant step towards eliminating excess capacity in our naval support facilities and will save some £20 million annually. The human cost of closure is, of course, a matter of regret, and I pay tribute to the work force at Rosyth for their admirable record in serving the Royal Navy for most of this century.
I am personally committed to ensuring that the future redevelopment of the parts of the base that are no longer required by the Royal Navy takes place as quickly as possible, and in a manner in which enhances the economic and particularly the employment prospects of the region. I look forward to receiving proposals next month from the Rosyth 2000 consortium for the whole Rosyth complex. We will carefully consider those and any other approaches to take over surplus facilities, so long as they assume responsibility for the whole rather than only part of the facility.

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Proposals to streamline Royal Navy armament depots have also been announced, and my hon. Friend the Minister of State for the Armed Forces has also announced in recent days the Government's intention to rationalise the naval stores depots, leading to the closure by April 1997 of three main depots—at Exeter, Eaglescliffe and Wrangaton—and reductions elsewhere, particularly at Devonport. Those measures are intended to maximise the utilisation of the modern facilities we have, eliminate the overheads associated with excess capacity in the system and, most importantly, meet the operational requirements of the Royal Navy.
Mr. Gary Streeter: Will my right hon. Friend assure me that every effort will be made to try to find alternative employment within the Ministry of Defence for the people, particularly in Plymouth, who will be made redundant by the recent announcement, and that outplacement consultants will be engaged to give them every ounce of active advice possible?
Mr. Freeman: Of course my hon. Friend is concerned about his constituency, but the point is of general interest, wherever changes are made.
My hon. Friend the Minister of State and I are jointly responsible for a number of decisions affecting service men, service women and civilians. First, we take very seriously the need to co-ordinate within the public sector to ensure that other Departments deploy their skills and experience in helping those people to find alternative employment; secondly—I cited Rosyth as an example—central Government have a role to ensure that we take the initiative now, before the depot or naval base closes, and without unnecessary delay to find an alternative use.
I am quite determined not to fall into the trap of piecemeal closure and piecemeal sale. The people who work at Rosyth, for example, and many other locations, deserve our help now, not simply, when the depot or garrison closes, our thanks at the end. I therefore hope that my hon. Friend is suitably impressed.
Mr. David Jamieson: Will the Minister tell the House how, by closing the supply stores at Exeter and Wrangaton, and by the partial closure of Devonport, the Royal Navy is best served by having those supplies sent from Portsmouth, which is 170 miles away? Is there some hidden agenda whereby he intends to run down or close the naval base at Devonport?
Mr. Freeman: No, absolutely none at all. The hon. Gentleman, I am sure, appreciates the difference between slow-moving stores—those that are required perhaps at a week or even a month's notice when a ship comes in for a planned refit, in which case they should be held in a centralised location—and the stores that are needed when a ship comes in, for example, after sea training off Portland, which may need a new generator and needs it now. If it comes in to Devonport, the Navy will have the available stores at the dockside. Therefore, the items that are fast moving, in urgent need, will be available at the ports.
Mr. Jamieson indicated dissent.
Mr. Freeman: The hon. Gentleman shakes his head, but I can assure him that the Navy take an even greater interest than I do in ensuring that the spares and stores are available for the ships when they are needed.
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Plans to move the Flag Officer Scotland, Northern England and Northern Ireland and his non-operational staff from Pitreavie to Faslane by April 1996 were announced last year, and I have announced today, in the form of a written answer, that the Government also intend to relocate FOSNNI's operational headquarters to Faslane in the same time frame. Consultation on those proposals have been under way for several months, but having weighed all the representations most carefully, it has been decided to proceed with the relocation, which will save some £22 million over the next 10 years.
I am pleased to be able to say that we have already reached agreement with Fife Enterprise to release a small area of the Pitreavie site for inward investment purposes, and the rest of the site will be similarly disposed of after April next year. In that way, the economic impact of the decision will be substantially offset, to the benefit of the local community and the Ministry of Defence employees affected.
I now outline the key principles that affect our procurement policy. It is time that we put on the record the elements of a modern procurement policy, which faces very different circumstances from the ones which Sir Peter Levene, as Chief of Defence Procurement, found almost 10 years ago when he revolutionised the way in which we acquire equipment. To maintain our Navy in the years ahead, we need a fully appropriate procurement policy, to which I now turn.
The first policy objective is for the United Kingdom to retain a capability to build warship hulls and to retain as far as possible a choice of yard for each class of vessel. But there is, understandably, more warship building capacity in the United Kingdom than can be sustained by Ministry of Defence requirements alone. That means that yards must now turn to new markets if they are to survive in their present form, and it remains our aim to secure the opening of the European market for warship building on a fair and equitable basis.
Winning export orders will not get easier. In general, a reduction in the perceived threat and universal pressure on defence spending has resulted in declining opportunities to supply new build warship hulls, and a greater number of naval hulls may ultimately be built in the yards of previous customers.
The over-capacity among warship builders has, of course, had its casualties, as in the case of Swan Hunter. Swans had a strong tradition of supplying the Royal Navy with quality ships, and, in keeping with its excellent track record, completed the type 23 frigates Westminster, Northumberland and Richmond to a very high standard in what were difficult circumstances. That excellent record is testimony to the work force's commitment, and will no doubt assist the receivers in their future drive to find a buyer for the yard's main shipbuilding facility at Wallsend.
I am confident that sufficient capacity still remains for the Ministry of Defence in warship building. Our competition policy has been successful and our latest ships represent excellent value for money. As in the rest of the equipment programme, if competition proves impracticable, we would continue to seek value for money, through pursuing what we call "no acceptable

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price, no contract" arrangements, pricing non-competitive contracts at the outset and in such a way as to promote efficiency.
Mr. Hutton: The Minister said that it would be the Government's policy to retain a capability to build hulls. What about fitting out? Is it the Government's policy that the fitting out of vessels will also be retained in the United Kingdom?
Mr. Freeman: If the hon. Gentleman will bear with me, when I conclude I will deal with project Horizon and answer that question specifically, because I draw a distinction between hulls and equipment. The hull accounts for perhaps 10 to 15 per cent. of the total cost of a warship. The equipment that goes in is the expensive part. Even for a Royal Air Force modern fighter, 50 per cent. of the cost is in the avionics alone.
The second policy objective is to ensure that warship building and refitting are in the private rather than the public sector. The royal dockyards at Devonport and Rosyth continue to benefit from the refitting arrangements announced in June 1993 by my right hon. and learned Friend the Secretary of State for Defence.
Both dockyards continue to receive a regular allocation of work from the naval refitting programme, and additionally, both have been successful in securing work from the unallocated programme, in competition with other ship repair companies. In that way, Devonport Management Ltd. has secured contracts for the refits of HMS Cornwall and HMS Birmingham, and Babcock Rosyth Defence Ltd. has recently won the competition to extend the life of the Royal Fleet Auxiliary vessel Sir Bedivere.
Following the announcement in October 1993 of the Government's intention to seek tenders from the private sector for the sale of the royal dockyards as separate and independent commercial entities, invitations to submit initial tenders were issued in July last year. As I announced on 23 November last year, we have received initial tenders from Devonport Management Ltd. for Devonport dockyard, and from Babcock International Group for Rosyth dockyard.
Those initial proposals have been evaluated, and invitations to single tender to those companies have now been issued, with final tenders due before Easter. I cannot rule out at this stage other options for future dockyard management, but we continue to believe that privatisation on the right terms will give value for money, and for the taxpayer within the future framework of fleet support. These are complex undertakings, which will involve detailed contractual negotiations, but we expect to be in a position to make final decisions by the summer.
Our third policy objective is to meet the operational requirements of the armed forces in a way that achieves the best value for money for the taxpayer. As a result of the Government's competition and open procurement policies, the UK defence industry is strong and highly competitive at home and overseas. It would soon lose its place in world markets that have generated an average of £5,000 million-worth of export orders a year over the past five years—that is the average rate of orders—if we resorted to protectionism, or abandoned the principle of value for money for the customer.
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When assessing the available options, however, Ministers must take account of the wider implications that procurement decisions will have. Some decisions may have consequences for the future availability of competition, and could in extreme cases even bring into question the continued existence of a viable industrial sector, with consequential effects on employment in the United Kingdom. Defence Ministers therefore give due consideration to the possible consequences of any procurement decision for the defence industrial base.
Fourthly, we need to consider security of supply; but that need not imply production in the United Kingdom. It is difficult to envisage future circumstances in which Britain would act militarily without the support of allies, or when all overseas supplies were unavailable. British and French companies are currently discussing a possible link in ammunition production. We shall need to take a view in due course on whatever proposals may emerge, but in principle we would not consider production-sharing in an Anglo-French industrial collaboration a fundamental threat to our security of supply.
Fifthly, we are alert to the possibility that a militarily important technology might be put at risk as a result of a procurement decision, but we have not found that to be a problem so far. There has undoubtedly been a significant reduction in the capacity of the UK defence industry, but that has not led to any significant loss of capability. It is not essential to retain a domestic capability in every area of defence technology, but in a number of instances—for military reasons—we would not be prepared to buy from overseas, provided that an indigenous capability could be sustained at an acceptable cost.
Before a Front-Bench spokesman asks me to name those key technologies, let me say that, if I did so, we should be at a disadvantage in terms of retaining procurement value for money for the taxpayer.
Sixthly and finally—I apologise for going into the subject at such length, but I consider it important—we need to accept and pursue collaboration in defence research and procurement with our allies in Europe and the United States, for sound economic reasons. Some restructuring of industry is inevitable, given declining defence budgets, the increasing costs of high-technology development programmes and the competition from a rationalised United States defence industry.
If UK companies are thinking about alliances and mergers—as, of course, many are—they would do well not to confine their attention to other UK companies alone. I am pleased to note that many are entering into joint ventures and co-operative arrangements with companies in both Europe and the United States.
There is no doubt that such cross-border alliances will be a vital component in meeting our future defence needs. Collaboration is an economic necessity, and as a result of our efforts to promote wider armaments co-operation with other nations, we are currently collaborating on some 45 projects at various stages of the procurement cycle—the largest being the European fighter and Project Horizon. The keys to successful collaboration in the future must lie in the agreement of a standard requirement, a sensible industrial structure and maximum use of competition within the collaborating countries, at the very least.
I want to make special reference to Project Horizon, on which the United Kingdom is currently collaborating with France and Italy. The programme will provide the Royal Navy with a new anti-air warfare warship in the early

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years of the next century to replace our 12 type 42 destroyers. The programme memorandum of understanding for the ship was signed on 11 July 1994. The principal anti-air missile system will be subject to a separate memorandum of understanding when the three partners have reached an agreement with industry on a compliant, cost-effective solution; I expect that to happen soon.
The Horizon trinational project office is based in London, and staff there from the three nations have already embarked on important preliminary steps that include the issuing of invitations to tender for the design definition of the ship and its combat management system. An international joint venture company comprising companies from all three nations will act as prime contractor for design and build of the three firsts of class—one for each nation. That involves the hull of the ship.
The Horizon project combines the essential ingredients for effective collaborative procurement. The three nations have agreed a common requirement, with only minor national exceptions; the industrial structure is sound; and—here I refer to the point made by the hon. Member for Barrow in Furness (Mr. Hutton)—the components of the warship will be ordered following international competition. I do not limit that competition to the three participating nations. All that benefits both the Royal Navy and the taxpayer.
It has been a busy and challenging 12 months for our senior service, but I know that I carry the House with me when I say that, once again, the men and women of the Royal Navy, and the civilians who support them, have acquitted themselves superbly. They have been a credit to themselves and, indeed, to the nation as a whole.
4.55 pm
Mr. Derek Fatchett: Unlike the Minister of State, I have not returned to this annual debate as almost a recidivist; I am here in my present capacity for the first time.
I welcomed some of the Minister's comments, and the way in which he set out the roles performed by the Royal Navy. It is always interesting to hear them set out, and their extensive nature described. The Minister did that in his opening remarks, and he was right to suggest that the Navy's important functions in the Adriatic and Somalia, for instance—and its other United Nations functions—are making an important contribution to both peacemaking and peacekeeping throughout the world.
I am sure that every Opposition Member wishes to be associated with the Minister's closing thanks to all in the services who have made those tasks possible, and fulfilled them so effectively.
I particularly welcomed what the Minister said about procurement. I shall deal with some of it later in my speech.
Reading reports of Royal Navy debates held in previous years, I was struck by the fact that—regardless of the political position that hon. Members may adopt on a number of other issues—there seems to be a genuine consensus on the specific theme of defence debates, whether it is the Royal Navy, the Royal Air Force or the Army. That is largely understandable, because defence debates are part of the national and international debate about what is happening to our forces—and those of other countries—in the post-cold war period.
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The hon. Member for Upminster (Sir N. Bonsor), who chairs the Defence Select Committee so effectively, will be very familiar with the remarks that I am about to quote. In his contribution to last year's debate and in his Select Committee's 1993 report, he summed up the anxiety felt by hon. Members on both sides of the House about the future shape, activities and functions of the Royal Navy. He seems to have the ability to write in language that I suspect will attract one or two newspaper headlines. I do not object to that; I think that it does not do a bad job in warming up what may sometimes be seen as rather a tedious issue. The hon. Gentleman has brought to the Select Committee the same sort of approach that Judge Tumim has brought to the Prison Service: I mean that as a compliment.
In the Select Committee report, the hon. Gentleman concluded:
"It appears self-evident to us that matching resources to tasks is becoming increasingly fraught, stretching both crews and vessels to unwise levels even during peacetime. It is evident that, in the event of full-scale war, the Royal Navy would be incapable of defending our sea-routes on which we depend for both trade and the movement of our Armed Forces. It is our view that this shortcoming poses a serious, and potentially fatal, threat to the long term security of this country."
That view, expressed by an all-party Committee, has been reflected in debates both before and after the report's publication.
The hon. Gentleman used different language to make exactly the same point in the closing words of his contribution to last year's Royal Navy debate. He said:
"We must look to the long-term future with a possibility that we shall need a strong united Nato and a British contributory force in the Army, the Navy and the Air Force capable of carrying out a role in an all-out war against us. It is the finding of the Defence Select Committee that our Navy is not strong enough properly to fulfil such a role."—[Official Report, 17 February 1994; Vol. 237, c. 1105.]
That has been the backcloth, and I shall return to those key arguments later in my speech. There has been broad agreement across the House that resources must match commitments and that we must engage in a broad debate on how we bring those two sides of the equation together.
At the end of his speech, the Minister mentioned the need for teamwork and co-operation. He pointed out that, like good industry, all our forces depend on developing teamwork. It is an essential part of the esprit de corps of the services' efficiency. The Navy is no exception in that respect. We are concerned about the extent to which the management of the Ministry of Defence can undermine the armed forces' confidence and sense of purpose. The Ministry is about leadership and a sense of direction and, if those are lacking, morale can fall, if not collapse, in certain circumstances.
The National Audit Office, the Public Accounts Committee and my hon. Friend the Member for South Shields (Dr. Clark) have all drawn attention to the important issue of waste and inefficiency in the Ministry of Defence. [Interruption.] I know that parliamentary private secretaries take a Trappist vow, but the word that the hon. Member for Norfolk, North-West has just uttered is absolutely correct: that waste is "disgraceful".
The catalogue is substantial, and includes the fact that £1 billion was spent on Upholder submarines. No function was defined for those submarines, which are now for sale. A further £7.2 million was spent on the Government's

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favourite friends—consultants—who were brought in at Rosyth and Devonport. That money was wasted because the consultants could find only one horse to run in the race.
Dr. Reid: That is not bad for £7.2 million.
Mr. Fatchett: As my hon. Friend says, that is not bad for £7.2 million.
Other problems have emerged. My hon. Friend the Member for Plymouth, Devonport (Mr. Jamieson) has come up with a lovely Spanish practice that seems to exist in the Ministry of Defence. At one time, trade union practices were criticised, but we have found such a practice in the Ministry of Defence.
It concerns the housing trust which the Ministry was to establish. I suspect that many of my constituents would love such a job—all the freedom and a salary to go with it. In response to my hon. Friend's questions, replies from the Minister of State for the Armed Services show that the chief executive of that housing trust, which does nothing because it has no role, is on a three-year contract worth £240,000. In addition, he has an efficiency bonus totalling £600,000. I presume that, if one starts with no houses, one cannot mismanage the housing stock, so he will qualify for that bonus.
The Royal Naval engineering college at Manadon in Plymouth is now up for sale, and I have before me the glossy brochure produced by the estate agent. If anyone is looking for a cheap property, this may be the answer. It has a number of bedrooms and a range of facilities. We know that it is up to date because, in recent years, the Ministry of Defence spent nearly £3 million on modernising it. In line with the new traditions in the Ministry, I understand that, in the ward room, £20,000 was spent on carpets. We have no figure yet for the amount spent on curtains, but I am sure that they are up to traditional Ministry of Defence standards. There are many other examples of that process of waste in the Ministry of Defence.
Significantly, a statement made last week about the air vice-marshal was not made in this Chamber by the Secretary of State, and no ministerial or civil service responsibility was taken for the waste and inefficiency in that Department. Is it not time that a sense of values returned to our public life, and people responsible for decisions carried the can when those went wrong?
Mr. Mackinlay: If it had happened in a Labour-controlled council, we would have heard about it.
Mr. Fatchett: My hon. Friend is absolutely right, but he knows that no Labour-controlled council could waste money on that scale, even if it tried.
Morale is damaged as a result of that wastefulness.
Mr. Andrew Robathan: I apologise to the hon. Gentleman for not having heard his whole speech but, on the latter point, may I point out that, for two years, I was a councillor on Hammersmith and Fulham council, which is Labour-controlled. The hon. Gentleman is absolutely wrong, because it was wasting money like it was going out of fashion.
Mr. Fatchett: I am delighted with that intervention, as I note that the hon. Gentleman does not try to support the Ministry of Defence. Clearly, that was beyond even his substantial talents.
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I noticed that, in opening the debate, the Minister did not refer to the pay, conditions and job losses of those who work in the Navy. It is worth while putting on record what has happened over recent years.
Numbers have dropped substantially, but that drop appears to have taken place differentially. In 1979, the last year of the last Labour Government, 72,500 people were employed in the Navy. The figure is now 54,000—a loss of 18,000. During that period, the number of officers has dropped by 8.4 per cent., and the number of ratings by 25 per cent. So when the burden of redundancy has been divided in the Royal Navy, as in other services, those at the bottom have, yet again, taken the brunt. We now have an officer:ratings ratio that is substantially less efficient than it was 15 years ago.
What has happened on pay? One might think that the Royal Navy is based on esprit de corps, the principle of equality which even the Prime Minister in last week's Question Time said he accepts. That principle of equality may be shown in terms of pay. The figures, which the Minister did not defend, show that, in the period 1978–94, the top two ranks in the Navy have enjoyed pay increases of 15 to 18 per cent., while the bottom two ranks have suffered pay cuts in real terms of 13 to 14 per cent. The gap has widened not just in society as a whole but within our armed forces, and it is simply not acceptable.
The Minister discussed the importance of civilian forces, and how the Ministry of Defence civil service backs up the role performed by our armed forces. He was right to make those comments, and, at one stage, he related them to this week's decision to close the naval stores at Eaglescliffe, Exeter and Wrangaton, with 1,000 job losses.
When the Minister said that everything would be done to provide jobs for those people, I thought that, if that were said to the 1,000 people whose jobs are now at stake, their response would be cynical, given the Government's record. They have heard it before, it never happens, and there is no reason to believe that it will happen on this occasion.
A recent report produced by the hon. Member for Upminster on the Ministry of Defence naval stores was a damning indictment on the process of management within the Ministry of Defence. The first page sets out a catalogue of failed consultations and the inability of the Ministry of Defence to talk to its trade unions and civil servants, or listen to others.
The Select Committee yet again damned the Government's proposals in strong language. The conclusion of that all-party, Conservative-dominated Select Committee was critical of the way in which the MOD handled these matters. It stated:
"The procedure by which the conclusion was reached was fundamentally flawed".
Does not that describe the Government, not just in defence policy but in a whole range of issues? They do not understand the word "consultation". If ever it passes their lips, its application is fundamentally flawed. When the hon. Member for Plymouth, Sutton (Mr. Streeter) feels that he has a promise that he can take to the bank in relation to the 1,000 people who have lost their jobs, he should think again of the fundamental flaw in that consultation process.
Mr. Streeter: Is it still the Labour party's policy to reduce so-called waste in the armed forces by decreasing the defence budget by 30 per cent.?
Mr. Fatchett: I thought that that intervention would come up. I am delighted that it has, because I have with me yet further evidence of the great inefficiency of Conservative central office—a brief that it prepared on 5 October 1994. The hon. Gentleman probably does not read everything that comes out of central office. I can understand that; it is perfectly acceptable. I confess to the hon. Gentleman that I do not read everything that comes out of Walworth road. If that damages my future promotion chances, I shall put it on the record and just put my hand up.
The document, which no doubt the hon. Gentleman used with enthusiasm—I can imagine the press releases going off to radio stations in Devon and newspapers in Plymouth—sets out a series of Labour's new expenditure commitments, so I read it with interest. Central office always accuses Labour of taking money out of the defence budget, so I assumed that there would be a minus figure for defence, and that the hon. Gentleman would be right.
I know that central office likes to do its research on an accurate, honest and fair basis. Its document does not show a minus figure; it states that Labour will increase its defence expenditure. It has got Labour adding to its defence commitment. I am an innocent man in this respect. I believe what comes out of central office. It says that expenditure is going up.
Mr. Streeter: The hon. Gentleman made a bit of a hash of answering my question. Will he please tell us what Labour's policy is? Will it cut defence expenditure by 30 per cent.—yes or no?
Mr. Fatchett: The hon. Gentleman should read the central office record. Labour's position is simply the position at the 1992 election.
Mr. Andrew Hargreaves: What about the 30 per cent. reduction, and the Labour party conference vote?
Mr. Fatchett: Our manifesto is very clear. During the excitement of the next election, I shall ensure that the hon. Gentleman receives a copy of the manifesto, which will clearly show him and the country that Labour will commit the resources that are necessary to maintain this country's defence.
The hon. Member for Sutton was so myopic in his intervention. He failed to recall the comments of the Minister at the beginning of his speech, when he said that, since 1989, this Conservative Government had cut 25 per cent. out of the defence budget. The hon. Gentleman should get the facts and listen to his own Minister.
Mr. Colvin: Will the hon. Gentleman take this opportunity to acknowledge that the 25 per cent. reduction is entirely consistent with the expenditure of our North Atlantic Treaty Organisation allies?
Mr. Fatchett: I have no reason to say otherwise. The only exception—I am not advocating this as a policy, or the hon. Member for Sutton would get too excited and read it in another way—is France, which has gone in the other direction and made some increases in defence
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expenditure. The hon. Member for Romsey and Waterside (Mr. Colvin) was correct about the general trend among our NATO allies.
I have spent some time considering MOD mismanagement. It is right to do so. That wasted money should he available for our troops and for our front-line functions. It is not available, simply because of the Government's mismanagement.
I should like to discuss an important issue that the Minister raised. He is right to say that, without an efficient industrial base, we cannot support our defence requirements. The two go hand in glove. I was delighted to hear him say that Britain's industrial future will be taken into account when procurement decisions are taken. I congratulate him on that. He has shifted the Government's ground. We welcome that. They are going much more in the direction that we have been advocating for some time. It would be churlish of us not to congratulate the Minister now that he is moving towards our ground.
I welcome the decision taken in the past 12 months—not by the MOD, but by the Department of Trade and Industry—to refer the British Aerospace and GEC bids for VSEL to the Monopolies and Mergers Commission. That is the right decision. Again, we asked for it. It is crucial that national and defence interests should be taken into account by the MMC. The Government should recognise, as they did on that occasion, that leaving everything to the market is not the best way of securing Britain's defence interests and its industry.
In the past few years under this Conservative Government, a significant shift and decline has taken place in our manufacturing base. Highly skilled jobs that are important for our industrial future have been lost in our defence-related industries. There has been a significant decline. We need to recognise that, and to lit that into procurement policy.
When the Minister talked about the three requirements of procurement policy, he raised questions as well as provided answers. He talked about a need for a standard requirement in terms of procurement and of the item under question. He talked about the need for an industrial base and for competition. He also referred to an industrial dimension. He will recognise—perhaps the Minister of State for the Armed Forces will comment on this in winding up—that a substantial restructuring of defence industries is taking place in Europe and in the United States of America. We must decide to what extent that restructuring will be assisted in any way by Government, or whether it will be left to the market.
We must also decide whether that restructuring will be undertaken on a UK-Atlantic basis, on a UK-only basis, or as part of broader European integration. If so, are we moving into common European procurement? What does that mean in terms of the Government's wish for competition? Does it mean substantial restructuring of the defence industries, with only one capability in each European Union country—Germany undertaking one function, the UK another, and France another? Is that the Government's objective? A common procurement policy poses real and substantial dangers to Britain's industry. We need to discuss them.
In winding up, the Minister should make abundantly clear the Government's intentions in relation to Britain's industry and, in particular, to the relationship with Europe. I know that it is difficult for Conservative Members to

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raise the issue of Europe without getting into great difficulties, but key issues exist here and they must be dealt with for the sake of British jobs, British industry and British companies. We need to hear what Ministers are thinking. They should not be frightened of their own Back Benchers: they need to face up to those issues.
Mr. Freeman: I hope that I did not confuse the hon. Gentleman. I tried to set out clearly our present procurement policies. Collaboration within Europe is a separate issue from Government funding of restructuring or diversification—call it what you will—within the United Kingdom industrial base.
Our policy is clear: that is a matter for industry, and not for the taxpayer. We have no intention of funding a diversification agency, as is being tried in the United States, because we do not believe that that is the most efficient way forward. It is for industry to make its own decisions about either looking for more exports or rationalising production, and it has been successful in doing that.
Will the hon. Gentleman set out clearly whether any future Labour Government would commit additional funds, separate from Konver—the European Union funding programme, with which the hon. Gentleman will be familiar—for conversion of the defence manufacturing base? If so, how much?
Mr. Fatchett: The right hon. Gentleman has raised an interesting point about diversification, and I will answer it. However, I should like to tease out of the Minister the view that he expressed in the early part of that intervention.
I believe that the Minister said that it is not the Government's responsibility to use taxpayers' money to help restructure industry—I would not want to misquote him. I understand that: the Government may have a role, but not in terms of making available taxpayers' money. The Government have accepted that, because of their decision to refer the VSEL case to the Monopolies and Mergers Commission.
I want to tease from the Minister the extent to which the Government see themselves as having a responsibility to restructure Britain's defence industries, either in line with some European process or in another way which sees Britain standing alone, or perhaps in some alliances across the Atlantic with United States companies. That is the important issue. In that way, the Government would be using not taxpayers' money but their own good offices. I want to know what the Government's direction is.
Mr. Freeman: Perhaps I can help the hon. Gentleman. Clearly the Government are involved in the restructuring of British industry, not in terms of directing what GEC, British Aerospace or Rolls-Royce should do—that must be for industry—but as the procurer and the spender of upwards of £10 billion of research, development and procurement moneys. Clearly, the Government's procurement policies must have an effect on the industrial base.
The hon. Gentleman will wish to read my comments at his leisure, but I did say that, if Governments—the procurers—collaborate on a European basis, they can require competition at the industrial level. That
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competition on a European scale will lead inevitably to the restructuring of the European defence manufacturing base.
Mr. Fatchett: We have opened up an interesting area of debate, and I suspect that the Minister and I could spend some time discussing it. I am delighted that the Minister has pushed the Government's policy along substantially towards a recognition that there might be a need for something called an industrial policy. I wish that we could transfer this Minister to the Department of Trade and Industry, where his comments are much needed and could be important for the future.
I am sure that the Minister would not wish me to avoid reference to diversification. I recognise that there is an important responsibility to assist the process of change. It can be played out in different ways. The Government have had a minimal role in that process, and have left most of it to the market. They could play a more active role in terms of dual-use technology and looking for ways in which the process of change could be helped.
That is why we have talked about the need for a defence diversification agency. We have always recognised that it would be a slim body, and that its funding would not be substantial, but it would change the climate and culture, and try to ensure that companies that have had a long-standing relationship with the Ministry of Defence could look for new markets and operate in new ways. It would be a culture-changing agency, and it is crucial.
The Merchant Navy is crucial to the success of the Royal Navy. It is often overlooked in these debates. In 1982, talking about the Falklands, Admiral Sir John Fieldhouse said:
"I cannot state often enough or too clearly how important has been the Merchant Navy's contribution to our efforts. Without the ships taken up from trade the operation could not have been undertaken and I hope that this message is clearly understood by the British nation."
It might have been understood by the British nation, but I wonder whether it has been understood by the Government. Since 1980, the level of tonnage on merchant shipping for the United Kingdom has fallen to a third of the level 15 years ago. That is a substantial decline. There are those on both sides of the House who raise serious questions about whether the Merchant Navy could fulfil again the functions that it has fulfilled in the Gulf—at substantial cost—and in the Falklands.
In last year's debate, the then Minister, now the Chief Secretary to the Treasury, said, with all the dynamic nature of his market approach to politics, that the Government would keep an eye on the Merchant Navy. If he did that, he would see that it has declined both in size and in the contribution that it could make.
The Minister who opened the debate today is more active, more of an interventionist. I look to him to make sure not just that he keeps an eye on the Merchant Navy but that he recognises the contribution that it has made, and could make in the future. [Interruption.] My hon. Friend the Member for Motherwell, North (Dr. Reid) said that, with that reference, the Minister could be the new Chief Secretary.
When looking at last year's debate, I noticed that the winding-up speech was made by the present Chief Secretary, and the debate was opened by the current chairman of the Conservative party. I do not know

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whether that is seen as promotion within the Conservative party nowadays. However, I must tell both the current Ministers that one great possibility is open to them if they join the Cabinet—they no longer seem to be bound by collective responsibility. They will be able to speak freely on all the issues that are important to them.
Some of the broader arguments have run through all these debates over the years. They include the questions of commitment and resources. As politicians—the Government in particular, because they have a greater responsibility—we have missed an opportunity to engage in an important debate for Britain in terms of a cold war world. We have seen a clear threat disappear, but we have not clearly defined our new roles. I must tell the Defence Ministers that "Options for Change" and "Front Line First" have not engaged in that exercise.
There is a strong criticism that the conclusions of those studies were Treasury-led rather than foreign policy-led, and we need to ensure that we work out our foreign policy options and requirements. Defence is the support of those requirements and options. That is why the Opposition have been arguing consistently for a full defence review.
That argument has a great deal of intellectual weight and merit. Our view is supported by people in the services, those who used to be in the services and academics who understand the issues. All those individuals understand that we need to put together three crucial aspects—our future foreign policy role, the defence requirements to fulfil that role, and the industrial base to ensure that we can do it. A future Labour Government will engage in that full defence review, because that is the way for the future.
There is an element of cheek in the Secretary of State and his Ministers—the salami Ministers from the Ministry of Defence—saying that Labour would mean uncertainty for our armed forces. I think that everyone in the armed forces agrees that if, in the desperate months in the run-up to the next election, the Government are faced with the choice of cutting public expenditure on defence and offering tax cuts, they will go for tax cuts. That is the greatest uncertainty for our defence forces. Only Labour offers a clear policy.
Our defence forces—the Royal Navy and others—would benefit from a stable Government with a clear majority and a sense of purpose. Only Labour can offer that on defence. The Chief Secretary, whom I quoted earlier, said that, if defence was not safe in the hands of a Tory Government, that Government were nothing. I think that he was right on both counts: defence is not safe in the hands of this Government, and the Government are nothing. The electorate know that, and the Government will be out of office soon.
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Sir Nicholas Bonsor: I welcome the hon. Member for Leeds, Central (Mr. Fatchett) to his new post on the Opposition Front Bench. We shall enjoy his contributions enormously over what I hope will be a prolonged period: I trust that he will stay on the Opposition Front Bench for many years to come. I thank him for his kind remarks about the Select Committee on Defence and my contribution to its work. What they did for my popularity with my colleagues I am not sure, but, none the less, it was very kind of him to draw attention to the Committee's work.
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The hon. Member for Leeds, Central quoted the Select Committee's report. I think that it was wrong to cut 25 per cent. from our defence expenditure. Since 1985, the world has become a significantly more dangerous place. I say that for two reasons, and I think that it is worth outlining them briefly.
The first is that Russia is not a lesser threat to security than the Soviet Union was. In the 50 years or so since the last world war, we have had what in retrospect we can clearly see to have been a prolonged period of peace because of the nuclear stand-off between the Soviet Union and the west. The Soviet Union was not really going to attack western Europe and we certainly were not going to attack the Soviet Union, but there is now a grey area in central Europe. However, we shall stand by it and not allow it to be taken back into a communist regime. Poland, Hungary, the Czech Republic and Slovakia can rely, and should be able to rely, on western intervention if Russia were to reinvade them. Under Mr. Yeltsin that will, one hopes, not occur, but Mr. Yeltsin's regime is not secure.
Members of the Select Committee went to Russia last year. The most depressing part of our trip was to discover that not even senior members of the current regime in Russia were prepared to tell us that they thought that they were secure. Usually when one goes to a foreign country, even if it is on the brink of revolution, the people in power will not admit to a foreigner that they are not secure. However, every Russian to whom I spoke in the current Administration said that they did not think that their positions were secure. They were extremely fearful of being overthrown by a Zhirinovsky-type regime, not necessarily by Mr. Zhirinovsky himself but by someone who shares his ideals—perhaps "ideals" is not the right word to describe his wish to recreate a Russian empire and reoccupy the areas which Russia once ruled.
I do not think that we can safely allow our defences to stay at a level that might not allow us to face the possibility—I hope to God that is only a faint possibility—that the west and Russia will confront one another in the foreseeable future over democratic government in the central European countries that have now turned their faces to the west. We cannot safely ignore that danger.
Nor can we safely ignore the possibility of something happening in the middle east, where fundamentalist Islamic regimes are expanding their power base and moving into Egypt and Algeria and along the north African coast in what looks like an inexorable advance of that philosophy.
That philosophy is hostile to the west and must pose the danger of a major war or a possible one-off attack by a lunatic such as, for example, Colonel Gaddafi unleashing a missile or two on Europe.
They are the two main dangers facing our country and our allies in the next 10 years or so, and our defences must be sufficient to deal with them. I regret the cuts introduced under "Options for Change" but I shall not dwell on that because the case has already been well made. We must and will now begin to re-establish the strength of our military forces.
I deal now with specific matters in which the Select Committee has been interested and on which it reported to the House. We raised several issues arising from the report in a debate on the defence estimates last October. I am delighted that in many instances the Government

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responded to our anxieties and dealt with the shortcomings that we outlined. For example, I am very pleased with the order for the Sandown class mine counter measure vessels. We have 18; the Ministry has identified a minimum of 25 as necessary and we are now tackling the shortfall. I am a little disappointed about the time scale but hope that Ministers will be able to speed up progress and ensure that we reach the required number earlier rather than later in the first decade of the next century.
I welcome the fact that the Trafalgar class will get Spearfish torpedoes and welcome the continuing programme for building and equipping our submarine fleet. Last year, the Russians built and commissioned as many submarines as we have in our entire fleet. They also commissioned the most powerful cruiser in the world, so we must not take our eyes off the potential threat with which the Royal Navy might have to deal.
We welcomed the amphibious replacement programme, especially the HMS Ocean helicopter landing platform. We also welcome what my right hon. Friend the Minister said today about the two assault ships. I am pleased that we now have a firm programme for the replacement of HMS Fearless and Intrepid. I am a little concerned about the Royal Fleet Auxiliary. I know that the "O" class tankers are to be replaced but I am not absolutely clear about when. They are old, and I hope that we can formulate a programme quickly.
We have three Rovers and three Leaf class support ships, which are also getting old. As far as I know, there are no plans to replace them, but I hope that they can be added to the programme of new shipping.
The Merchant Navy is, of course, a vital part of our defence strategy. It is extremely important that it is always able to carry our troops wherever they are needed and that it could, if necessary, once again launch a Falkland-type operation. The Select Committee took evidence on the Merchant Navy yesterday and was assured that the Ministry of Defence is confident that it could do so. We examined in detail the facts put to us and will report fully to the House in due course.
At this stage, I am still concerned about the number of people in the Merchant Navy reserve and the number of ships available. A paper exercise is being carried out in the next week or two to ascertain whether we could launch a Falkland-type operation. The Chamber of Shipping has been asking for such an exercise for a long time, and I welcome the fact that it is at last being undertaken.
Mr. Jamieson: The hon. Gentleman refers to the fact that we now have insufficient merchant ships to launch a Falklands-type campaign. Does he agree that we now have insufficient dockyard capacity to launch a Falklands-type campaign?
Sir Nicholas Bonsor: The short answer to the hon. Gentleman is no, I would not accept that. We probably could launch such a campaign. Our dockyard capacity certainly has shrunk, but it has not been suggested to me that we could not launch a Falklands-type campaign for that reason. I shall ensure that we address the hon. Gentleman's point, but at the moment I do not think that his fears are justified.
The hon. Member for Leeds, Central said that the Select Committee has been highly critical—as, indeed, it has—about the way in which the decision to close Eaglescliff
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and the other naval stores and to centralise them in Portsmouth was undertaken. Committee members were not, however, critical about the conclusion. We were critical about the way in which it was undertaken, and justifiably so. The Ministry has accepted most of our criticisms and in its reply to us, which is in the Library, it has accepted that the way in which that decision was taken was flawed. I hope that it will not happen again.
The Minister of State for the Armed Forces (Mr. Nicholas Soames): The Select Committee made some important criticisms and, as my hon. Friend said, we took them on board. I should like my hon. Friend to know that we remain determined to handle such matters better in future and I like to think that, as a result of that report and the actions that we have taken, we shall do so.
Sir Nicholas Bonsor: I am grateful to my hon. Friend. I welcome his statement and I am sure that what happened will not be repeated. To be fair to him, most of the front-line study reports submitted to the Defence Select Committee were very full and had clearly been very well thought through. Naval stores were the exception not the rule. [Laughter.] The way in which that particular decision on naval stores was taken was the exception not the rule. Most of the reports are extremely full and I do not think that the Ministry should be criticised on the generality. As my hon. Friend said, there certainly was a flaw in the way in which the Ministry went about the decision on naval stores.
I very much welcome the fact that training will become the responsibility of a defence agency. I hope that there will be a vigorous programme of market testing, as the Ministry has promised, that it will begin soon and that we shall he able to see its results.
The Committee regretted the closure of Manadon. I understand the reasons for it and that it was—possibly—inevitable. None the less, it is a great loss to the Royal Navy and the way in which we train our engineering officers. It is a great pity that the opportunity was missed to join with Shrivenham and put the engineering forces into that university. The Select Committee visited Shrivenham last year and saw that there was no doubt that it had the capacity to undertake such an additional course. It would have enhanced Shrivenham and would have fitted very much better into royal naval training than sending the potential royal engineer officers to Southampton, which is what will happen.
We hope that the Southampton university course will be a success and will turn out engineering officers who will stay in the Royal Navy. The Committee will watch closely how that situation develops, but I would be less than honest with my hon. Friend and the House if I did not express fears that it is not an adequate or satisfactory long-term solution to the way in which we train our engineering officers.
The Committee was concerned that, despite the assurances that we were given, there were excessive funding constraints on ships' exercises. We concluded that the failure to give adequate exercise to our royal naval vessels could lead, in time, to measurable deterioration in our operational standards. The Ministry's reply to the Committee observes that exercise cancellations are often the results of programming pressures and changing priorities in operational commitments. I accept that. In fact, it is another way of saying precisely what we are saying—that there are not enough ships and that they have

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too much to do. At the moment, we cannot put our Royal Navy ships into the areas where they are needed and give them adequate exercise time in major warfare preparation, and that should be addressed.
I am very sad that we do not have a type 23 combined tactical trainer stage five simulator at HMS Dryad, or, indeed, anywhere else. That means that people who are training either for the new type 23 ships, or for the upgraded older ships that have been fitted with the same equipment, undergo training at sea during live operations, which is a great pity. It is a waste of resources and it must he very difficult for those conducting the training. Indeed, to have to run as a training base as well must be very difficult for ships' ordinary operations. It is unsatisfactory and I very much hope that my hon. Friend will address that in his winding-up speech and will be able to assure the House that when we order the Horizon frigate we shall ensure that we also order a training simulator. We are due to get a type 23 simulator, but not for at least another three years. That is three wasted years, which could have been avoided with a little foresight.
I congratulate my right hon. Friend the Minister of State for Defence Procurement, who, unfortunately, is not in his place, on the way in which he has handled the difficult issue of our industrial base. There will always be a stand-off between our defence needs—in other words, the need to give to our troops and our armed services the best available current equipment—and our need to ensure that we have a defence industrial base capable of meeting our needs in the longer term. An obvious example of that is the European fighter aircraft. It would have been very much cheaper and easier for us to have ordered the American aircraft, which are probably very nearly as good, but the view was taken, correctly, that Europe, and especially Great Britain, could not afford to lose the technical capability that we shall need in the longer term to ensure that we can equip ourselves with such aircraft.
There is a trade-off between what we need for our defence purposes and the industrial base that we need to preserve. My right hon. Friend set out clearly and very well the Government's approach to that. I welcome it and look forward to seeing what comes out of it in due course.
5.46 pm
Ms Rachel Squire: I am pleased to follow the hon. Member for Upminster (Sir N. Bonsor). I entirely agree with his comments on the European fighter aircraft and I share some of his concerns about the developments in the former Soviet Union and the middle east over our security and foreign policy.
While another year has passed since the previous debate on the Royal Navy, the Navy has certainly dominated my agenda as a Member of Parliament. For instance, I am just about to complete the armed forces parliamentary scheme with the Navy, along with the hon. Member for Birmingham, Hall Green (Mr. Hargreaves). I am sure that the hon. Gentleman would agree that it has been an interesting, informative and invaluable programme. I am sure that we would both welcome the earlier announcement of the four new vessels for the hydrographic service, with which we spent an interesting day, during which we were greatly impressed by that excellent, world-class service. I am pleased to mention that service because we often tend to forget the invaluable role that it plays.
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The armed forces parliamentary scheme has certainly introduced me to people and taken me to places I would never have thought possible. I have had meetings with admirals, I have been winched into helicopters and I have been saluted by men in uniform. I have had many memorable experiences, but probably the most memorable of all was my visit to HMS Nottingham with the hon. Member for Hall Green, when the ship was out in the Adriatic enforcing the arms embargo against the former Yugoslavia. There I found myself undertaking a jackstay transfer between HMS Nottingham and another vessel. It was quite an experience to find oneself dangling on a rope, buffeted by the wind, and with no secure, firm deck underneath one's feet.
More seriously, when I thought back on that jackstay transfer, which lasted for no more than five minutes, I realised that it has been the experience of Rosyth for the past five years. The base has felt itself to be dangling on a Treasury rope which is becoming ever slacker, with no firm deck of security underneath. The stress and strain of that insecurity has had many effects, not least on people's health. It is not entirely surprising that earlier this week, Walter Strachan, the industrial convenor at Rosyth naval base, was taken into hospital with chest pains. I am sure that the whole House wishes Walter a full and speedy recovery. While I was inquiring about his progress at Queen Margaret hospital in Dunfermline, I also inquired about another strong supporter of Rosyth, Lord Ewing. Again, I am sure that Members on both sides of the House wish him a full and speedy recovery.
During last year's Navy debate, I talked about the strategic and operational importance of Rosyth naval base. It is clear that my words fell on deaf ears, as did the words of many others. When we were assured last February that Rosyth's future was safe and that no decision had been taken, we did not believe that assurance and we certainly do not believe it now. Rosyth's experience of uncertainty and insecurity has lasted for five years. Two days before Christmas 1989, the first rumour came out that the closure of Rosyth naval base was firmly on the agenda for certain people within the Ministry of Defence. The campaign at that time was effective in preventing the closure. However, with the benefit of hindsight, it is easy to see that the intention to close Rosyth did not disappear. The campaign did, however, force the Government to adopt a salami-slicing approach rather than wielding a big axe. The decision to reduce the base to a minor war vessel operating base clearly weakened its position in the defence establishment and resulted in the loss of 800 civilian jobs and the transfer of 1,100 service personnel.
I protest about the manner in which the effective closure of the naval base and the decision on the naval stores were announced. To make the announcements in written answers was a way out for the Government. I accept that this week, at least, we have the opportunity, two days after the written answer, to have a proper debate about the decision on the naval stores. However, to confirm the decision on the effective closure of Rosyth naval base in a written answer not long before Christmas was unacceptable. It would have been far more honest for the Government at least to have made a statement on the Floor of the House which would have allowed questions to be asked immediately.
I return to the history of Rosyth's campaign. When the defence costs study was announced in November 1993, it was once again clear that Rosyth was a target for closure.

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Sure enough, despite the denials given, that was the recommendation made in July 1994. The decision was then confirmed. The Minister may be thinking, "What is new? We have heard all about Rosyth before." I can only repeat that there has been blow after blow for the loyal, dedicated and committed work force of Rosyth naval base who feel that their loyalty has been repaid with betrayal and broken promises. Moreover, they feel strongly that public money has been wasted. Some £63 million has been spent on improving facilities at the base. Substantial savings were made by the work force which have apparently been ignored.
Some 10,000 defence-related jobs are going in Fife between 1991 and 1996. That estimate was produced not by some Labour research team, but by the Fraser of Allander institute and McKay Consultants. Their report says clearly that Fife is an area where 30 per cent. of gross domestic product is defence-dependent. The unemployment rate is already 24 per cent. more than it is in the rest of Scotland. I would welcome the Minister telling us where those people can go to find alternative work and whether all of them will be offered jobs on the quangos referred to earlier.
I am well aware that defence-related job losses have not been confined to Rosyth and that the latest announcement on the naval support infrastructure affects areas all over the country. I especially mention Exeter, Devonport, Wrangaton and Eaglescliffe. I condemn the way in which the decisions were reached and announced. My hon. Friend the Member for Leeds, Central (Mr. Fatchett) referred to the report by the Select Committee on Defence and to its criticism of the conduct of the defence costs study. I take this opportunity to quote paragraphs 9 and 12 of the report because they have widespread relevance and are not only relevant to naval stores.
The report says:
"The absence of any appraisal of alternative options from the naval support stores consultation documents means that they failed to provide for the proper degree of public accountability: and that the impression was given that the proposals were ill thought out and unlikely to withstand intensive scrutiny … Without the results of that investment appraisal it was unsafe for MoD to have reached a conclusion. MoD's view is that the confirmation in broad measure of its favoured option provided by the investment appraisals means that the work was 'nugatory'. We utterly reject that view. In matters of such significance, public and parliamentary accountability demands the production and publication of proper financial and operational appraisals, so that justice can be seen to have been done".
That point applies not only to the defence costs study on the naval support infrastructure, but to Rosyth naval base and, indeed, to Pitreavie. I hope that the Minister will listen to the concerns being expressed about the decisions on the naval support infrastructure, not just by Opposition Members, but by senior naval personnel who are concerned about the centralisation of the stores.
As I mentioned, the criticisms made by the Select Committee also referred to what has happened over Pitreavie. Yet again, this afternoon I had the dubious pleasure of finding on the notice board a letter with the Ministry of Defence insignia on it. I have learnt to dread such letters, as they always mean bad news and jobs lost, as my hon. Friend the Member for Plymouth, Devonport (Mr. Jamieson) knows only too well.
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Pitreavie thought that it had a secure future. Again, in the past two years, money has been spent on improving the facilities there. Less than two years ago, the Secretary of State for Defence announced that the rescue co-ordination centre for the United Kingdom would be at Pitreavie. In July, it was announced that the flag officer for Scotland, northern England and Northern Ireland would be moving to Faslane, as part of the effective closure of Rosyth naval base. That meant that the Government decided that Pitreavie was too costly for the RAF to stay there. Last year, the Secretary of State announced that the rescue co-ordination centre and the air officer would be transferred to Leuchars.
That was welcome news to Fife Members at that time, in particular to the hon. and learned Member for Fife, North-East (Mr. Campbell). It was regarded as recognition that the people of Fife should be assured that their contribution to the defence of the realm and, in particular, their contribution to rescue co-ordination work were valued and would be retained. Rumours then started—of course, they were denied by the Ministry of Defence—that the rescue co-ordination centre was to go elsewhere, probably Kinloss. I hope that the Minister will confirm today that the RCC is to stay at Leuchars rather than at Kinloss. I would welcome an end to insecurity about Pitreavie and Leuchars.
Mr. Menzies Campbell: I am most grateful to the hon. Lady for giving way and, in particular, for the objective way in which she has put the case for the rescue co-ordination centre to be relocated from Pitreavie to RAF Leuchars in my constituency. Is she aware that, last week, the Royal Air Force in Scotland confirmed that the centre was to move to Kinloss, whereas the Ministry of Defence in London declined to give any confirmation whatever, and said that no decision had yet been reached?
Ms Squire: I thank the hon. and learned Gentleman for his intervention. What he has recounted does not surprise me in the slightest. It is all too characteristic of the conduct of the Ministry of Defence. It also relates to crucial lessons that I urge the Ministry of Defence and the Government to learn in respect of the defence of this country and their treatment of those on whom we depend for the defence of the realm.
The Pitreavie saga and the future of the rescue co-ordination centre cause one to wonder who will lose most. Will it be the people whom the service is committed to rescuing or will it be the Government? Once again, we have a Government shambles masquerading as a defence review that involves more broken promises and more money leaving the Fife economy.
The removal of the operational facilities from Pitreavie undermines the future of a naval presence at Rosyth and fuels the widespread view that, however the Ministry of Defence might like to dress it up and talk about a Royal Navy support establishment, in effect it is severing the Navy's links with Rosyth, which will lead to complete closure. It is also characteristic of the Government's defence policy that we in Fife are to be left with holes in the ground. We already have the infamous RD57, and it now looks as though we will have the reinforced concrete bunker at Pitreavie.
Reference to RD57 leads me to Rosyth dockyard. It is not only naval base personnel who have been involved in that permanent jackstay transfer of uncertainty and

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insecurity; so, too, have the dockyards. In the mid 1980s, Rosyth and Devonport had to deal with partial privatisation. The dockyards then had the fierce argument about where submarine and surface ship refitting work would be allocated. Both dockyards now face full privatisation. When the major customer will always be the Ministry of Defence, when the Ministry of Defence will always have a major interest in those workplaces, and when there is only one bidder for each yard, it is a waste of time and money to proceed with privatisation.
I will give the Minister credit for visiting the dockyard recently. His interest and his personal attention were much appreciated by the work force and the management at the dockyard. I hope that there will be a continuing improvement in direct communication between the upper echelons of the Ministry of Defence and those on the ground who are working for the defence of the country day in, day out. Privatisation, if it proceeds, will make it even more important that the dockyards are treated equally and receive contractual guarantees of the work that is allocated to them in future. I ask the Minister to give me such a guarantee tonight.
I seek further assurances from the Minister. First, I seek an assurance that all decommissioned submarines will be removed from Rosyth, following the welcome assurance that RD57 would not he turned into a graveyard for decommissioned hulks. Secondly, I ask the Minister to repeat that the allocated programme of surface ship work for Rosyth will include aircraft carriers. Thirdly, I seek an assurance that the work force at both dockyards will have their pension arrangements honoured and their redundancy entitlements met.
I should like clarification of the Minister's statement concerning other options. Perhaps I am paranoid and suspicious about such phrases.
I now refer to other immediate action that the Government should take in respect of Rosyth and Pitreavie and to some of the overall lessons that are to he learnt. If the Government are serious about offering the Rosyth complex a future and security, we need a positive, co-ordinated approach that will assist employment creation and economic regeneration in an area that is heavily dependent on defence. Nearly 80 per cent. of the naval bases' work force are resident in the Dunfermline district, and approximately 85 per cent. of commercial defence-related output emanates from the Dunfermline district. Economic activity must be stepped up a gear if the Fife economy is to have a chance of staying afloat.
I welcome previous statements about the need for a central Government initiative, but I should like the Minister to answer some questions. First, what resources will the Government allocate to Fife to deal with such high unemployment? In particular, what hard cash will be made available? Secondly, will the Minister update us on what the Scottish Office task force is doing? Thirdly, what is happening about the disposal of land and assets at the Rosyth complex? Will the Ministry of Defence undertake all necessary work to ensure that contaminated land, premises and facilities are properly treated? What was meant by an earlier statement about the responsibility for the whole site and not just a part, and a rejection of the piecemeal approach? Is the MOD now trying to walk away completely from the whole Rosyth site, or will it be realistic and accept that it will always have interests and responsibility?
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Fourthly, what arrangements arc being made to provide the men and women who are facing redundancy with an integrated package which offers proper training and the realistic hope of a job at the end of it? Will the Minister establish an integrated training initiative? What will the Minister do to encourage companies to come to the area and provide real and decently paid permanent jobs, and not casual, short-term and low-paid work?
I draw attention to some general lessons which the Government need to learn from the way in which they have dealt with the Rosyth and Pitreavie work forces. They should reward the loyalty, commitment and dedication of the naval personnel and civilian work forces by providing them at least with some relatively secure decks on which to stand.
I shall quote from the Royal Navy's "Broadsheet" article on the defence costs study, which states:
"It was recognised that, following the changes that have occurred in recent years culminating with "Front Line First", there is a need for stability … Change is likely to be a continuing theme but everything will be done to minimize its many effects on those who serve in the Navy and especially upon their morale … We have to recognise that change is endemic and strategic uncertainty probably as great as ever before in our history. Nevertheless the Navy Board will be aiming for stability in the fundamental structure of the Service."
If the Government and the Navy are serious about those statements, I suggest they do a number of things.
First, I should like to pick up on a comment made by my hon. Friend the Member for Leeds, Central (Mr. Fatchett) that the Government should conduct a full defence review, rather than one led by Treasury demands. That view is not just confined to myself or to Opposition Members. I have had contact with naval personnel and civilian work forces all over the country as a result of the armed forces parliamentary scheme. One of the constant themes—whatever the ship, base or facility that I visited—has been the strong feeling of insecurity and uncertainty at a Treasury-led defence policy, where decisions are determined by the Chancellor rather than by the Secretary of State for Defence.
Mr. Colvin: The hon. Lady's call for a full defence review seems to be a shroud behind which she can hide a non-existent defence policy. Through "Options For Change" and the defence costs study we have had what amounts to a full-scale defence review. What more can the Labour party offer?
Ms Squire: There is a widespread view, not only among naval personnel but among all sections of the armed forces—including retired members—and among academics that the questions posed by the end of the cold war which require difficult issues to be debated have not been adequately dealt with by the Government. There is a feeling that defence reductions have been initiated by Treasury demands for savings. An overall review would outline the strategic and operational requirements for the next five years, and would take us into the 21st century. We will decide on the basis of those decisions what level of defence expenditure will be necessary.
Mr. Colvin: It seems to be inconsistent of the hon. Lady to, on the one hand, report to the House that the

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armed forces are calling for stability while, on the other, reporting that they are calling for a further defence review with all the instability and uncertainty that that engenders?
Ms Squire: Naval personnel are looking for some stability and certainty, but they are criticising what has happened to them in the past few years. They feel that the Government's defence policy has lurched from one Treasury-determined objective to another. My impression, from my contact with members of the Royal Navy and the civilian work force, is that the person who they would nominate to put out on a permanent jackstay transfer—or, even better, to walk the plank—is none other than the Chancellor of the Exchequer. Some Conservative Members may feel that it might be an attraction if, at the next election, the Chancellor of the Exchequer offered to walk the plank.
Mr. Gareth Wardell: Like my hon. Friend, I was one of the first Members to have the benefit of taking part in the armed forces parliamentary scheme, and I spent some considerable time with the Royal Navy. In addition to the well-made points which she has put to the House, does she feel that one of the fundamental difficulties which the major leaders in the armed forces—the First Sea Lord, the Air Marshal and the head of the Army—find is that they are put in an unstable position because they plainly do not know what the Government want them to do?
Ms Squire: I entirely agree with the excellent points made by my hon. Friend.
There are other lessons which the Government must learn. There was widespread agreement among naval personnel that the Navy can take no further cuts. The feeling is that it has been cut to the bone, and there is no spare flesh. There is also a widespread view that the defence procurement policy of the Government is still unsatisfactory, and that there is a waste of money because of the overpricing of both basic items, such as telephones, and complex equipment. There is a strong feeling that the time that people are being asked to spend away from their families is being unfairly increased.
I return to the argument that was made earlier about people saying that they need some stability and feel uncertain and insecure. I hope that the Government will find ways of listening more closely to what is being said by those who daily serve in the defence of the country.
The third specific lesson that I would ask the Government to take on board is the one that was reflected earlier in the comments of the Second Report of the Defence Select Committee concerning the naval infrastructure—the need for openness, for full consultation and for a complete review of the process of managing and proposing change.
I think that we all agree that the country's defence depends on people. However high-tech and expensive the equipment that is available to us, loyal, dedicated and skilled people are needed to make it, maintain it and use it. The Government must start to demonstrate far more clearly their appreciation of the loyalty, commitment and dedication of defence personnel, the civilian work forces and their families. An invaluable way of doing so would
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be to provide more accurate information and proper consultation and to give those people, as my hon. Friend the Member for Leeds, Central said, a sense of values.
The fourth lesson that I urge the Government to learn from the process of the defence costs study is one that has already been mentioned: the whole business of taking into account industrial procurement. I welcome the hints that have been given about that. I have a special interest in respect of the future of our warship building capacity, and I feel compelled to express again my dismay at the tragic loss and closure of Swan Hunter and the waste of such valuable skills.
It appears that the future of what is left of our warship building capacity is insecure, and I look to the Minister to give an assurance that the long-term procurement plans of the Navy are sufficient to maintain the remaining warship building capacity in this country.
I quote the Defence Select Committee again, which said in its Fifth Report of Session 1993–94, at paragraph 96:
"The United Kingdom industrial base is a strategic asset and must be safeguarded accordingly. We believe that it would be unwise to rely entirely on even our closest Allies to provide surge capacity as they have their own priorities and their industry may wish to supply their own national forces first."
In conclusion, I am determined, as are my hon. Friend the Member for Dunfermline, East (Mr. Brown) and other Opposition Members, that the lessons to be learnt from Rosyth's experience should be neither forgotten nor repeated. I would not wish any other group of naval personnel or civilian work forces to be treated in the way that I think that the Rosyth work force have been treated by the Government.
I trust that, in his reply, the Minister will demonstrate that lessons have indeed been learnt, that the Government are committed to the best traditions of the Royal Navy and the defence of the realm, and that they intend to provide some security for all those who serve our country so well.
6.23 pm
Mr. Andrew Hargreaves: I am especially grateful for the opportunity to contribute to the debate, and especially pleased to follow the hon. Member for Dunfermline, West (Ms Squire), because we are just completing our attachment to the Royal Navy under the armed forces parliamentary scheme, and I should like to say what a pleasure it was to accompany her on the various visits; some of those visits were slightly more hairy than others, notably the jackstay transfer.
We were both enormously impressed by the way in which the scheme was organised. We should like to thank my hon. Friend the Minister of State for the Armed Forces and ask him to pass on our thanks for the way in which it was organised and for the value that was attached to the scheme.
I also wish to put on record our appreciation of the immense professionalism and cheerfulness of all ranks—officers and other ranks—and the positive attitude, despite some difficult circumstances and change, of all those in the Royal Navy whom we met. It impressed us and we are very pleased to note it for the House.
In a previous debate, I and other hon. Members questioned the concept that the world had become a safer place than it was during the cold war, and therefore the logic that lay behind the massive reductions that have

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taken place in our defence budgets since "Options for Change". In that, I wish to identify my remarks specifically with those of my hon. Friend the Member for Upminster (Sir N. Bonsor).
Indeed, if anything, the contrary is now true, in that the world is a less stable place and we are more likely rather than less likely to need our armed forces to protect British or western or European interests. For that, we perhaps need a different balance of forces. The recent exercise of defence costs studies made some progress in trying to solve that problem, and I pay tribute to the Ministers and their predecessors on the Front Bench for the way in which they approached that exercise.
However, if one is to consider, as perhaps we should, the role that we might foresee for our armed forces in the next five or six years, one thing is absolutely for sure—the Royal Navy is crucial and pivotal to the type of force projection that one might imagine to be necessary, especially where there are likely to be extremely sensitive political considerations.
The hon. Member for Dunfermline, West referred to our participation on board one of Her Majesty's ships in the Adriatic as part of Operation Sharp Guard. That is only one type of activity that exemplifies the way in which the Royal Navy is pivotal to the ability to project a force in an extremely difficult area.
The Royal Navy and any navy like it, but especially the Royal Navy, possesses certain advantages for this purpose. They are: the ability to maintain a self-sustained presence for long periods; a self-sufficiency even where there are no friendly bases in the vicinity; controlled increase or decrease in the scale of force projection required and the possibility of temporary or complete commitment, or indeed withdrawal, as for example might be the case from Bosnia; the choice of highly visible or covert operations; and the advantage of using the same tools, perhaps with the possible exception of SSBNs, as would be used in total war. The Royal Navy therefore affords an extraordinarily potent stand-off capability, or stand-to capability, while using exactly the same investment that the taxpayer has already made for full-scale engagement as might be envisaged during a war.
However, if one believes that that type of force projection is necessary—as it may well be—to defend British interests, or to act for humanitarian purposes, in the next five or six years, one needs to consider the assets that the Royal Navy might need. I wish to single out the role of the aircraft carrier. My right hon. Friend the Minister of State for Defence Procurement mentioned HMS Invincible, which is shortly to be replaced in deployment in the Adriatic by HMS Illustrious.
I joined the hon. Member for Dunfermline, West on board an aircraft carrier. We were impressed because, in many ways, such a vessel is the only unit that can provide for a task group a platform capable of two essential ingredients of any military effectiveness. It has the broad spectrum of capabilities in one ship, ranging from organic self-defence or external defence and land attack, through surface warfare, to a highly potent anti-submarine warfare capability, which allows it to carry out composite war commander's duties, whatever those might be in that area. It can also move on along the high seas almost anywhere in the world, where it can poise in international waters without commitment or the need for any host nation to support it.
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The naval aircraft launched from that vessel might be the first on the scene in any particular situation, which would therefore grant politicians or military commanders alike a number of variable options not otherwise available, at immediate notice.
With that in mind, I agree with my hon. Friend the Member for Croydon, South (Mr. Ottaway), who raised with my right hon. Friend the Minister of State for Defence Procurement the need to start thinking now about replacing one or two of our aircraft carriers, which, in 10 years, will almost certainly be beyond refit capability. HMS Ark Royal is the oldest and would probably be the first to fit the bill. I hope that Ministers will consider seriously now what to do about those extremely important and capable assets in the future, because the cost of replacing or refitting a number of extremely expensive items of defence expenditure could be lumped together rather dangerously in 10 years' time.
The need for any task group force must be considered in conjunction with the need for submarine capability and frigate or destroyer escort. My right hon. Friend the Minister has already mentioned the extremely welcome news about the order for more type 23 frigates. I hope that my hon. Friend the Minister of State for the Armed Forces will be able to confirm that the communications systems on those frigates have been improved. I understand from Royal Navy personnel that the existing system posed some problems, so I look forward to my hon. Friend's confirmation that they have been resolved satisfactorily. It would be a great pity to have ship which could not he used in the type of operations we are currently running, for example Operation Sharp Guard. I hope that my hon. Friend will be able to offer me good news.
On submarine warfare, I was pleased to hear about the likely orders for batch 22 Trafalgar class submarines. I was also extremely pleased to hear at the time of the defence costs study about the possibility of fitting Tomahawk cruise missiles on those submarines in due course. That would give the Royal Navy an even greater stand-off capability to poise and to deliver a potent threat where necessary. That would enormously improve the way in which we could subtly escalate or de-escalate, if necessary, a military commitment or threat. Those weapons offer a huge advantage because they can be fired from a position unknown to any possible enemy. Those submarines are therefore able to operate from a cloaked position, perhaps well away from any other task group that might be deployed in the area.
One of the most important subjects about which Ministers have spoken and which has been referred to recently in Navy journals, is amphibiosity. In any discussions about the role of the Royal Navy in the next six years, amphibiosity must be the key to our ability to deliver or extricate forces in any given situation. The order for the landing platform docks is therefore good news.
I am also pleased that my right hon. Friend the Minister has been able to put a time, finally, on the order for the replacement of Fearless and Intrepid. I hope that it will not be subject to any delay, because it has been flagged up on a number of occasions. I hope that that promise is crystallised into reality.
At the time of the defence costs study the excellent idea of a joint rapid defence force was mentioned, but things have gone rather quiet since then. From the discussions

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that the hon. Member for Dunfermline, West and I had with members of the armed services during our attachment, we know that they are keen on that idea. They were rather disappointed that they had not heard more about it.
Mr. Soames: My hon. Friend has raised the most important matter of a JRDF. I am glad that he is excited by that prospect. He will understand that that concept requires a great deal of work to get the operations and strategy deployment correct. I can assure him that a great deal of work is going on and we hope to be able to make a detailed announcement, certainly not in the near future, but in the medium future. We are anxious to complete that work as soon as we can.
Dr. Reid: It has been crystallised.
Mr. Hargreaves: Yes, it has.
I am extremely grateful to my hon. Friend the Minister for that announcement, which will be widely welcomed in the Royal Navy and by the other forces.
I also welcome my right hon. Friend's announcement about the new hydrographic vessel. The hon. Member for Dunfermline, West and I were extraordinarily impressed by the professionalism of the service operated under the command of Captain H at the hydrographic squadron. I am sure that the hon. Lady shares my pleasure that the new vessel is considerably larger than the existing one. It will be a great extension to the squadron's capability, because it has long argued for a longer hull to improve its sea-keeping capabilities so that it can put to sea, irrespective of the weather, in whichever section it is asked to operate. The members of the squadron will be able to keep going on-station, without having to dive because of storms and so forth. The squadron will be delighted by the announcement.
There is a slight question mark over that vessel, however, because I read somewhere that it might have a maximum speed capability of not more than 17 knots. I hope that my hon. Friend the Minister will prick up his ears at that, because, given our aim to have ships that are flexible in terms of investment, whether they are used in a Falklands operation or anywhere else, we should consider whether there is a cheap way to improve that speed should the need arise. That would be in the interests of joint force operability at a later stage.
A number of concerns became apparent to the hon. Member for Dunfermline, West and I during our various visits to ships and ships' companies. I had intended to allude to them, but they have already been mentioned by the hon. Lady. My hon. Friend the Minister knows, however, about my concern about the pressure on family life when ships' crews are at sea, whether on Operation Sharp Guard or elsewhere, and away from the home port for seven months or more. Everything that we can do to reduce that time spent at sea would be greatly appreciated.
I cannot resist mentioning morale. Despite the tribulations which have been experienced by the Royal Navy and the other services as the result of several changes, the hon. Member for Dunfermline, West and I found that morale in the Royal Navy is remarkably good, all things considered. I do not feel that it will be enormously improved by the comments by the Opposition spokesman, the hon. Member for Leeds, Central (Mr.
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Fatchett), who could not resist his classist, socialist revanchism by pointing out the differentials between the pay of officers and other ranks. It would have been interesting to hear whether the Labour party intended to change that. The First Sea Lord happened to be in the Gallery at that time and I am sure that he was interested in those comments as well. Such remarks will not help him as he tries to attract quality graduates to become officers in the Royal Navy. It will not help those graduates, nor those chief petty officers and others who aspire to be officers if the politics of envy are introduced even on matters of pay into debates here.
Dr. Reid: Far be it for any of us to introduce the politics of envy, but we cannot accept the hon. Member's proposition that it is not a fall of 15 per cent. in real terms in the wages of ratings and squaddies that is wrong, but the fact that the Labour party should remark upon it. Is it not essential, especially at a time of instability and rapid change, that the esprit de corps, comradeship and unity in the armed forces should be strengthened and increased by equality of treatment and fairness rather than that the differential that existed in 1979 should be increased by a huge percentage?
Mr. Hargreaves: The House is better informed for the hon. Gentleman's intervention, but I can assure him that one thing that we did not encounter on our visit to the Royal Navy was serious unhappiness about pay. The unhappiness that we mentioned came from instability rather than pay.
The other unhappiness that is worth mentioning, if I can call it that—and I am sure the hon. Member for Dunfermline, West will agree—had more to do with the internal differentiation of jobs within the Royal Navy than with almost anything else. That was a key factor in the ward rooms. It did not involve the relative earnings of officers and junior ranks. I shall pass over that as it was not a helpful contribution from the hon. Member for Leeds, Central.
Finally, the hon. Member for Dunfermline, West and I were enormously impressed by the job that the Royal Navy does. I hope that one message we send back from these debates is that we appreciate those who serve in the Royal Navy and we support them, no matter what strictures are imposed by budgets from the Treasury or the requirements of Foreign Office inspired commitments that we cannot always control, although we would like to do so—and that does not always make their lives easier. We appreciate that they do an extraordinarily good job, in sometimes extremely difficult circumstances.
6.41 pm
Mr. Menzies Campbell: These single service debates allow the opportunity for concentration on the particular service with which they are concerned, but they also give us a chance to debate some of the wider strategic issues and to apply our minds to the strategic context in which the Royal Navy has to operate.
Looking round the House, since approximately six and a half years ago when I first spoke in a defence debate in the House, I do not remember an occasion when the House was quite so thinly populated. That is a pity because the importance of all three services—and today's debate emphasises the importance of the Royal Navy—certainly cannot be underestimated.

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Had he still been present, I would have liked to welcome the hon. Member for Leeds, Central (Mr. Fatchett), who opened the debate on behalf of the Opposition, to the first defence debate he has addressed from the Opposition Front Bench. He made an extremely competent and quite combative speech. Not surprisingly, like others who have spoken from the Labour Front Bench in recent times, he laid some stress on the policy of what is sometimes called, "a fundamental defence review", "a full-scale defence review" and "a far-ranging defence review", and I shall return to that in a moment.
The message which is transmitted to any of us who have spoken to commanders at all levels of the armed forces is that the one thing that they desperately require is a period of stability and calm. We tend to forget that the political decisions about "Options for Change" and "Front Line First" have been taken and announced, but that those decisions have not yet been fully implemented and there is a period of disruption yet to come. Only yesterday, there was an announcement in the newspapers about further redundancies at senior levels in the Army.
I am one who in the past has argued vehemently for a full-scale defence review. There was a time, particularly in the period immediately after the announcement of "Options for Change" when the strategic context was changing so rapidly and fundamentally, when a full-scale defence review would have been entirely appropriate, but I am now of the view that that time may have passed.
Those of us who argue for a full-scale defence review, or have done so in the past, should now be arguing that the conduct of defence policy should depend on a number of principles. First, foreign policy should dictate defence policy. Secondly, resources should match commitment and, thirdly, we should accept the overwhelming presumption that the stability that senior commanders require is best met for the time being and for the foreseeable future by no further reductions in the defence budget.
I understand the intellectual case of those who argue vehemently for a full-scale defence review, but we cannot instigate such a review with an entirely open mind unless we are willing to consider increasing defence expenditure. I do not know of any defence review, fundamental or otherwise, ever carried out in the United Kingdom containing a resolution that defence expenditure should be increased, with the possible exception of the rather fraught circumstances of the 1930s, when after a period of total lack of resolution, investment in defence became necessary as a matter of survival.
Dr. Reid: I have listened carefully to the hon. and learned Gentleman, who speaks with great authority in these matters and I understand the point he makes and the requirement and desire for a period of stability in the armed forces. However, the three principles that he Gentleman set out contain an inherent contradiction.
The hon. and learned Gentleman's first point was that foreign and defence policies should match, his second requirement was that resources and commitments should be matched, and his third and vital one was the presumption that the status quo fulfils the first and second requirements. The status quo patently does not fulfil a match of resource and commitments of foreign policy and
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defence which is precisely why we need to bring them into alignment and one can not do that in a rational fashion without a defence review.
Mr. Campbell: If the hon. Gentleman had listened he would have heard me say that there should be a presumption for the foreseeable future that there will be no more raids on the defence budget. I am one of those who argues strongly that if a political settlement is achieved in Northern Ireland, that should not be seen as an excuse for a further raid on the defence budget by the Treasury. There is a full range of tasks which the United Kingdom land Army could perform in furtherance of the United Nations and for which it has special skills; we should be making our forces available for that purpose.
If on 14 October 1997, or perhaps rather earlier, the hon. Gentleman and his hon. Friends march up the steps of the Ministry of Defence, call the chiefs of staff together and say, "The first thing we want is a full-scale defence review", if "Options for Change" and the defence costs study have not yet been implemented, those who contend that morale is fragile may be entirely justified by the response that they will get. We have to get way from what is essentially an absolutist position, and say that we will conduct our policy in accordance with certain principles.
It is a reasonable principle to say that the starting point should be that there is a presumption for the foreseeable future of no further cuts in the defence budget and that. in accordance with that presumption, we shall apply the principle that foreign policies should dictate defence policy and that resources should match commitments. I see nothing illogical in that, and it carries with it the benefits of that stability and period of calm for which I understand senior commanders are almost desperate because of the difficulties of morale which they identify in the conduct of their responsibilities as the head of their respective services.
We could not conduct a debate on defence without some reference to the debate on Europe which is taking place in the House and, perhaps more robustly, within the Cabinet Room in No.10 Downing street. In Luxembourg on Tuesday, 10 May 1994, when nine eastern European countries became associate members of the Western European Union, the Secretary of State was quoted as saying—I do not think that he has denied the accuracy of the quotation—that the evolution of a European Community defence policy was an "inevitable consequence" of the Maastricht treaty.
If that remark were widely publicised among some of the Secretary of State's hon. Friends, I think that it would cause considerable anxiety even now. I think that the Secretary of State is right, but I do not think that we will wake up one morning to find that a common European foreign and security policy has been declared. I think that such a policy will develop organically.
Elements of that development are already in place. There is extensive nuclear co-operation between France and the United Kingdom. It is not publicised very well, but it has been going on for 18 months to two years. The co-ordination of air resources between the two countries was announced some four or five months ago. The evolution of Eurocorps was first thought to pose some sort of threat to the North Atlantic Treaty Organisation and the allied rapid reaction corps. However, it is now viewed

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as being rather more friendly to existing defence structures. The United Kingdom-Dutch amphibious force has existed for a considerable time.
The NATO summit of January 1994 recognised the opportunity for what were described as "combined joint task forces", whereby NATO's entire resources may be made available to European members of NATO for operations in which the United States would not expect to take part. Those existing components, which are of varying strength, will lead inevitably to the evolution of a far greater degree of integration in defence matters in Europe.
Another equally, if not more, compelling factor for integration is economics. Because defence inflation always runs ahead of what may be described as "ordinary" inflation, there will be continued economic pressure for force specialisation, for interoperability and for common procurement. I do not underestimate for a moment the difficulties of achieving those aims, but I believe that they will be driven by economic necessity.
The Navy is currently contributing to the force in the Adriatic which is enforcing the arms embargo in the former Yugoslavia. Hon. Members have already paid tribute to the professionalism of those who are engaged in that task, and I had the good fortune to see it at first hand when I visited HMS Ark Royal.
The force's presence in the Adriatic depends on the continuance of the embargo. I am implacably opposed to any lifting of the arms embargo, either unilaterally or multilaterally. I think that there will be general agreement about that matter in the House. How could we continue the remarkable humanitarian effort if the arms embargo were lifted? How could our forces and those of other countries remain in the former Yugoslavia in safety if the arms embargo were lifted? How could we withdraw without undue risk from the difficult circumstances—including terrain and other factors—in the former Yugoslavia as we would inevitably have to do if the arms embargo were lifted?
Would the no fly zone be maintained? What air assets would be available for that operation and from whom would they come? For example, once we have withdrawn and the arms embargo has been lifted, would we continue to provide air resources in order to police the no fly zone?
I suspect that what is described in the Untied States as the "lift and strike" policy—lifting the arms embargo and then using air strikes—would soon become a reality. Once that had happened, what some have long suspected to be the principal objective of the Bosnian Muslims—to draw the United States and perhaps others into the war on their behalf—might be achieved.
What consequences would that action have for NATO? Some say that NATO would be finished for ever. I do not think that the consequences would be apocalyptic; however, I think that they would be severely damaging for NATO.
In practical terms, an announcement that the arms embargo will be lifted is hardly likely to be met by a totally unresponsive Bosnian-Serb Government. They would be bound to take maximum advantage of the inevitable gap between the announcement of the end of the embargo and the arrival of weapons, or the gap between the announcement, the arrival of weapons and
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the training of people in their use, and act upon their present military superiority. I hope that, even now, we will be able to persuade our friends in the United States—it is clear that we have persuaded the United States Administration, but I hope that we will be able to persuade others also—that that policy would be extremely damaging and dangerous.
Like other armed services, the Navy has faced the difficult transition from a capability which was based on a clear threat—which had existed for 40 years—to a capability that is now based on anticipated tasks. As many hon. Members have already pointed out in the debate, it is extremely difficult to anticipate what those tasks might be. Therefore, we must return to principles.
The first principle must be a balanced fleet, within which there may he a change of emphasis. For a long time the United Kingdom's anti-submarine warfare capability was deep water in nature because our task was to ensure that the reinforcement of NATO forces across the Atlantic would not be prejudiced by Soviet submarines breaking out from the north Norwegian sea. I am sure that hon. Members will recall our policy of forward maritime defence. That is no longer relevant in the changed strategic situation.
However, we still need anti-submarine warfare capability in order to counter the proliferation of diesel-powered submarines. Russia's readiness to sell Kilo class submarines to anyone who is willing to buy them gives rise to the possibility that our forces may be required to exercise their anti-submarine warfare capability against such submarines.
The hon. Member for Dunfermline, West (Ms Squire) asked the Minister many questions, but I would like to ask him only one. If he cannot answer it tonight, I will happily accept a written answer in due course. The Merlin programme is a very important part of the all-round capability of the type 23. Can the Minister tell me, either tonight or at a later stage, when the Ministry of Defence expects that the Merlin helicopter will he fully deployed?
Mr. Alan Jones of Westland announced today that he intends to relinquish the post of chief executive of that company. Mr. Jones has made a remarkable contribution to the fortunes of Westland and, in so doing, he has assisted in maintaining a very important industrial and military capability for the United Kingdom.
Mr. Colvin: Does the hon. and learned Gentleman think that an announcement from the Front Bench confirming the order for 25 Westland EH101 support helicopters would be a very nice parting gift for Mr. Alan Jones? We have been waiting for that commitment for nearly five years and it is about time that the Government gave it.
Mr. Campbell: As the hon. Gentleman knows, the first commitment was made in 1987 by the then hon. Member for Ayr, who is now Lord Younger of Prestwick in the other place. I think that Alan Jones would be well rewarded for his time at Westland if the Minister were able to make that announcement which hon. Members would welcome also. Apart from anything else, it would ensure the continuance of Westland as an important part of the United Kingdom's military and industrial base.
I suspect that some of the tasks and important roles that the Navy will be required to fulfil in future may be of a rather lower intensity than many of those for which we

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have prepared in the past. Under the auspices of the United Nations and in co-operation with others I suspect that the Royal Navy may be called on to take part in arms and trade embargoes authorised by United Nations Security Council resolutions. It is important to make the point that, although carrying out low-intensity operations can be a valuable contribution to security, it is equally clear that we must, in the Royal Navy, maintain a capacity for high-intensity warfare if it becomes necessary. Many people are concerned that if we become so committed to low-intensity United Nations-sponsored deployments, it might prejudice our ability to conduct high-intensity warfare. I know that the Minister is seized of that apprehension—indeed, I was able to discuss it with him when I went to see him at the Ministry of Defence a little while ago.
The nuclear deterrent remains the responsibility of the Royal Navy. We are committed to a minimum deterrent and to nuclear weapons as weapons of last resort. I do not believe that we fulfil those principles unless we take a conscious decision not to deploy any more warheads on Trident than on the Polaris system that it is to replace. In that regard, it is right to remind the Government of their obligations under article 6 of the non-proliferation treaty, which, of course, is currently under active consideration.
Important though the nuclear deterrent may be, we should remember that the most flexible asset that the Navy possesses—one that is capable of performing a wide variety of tasks—is the fleet of frigates and destroyers. I was pleased to hear the Minister of State for Defence Procurement, who opened the debate, say that we have 35, instead of that awful word "about" which, for years, bedeviled the Defence Committee's taking of evidence from Ministry of Defence officials, who would only ever say "about" 50, "about" 40 or "about" 35. The Minister was unequivocal, and for that he deserves the congratulation of the House.
I suspect that 35 is pretty well the minimum number at which the Navy could continue to perform the tasks that they are obliged to perform at the moment or may be called on to perform in the future. I remind the House that it is the frigates and destroyers from which we provide the West Indian guardship and part of our presence in the Adriatic. As has already been pointed out, it is from the fleet of frigates and destroyers that we were able to make such a swift deployment against a further threat to Kuwait only a few months ago.
There will be only 12 submarines. The four Upholder class are to be sold, leased or in some way disposed of. There will be a loss of capability, although that is substantially discounted by hon. Members who know more about submarine warfare than I do. It will mean that the remaining submarines will be very heavily worked and deployed. Therefore, refit schedules and their maintenance at a proper level of readiness will be extremely important.
I support the proposal to obtain cruise missiles. I believe that the opportunity for force projection, which that will give, will be a considerable enhancement of capability.
On mine counter-measure vessels, to which reference has been made, I believe that it is a capability in which we lead the world. It is vital that we do not sacrifice that lead. I get the impression that Ministers on the Treasury Bench recognise that it is important that that capability be preserved.
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The importance of the Royal Marines cannot be understated. At a time when we are looking for flexibility, what is more flexible and valuable in an unstable and unpredictable environment than an amphibious capability?
The hon. Member for Dunfermline, West spoke at great length, with great sincerity and to great point with regard to Rosyth. I certainly do not wish to do anything other than endorse what she had to say about the way in which Rosyth was treated and the experience of the loyal workers who worked there for many years. I would just embellish—if I may put it that way—what she said by making the comment that the position of both royal dockyards is still uncertain until the whole question of privatisation is resolved. It now appears that there has been only one bid for each, from the incumbent. I have not seen the bids and am not in a position to make any judgment about their commercial acceptability or otherwise, but I believe that it is incumbent upon the Government to resolve the issue as soon as they can, and if it is necessary, to ensure that those bids are effective, that there be some kind of contractual arrangement with regard to the provision of work to the two dockyards. I would support moves towards that end.
We are, notwithstanding the channel tunnel, still a maritime nation. We have traditionally been a naval power, but that tradition has been bedded in the practical necessity of ensuring that we were able to defend our shores at all times. Geographical and physical considerations will continue. The traditions of the Navy—service, commitment and professionalism—will be maintained. It is to those traditions that we should pay proper tribute this evening.
7.6 pm
Mr. Gary Streeter: I am pleased to follow the hon. and learned Member for Fife, North-East (Mr. Campbell), who speaks with great authority on the subject. I certainly wish him well with his leadership campaign.
I am also proud to represent a region that has had a distinguished record of service to the armed forces over the years, particularly the Royal Navy and Royal Marines. In Plymouth, there has been a naval base and dockyard for many centuries, and we have been the home of the Royal Marines for many generations. I know that you, Madam Deputy Speaker, are extremely familiar with all those establishments, and are well loved by those who serve therein.
I am delighted that my hon. Friend the Minister of State for the Armed Forces will be replying to the debate, because he made a recent and highly successful visit to Plymouth and, as usual, was extremely popular wherever he went.
In recent times—as you, Madam Deputy Speaker, will know—we have experienced the dreadful trend of downsizing our defence establishments, caused, quite understandably, by the ending of the cold war and the break-up of the Warsaw pact. I associate myself with the comments of my hon. Friend the Member for Upminster (Sir N. Bonsor), who made a telling argument about why it is more vital than ever that we keep our defences up.
The so-called peace dividend that we have enjoyed these past few years has hit us particularly hard in the west country. Since 1985, the number of employees at the

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dockyard has reduced from 13,500 to only 4,000 some 10 years later. It is generally recognised in the west country that, had the Labour party won the previous election, with its commitment to defence cuts of 30 per cent. or so from 1992—not from 1985, which deals with the point made earlier by the hon. and learned Member for Fife, North-East, representing the Liberal Democrats, who pledged to reduce defence spending by a staggering 50 per cent.—we would have been even harder hit. I will take no lectures on defence cuts from Opposition Members.
None the less, times have been hard in Devon and Cornwall, and we have experienced considerable job losses. As you will know, Madam Deputy Speaker, anxieties about job losses have not entirely gone away. They come from a variety of sources. The maintenance of the Trident submarine, and its refits, will secure and guarantee 4,000 jobs in Devonport dockyard for the next 20 years.
That is very welcome, but people in Devon and Cornwall worry about Labour's commitment to Trident if it formed the next Government—which we know is highly unlikely. They worry about Labour's record on defence. They worry about the 60 or more Labour Members who signed an early-day motion late last year calling on the Government to scrap Trident, and they worry about the fact that the leader of the Labour party, and indeed Labour's entire defence team, used to belong to the parliamentary branch of the Campaign for Nuclear Disarmament.
Dr. Reid: Would the hon. Gentleman care to amend that last statement, as in making it he was inadvertently misleading the House?
Mr. Streeter: The hon. Gentleman has not given me the detailed information that would allow me to amend it, but if he wishes to make a statement about his own position, I shall be delighted to hear it.
Dr. Reid: I have never been a member of the parliamentary branch of CND.
Mr. Streeter: The statement that I made about the leader of the Labour party none the less stands. Many hon. Members wonder how a Member of Parliament could decide that we should not have a nuclear deterrent when the cold war was at its height and the Warsaw pact constituted such a threat, and then decide in 1990—when the cold war was winding down and the Soviet bloc was breaking up—that such a deterrent was appropriate for this country after all. Many of us feel that that conversion was extremely superficial, and would melt in the heat of battle.
Mr. Jamieson: Labour's commitment to Trident is certain. The hon. Gentleman knows that, because our Front Benchers have made it clear on many occasions. His own Front Benchers, however, may be interested to know that I have a photograph in my pocket—I will show it around the House if the hon. Gentleman wishes me to—taken in 1987, which shows the hon. Gentleman, then an SDP councillor standing with the SDP Alliance in Plymouth. In the photograph, the hon. Gentleman is sharing a platform with a leading member of the local branch of CND.
Mr. Streeter: That is a rather feeble point, for two reasons. First, the purpose of that debate was for me to
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put the case for a nuclear deterrent, against which the CND member was arguing. Secondly, the hon. Member for Plymouth, Devonport (Mr. Jamieson) has an old skeleton in his cupboard in the form of his past membership of CND. How ironic that he should now represent Devonport, whose dockyard is to maintain the Trident submarine.
Mr. Jamieson: On a point of order, Madam Deputy Speaker. Will you ask the hon. Gentleman to withdraw that comment? I have never been a member of CND.
Madam Deputy Speaker (Dame Janet Fookes): That is not a point of order for the Chair. It is a point on which the hon. Member for Plymouth, Devonport (Mr. Jamieson) might wish to intervene, and that is how I shall treat what he has said.
Mr. Colvin rose—
Mr. Menzies Campbell: He has not accused you yet.
Mr. Colvin: He probably will.
Sharing a political platform with someone does not necessarily involve sharing that person's views. I have shared a platform with the right hon. Member for Chesterfield (Mr. Benn) many times, but that does not mean that I shared his political views on those occasions.
Mr. Streeter: I am grateful to my hon. Friend. Indeed, as I said, the purpose of my being on that platform was to contradict the CND argument. I have always supported the independent nuclear deterrent. Will the hon. Member for Devonport reflect on this point? I think that it is better for an hon. Member to maintain his principles while changing his party than to stay in his party and abandon all his principles, as so many Opposition Members have done.
Let me continue with my thoughtful speech. People in Plymouth are also worried about talk of a further defence review. I have spent a good deal of time talking to members of the armed forces, and I know that the last thing they require is another defence review. They want a period of stability and certainty, and the ability to plan within a given framework; the possibility of a further defence review terrifies them. I agree with what my hon. Friends have said about the desirability of such a review.
People in Plymouth are also concerned about the fact that the implications of "Front Line First"—albeit a masterly exercise in support for our front line—are still trickling through. Only this week, we heard the sad announcement of 427 job losses in Devonport as a result of the rationalisation of naval stores.
I believe that my hon. Friend the Minister of State for the Armed Forces handled the matter as sensitively as it could have been handled, but he will appreciate that this constitutes a further blow to economy and morale in a region that has already been hit by many job cuts over the years. Moreover, the review of the Royal Marines and their location is still taking place. I know that my hon. Friend will understand my concern, and will note my call for a period of stability and security for Devon and Cornwall.
I welcome the clear assurance by my right hon. Friend the Prime Minister that there will be no further defence cuts under the present Government. That gives us confidence for the future; how it contrasts with what has been said by Opposition Members.

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May I raise three specific local issues? I hope that my hon. Friend the Minister will deal with them, either when he winds up or later in the year. I seek assurances about the future of vital defence establishments in our region.
From time to time, we have debated the future of the naval base at Devonport. I entirely accept the assurance that the Ministry of Defence believes that we need a strong naval base there, and that the base has a strong and vibrant future; but concerns remain about the onward drift to Portsmouth and the amount of base-porting in Devonport. We in Devon and Cornwall seek a positive commitment to the naval base. We were pleased to learn of the commitment to replace HMS Fearless and HMS Intrepid with two new landing platform docks and a new amphibious craft for the landing of helicopters.
I suggest to my hon. Friend that there is a happy marriage between the base-porting of amphibious craft and the location of the Royal Marines. I understand that the base-porting of amphibious craft has not yet been settled; will my hon. Friend give a commitment to base-port those vessels in Devonport, so that they can enjoy collocation with the Royal Marines—our strike force in Devon—that will be of great strategic and economic benefit to the Navy and our region? I am prepared to wage a long campaign until Devon receives the answers to which I believe it is entitled.
It is not part of my brief today to be in any way derogatory about Portsmouth, the city in which I was born. I fear, however, that, as ferry traffic from Portsmouth increases—the channel tunnel may affect some ports in Kent in the same way—it may not be the right place in which to base-port new naval ships.
My next point concerns the location of the Royal Marines. They are currently based at the Citadel and Stonehouse, with a logistic division at Seaton and Coypool and a 42 Commando at Bickleigh. They have been part of our history for as long as anyone can remember. We know that the Ministry of Defence is currently considering the relocation of some Royal Marines at RAF Chivenor; that option is clearly attractive, given that it is a level, single site with newer facilities than Plymouth can offer in some instances.
I realise that my hon. Friend is examining the possibility of the move very carefully. He is taking his time to get it right, and I respect and support that. We are grateful that the Citadel and Stonehouse are not even under consideration. We know that the Royal Marines will remain in those locations.
I would understand it if the Logistics Division were to relocate from Seaton and Coypool, which are not ideal sites. I could understand the argument if it were in the interests of the Royal Marines to move that to RAF Chivenor in north Devon. However, if 42 Commando is moved from Bickleigh, particularly if it were for purely financial reasons, it would be seen as a major blow to our region, and the final straw that broke the camel's back. So I ask my hon. Friend the Minister to consider carefully before going further down that route. We must retain 42 Commando in Bickleigh.
If the Logistics Division relocates from Seaton and Coypool—I do not concede that point—will the Minister do everything possible to ensure an early release of those sites into the private sector, so that new jobs are generated from those valuable sites in the centre and on the edge of Plymouth?
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Will he reassure me that, if those relocations take place, those sites will be actively put on to the marketplace for economic regeneration? The release of surplus Ministry of Defence sites in Plymouth has a mixed history. We welcome the excellent investment of £45 million in the site of the Plymouth Development Corporation, but are concerned about how long it is taking to deal with the redundant Manadon site.
The third issue that I wish to raise with my hon. Friend the Minister is competition in defence procurement. I welcome my hon. Friend's remarks about the Royal Navy's secure future. Many of my right hon. and hon. Friends would like even more ships to be ordered and built than those referred to in last year's "Statement on the Defence Estimates", but with replacements planned for HMS Fearless and HMS Intrepid, the batch 2 Trafalgar class submarines and up to three type 23 class frigates, significant work will be provided for our warship building yards and, importantly, the naval equipment supply industry?
I declare a further constituency interest. A company with many employees based in my constituency—British Aerospace Systems and Equipment Ltd.—is one of the equipment supply companies that will benefit from that work. I recently received a brochure from British Aerospace Systems and Equipment Ltd. which recalls the substantial naval work carried out within British Aerospace.
Most of us probably regard British Aerospace as the nation's premier supplier of aircraft, and I confess that, until I saw that brochure, I had only limited knowledge of the company's significant presence in naval prime contracting and systems. Hon. Members will be surprised to learn that, in 1993, British Aerospace's naval business turned over some £365 million.
Will my hon. Friend the Minister confirm that it will continue to be the Government's policy to encourage competition between British Aerospace, GEC and other major prime contractors, as the best means of ensuring value for money in naval, whole ship and systems procurements? It has been our consistent line to insist on competition in the refitting and maintenance of our ships by maintaining two dockyards. I hope that similar principles apply in relation to major defence procurement elsewhere.
In conclusion, I seek assurances about the future of Devonport naval base, and would like a response on the specific suggestion that I put to my hon. Friend the Minister. I also seek assurances on the retention of a substantial Royal Marine presence in south Devon and that the world of defence procurement will continue to be a competitive environment.
7.23 pm
Mr. David Jamieson: I am pleased to follow the hon. Member for Plymouth, Sutton (Mr. Streeter), having listened to his speech, which was so carefully crafted in the few minutes before he rose. Is it not refreshing that a Conservative Back Bencher should be so close to the ear of the Prime Minister? He comes to the Chamber tonight to tell us facts about the Government's policy on defence that we have not heard from the Minister. He said that there will be no further cuts in defence, but I understood that the Government's

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policy was to make a succession of cuts in defence during the rest of this Parliament. Clearly, the hon. Gentleman has the ear of the Prime Minister on those matters.
Mr. Freeman: I hope that there is no misunderstanding. In my opening speech, I made it clear that we sought stability in funding in real terms from 1 April this year for the next three financial years. That is the period for which the Government plan and the Chancellor made that clear in his statement. Decisions made under "Options for Change" and "Front Line First" will take a number of years to implement. I made that plain in my speech and my hon. Friend the Member for Plymouth, Sutton (Mr. Streeter) has been consistent with what I said. It is as plain as a pikestaff that that is what will happen.
Mr. Jamieson: That was a revelation. I am pleased that the Minister has confirmed that cuts will continue for the next four years. What the Prime Minister meant in the private moment that he spent with the hon. Member for Sutton was that there will be a succession of cuts in the next four years, which have already been agreed by the Government. I am glad that the Minister has reaffirmed that view.
The hon. Member for Sutton said that I was scaremongering when I mentioned the Marines leaving Plymouth. I am glad that he has now come to the view that the Government may take the Marines away from the city.
Like some of my hon. Friends I declare an interest. My hon. Friend the Member for Dunfermline, West (Ms Squire), who made an excellent speech on behalf of her constituency in Scotland and the Royal Navy, and the hon. Member for Birmingham, Hall Green (Mr. Hargreaves) are both on the armed services parliamentary scheme. I, too, have been on the armed services parliamentary scheme, with the Royal Marines. If I am allowed to mention the Royal Marines in a Royal Navy debate, may I say that I admire their work and pay special tribute to the work that they contribute to our armed services' effort. On one occasion, for the brief moment in which the hon. Member for Sutton was also on the scheme, he and I were sped around Poole harbour on a landing craft. Having heard his speech tonight, I wish that I had pushed him in.
Before I clear up the matter of the photograph, will the hon. Member for Sutton withdraw the comment that he made about my having been a member of CND? I have never been a member of CND but he has put it on the record that I have.
Mr. Streeter: I am always willing to accept the hon. Gentleman's word. I therefore withdraw the remark if he assures me that it was inaccurate.
Mr. Jamieson: Anyone listening to the hon. Gentleman will realise that his ungracious apology will not be well received.
Let me clear up the matter of the photograph. The hon. Gentleman said that he shared a platform with, but was in opposition to, a member of CND. That is not true. The photograph in my possession shows that when the hon. Gentleman was a member of the SDP and shared a political platform with the alliance, and therefore the Liberals, he was photographed for election material put
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out on his behalf standing next to the leading member of the CND in Plymouth. We are, however, glad of the hon. Gentleman's conversion to sense. Now that other Conservative Members have discovered that, long may he remain on the Back Benches.
Dr. Reid: Will my hon. Friend confirm that it is now clear that my hon. Friend and I were never members of CND but that the person who accused us was on a platform supporting, and publishing literature proclaiming his association with, the CND?
Mr. Jamieson: My hon. Friend is correct.
Mr. Streeter: On a point of order, Madam Deputy Speaker. How can I place it on the record that I have never, at any stage in my life, espoused the principles of CND, and that I have always supported an independent nuclear deterrent? The hon. Member for Plymouth, Devonport (Mr. Jamieson) is misleading the House and he should be careful.
Madam Deputy Speaker: Matters of fact are not something on which the occupant of the Chair can rule. Of course I expect hon. Members to be careful in what they say. I am sure that, if they are found to have made inaccurate comments, gracious withdrawals would be the order of the day, but I cannot adjudicate on such matters.
Mr. Jamieson: If we want some clarification, I shall say it again. A photograph of the hon. Member for Sutton standing next to the chairman of CND appeared on election materials. At that time, he was in the SDP and sharing the same political platform as the Liberal Democrats. I am pleased that he has come to the House to make the position clear. We welcome his change of view over that period.
Mr. Streeter: Will the hon. Gentleman give way?
Mr. Jamieson: I shall give way in a moment. We have heard enough from the hon. Gentleman. I am glad that he has clarified his position on the matter. If he wants to put out a public statement to make absolutely certain that everyone in the House understands that he never shared a platform with people who espoused CND views, I would be happy to read that statement.
Mr. Streeter: Will the hon. Gentleman give way?
Mr. Jamieson: Not at this moment.
Mr. Streeter: On a point of order, Madam Deputy Speaker.
Madam Deputy Speaker: Order. This debate on the Royal Navy is of great importance. I deprecate what appear to be personal comments being made across the Floor of the House. It would be for the good of the debate if no more references were made, and if any differences were settled privately outside the Chamber.
Mr. Jamieson: As always, I shall be guided by your words, Madam Deputy Speaker.
Mr. Streeter: Will the hon. Gentleman give way?
Mr. Jamieson: I shall not give way to the hon. Gentleman. Having been guided by your words, Madam Deputy Speaker, I shall not give way again to the hon. Member for Sutton.
Mr. Streeter: On a point of order, Madam Speaker. Is it in order for an hon. Member to make a scurrilous accusation, and then not to give way so that it can be corrected?
Madam Deputy Speaker: I regard that not as a point of order, but as a point of fact. I have given my advice on how the matter might be handled. I hope that that advice will be heeded by both hon. Gentlemen.
Mr. Jamieson: I will again follow your advice, Madam Deputy Speaker, and I shall not respond further to the hon. Member for Sutton, as I have made clear my views on the matter.
The debate is of great importance to the Royal Navy, to Plymouth and to the south-west region. The south-west economy relies heavily on defence spending and defence-related work. Plymouth, in particular, and Devonport are totally committed to the defence of the country, but how committed is the Navy to Devonport? In particular, how committed are the Government to Devonport, and to the men and women who have given many years of loyal service to the Navy, in both military and civilian capacities?
In recent years, cuts have been made in services generally, but naval cuts and closures, in particular, have had serious effects on Plymouth. As promises to maintain jobs in the dockyard and the supply depots have been cynically broken, a feeling of betrayal pervades the work force and the local people, not only because of the cuts and those broken promises, but because there is no support and no planning. The Minister made it clear that the Government have no aspiration to find new employment for the people who have lost their jobs, many of whom have skills in that sector.
The Ministry of Defence has consistently failed to provide help for redundant workers, and support for service personnel. Only recently, following considerable pressure from me and from others, it started working with the local authority in my area and with other bodies to secure the best use of redundant land.
Mr. Soames: I am sure that the hon. Gentleman would wish to clarify his comment that the Government have done nothing for service personnel. The Government's resettlement programme for service personnel is unmatched by any other institution in this land. It is widely regarded as the most effective organisation of its type. The hon. Gentleman should clarify what he said.
Mr. Jamieson: I thank the Minister for that and I will tell him exactly what I mean. The Minister must bear some responsibility for the thousands of people who have lost their jobs in Her Majesty's royal dockyard over the years. Most of them have not found alternative employment, and the Government have failed them by not helping to find them new employment. The Minister may be interested to know that the unemployment figures rose this week in the south-west region and in Plymouth, in particular. The main reason for the increase is the cut in defence, over which he is presiding.
Workers in the dockyard in Plymouth are justifiably disappointed by job losses, but they become angry when they see massive waste and injustice in the system. The MOD justifies redundancies by saying that they will save money, but then wastes millions of pounds on the refurbishment of official residences, on consultancy fees, and on gross inefficiency of breathtaking proportions.
1194
Recently, Tory Members have been trying to blame local authorities for cuts in education, saying that the authorities were wasteful, yet when it comes to waste and inefficiency, the MOD has cornered the market. In the past three years, £55 million has been written off in lost rent on empty homes alone. Only four years before HMS Andromeda was offered for sale, £27 million was spent on its refit, and we hear that the asking price may be as little as £1 million. Those are just are two examples of waste.
Usually, the debate on the Royal Navy rightly concentrates on weapons, hardware and logistics, but I want to examine some of the issues that are important to the people who keep the Navy going, either by serving on ships or on shore, or by working in a civilian capacity to ensure that the Navy is fit to respond to any situation. The MOD is guilty of paying too little attention to the welfare of its employees in relation to housing, jobs and education. On Tuesday, the Minister announced the loss of jobs in Royal Navy supply depots at Devonport, Exeter and Wrangaton, all in my part of the country. The total loss amounted to 734 jobs, 427 of them in my Devonport constituency. That constitutes a further dismantling, of Europe's most efficient naval supply network. Those decisions defy logic and common sense.
How can it be sensible to dismantle the supply stores for naval ships based in Devonport so that they are to be supplied from Portsmouth, 170 miles away, and through the narrow roads of Hampshire, Dorset and South Devon? What sort of logic states that having three depots close at hand in Devon to supply ships in Devonport is, as the Minister said,
"fragmented by nature and difficult to manage"
but that supplying them from somewhere 170 miles away will be more efficient, despite the fact that £9.5 million will be spent on "modernised infrastructure" at Portsmouth? How can the Minister claim in his letter to me that
"Devonport is and will continue to be the principal Naval base on the South Coast"
when he admits that the current situation of more ships being based at Plymouth than at Portsmouth will change as the 4th Frigate Squadron builds up at Portsmouth, and as the type 22 frigates are paid off?
Under "Options for Change", and as recommended by the defence costs study, the total reduction in stockholdings will be in excess of 50 per cent. over five years. That is disproportionate to the reduction in the size of the Royal Navy and does not reconcile with the perceived work load. I can conclude only that there is a hidden agenda of further cuts in the size of our Navy, and a threat to the very existence of Devonport as a major naval base.
Mr. Soames: So that the hon. Gentleman does not wander off down that fantastic lane, may I assure him that no further cuts are planned to the front line of the Royal Navy and to Devonport?
Mr. Jamieson: I am pleased that the Minister has been able to reassure me. However, he must realise that those who have been in Plymouth for a long time know that similar Ministers have given similar assurances over the past 10 years. In 1983, when we said that there would be massive job losses at Devonport, we were told that we were scaremongering and that there would he no cuts.

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Nearly 14,000 people were employed at the dockyard at that time. We were told the same in 1987 and 1992. No doubt at the next election we will be told the same again. However, I am pleased that the Minister has given me that assurance, and I promise that I will repeat it many times, which I am sure will bring him pleasure.
The Government recently offered for sale the royal dockyards at Devonport and Rosyth for total privatisation. The Government have made the dockyards so unattractive that, even after spending £7.2 million on consultants to help sell off the dockyards, there was only one bidder for Devonport and one for Rosyth. The Government spent £7.2 million to tell Devonport Management Ltd. and the Babcock International Group about the dockyards that they already occupied. That money could have been better used to help the many thousands of people in Devonport and in Scotland who have lost their jobs in the past few years.
My hon. Friend the Member for Dunfermline, West asked who will underwrite the redundancy payments. I ask the Minister again. Will it be the Government or will the private company that takes over be expected to do that? The total redundancy estimate for Devonport is £140 million.
Quite rightly, workers want to be reassured about their rights and their conditions of work. The Government have previously given assurances that those would not change after privatisation. Will the Minister confirm what legal rights the workers will have after privatisation? Can he categorically assure workers that their loyal service over many years will be rewarded by the continuance of the contracts that they have enjoyed in the past and that they will still enjoy the same pension and redundancy rights?
The privatisation threatens the economy of Plymouth and the surrounding areas partly because it creates uncertainty about employment. Already, many people in the Devonport dockyard receive redundancy one week and are taken on a week after on short-term contracts and reduced pay. Privatisation will not bring any benefits for the work force at Devonport and it is hard to see what benefits it will bring for the Royal Navy. Only the Treasury will benefit. It is a defence policy run from planet Portillo or asteroid Aitken. The Ministry of Defence now offers better career prospects and job security to merchant bankers and financial consultants than to those serving and supplying the Royal Navy in defence of the realm.
Another matter that is of great concern to my constituents, and to people throughout the country, is naval housing. While my constituents who have loyally served their country lose their jobs, inefficiency and waste run riot throughout the Ministry of Defence. Let us examine the running of the naval living quarters. The Ministry of Defence owns, as at 31 December 1994, 12,408 vacant properties—15 per cent. of its stock of houses. Some 236 of those are in my constituency of Devonport. Those 12,408 houses would be the equivalent of a town such as Canterbury, Banbury or Taunton.
The Ministry of Defence housing policy is disastrous. It lacks planning and is riddled with incompetent management. The number of empty homes is increasing almost daily. The empty homes have resulted in loss of rent of £55 million in the past three years. There is also the loss of council tax to local authorities as well as the cost of security and maintenance, which, by the Minister's
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admission to me in a written answer, has been £355,000 in the past two years. Is the Minister aware that 118 former wives of naval personnel were evicted from their homes in the past five years? Last year, Plymouth city council had to rehouse 77 ex-service families who had been declared homeless and evicted by their former employers, the Ministry of Defence.
Mr. Peter L. Pike: Will my hon. Friend recognise that there is a similar problem at Deal, where the properties of the Royal Marines are deserted and where there is temporary housing? It is appalling and the Royal Navy and the Admiralty must do something with those properties.
Mr. Jamieson: I agree with my hon. Friend. They must be part of the 12,408 homes to which I had referred, or perhaps they will be added to that figure in the next few months. Perhaps the Minister will clarify that.
Is the Minister aware of the case of my constituent, Sharon Terrell, who lives in Barne Barton in St. Budeaux in Plymouth? She separated from her naval husband after being assaulted. She is facing eviction from naval quarters despite the fact that she can see 15 empty Ministry of Defence properties on her estate from the window of her kitchen. She is still paying rent. In the next few weeks the Minister's Department will evict that woman and her former home will lie empty. Would it not make more sense to allow her to continue to live in the property, paying the rent and looking after it on behalf of the Royal Navy rather than having another empty house and a homeless young woman?
The evictions, inefficiency and failure to act continue despite the devastating criticism of Ministry of Defence housing management by the Government's own task force, set up by the Department of the Environment. It published its report in July 1994. It may be instructive to hear what that task force said about the Ministry of Defence. The report states:
"Between £30 million and £100 million is lost by the taxpayer each year by 10,000 homes remaining empty."
It goes on:
"The MoD, as the largest holder of empty homes, has not been amenable to influence."
It also said:
"Effective action by Defence Ministers is urgently needed and should not be further delayed."
Most tellingly it said:
"For more than two years, frequent and energetic efforts have been made to persuade the MoD to reduce their vacancies … Regrettably our assessment is that the Ministry of Defence appears to have been unwilling to accept many of these suggestions."
Is that not a major condemnation of the Ministry of Defence by another Government Department?
On the evictions of former wives of service personnel, the report accused the Ministry of Defence of "shortsighted, anti-social activity". Will the Minister comment on those matters?
The Government responded to the report in July 1994. They said:
"Since the Task Force report was written, vacancies have now started to fall."
That is blatantly untrue. The number of vacant homes increased by 2,000 between January and December 1994. They then said:
"The Government proposes to set annual targets and to publish the Department's achievements at the end of each year."

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Will the Minister tell us whether the Royal Navy achieved its targets for empty homes last year, and tell us when this year's figures be published? Will he freeze all evictions of naval families from their quarters until the scandal of empty properties has been resolved? He could make inroads into the mass of empty properties by releasing the 94 married quarters on the Furse Park estate in Barne Barton in my constituency to either a housing association or to Plymouth city council, which is desperate for family accommodation.
The Government's response to the increase in the number of empty naval homes was to set up the Crown housing trust, yet another Tory quango gravy train. We are told that the chief executive was given a salary of £80,000 a year and even offered £20,000 performance-related pay. I look forward to the Minister telling us how much performance-related pay that man will get because the number of empty properties has increased since he got the job.
The "new arrangements" for service housing have cost £5 million since 1991 and, of course, consultants were paid £3.3 million for the failed project. The Secretary of State for Defence said that the trust "encountered difficulties"; then it was scrapped and replaced by the Defence housing executive, an agency—so-called—with responsibility for privatising the whole MOD estate. In other words, the MOD continues to set up quangos and agencies while the number of empty home grows.
Is the Minister aware that a report published last year by Crisis said that 25 per cent. of all the single homeless had previously served in the armed forces and that the advice and help given to those coming out of the services was not adequate? I stand by my earlier comments.
Negotiations are currently under way in Plymouth about a matter in which the MOD might be able to help. It is an example of how the Ministry could assist my constituents and the health service at the same time. The Ministry of Defence must become more responsive to the needs of the community that surround it and should be helpful rather than obstructive. There is the opportunity for the Ministry to act positively in Plymouth and to help the health service and the taxpayer instead of considering only the narrow remit of its own balance sheet. I am referring to the negotiations about the Cumberland house site in Devonport.
The Plymouth Community Services NHS trust—trusts are one of the Government's favourite creations—has been attempting to purchase MOD land and property for the development of a much-needed health facility for the local community in Devonport. However, the Ministry is setting higher hurdles and costs for the purchase of the site and adjoining property, which will restrict the trust's ability to fund the project. Unless the deal can be struck by the end of March this year, the project is likely to founder, thus denying a deprived area of Plymouth of a much-needed local health facility. It appears that the Ministry's desire to gain as much profit as possible from the trust could put the deal in jeopardy. I ask the Minister in all sincerity to intervene personally in the negotiations between the Defence Land Agents and the trust to ensure that the negotiations are completed successfully and without delay for the benefit of the local community, the MOD and the taxpayer.
Another issue connected with naval establishments, and one which is giving rise to great concern, is hunting. As I discovered after tabling a number of written questions,
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the taxpayer is underwriting the cost of paying for service men to go hunting during duty hours. Some of the costs for the maintenance and upkeep of kennels are also paid by the MOD.
Mr. Henry Bellingham: Why not?
Mr. Jamieson: I can tell the hon. Gentleman why not. The vast majority of decent people in this country are affronted not only by hunting but by a Department that underwrites and encourages it.
Mr. Colvin: I have never seen a sailor on a horse, and this debate is supposed to be about the Royal Navy. Let us remember that this year we are talking about VE day celebrations. I recall, when I was very small, watching the victory parade in 1945. There was great difficulty in finding four admirals to get on the four grey horses for the parade, so I really do not understand what connection there is between hunting and the Royal Navy.
Mr. Jamieson: I can assist the hon. Gentleman. Naval personnel are riding to hounds from military establishments across the country. He may be interested to know that the right hon. Member for Richmond and Barnes (Mr. Hanley), who was previously the Minister of State for the Armed Forces and is now the chairman of the Conservative party, said that hunting promotes "good tactical ground appreciation" and that the hon. Member for Rutland and Melton (Mr. Duncan) recently said that hunting "developed character" and that there was
"nothing cruel in the great and glorious death of a fox in the field".—[Official Report, 31 January 1995; Vol. 253, c.836]
Like the hon. Member for Romsey and Waterside (Mr. Colvin), I do not know where they are keeping the horses on the submarines and ships.
Mr. Pike: The Royal Navy has as one of its sections the Royal Marines. When I did my national service in the Royal Marines, the adjutant always used to ride his horse during inspections.
Mr. Jamieson: I thank my hon. Friend for that information.
Will the Minister deny rumours that bell-bottomed trousers are to be phased out by the Navy as a cost-cutting exercise? Will he be supplying the men with jodhpurs and red coats instead? Has the MOD hatched a new strategy to introduce men riding into battle on horseback? Will the Minister be replacing the battleships and nuclear submarines with sailors in red coats on hunters patrolling our shorelines and shouting "tally-ho" and blasting bugles at unwanted intruders?
Dr. Reid: I am fascinated by my hon. Friend's detailed examination of expenditure cuts. Has he come across any reports that the Ministry of Defence is to cut the cavalry to one spur on the basis that, once one side of the horse is moving, the other is likely to follow?
Mr. Deputy Speaker (Mr. Michael Morris): The cavalry is not part of the Navy.
Dr. Reid: But the marines are.
Mr. Deputy Speaker: The cavalry is not the marines.
Mr. Jamieson: I am grateful for your guidance, Mr. Deputy Speaker.

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Unfortunately, hunting and riding on horseback are part of naval expenditure and my point is that they should not be. Why does the Ministry of Defence support the continuance of cruel and barbaric hobbies? Will the Minister give an assurance that not one single penny of taxpayers' money will be spent on hunting, either directly or indirectly?
I shall now deal with the education of service children, especially children whose parents are serving in the Navy. Last year, £133 million was spent on the Ministry of Defence boarding school allowance. I accept that service children need stable education and agree that the Government should provide assistance, but the whole system lacks accountability. Accountability is especially important in this instance as so many parents are abroad and unable to monitor their children's education.
I have written to the Ministry many times, so the Minister will know that many of the private independent schools benefiting from the scheme have poor examination results. We are not sure how most of the schools are performing because only nine HMI/Ofsted reports have been published on schools that receive the Ministry's boarding school allowance.
Finborough school in Suffolk and Rodney school in Nottingham both had mediocre reports from HMI and Ofsted but continue to receive hundreds of thousands of pounds of taxpayers' money through the boarding school allowance scheme. Why is the Ministry supporting such low standards in private schools? A constituent of mine, who is a serving member of the Royal Navy, has children at Finborough school. The principal at the school refused to send out the Ofsted report to parents, even after repeated requests. Eventually, those reports had to be sent out by the Minister's Department. Why does not the Minister use more local education authority boarding schools? The Service Childrens Education Association admits that the results in those schools are often better than those in the private, independent sector, and, of course, they are always cheaper, because the non-boarding costs are met by local education authorities.
I also ask the Minister to look carefully at the role of the Service Childrens Education Association. How does it monitor the schools which it has on its admissible schools list? Does it have the resources to carry out checks and inspections or does it use only word of mouth? Many service children are being short-changed by some of those schools. Moreover, the taxpayer is being short-changed. Will the Minister consider introducing more accountability to the system? Will the Government look at ways in which to check the standards of those schools, which receive millions of pounds of taxpayers' money?
I ask the Minister to make a firm commitment to Devonport as the major dockyard and naval base. Will he give the assurances, for which my hon. Friend the Member for Dunfermline, West asked and for which I am now asking, that when or if those dockyards are privatised, the work force will retain the pension and other rights that they currently enjoy? Will he examine carefully the inefficiency and waste that is destroying jobs in my constituency and is burning the heart out of our naval capacity?
8.1 pm
Mr. Michael Colvin: It was a good thing that my hon. Friend the Member for Plymouth, Drake (Dame Janet Fookes) was presiding over our debate earlier, as the exchanges between the hon. Member for Plymouth, Devonport (Mr. Jamieson) and my hon. Friend the Member for Plymouth, Sutton (Mr. Streeter) became quite heated. I very much hope that the two gentlemen can join together for a game of bowls at Plymouth this weekend and that my hon. Friend the Member for Drake is around to umpire the game—otherwise that, too, might come to a sticky end.
We are debating the Royal Navy five years after the collapse of communism, the withdrawal of the iron curtain and the end of the cold war. It is time to assess the peace dividend, if there is such a dividend. Hon. Members have referred to the new world order. I would call it disorder, with 15 conflicts now in progress around the world, many of them involving United Nations forces on deployment, and with another 15 or so situations almost at flash point, where hostilities could break out at any time. It is a very uncertain world in which we now live, following the certainty that persisted during the cold war.
In that respect, we need to think carefully about our defence role three, which is to contribute to promoting the United Kingdom's wider security interests through the maintenance of international peace and stability. I have long maintained that there are insufficient resources—in fact, hardly any resources—set aside specifically to honour that commitment to role three. Her Majesty's Government can meet their commitments on those international obligations to assist the United Nations in its peacemaking and peacekeeping roles only by taking resources from roles one and two. Role one is the defence of the United Kingdom and its dependent territories and role two is the resisting of threats to the United Kingdom and our allies such as NATO.
The hon. Member for Leeds, Central (Mr. Fatchett) referred to the matching of resources with commitments, which is quite right. One has to ask what are our commitments under role three, as set out by my right hon. and learned Friend the Secretary of State for Defence? Obviously, in this day and age, maximum flexibility is a very important principle of war. However, it is difficult to determine precisely Britain's national interests in the international scene. What are our interests in places such as Cambodia, east Africa or Kashmir? Should we be involved in such operations?
I argue that no other country in the world has a wider interest in free and uninterrupted trade. Britannia may no longer rule the waves, but she has tremendous interest in world peace and stability. Our overseas investments are huge. I suspect that, as a percentage of our overall investments—internationally and domestically—our overseas investments are probably as large as that of any other country. It is against that background that we debate the state and the role of the Royal Navy.
I shall concentrate on three specific aspects, because many of the points that I would have otherwise made have already been covered by hon. Members. Defence is bedevilled with acronyms and I shall try a few on the House. I shall talk about DIB, ACP, STUFF and the TSCS. To enlighten hon. Members, those acronyms stand

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for the defence industrial base, the arms conversion project, ships taken up from trade and the tri-service chaplains school.
I welcome the emphasis of my right hon. Friend the Minister of State for Defence Procurement on preserving the viability of our defence industrial base and on the importance of keeping a watchful eye on the reliability of our overseas partners in collaborative defence projects, from a political as well as from an industrial point of view. He referred to 45 different collaborative armaments projects which are proceeding at the moment. It is important in international collaboration that the United Kingdom has a proper share in the development of the projects and not only in their manufacture, because if we forfeit the development aspects of our armament projects we throw away the seed corn that keeps industry going and enables Britain to maintain the essential leading edge in technological advance.
Hon. Members have referred to the importance of value for money in defence procurement. No one would question the importance of buying the best possible equipment for our armed forces. However, there is also a case for taking into account what I would call the social cost of not buying British. If one buys from overseas, one may end up with a very good product at a unit cost slightly less than that on the home market, simply because some of the production runs of equipment in big overseas manufacturers such as those in the United States enable unit costs to be reduced. So, one must bear in mind the importance of maintaining Britain's industrial defence capability and ensure that it grows.
A case in point is the Westland EH101 helicopter and the order for 25 support helicopters to which several hon. Members have referred. At the moment, we hope that that order will be confirmed. However, it is important that the order is confirmed for the full 25 and not fewer because of the importance of sales to third countries. There is no doubt that that helicopter, which is in the forefront of technology and available in a number of different versions, is attractive to many potential overseas buyers. But those buyers will be looking at how many Her Majesty's Government order. If the order is for any fewer than 25, they will ask why the British Government are buying fewer of those aircraft than they had originally said they would. I want there to be a full order for 25 and I think that that view is shared by all hon. Members.
It is important to consider carefully the value of so-called offsets when we buy from overseas. There has been a big debate about heavy transports for the Royal Air Force. I know that I am digressing slightly from the Royal Navy, but I believe that this point is applicable to naval projects as well. It is important that when we have to buy from overseas, the offsets that we obtain for British industry to compensate for those purchases contain proper development work and are not just what is called tin-bashing. The work must have real technological value to maintain the viability of our industry.
The hon. Member for Leeds, Central also referred to the decline in our defence industrial base. He spoke of the restructuring taking place world wide and he raised the question of a possible European common procurement policy, which he suggested would be damaging to British industry. To some extent, that is true, but it is important that we collaborate with our European partners to spread the capital and development costs of new projects and that we do not, when looking for overseas partners, always
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look across the Atlantic to the United States. The United States seems to get the best of most deals. I remember that when the Conservative Government took office in 1979, the so-called two-way street across the Atlantic was 15:1 in favour of the United States. It is now about 2:1 and diminishing. It is important that the two-way street, if it is to be maintained, is balanced. We must, however, have partners in Europe as well as partners across the Atlantic.
Mr. Fatchett: There is a danger in the European argument of expressing our position in absolute terms. That was not my intention. There are substantial benefits from European co-operation. My point is that we should work out the extent of that co-operation both in procurement and production. At a certain point, there is a potential downside. I am not saying that I am against European co-operation. I would encourage it, but we must be aware of the downside when it occurs.
Mr. Colvin: I concur with that point of view.
Opposition Members have referred to Labour's pledge for a diversification agency; I wonder how it would be funded. If it was not funded straight from taxpayers' money, from where could it get funds other than those available from the Konver fund within the European Union? Would the agency be an interventionist board, such as the National Enterprise Board of which we do not have good memories in terms of what it fulfilled during its existence?
Mr. Bennett: It did very well.
Mr. Colvin: It did not.
The questions raised about the importance of our defence industrial base almost anticipated what has already been decided by the Select Committees on Trade and Industry and on Defence. In our wisdom, we too felt that this was a matter that needed to be addressed. That is why the two Select Committees have combined to set up a joint Sub-Committee to investigate this precise matter with a fairly broad brief. The intention is to report before the summer recess. I very much hope that the Sub-Committee, which is a hybrid, will produce the vigour that one usually sees in hybrids; I speak as a farmer with some knowledge of genetics and breeding.
We are all concerned about the risk to our defence industrial base because another important principle of war is defence in depth. In view of the importance of maintaining supplies for our armed forces and of providing them with equipment that will be supreme. we must ensure that the defence industrial base is sound. In the defence costs estimates, much is said about our stores set-up. The Select Committee's report on the naval stores proposals, which have been addressed by a number of hon. Members today, is valid. With the reduction of stores, which is intended to save money, one cuts the output required from Britain's factories. That, again, is bad news for our defence industries and makes it even more important that we address the problem.
I was interested to see a pamphlet, which most hon. Members have probably received, entitled "Networker". It comes from the arms conversion project which was set up to look at the whole question of diversification and conversion. It seems to be almost a blueprint of the Labour party's diversification and conversion programme. Under the objectives for the project—which I shall not

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bother to read out—there is nothing about reacting to closures, nor about how to deal with the mobility of those made redundant. There has been much more scope for labour to move around the country since the Government introduced shorthold and assured tenancies which have breathed new life into the private rented sector. People who lose their jobs are no longer stuck; they can move around the country to find jobs where they are available.
Nor does the arms conversion project deal with retraining. Although my hon. Friend the Minister of State for the Armed Forces has stressed the importance of the Government's resettlement programme, more could be done to retrain those made redundant from the armed forces. Here I pay tribute to the Royal British Legion and the establishment of its training company at Tidworth which is doing a great deal in this respect.
The second acronym I mentioned was STUFT, which stands for ships taken up from trade. An important principle of war is mobility. All hon. Members have drawn attention to the rundown of our merchant fleet, which has been torpedoed more effectively by the Treasury than by any Exocet missile. There is no doubt that the scrapping of the 100 per cent. investment allowances which were available to shipowners did a great deal to reduce the size of our merchant fleet. It is important, therefore, in terms of the importance of maintaining international United Nations operations, that we have adequate merchant ships so that we can fulfil such requirements.
I recall that during the Falklands operation, in addition to 43 Royal Navy ships, 44 merchant ships were involved. We could not have mounted that operation or our operation in the Gulf without the support of the merchant fleet or the crews to man the ships. It is all very well chartering ships from overseas, but if one does not have the crews to man them, one is in considerable difficulty.
I know that the Ministry of Defence has said that it will carry out a paper exercise, which it calls a scenario-led discussion, some time in the coming month. That is not good enough. I would prefer, on an irregular basis, perhaps once a year, the Secretary of State for Defence to blow the whistle and say, "We are off tomorrow." He could say exactly what he wanted by way of tonnage and he could then see whether the Baltic Exchange and the merchant navy could respond and produce the ships. That would be quite a simple desk exercise which should be carried out irregularly without notice to test the ability of the merchant fleet to respond to what is required.
I am also concerned that the Ministry of Defence may not have adequate powers to requisition ships. In the case of national mobilisation or a threat to the security of the realm, it probably has adequate powers under existing legislation. However, that may not be the case with overseas operations in support of the UN, such as supplying humanitarian aid. Such operations may not be covered by the legislation giving the Government the power to requisition ships. I should like to know whether the powers are adequate for that purpose or whether the Government merely have to rely on normal charter operations for additional shipping if they have to mount such international operations for the United Nations.
One passing thought is that the former Soviet Union countries desperately need foreign currency. If we want proof that it is important from a defence strategic point of
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view to have a strong merchant fleet, one has only to consider the size of the fleet that the former Soviet Union had in the days of the cold war. It was massive, and it was not just to earn the Soviet Union foreign currency; it was because the Soviet Union took the view that it was an essential resource in what might become a hot war.
Most of the former Soviet Union's ships are still around. Many of them are sitting in dock doing nothing. When we see the former Soviet Union and its economic plight, there is scope for considering an arrangement with countries in the former Soviet Union which have joined the partnership for peace under NATO to make their hulls available to western powers, if they need them, in order to provide resources to carry out international operations for the United Nations.
There has been some debate about the tri-service chaplains school. I am aware that the chaplains school which, at the moment, is at Amport near Andover, is already a combination of Royal Navy and RAF chaplains. Army chaplains, who are moving out of Bagshot park, will amalgamate with them. Several alternatives have been put forward for consideration, including Eltham, Guildford, the Royal Naval college at Greenwich and Amport house. Eltham and Guildford have now been eliminated from the contest, so it is a straightforward choice between Amport and the Royal Naval college at Greenwich.
Many rumours have been going around. The matter is local to my constituency, so I am concerned about the future of Amport house. Building consultants have looked at Amport house and considered how it could be extended to provide facilities for a tri-service chaplains school. I believe that the cost of the extension to Amport is about £600,000. One must compare that with the £15 million or more that would be involved if the tri-service chaplains school were to go to the Royal Naval college at Greenwich.
It is important also to consider the cost per student day. Amport has now succeeded in bringing down its costs from £79 to £73 per student day. If the amalgamation can go forward and there is a tri-service chaplains school at Amport, the cost could go down to about £56 per student day. That seems to be economical. It gives rise to two questions: first, which would be the best base for the tri-service chaplains school? Secondly, what should be done about the Royal Naval college at Greenwich? It is a very important listed building of great historic and architectural importance.
The time has come for my right hon. and learned Friend the Secretary of State for Defence to shed responsibility for historic buildings. We now have a Department of National Heritage. It should be a simple bookkeeping transaction to transfer those buildings into the responsibility of the Secretary of State for National Heritage. That would remove from the Ministry of Defence what could be a very burdensome liability in the future.
I applaud hon. Members' support for our Royal Navy and their calls for stability. That is what our armed forces and the country want. We may no longer be able to boast the biggest Navy in the world, but I am certain that hon. Members will agree that we can still say that we have the best Navy.
8.23 pm
Mr. Nick Raynsford: I hope that the hon. Member for Romsey and Waterside (Mr. Colvin) will

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forgive me if I do not follow his wide-ranging comments on a variety of issues, although I will pick up some of his comments on the tri-service chaplaincy. I intend to focus narrowly on issues relating to the future of the Royal Naval college and the Joint Service Defence college, currently located in the historic former Royal hospital buildings in Greenwich.
In a previous debate—I think that it two years ago—I spoke about the Royal Naval college, and I paid tribute to its impressive record and excellent work. My view is shared by hon. Members, particularly those who are familiar with the college's work and have visited it.
In last year's defence costs study, the Secretary of State set out proposals for merging the existing separate service colleges into a new joint service command and staff college. That proposal, I believe, was widely agreed as a sensible response to changing needs for staff training that allowed economies to be made in current spending. There is no dispute about the recommended merger of the existing separate colleges into a combined tri-service college.
There is, however, a very serious question about the subsequent process of determining where the new tri-service college should be located. In the defence costs study, it was confirmed that a review was being conducted to determine whether the Army staff college site at Camberley or the Royal Naval college site in Greenwich would be the best location. On 8 December 1994, the Secretary of State announced the Government's decision in favour of Camberley, claiming that Camberley is
"by far the most appropriate and cost-effective site".—[Official Report, 8 December 1994; Vol. 251, c. 303.]
The statement concluded that staff training at Bracknell and Greenwich should cease.
Following that announcement, I corresponded with the Secretary of State and the Minister of State for the Armed Forces, seeking further clarification of the basis on which the decision had been reached, in particular requesting sight of the relevant papers and costings. In reply, the Minister of State for the Armed Forces wrote to me on 22 December, promising early publication of a consultation document which
"will contain all relevant information including costings."
The consultation paper was issued last month. On a superficial reading, the decision in favour of Camberley appears to be clearly justified on financial grounds. The table of comparative costs showed costings for Greenwich coming out at about £40 million more over a 10-year period, discounted to net present values. A more detailed analysis of the accompanying tables showed that the great bulk of that additional cost was accounted for by the capital costs of works to convert the existing buildings at Greenwich. Those tables showed the cost of capital works during 1995–96 to 2001–02 at more than £60 million, compared with costs of about £30 million at Camberley. They are broad figures because, in each case, there were two separate options for a different size of college.
The consultation paper did not demonstrate how those costs were made up, but it indicated that they were based on a report by the firm Building Design Partnership, which had been commissioned by the Ministry of Defence to conduct a study of the matter. I therefore asked that a copy of that report should be placed in the Library. The Minister, in his reply to me on 26 January, declined to do so on the grounds that the report contained information that was classified and that it comprised advice to Ministers.
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I have to say that I was surprised by that response on two counts. First, the suggestion that a report on the conversion of 300-year-old historic buildings to provide lecture theatres, offices and residential accommodation constitutes a classifiable military secret seems to stretch the bounds of credibility rather far. Secondly, the refusal to make the information available on the ground that it constitutes advice to Ministers clearly flies in the face of the pledge that I had previously been given by the Minister of State for the Armed Forces, to which I have already referred, that all relevant information, including costings, would be made available.
Not surprisingly, I challenged the Minister on that, and, after further correspondence with him, he agreed on 10 February to release to me the executive summary of the Building Design Partnership's report. Although that was a welcome step in the right direction, it did not provide very much more information than was already in the public arena, and in particular it did not demonstrate how the various additional capital costs, which made the Greenwich option appear twice as expensive as Camberley, were made up. In his covering letter, the Minister of State for the Armed Forces commented:
"you are right to conclude that the principal reason for the difference in cost between the Greenwich and Camberley options is the need for significantly greater capital expenditure in the early years at Greenwich. This difference is almost entirely due to the fact that the Greenwich site is a Grade 1 listed building and scheduled Ancient Monument and the costs of meeting this substantially larger JSCSC requirement within the statutory constraints associated with that status not surprisingly are high."
Were the Minister here, I would thank him for the care that he put into his lengthy letter, even if he did not provide the information that I requested. The letter continued by identifying specific issues, including
"difficulties of installing networked IT systems; the problems of floor loading (since the upper floors are of a wooden construction); Health and Safety and fire requirements arising from the change of use: and engineering services, in particular the need to double the output of the electoral supply system."
All those points would appear entirely reasonable and plausible, but for the revelation towards the end of the letter that similar costings are unlikely to be applied in respect of the proposed alternative use of the historic buildings at Greenwich, which it is now suggested might house the defence school of languages, or possibly the tri-service chaplaincy.
Clearly there will be some differences in specification for different users, but if it transpires that the cost of adapting the grade 1 listed building at Greenwich to house the defence school of languages can be reduced substantially below the costings assumed necessary for the JSCSC, that raises automatically the question of whether similar economies might have been achieved in the JSCSC specifications.
Before leaving the issue of the suggested alternative uses for the Greenwich site, I have to say that I see no evidence that any financial provision has been made for the costs of transferring alternative Ministry of Defence uses to Greenwich. Unlike the site at Camberley, which could be disposed of if it is not used for the JSCSC, the historic buildings at Greenwich are held in trust by the Greenwich hospital estate, of which the Secretary of State is the sole trustee.
If the Greenwich site is no longer used as a naval or joint service college, the Secretary of State cannot just dispose of it, despite the suggestions of the hon. Member

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for Romsey and Waterside. The Secretary of State has a responsibility and he is clearly seeking to discharge that by trying to find an alternative use. No financial provision for that alternative use appears to have been included in the costs of the location of the JSCSC, either at Greenwich or at Camberley.
There is an element of doubt not only about whether the costs of the Greenwich option may have been unduly inflated, but about whether some additional costs which, of necessity, flow from a decision to locate the tri-service college at Camberley have been taken into account.
That is not the end of the story. The consultation paper recognises that if the army staff college site at Camberley were no longer required—that would presumably be so if Greenwich was the preferred option—it could be sold. Yet no allowance appears to have been included in the table of comparative costs for the disposal of the Camberley site.
In parliamentary questions to and correspondence with the Minister of State for the Armed Forces, I have sought further clarification of the point. You can imagine my surprise, Mr. Deputy Speaker, when I was told that the information could not be made available for reasons of commercial confidentiality. I am grateful that, on this occasion, the Minister did not try to pretend that the sale value of the Camberley site was a classifiable military secret. Nevertheless, his answer had exactly the same effect of denying the information.
Further correspondence and another parliamentary question established that of the 883 acres of MOD land at Camberley, 70 acres were solely occupied by the Army staff college. Inquiries to local estate agents have suggested that the current value of the land suitable for residential development in the Camberley area would be between £400,000 and £500,000 an acre. On that basis, a rough estimate of the potential value of the site would be somewhere between £28 million and £35 million.
The significance of the figures will not be lost on anyone looking carefully at the issue, for that is roughly the same sum as the difference between the costs of the building work at Greenwich and the building work at Camberley, according to the Building Design Partnership report and consultation paper.
From the information that I have been able to extract from a clearly secretive Ministry of Defence, I suspect that there is no allowance in the table of costings for the disposal of the Camberley site. I have written to the Minister on this, but I have not yet had a reply. In fairness to him, he has probably only received my letter within the last two days. If I am wrong on this matter, I shall happily withdraw my claim, and I hope that the Minister will tell the House whether such provision has been made and what the provision amounts to in total. However, if I am not wrong, it is clear that the figures on which we are invited to agree that Camberley is, in the words of the Secretary of State
"by far the most cost-effective option"
are a serious distortion of the respective costs of the two sites.
Unless the Minister is able to give a clear, categorical and specific assurance and the information that I am requesting, the only conclusion that we shall draw is that the figures set out in the consultation paper are highly misleading and do not accurately represent the respective
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costs of the Camberley and Greenwich options. The consultation paper should therefore be withdrawn and new costings prepared, taking account of the various elements which I have highlighted—savings on the conversion cost of the historic buildings at Greenwich, the additional costs of relocating other Ministry of Defence functions in Greenwich and the savings attributable to land sales at Camberley.
If the Ministry of Defence is not prepared to do that, it is only right that the Public Accounts Committee should look into the way in which the exercise has been undertaken and also the validity of the estimates being advanced by the Ministry of Defence.
Finally, I shall say a brief word about other elements in the consultation paper. It is not, I fear, only in respect of the figures that the odds have been stacked against Greenwich in this consultation exercise. The paper contains passages that reveal an inherent bias against Greenwich—for example, the section headed "Domestic Considerations", which states:
"Camberley is well served by local schools and medical care is easily accessible. Also the local community in Camberley and Surrey Heath is excellently placed to provide sponsorship to overseas students and their families, giving them a favourable view of Britain and the British way of life, and acting in concert with the college to help them overcome the difficulties of moving in and out. The shopping facilities in the Camberley area are excellent."
Hon. Members must compare that with the tone of a paragraph in the same paper oil Greenwich, which states:
"Greenwich has good access to the facilities of London but is less well served locally. Historically the majority of staff and students at RNSC and JSC are unaccompanied by their families and so domestic considerations have played a lesser role in the development of the college than at Camberley".
That is all. There is no reference to local schools or medical care, leaving the implication—no one has the guts to put it in writing, of course—that local schools and medical care are inferior. There is no reference to the shopping facilities in London, but I find it difficult to believe that they do not compare with Camberley.
There is no reference to the historical location and the exceptional cultural facilities in Greenwich and London. Nor is there a reference to the ability of the local community in Greenwich to make overseas students welcome. It says something about the sense of values of the person responsible for penning that paragraph that he or she clearly assumes that overseas visitors and their families will form a more favourable view of the British way of life in suburban Camberley than in historic Greenwich, where they would be studying in a complex of buildings designed by the greatest names in British architecture—Inigo Jones, Christopher Wren, Webb, Hawksmore and Vanbrugh—and eating their meals in a building as splendid as the Painted hall.
That blatant prejudice sadly distorts the consultation document, and is another reason why the recommendation should be reconsidered. The Royal Naval college and the Joint Service Defence college at Greenwich have, over the years, performed an outstanding service. The site they occupy is one of the jewels in Britain's crown. Greenwich deserves better than the shabby treatment it is being given by this biased and flawed consultation exercise.
8.38 pm
Mr. John Hutton: Debates in the House on the Royal Navy are always important

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occasions, and tonight's debate has been given special significance by some of the comments made by the Minister of State for Defence Procurement about the future of Britain's defence industries and the Government's newly emerging policy on defence procurement. The debates are also important because the Royal Navy is the senior service, and as a country, and as Members, we should pay tribute to the men and women who serve, and who have served, in the Royal Navy. We owe them an enormous debt.
A theme which has concerned me consistently during my time in the House is the way in which the Government handle the principle procurement issue within the Ministry of Defence.
There has been much discussion during the debate about the extent to which defence expenditure has been reduced, where the cuts have fallen and the resultant implications for our defence industrial base. I believe that the Government, in reducing defence expenditure, have hit systematically at procurement, which has therefore taken the brunt of the Government's reductions in defence spending. I am not sure that that is the best course of action to take. If our fighting forces are to retain their maximum capability, by definition they must also have the most effective equipment.
Between 1990, the year of the"Options for Change" review, and 1994–95, expenditure on sea equipment fell by more than expenditure on land and air equipment. In real terms, the decline in that period in purchasing new sea equipment was 27.5 per cent. In the same period, the defence budget increased in cash terms from £21,709 million in 1990–91 to £22.51 million in 1994–95, which, in real terms, represents a decrease of 17.4 per cent. Those are two interesting figures; the defence budget has fallen by 17.4 per cent. in that period but expenditure on new sea equipment has fallen by 27.5 per cent. If those figures come as a surprise to Ministers, let me tell them that the figures were produced by the House of Commons Library.
That is a significant issue, because we all understand, and we accept on both sides of the House, that in the post cold war climate there is a reduced need for defence expenditure. That is common ground between us. The way in which the Government manage that process of reduced defence expenditure causes concern, not only to me, but to my constituents who bear the brunt of those cuts in procurement. In my constituency, that has a special resonance because of our long association with the Royal Navy.
There is a disturbing trend in the way that the Government are handling the country's defence budget. I think especially that the bulk of that economy in terms of new equipment has affected the Royal Navy more than forces on land and in the air. I have a simple question to ask Ministers—"why?" Why have the Government chosen to inflict those economies on new sea equipment? What is the rationale for that? What is the defence justification?
In my constituency, the direct consequence of the Government's reduced expenditure on sea equipment is the loss of 8,000 jobs at VSEL with, I am sorry to say, the probability of even more job losses to come. It has also meant the end of apprentice training.
In my constituency, the Vickers shipyard has been the heart of the local economy ever since the town was established. For the hundreds of young men and women who have acquired valuable engineering skills in my
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constituency, that prospect has ended. There is no apprentice training, and there has been no recruitment since 1990–91. The consequence is catastrophic. VSEL used to recruit about 400 men and women to their apprentice training programme every year. I am no mathematician, but that means approaching 2,000 lost engineering apprentices in a community that is 40 miles from a motorway and more than 100 miles from any other approximate centre of population.
The hon. Member for Romsey and Waterside (Mr. Colvin) said that people can simply move to find work, but in this case they cannot. I know that the hon. Gentleman is about to leave the Chamber and I do not wish to embarrass him, but let me tell him that in my constituency it is almost impossible for a young couple, one of whom or both have lost their job at VSEL, to sell their home and move, because the housing market in Barrow-in-Furness has been in the doldrums for many years. There is a substantial problem of negative equity. It is extremely difficult for skilled workers in my constituency to move to find new jobs. That is not on the realistic agenda.
The probability of extra redundancies continues to hang over us. Many of the men and women who currently work in VSEL, and their families who depend on the wages that they earn, live constantly under the threat of their principal wage earner losing his or her job. That is unacceptable.
I contend that the Government have added to the burden of redundancy unnecessarily by delays in key procurement decisions. The principal example that I give to the House and Ministers is the decision to delay procurement of batch 2 Trafalgar class submarines. The Minister of State for Defence Procurement was gracious in allowing me to intervene on his opening speech, but if one examines the records of parliamentary proceedings on earlier occasions, one finds that in 1992 the following answer was given to a written question by the then Minister of State for Defence Procurement, now the Chief Secretary to the Treasury. He said:
"Studies into the design of a batch 2 Trafalgar class are in progress … we expect to invite tenders for design and build of the first submarine during the course of next year"—[Official Report, 21 May 1992; Vol. 208, c. 258.]
That was 1994. It is now 1995. I understand, from what the Minister said today, that it no decision is likely to be made before summer 1996 to order any of those batch 2 Trafalgars. That is a delay of two and a half years. The Minister must understand the consequences that the delay has had, and will have, on employment at VSEL.
The Minister gave the House a possible explanation for the delay. Unless I am misquoting him, which I do not wish to do, the delay was due to the fact that the Government wanted to create competition for the batch 2 Trafalgars. We know what that means—the Government paying money to GEC to put together a rival bid to construct the batch 2 Trafalgars.
The Minister has admitted to the House, which he is right to do because it is correct, that only one shipyard in Britain is licensed to construct nuclear submarines—VSEL. What on earth have the Government been doing, spending what may be as much as £20 million constructing a bogus and fabricated competition for the new batch 2 Trafalgars? There is no doubt, in my opinion, that those submarines will be built at VSEL. I very much hope that that is so.

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On the Trident programme, VSEL has an established record of producing value for money, and of producing vessels to quality, to standard and to time. The Trident contract is a perfect example of the ability of VSEL to produce high quality equipment that provides value for money for the taxpayer. I do not believe that that would have been any different with the contract for the batch 2 Trafalgars. So I am worried about the Government's policy on that issue and the way that they have handled the ordering of the batch 2 Trafalgars.
My final concern relates to the Government's stated policy, with which I agree, of maintaining 12 operational SSNs. I hope that the Minister is able to answer the following question: will the delays in ordering the batch 2 Trafalgars affect in any way the ability of the Royal Navy to maintain and deploy 12 operational SSNs? The programme for constructing the batch 2 Trafalgars is now two and a half years behind schedule, and that will necessarily, I understand, require the continued operation of now aging vessels for that extra two and a half years if we are to maintain an operational fleet of 12 SSNs. I am very worried about the way that the Government have mishandled the issue.
I am also worried about the length of time that the Government appear to spend on processing some of those tenders. I understand that the landing platform dock tenders, which will be submitted in March 1995, are expected to take as much as nine months to be assessed by the Ministry of Defence. Batch 2 tenders are likely to take at least 12 months to assess.
I fully appreciate, and am happy to concede, that the tender documents will be very technical and will require proper assessment to ensure, not only that the Navy obtains the equipment that it wants, but that the taxpayer obtains value for money. However, the longer that the Minister takes to assess those tenders, the greater the consequences that there might be for employment at VSEL. I hope that he will reconsider the length of time that he proposes to take to investigate the merits or otherwise of those tenders.
I also hope that the Minister might be able to say something to the House tonight, because other hon. Members have mentioned the subject, about what is happening to the Upholder class submarines that are currently in my constituency waiting for sale. What progress has been made on the sale of the Upholders? Are the Government in a position to say something more concrete about their future?
I am happy to support the Government in their decision to invite tenders for the replacements for HMS Fearless and HMS Intrepid. I support that completely and I hope that the Government will say that they intend to order two vessels to replace Fearless and Intrepid. From an operational point of view, if those amphibious ships are to be deployable, I imagine we would need a bare minimum of two, and I hope that the Government will confirm that that is their intention.
I want to say one or two words about the reductions in the Royal Naval Reserve and the decision to disband the Royal Navy Auxiliary Reserve. I am sure that the Minister is aware that a new organisation, the Maritime Voluntary Service, has been set up. It has recruited up to 1,500 volunteers in a uniformed, disciplined service to provide some continuity now that the RNR has been reduced and
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the RNAS has been disbanded. Because of those reductions, there is a danger that the nation could lose key maritime skills and traditions that are vital to the security of the nation and fulfilling our NATO commitments. The Government should be considering what steps they can take to encourage the retention of that maritime tradition. Ministers have a particular responsibility in that respect, given the continued popularity of the Sea Cadet Corps and the great difficulty that many of those who emerge from it at 18 will have in pursuing a career in the Royal Navy. Those people want to continue to develop their maritime skills so that they are available to the nation in times of emergency.
The Maritime Voluntary Service can provide a useful service to the nation and it deserves the support of the Ministry of Defence. I am interested to know what consideration the MOD has given or is giving to allowing that newly formed service the first option to buy some surplus craft, such as inland minesweepers and fleet tenders, which are now lying idle around the country. It would be a positive step if the Ministry could say that it planned to make those vessels available at a competitive and reasonable price, of course, for the taxpayer. I emphasise that that service is not asking for taxpayers' money to support its work, but it is looking for some sign from the Government that they are interested in retaining traditional maritime and naval skills.
The Minister of State for Defence Procurement mentioned important industrial defence issues to do with procurement and stabilising our industrial base. It is common knowledge that defence industries around the world are undergoing major structural change. The GEC—British Aerospace bid for VSEL is simply part of that wider process of change. I am glad that the Government have referred that bid to the Monopolies and Mergers Commission. I am particularly glad that one aspect of that reference includes consideration of the public interest in addition to the traditional concern about ensuring competition and avoiding monopolies. I hope that that reference and the MMC's report will include an assessment of employment prospects in our naval shipyards and what needs to be done by Government and industry in partnership to ensure the continuation of those vital engineering skills.
The bid for VSEL raises a number of important questions. First, it highlights the importance of export markets in terms of securing employment in the naval shipyards. We know that the MOD's budget is subject to continuing pressure and we also know that, quite simply, not enough of work is coming from the MOD to keep all the present naval shipyards fully employed up to their maximum capability. For that reason export markets are extremely important. I hope that their importance is also included in the Government's assessment of the defence industrial base.
The VSEL bid also calls into question the future of smaller defence companies. They will face particular difficulties in the future, because if the process is one of rationalisation, with large companies coming together to form bigger groups, where will that leave some of our smaller but highly proficient and technically expert defence contractors?
Another problem relates to competition and monopoly—a central issue that the MMC reference must address. There is not enough business coming out of the MOD to enable the Government to rely on competition

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alone as a mechanism to influence the structure and shape of the defence industry. There is not enough business to keep three yards fully occupied. Not long ago there were five naval shipyards, but, sadly, in the past two years we have lost Cammell Laird and Swan Hunter.
I agree with my hon. Friend the Member for Leeds, Central (Mr. Fatchett) that the possibility of greater European collaboration within the European Union must be considered. I would be interested to know whether the Government are currently considering amending article 223 of the treaty of Rome and proposing any changes in that regard at the intergovernmental conference in 1996. Are the Government considering a case for the creation of a single European market for defence goods? What would be its implications for the United Kingdom?
On the question of collaboration and greater co-operation between European defence contractors, will the Minister of State for the Armed Forces give us slightly more information than that offered by the Minister of State for Defence Procurement? The right hon. Gentleman referred specifically to the Government's belief that they need to retain a capability to build hulls. I asked him whether that involves the key operation of fitting out. With respect, I do not think that the right hon. Gentleman quite understood my question. Naval shipyards are not just places where hulls are built, but where equipment is installed and ships are finished, for example, by fitting engines, propulsion units and weapons systems. The right hon. Gentleman is well aware of that, but he did not say that the Government saw the need to protect fitting out as an operation conducted within the remnants of the United Kingdom's warship building industry.
In the light of what the right hon. Gentleman said, hulls could be completed in the United Kingdom but towed somewhere else to be fitted out with kit and equipment that may be British or foreign. It is important that, in order to retain the skills base in the naval shipyards, those fitting-out operations are also completed in the United Kingdom.
A large proportion of the equipment fitted in the type 23 frigates is not built in the United Kingdom. That fact was not at the heart of the question that I put to the Minister of State, but if we want to retain a hull-building capability in the United Kingdom—I strongly urge that we want to do that—are we also committed to retaining that technical ability to fit out and finish off those hulls and platforms? I strongly urge the Minister to make it clear that that is the Government's intention, because that key fitting-out operation is just as important in terms of retaining our shipbuilding capability as is the ability to complete a steel hull.
I hope that once the MMC report on VSEL is published there will be an opportunity for right hon. and hon. Members to discuss its implications. It has always been my contention that the issues raised by the VSEL takeover go far beyond the future of the Barrow and Furness economy. They affect the whole structure, size and location of the British defence industry. That issue is critical to the future of the Royal Navy and our armed services in general.
8.56 pm
Mr. Andrew F. Bennett: I am pleased to have the opportunity to contribute to the debate. In common with other hon. Members, I should
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like to begin by paying tribute to all those who serve in our armed services, particularly those in active service now in support of the United Nations. Since this is a debate on the Navy, I should like to pay particular tribute to those who are serving in the Royal Navy.
I should also like to pay tribute to my hon. Friend the Member for Leeds, Central (Mr. Fatchett) on his thoughtful opening speech. I welcome him to his new role on our Front Bench. I should also like to thank the Government Whips, because, in the past, I have sat through many other debates on services and been called right at the end only to see the Government Whips pull in Conservative Back Benchers to speak who had not sat through those debates. I appreciate the fact that the Government Whips have not done that on this occasion. In the 20 years in which I have served in the House it is interesting to note how support for debates on the services has steadily declined within the Conservative party. There was a time when it was extremely difficult even for Conservative Members to get called.
The speech by the Minister of State for Defence Procurement was also extremely helpful. I do not blame him for drawing attention to the difference between the Opposition Front Bench and people like myself. I am certainly not ashamed of my position as someone who has always supported unilateral nuclear disarmament and I shall continue to do so. I have no need to wear a badge as I have always supported those views. If they were right at the height of the cold war they are still right.
What disappointed me was the Minister's reluctance to accept that there is common ground between the Government, the Opposition Front Bench and people like myself. We are all committed to getting rid of Trident; we disagree on the method not the desire. It is important for the House to stress just how expensive the Triclent system is, the £30 billion in expenses that are likely to be involved and the unimaginable horror that would result if the weapons were ever used or if they were involved in an accident. Even if the weapons were never used, considerable environmental problems would be involved in getting rid of the ships and the weapons.
I had hoped that the Minister would spend some time telling us how the Government envisage the removal of the weapons systems. In particular, I would have liked him to tell us what progress is being made in the preparations for the non-proliferation treaty discussions and to give the House the assurance that they have always been reluctant to give—that Britain is not in breach of the current non-proliferation treaty by the introduction of Trident and the number of weaponheads that may be involved, and that it will not make the negotiation of the new treaty that much more difficult. I was disappointed that we did not hear it from the Minister of State for Defence Procurement; perhaps we will hear something from the Minister of State for the Armed Forces when he replies to the debate.
What progress is being made on getting a complete test ban on nuclear weapons? The Government have reluctantly accepted that we can do all the testing that we want with simulation rather than actual tests, but there is still a question mark over what the Chinese do. If the Chinese test, the Americans may test and that will lead to the issue of whether we do. It would be helpful to hear more about the Government's views.

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As the whole idea was that Trident would be a deterrent, there should be more transparency about the Government's proposals and their policy towards it. If it really is a deterrent, the more we tell people about it the more likely it is to deter.
The hon. Member for Upminster (Mr. Bonsor), the Chairman of the Select Committee, pointed out the continuing military capability of the former Soviet Union. What are the Government doing about that? There must be fear in people's minds that a changing regime within the former Soviet Union might return to a rather more warlike and aggressive stance. How far are the British Government helping to scale down the military industrial complexes within the former Soviet Union? Only if they can be scaled down and their resources reallocated to consumer production—the sooner that happens, the better—will there be less likelihood of a new threat developing from that part of the world.
Therefore, it is very important that when we discuss arms conversion, we do not limit our debate to the United Kingdom and western Europe, but explore what can be done to aid arms conversion within the former Soviet Union.
We have also to examine other threats. Conservative Members talked about the threats from fundamentalists and terrorist groups. The theory of deterrence does not work when we face a threat from those groups of people. It is important that we rethink how we are going to deal with such threats. In respect of both the fundamentalists and the terrorist groups, it is essential throughout the world to ensure that nuclear materials are not readily available. I fear that some of those groups may not be deterred—if deterrents have ever worked against anyone—by the threat of us having nuclear weapons, that may even spur them on to action.
I had hoped that the Minister could have said a little about what we are doing to prepare for the decommissioning of nuclear-powered submarines that already have been laid up and the Polaris submarines and their nuclear fuels. The United States and the former Soviet Union have increasing numbers of nuclear-powered submarines rusting away in various coastal inlets. Their disposal will create problems. When we are talking about creating jobs, any country that can come up with the technology to become involved in decommissioning nuclear submarines has good prospects for some excellent jobs in the future, not only providing employment opportunities but making an important environmental contribution.
I turn briefly to the question of the diversification of defence industries. The Minister said that we could not expect the Government to provide subsidies for arms conversion. However, the Government have provided subsidies for most of our defence contractors over the years in the form of defence research and development work. I suggest that the Government continue that research and development, but at the same time encourage some of our military contractors to look at civil uses for their equipment.
If we are not careful, any chance of competition for military contracts will decline steadily and it will cost far more money to purchase goods and equipment from a
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single supplier. It would be a better use of taxpayers' money to encourage the existing suppliers to diversify their operations and give them an alternative base.
The alternative—which the Government seem to be very keen on—is to encourage our defence contractors to sell military equipment to any country in the world. I believe that that is a very dangerous policy. Time after time we have sold defence equipment to allegedly safe, favourable regimes which, five or six years later, have changed totally and, in some instances, have become extremely hostile to this country.
I do not believe that we should try to subsidise and maintain defence contractors in this country through a policy of selling military equipment to any country in the world which is not acting aggressively towards us at that time. It would be far better to spend a small amount of money to ensure that defence contractors can develop alternative, peaceful uses for their factories and their skilled workforce. Factories could then have a military production line as well as an economically viable civil production line. That would be better than pushing defence contractors out of business, or forcing them to sell military equipment to undesirable countries.
I hope that the Minister who replies to the debate will tell us what progress the Government have made with regard to the nuclear non-proliferation treaty. Will he inform the House when the Government hope that the Soviet Union will move to reduce its capability for producing all sorts of ships, many of which have nuclear capability? Will he explain what the Government are doing about decommissioning the existing nuclear-powered submarines in this country? I also seek the Minister's assurance that the Government will look more carefully at the countries to which they encourage British arms manufacturers to sell weapons, because we may be storing up problems for the future.
Mr. Deputy Speaker: I call Dr. Reid.
Mr. Soames: Hear, hear.
9.7 pm
Dr. John Reid: Thank you, Mr. Deputy Speaker—and thank you for the groans of support from the Government Front Bench. In a wide-ranging debate such as this it is obviously impossible to address all the points that have been made—although I am sure that the Minister of State for the Armed Forces will do his best in his wind-up speech.
My hon. Friend the Member for Thurrock (Mr. Mackinlay) raised a specific point about HMS Caroline being retained in the north of Ireland. Having consulted my colleagues, I can assure him that a future Labour Government will be well disposed toward that matter.
The hon. Member for Upminster (Sir N. Bonsor) made his usual formidable contribution to the debate. I usually quote him at great length when criticising the Government, but in his speech today he challenged our commitment to the defence review, as did the hon. and learned Member for Fife, North-East (Mr. Campbell). I will return to that point later.
The contributions of my hon. Friends the Members for Dunfermline, West (Ms Squire) and for Plymouth, Devonport (Mr. Jamieson), as well as the hon. Member for Birmingham, Hall Green (Mr. Hargreaves), were spiced with the knowledge and experience that they

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gained through the armed forces parliamentary scheme. However uncomfortable that experience may make the Government of the day—I am sure that it will happen to us when we are in Government—it is a worthy scheme. In the decades following the end of conscription, fewer Members of the House have had experience of or personal contact with the armed forces. I know that the scheme is widely supported.
The hon. Member for Hall Green emphasised the importance of our carriers. I think that he was one of only two people to raise that matter tonight and he was correct to do so. I hope that the Minister will have something to say on it. He also mentioned amphibiosity, and I concur with the views that he expressed. If I heard him correctly, however, he referred to a "subtle escalation" in nuclear war. I know that there may be nuances of difference between on us on that subject, but did he really say that?
Mr. Hargreaves: The hon. Gentleman misheard me. I think that I was suggesting that submarines could be used for the subtle escalation or projection of force. That would be in conventional terms, of course, rather than nuclear.
Dr. Reid: I am greatly reassured by that comment.
A number of hon. Members raised an important issue—the ratio of shore leave to time spent at sea—which I shall deal with briefly. That does not mean to say that I deem it to be less important than other issues. During debates on the Army, it is common for us to raise the subject of the time between roulement battalions—I suppose that this is the parallel in the Navy. I know that the Minister will be concerned about it. Perhaps he will assure us that, as the downsizing feeds through and the world position changes, and our Northern Ireland commitments diminish, the problem will ease. Hon. Members on both sides of the House are concerned because the material condition and welfare of our troops is essential. It is a good thing in itself and is a vital component of morale.
The hon. and learned Member for Fife, North-East, who challenged the defence review, did so in a sustained and intellectually coherent fashion, which we found refreshing, as it has often been dismissed over the years by Conservative Members, without any real basis of intellectual argument against it. I listened carefully, as did my colleagues, to what he said. There is, perhaps, much wider agreement than at first appears—certainly with the first two of his points—on the relationship between defence and foreign affairs and the nature of matching resources and commitments. Indeed, were they not official spokesmen, both Ministers would agree with those points. I take it that he is arguing that a review was right all along and that the Government have got it wrong all along. But having got it wrong and imposed all the burdens on the services, for God's sake do not impose yet another burden. He can be assured that we are aware of that difficulty and will take it into account in our own thinking.
The hon. Member for Plymouth, Sutton (Mr. Streeter) spoke of the anxiety and the reality of job losses in Plymouth and Devon and the sensitivity of the Minister of State for the Armed Forces when dealing with sackings. There was, of course—we all want to forget—a long and rather unedifying discussion on membership of the Campaign for Nuclear Disarmament. I am of the opinion that if everyone in the House who is accused of CND membership was actually in CND at one time, its coffers would have been swollen well beyond what they were.
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One hopes that if the hon. Gentleman ever joins the armed forces parliamentary scheme again, his target practice will be slightly more successful than it was tonight, because when—at around dinner time—only five or six Labour Members were present, he picked two who, supposedly, were in CND, and was wrong on both occasions. If in one's previous political incarnation in the SDP one has stood on the same platform with CND representatives, and proudly displayed it in one's election leaflet, one should not, when one later becomes a Tory Member of Parliament, stand up and accuse Labour Members of being in CND, when they were not in the first place.
My hon. Friend the Member for Devonport gave a pretty damning indictment of the Government's policy on personnel, housing and education. No doubt the Minister will wish to reply.
The hon. Member for Romsey and Waterside (Mr. Colvin) made pertinent points on the defence industrial base and the size of the merchant navy.
I was increasingly convinced by the defence of Greenwich advanced by my hon. Friend the Member for Greenwich (Mr. Raynsford). I hope that the Minister was listening as carefully as I was. He suggested the existence of huge and significant omissions from the consultation document which must put its validity and objectivity in question.
As usual, my hon. Friend the Member for Barrow and Furness (Mr. Hutton), who attends nearly all our defence debates, delivered insights into procurement management and enlightening statistics relating to naval expenditure. My hon. Friend the Member for Denton and Reddish (Mr. Bennett) again raised the general subject of the Government's approach to the nuclear non-proliferation treaty, targeting his points successfully. He also pointed out—and it is worth noting—that very few Tory Members have been present for the debate.
This must be the first occasion in living memory on which the Conservative party has run out of speakers during a defence debate, and it demonstrates beyond doubt that the defence argument is being won by the Labour party—a party whose defence stance is confident and assured. That contrasts with the performance of the Minister. As we know, the Minister of State for the Armed Forces approaches the Dispatch Box in a timid, faltering and directionless way, scratching around for solutions.
What do we ask from a debate such as this? We normally seek elucidation, enlightenment and education; that is the nature of our parliamentary exchanges, is it not? What have we learnt from today's debate? We have learnt about a number of interesting minor details: I was amazed to learn, for instance, of the emphasis that the MOD apparently places on subsidies for foxhunting. It seems that foxhunting adds immeasurably to the tactical judgment of sailors in particular. I look forward to studying the underlying reasons when my party is in government.
We also learnt that the vast majority of soldiers, sailors and airmen have experienced a cut of over 15 per cent in their salaries and remuneration since the Conservatives came to power in 1979. Having drawn attention to that, we were accused of stirring up subversion in the armed forces. Apparently, it is now a treasonable offence to point out to a soldier, sailor or airman that the Tories have cut the amount of money that he receives. Not only hanging but drawing and quartering is the fate that awaits those who commit the even more treasonable offence of

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pointing out that, during the same period, admirals, commodores, brigadiers and generals have been given a 17 per cent. pay increase. Of course, those who will decide the matter are members of the armed forces, who will make their opinion known in the secrecy of the ballot box.
We learnt that during the periods since the war when Labour has been in government a higher percentage of gross domestic product has been spent on defence than under the Tories: 6.4 per cent. per annum, rather than 5.8 per cent. Those are interesting statistics, given the Conservatives' record in maligning our position on defence.
We also heard again something that we had heard only 24 hours ago. Yesterday, for the first time in years, we heard an admission—from the Minister of State for Defence Procurement—that what we have said for the past four years is true: that in the decade between 1985 and 1995 the defence budget has fallen by 25 per cent. in real terms. It has been—I quote the Minister—
"a much sharper fall in recent years for the support services."— [Official Report, 15 February 1995; Vol. 254, c. 960.]
The Minister may think that that is not the first time that the fall in the budget has been admitted publicly. I cannot expect him to know this, because he has not been around for the past four or five years, but some of us were accused of misleading the House by suggesting that a 25 per cent. cut was scheduled in that decade's budget.
Naturally, we fully expect the Treasury to seek financial solace from the Ministry of Defence, particularly in the aftermath of the cold war. Our charge against the Government is not that they have slashed defence expenditure; it is the simple but damning charge that, in the course of those reductions, they have proceeded without strategy or coherence; have cut, are cutting and will continue to cut in a piecemeal fashion; and, in the course of cutting, they wasted finances, squandered skills and thrown away equipment. In so doing, they have undermined both capability and morale in our armed forces.
No wonder a recent paper from the Institute for European Defence and Strategic Studies concluded:
"Far from being able to claim that 'defence is safe in our hands', the Conservatives must hope that defence will not be an issue at the next election."
Trying to make a virtue out of a necessity, the Government claim that the big upheavals are over and imply that the cuts have finished.
Mr. Colvin: To demonstrate the invalidity of what the hon. Gentleman has just said, may I point out that, first, the United States of America, which is accepted as being the most powerful country in the world in terms of defence, has cut its defence expenditure far more strictly than this country, with reductions of some 40 per cent. Secondly, it is responsible to cut the teeth first, to the extent required for our commitments, and only then deal with the tail. That is why recent reductions in support services have been of a higher percentage than front-line reductions, which is precisely what "Front Line First" is all about.
Dr. Reid: Two points arise from what the hon. Gentleman says. First, people should be careful before accusing others of wanting to cut defence and not being
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patriotic. I do not say that the hon. Gentleman does that, but it has become a habit among Tory Members. The present Ministers are too courteous to do so, but on one occasion I was accused of being almost treasonable, so I pointed out that those who had betrayed this country, whether in our intelligence services or armed services, up to and including Lord Haw-Haw, did not have the same background as my comrades. We question no one's patriotism or commitment to defence.
Mr. Colvin: Nor do I.
Dr. Reid: I know, but some of the hon. Gentleman's colleagues occasionally do. When it comes to testing the statistics, whether they are on wages, expenditure or on a historical basis, people should be careful. Who formed NATO? Ernie Bevin was not a leading member of the Conservative party. I said that we do not attack Ministers just because they cut defence expenditure. I gave a list of how they have cut defence expenditure and said why they should fear that when they face the electors.
We have now been told that the big upheavals are over. In the previous debate on this matter, we asked the Secretary of State to confirm that no more cuts would be made, but he would not do so. We asked whether more changes would be made, but no Minister will say that no more changes will be made because cuts are already in the system and the world is changing. So the Government should not make a meal of saying that there will be no more big upheavals.
The Minister of State for Defence Procurement was on BSkyB television last week and said that he expected a surface fleet of fewer than 35. If he is now prepared to guarantee that 35 is the minimum beneath which we shall not go in the foreseeable future, we shall accept that.
Mr. Freeman: I made it plain in my opening statement that the Government's policy on the escort ships is clear. For the foreseeable future, we plan to have 35. On the interview to which the hon. Gentleman refers, perhaps he will do me the justice of watching the entire programme, although I cannot guarantee that all my remarks have been included in it. No one can guarantee that. I implied that the number of platforms is not the sole determinant of defence capability; equipment on the ships and aircraft are also determinants. That point may have been slightly too complicated and sophisticated for the programme, but that point differs from my clear commitment about the number of escort vessels.
Dr. Reid: That was a more courteous end to the sentence than I had expected at one stage. I have not seen the whole programme because the television station would not give me all of it. I do not think that it has been broadcast yet. I saw and studied only the section that was on the news. I did not claim that the Minister said that the number would be below 35, but we did worry. He has cleared that matter up and we accept it, but he will understand why we have such misgivings.
In the past, when faced with demands for assurances, Ministers have always been what Churchill called—if I may quote other hon. Members' family members—"resolute in their equivocation." The role being played in this matter by the former Minister of State for Defence Procurement worries me. I am not sure that he has gone that far away in his new job as the Chief Secretary to the Treasury.

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When Churchill was put into an eminent position in a period of dark crisis for this country, Royal Navy ships were signalled with the brief telegram, "Winston is back." I doubt whether a telegram is being signalled around all the ships saying, "Jonathan has gone for good", because I suspect that Jonathan is taking a closer interest in the matter than it appears.
It is not just that cuts are being made; they are being made in a non-strategic fashion. There are three examples of that: Rosyth, the Upholders and the merchant navy, all of which have been mentioned. Strategically, the closure of Rosyth assumes that we will never again require substantial naval operations in the water to the north of the country. Is that a wise decision? Operationally, it undermines our primary obligation to defend our home waters by minehunters, minesweepers and offshore patrol vessels. It also undermines our ability to protect our oil, gas and fishery resources.
The Select Committee on Defence referred to the danger of
"blind cuts imposed by the Treasury axe".
When it comes to cuts, there is a mad axeman there who knows where the bodies are hidden.
Mr. Freeman: There is a distinction between the fleet's operations in the north-eastern approaches, and the facilities required to support the minesweepers and minehunters. There will still be facilities at Rosyth to support, in certain circumstances, those vessels. The hon. Gentleman is wrong to confuse those two issues.
Dr. Reid: Unfortunately, I cannot give way on every point, although I appreciate that a dialogue might be enlightening for all of us. The second example is the classic case of the Upholder. I will not go through all the details of the Upholder saga, which were mentioned earlier, but I wonder if the Ministers have thought over the history of the matter. The Upholder design contract was awarded in 1980. The first building contract was placed in 1983. The remaining three were contracted in 1986. The final boat went into service in mid-June 1993. The decision was made to take them out of commission at the beginning of July 1993.
Do Ministers realise what that means? It took 13 years to put Upholder in the water and 13 days to sink it. That is an incredible comparison, quite apart from the money involved. Thirteen years were spent getting a new submarine in the water and, within roughly 13 days of the final boat going in, a decision was made to decommission. That is a classic example of planning and procurement shambles in the MOD.
Merchant navy tonnage has fallen to one third of the tonnage that it inherited, with its strategic, industrial and political importance to this country. That is a fall of enormous magnitude. It is no good Ministers telling us that they are keeping their eye on it. I had to use this example once before. I am always suspicious of Ministers who tell us that they are keeping their eye on things because, as a very young lad, I had to watch a Scottish goalkeeper called Frank Haffey at Hampden Park keeping his eye on the ball, but Scotland lost 9–3. The fact that his eye was on the ball was of no benefit because the ball kept passing him. Could we have some action?
The Government have no coherent defence and industrial policy. The state of our amphibious capability should be a particular cause for concern. Perhaps the
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Minister can reassure me about the worrying case of Intrepid, which, as far as I am aware, still lies in dock, is unable to put to sea, and has been stripped of spares to keep other ageing assault ships going. It is in a state of extended readiness. Where I come from we used to call that mothballed. What we used to call cuts is now downsizing. We have been told that there will definitely be an order for two replacement ships. However, when announcing that order, the Minister said that the Government would order, "up to two". That must be the epitome of equivocation. How can there be any doubt about the numbers one or two? Perhaps it includes none. Apparently, in the euphemisms employed by the Ministry of Defence, that has now been changed to ordering "one (plus one)". Is the Minister having two, one or none?
I will not go on at great length about the Government's response to waste. However, I want to put one thing on the record. I do not intend to be offensive to anyone personally, but it should be a matter of honour in the House that when wastage is on such a massive scale, running into hundreds of millions of pounds, and is serious enough for Ministers to demand the resignation of a public servant—a serving officer—surely it should be serious enough for one of the Ministers or the Secretary of State to resign. How is it that in a Cabinet full of people who have brassnecked their way through scandal after scandal without resignation entering their mind, suddenly a scapegoat is found and a demand for resignation is levied against someone who, at this stage, cannot answer for himself?
I have already mentioned the increase in salaries for the other ranks as compared with that for the top brass. We have no objection to anyone in the armed forces receiving a salary, remuneration, back-up, education or housing that befits the sacrifices and risks that those personnel take. However, at a time of constraint, when morale is being tested and when sailors are being asked to spend longer periods away from home, we do object to a settlement that increases the top salaries by 17 per cent. and decreases the bottom salaries by 15 per cent. We make no apology for our objection to that.
As we approach the extension conference of the nuclear non-proliferation treaty, the Government's record has hardly been calculated to convince others of the wisdom of an unconditional extension. We have warned the Government about that continually. They have refused to limit the number of warheads on Trident, they have stood out against a moratorium on nuclear testing and they had to be dragged away from the development of a new sub-strategic nuclear system—TASM, the tactical air-to—surface missile. They have constantly refused even to consider a policy of no first use of nuclear weapons. Is it any wonder that there is now such resistance among non—nuclear states to an unconditional extension of the non—proliferation treaty? Can the Government tell us what they will do if they become the victims of their own behaviour and the non-nuclear states refuse to endorse the treaty?
This year, we set the Royal Navy the tasks which, in essence, have changed very little over past decades or even centuries. It has the task of safeguarding our home shores and mainland. We have asked it to fulfil a vital contribution to our allied effort and to represent our interests abroad, in war and peace. This year, as ever, our Royal Navy has responded with the discipline, dedication and professionalism that we have come to respect and to expect from the senior service.

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The Opposition join others in the House in recording our gratitude to the men and women of the Royal Navy. That includes those involved in the protection of our territorial waters and fisheries, those in the national carrier task group, the ships of Operation Maritime Guard in the Adriatic and the Sea Kings at Split, all of which stand ready to provide close air support, casualty evacuation and additional assistance to our ground troops in Bosnia. It also includes those in the Armilla patrol in the Gulf who, for a decade and a half, have protected peaceful commerce in that region, and the men and women who serve our country, whether on shore and at home or abroad, in the warm waters of the Mediterranean or the icy flows of the south Atlantic. Tonight we signal our appreciation and our debt to them all. We firmly believe that their professionalism, commitment and dedication deserve a better Government than they have at present, and we pledge ourselves to ensure that they have such a Government in the not too distant future.
9.34 pm
The Minister of State for the Armed Forces (Mr. Nicholas Soames): That was, as usual, a tidy and polished speech by the hon. Member for Motherwell, North (Dr. Reid) who seemed to be getting a little ahead of himself by regarding these Benches with goggle eyes. We shall do our very best to fight him off.
I hope to deal with most of the issues raised today but any specialist points relating to procurement will be dealt with separately by way of a letter from my right hon. Friend the Minister of State for Defence Procurement. I therefore hope that the House will indulge me if I deal only with the more general issues.
Clearly, this debate has been interesting and important, as such debates always are. I share the disappointment expressed by the hon. Member for Motherwell, North that so few hon. Members have come to debate a matter of extreme importance to the interests of the United Kingdom and of our services. Before I embark on the substance of my speech, I, too, pay a warm tribute to the men and women of the Royal Navy as they continue to play a crucial role in the defence of the United Kingdom. It is a great privilege to be Minister of State for the Armed Forces and have the opportunity to deal for a time with such admirable people.
My right hon. Friend the Minister of State outlined some of the important operations in which the Royal Navy has taken part in the past 12 months. The hon. Member for Motherwell, North paid a handsome tribute to the Navy's extensive operational role. In addition to its operations in the Adriatic and its contribution to the international task group off Somalia, the Royal Navy continues to operate vessels all over the globe. As we have been debating here tonight, in the south Atlantic HMS Dumbarton Castle is returning from a deployment to the Falkland Islands while HMS Endurance, the ice patrol ship, is on her annual deployment to the Antarctic—rather her than me. HMS Marlborough is making her way to the South Atlantic and, far out underneath the oceans, 24 hours a day, seven days a week, 365 days a year, the independent strategic deterrent patrol, is on guard for the life of Britain.
In warmer climes, the current West Indies guardship, Broadsword, and her tanker, the Royal Fleet Auxiliary Brambleleaf, represent our interests in the security and
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stability of the independent territories in the Caribbean. As my right hon. Friend rightly said, they regularly take part in anti-drugs operations in support of civilian authorities and seize the drugs that are increasingly bound for Europe.
In the far east, the Hong Kong patrol craft continue their duties to patrol the waters of the colony and support the civil authorities in very difficult anti-smuggling operations in which they demonstrate exceptional courage and skill. HMS Liverpool is also in the region, having just completed a visit to Malaysia, and is on her way to India.
As some hon. Members said, closer to home several Royal Marine units are in Norway for winter training and have this week participated in a major exercise in the Norwegian sea. They are being supported by several ships, including the assault ship HMS Fearless. Next week, all those units will move on to participate in NATO's major exercise, Strong Resolve. It is a large amphibious exercise, also in the Norwegian sea, and one that I very much look forward to visiting.
While on the subject of the Royal Marines, I am delighted to be able to say that Brigadier Thomson and General Le Pichon, the commanding officers of 3 Commando Brigade Royal Marines and the French 9th Marine Infantry Division, have today signed an exchange of letters promoting closer links between the two formations. The letters identify a wide range of opportunities for co-operation, ranging from exchanges of personnel to observing and participating in exercises. That link between marine units represents a valuable and practical step in building closer links between France's armed forces and our own.
Coming closer to home and to an interest close to your heart, Madam Deputy Speaker, the Navy remains busy in home waters around the United Kingdom. Her Majesty's ships Anglesey, Guernsey, Lindisfarne, Cattistock and Shetland are all on fishery patrol tonight on duties around our coastline. A number of ships are undergoing their operational sea training—indeed, today they will have been fighting the Thursday war before deployment on operational tasks—and several others are undertaking trials. That is extremely demanding and important work. A major joint maritime exercise off the north coast of Scotland, involving numerous Royal Navy and Royal Fleet Auxiliary ships, alongside those of our NATO allies, completes tomorrow. Meanwhile, 42 Royal Marine commandos are on patrol duties in Northern Ireland.
Although by no means exhaustive, I hope that that list adds to the quick spin that my right hon. Friend gave of the Royal Navy's commitments. It justly claims to be and remains a worldwide, blue-water Navy, of whose achievements we may be truly and justly proud. We are privileged to have a force of dedicated, highly trained, skilled and well-motivated men and women to undertake such important roles and to maintain a state of high readiness in what is often a fast-changing scene.
In any fighting force, great care must be taken to protect the well-being of the uniformed people. The Royal Navy is keen to deploy its assets effectively to meet a wide range of commitments, but, in so doing, it is keen to ensure that reductions in uniformed strength should not place undue pressure on individuals through stretch. In praising their commitment I would not wish to overlook the contribution made by the civilians who support the modern Royal Navy. They perform an increasing variety of essential work, whether as industrials, stores officers,

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engineers, scientists or administrators, working in tandem with Royal Navy service men and women to maintain the Royal Navy's presence around the world.
I shall deal with some of the points made by hon. Members. I begin by welcoming the hon. Member for Leeds, Central (Mr. Fatchett) to the Opposition Front Bench in his first service debate. He did a pretty—well he did a job. Indeed, by the end of it, he convinced me, and I suspect that he successfully reinforced the views of all of us on the Conservative Benches and of most people in the country, that there is no field of politics in which the Labour party is less convincing than defence.
I suppose that the hon. Gentleman gained a good deal of experience of the services when he was a junior research assistant at the London School of Economics. None the less, he made a detailed speech into which he had obviously put a good deal of effort and I shall try to deal with some of the points that he raised. Clearly, he made a sensible and important point about matching resources to tasks, with which we all agree. The Royal Navy is busy. That is exactly what it is there for and that is just as it should be. It is true that it has borne this year a heavy operational load and everyone agrees that it has done so with remarkable success. It is trained and equipped to influence events in the interests of this country, to exercise control of the sea and to be able to project power from the sea. Those are the principal roles of the Royal Navy, of which we should not lose sight.
The hon. Member for Leeds, Central talked about the housing trust—a familiar hobbyhorse. He knows that we are setting up a new tri-service housing organisation to be known as the Defence Housing Executive, whose sole purpose is to manage and maintain better the married quarters estate on an integrated basis, rather than on single-service lines. We remain extremely confident that the Defence Housing Executive will make an important and significant contribution to improve management of service housing for the benefit of service families and taxpayers alike.
The hon. Gentleman made some criticisms of the chief executive, Mr. Robinson, who was recruited on a three-year, fixed-term appointment. It is certainly not Mr. Robinson's fault that the trust proposal did not succeed. On the contrary, he has done a very good job for us in reorganising our housing effort.
The hon. Member for Leeds, Central made some points about the services' pay. Indeed, we have seen a rush-job, cack-handed press release put out by the shadow Secretary of State for Defence. The House should know that since 1979, we have always implemented the recommendations of the Armed Forces Review Body. These recommendations and this body have the full confidence of the services. The hon. Gentleman is quite wrong to attack an independent body in that way.
The hon. Member for Leeds, Central went on to discuss the naval stores consultation, a matter also raised by my hon. Friend the Member for Upminster (Sir N. Bonsor), the Chairman of the Select Committee on Defence. As they know, the Government have responded to the Select Committee's report and have welcomed the Committee's qualified endorsement of our naval stores proposals. We consulted widely on those proposals with the work force and the local authorities. Decisions were not taken until all the representations had been received and thoroughly dealt with.
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The hon. Member for Leeds, Central also mentioned the disposal of the Upholders. It was clearly a difficult decision, which was taken in the light of a changed strategic environment. Their primary task was to patrol the Greenland-Iceland-UK gap where their shorter endurance and slower speed compared with SSNs—strategic submarines nuclear—was not a disadvantage. The relative importance of this area of operations is declining. A greater requirement now is for flexible and mobile forces capable of responding to the more diverse range of tasks that we face world wide. The greater speed and endurance of the SSNs is better suited to the new security environment.
My right hon. the Minister of State for Defence Procurement set out the position on procurement in a full and detailed speech. The hon. Gentleman—
Dr. Reid: Will the Minister give way?
Mr. Soames: No, because I must get on. The hon. Member for Leeds, Central praised my right hon. Friend on his enlightened approach to procurement. Clearly, procurement is an important matter industrially and militarily within the United Kingdom. The hon. Gentleman also raised the question of a defence review. I tell him, as the hon. and learned Member for Fife, North-East (Mr. Campbell) rightly said, that nothing could be more calculated to damage and destroy the morale of the armed forces, for no good reason, than such a review. The Government will maintain balanced forces who are well equipped and well maintained.
I shall deal now with my hon. Friend the Member for Upminster. The House listened with respect to the powerful contribution by my hon. Friend, who has done a distinguished job as Chairman of the Select Committee. My right hon. and learned Friend the Secretary of State, my right hon. Friend the Minister of State and I noted with care his fears about Russia, about Islamic fundamentalism and its insidious spread and about the need to keep our defences in robust good shape. My hon. Friend speaks regularly and authoritatively.
My hon. Friend the Member for Upminster was pleased with the progress made in a number of our procurement projects. I share his pleasure at the announcement of the two assault ships which the hon. Member for Motherwell, North called into question. Clearly, there are two assault ships to be ordered and the landing platform helicopter HMS Ocean. I noted the points that my hon. Friend made about Manadon and the type 23 simulator. My right hon. Friend the Minister of State will let him have the details on that price. My hon. Friend congratulated my right hon. Friend on the way in which he is handling these complex procurement matters.
My hon. Friend made an important point about the Merchant Navy. I am pleased to have the opportunity to deal with that matter. The size of the merchant fleet has decreased, but studies by the Government have shown that despite that, there are generally still sufficient vessels on the British registers for defence purposes and that we would have no difficulty in manning chartered or requisitioned ships with British crews if that were necessary. We are not, however, complacent and we maintain a continuing dialogue with the Chamber of Shipping and the Department of Transport on manpower issues.
My hon. Friend also expressed concern about the impact of funding constraints on Royal Navy exercise programmes. I hope that I can reassure him that an

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appropriate level of training is an integral part of any ship's programme. Each year, such a programme is drawn up for each vessel, including ministerially approved operational tasks, other operational commitments and exercises, and is then funded accordingly.
The hon. Member for Dunfermline, West (Ms Squire) made a thoroughly thoughtful and interesting speech. I congratulate her whole-heartedly on what has obviously been her own admirable deployment with the armed forces parliamentary scheme and the Royal Navy. She has covered herself in glory. I am sure that the Navy will have greatly enjoyed showing her its splendid ships and people. I look forward to sharing her experience on a jackstay. I am not sure that they will not drop me in the middle, though.
I am very sorry, as my right hon. Friend will have been, to hear about Walter Strachan and about Lord Ewing. The House will wish to send them its best wishes.
The hon. Lady has been a doughty fighter and champion for her constituency interests. She dealt at length with Rosyth. As she knows, the decision was reached only after the fullest consideration of the many points that were raised during the most extensive consultations. In the final analysis, we did not accept that there would be any operational disadvantage arising from our proposals; on the contrary, there will be operational benefits.
Although we naturally regret the number of job losses, it is simply not possible to ignore the significant savings that will be available. There will continue to be 4,500 defence jobs in the Rosyth area. The dockyard will have a substantial allocation of ship refit work for some time to come. I wholly understand the hon. Lady's concern and anxiety—I will deal with the other points that she made by letter—relating to decommissioning submarines and how we will help the economic regeneration of the area.
The hon. Lady referred to my right hon. Friend's assurance on his recent visit to Rosyth that RD57 would not be used to store decommissioned nuclear submarines. Our policy in respect of those submarines continues to be that they will be stored safely afloat at the location where they are decommissioned. In regard to those at present stored at Rosyth, no decision has been made yet about their future storage. Should a decision be taken to move them at some point, there should be no difficulty in doing so.
The hon. Lady has had a bad week of it, I agree. I am sorry that she continues to receive the dreaded letters. I am sorry about Pitreavie, but the rationalisation of naval command, control, communications and intelligence facilities will generate savings of £22 million over the next 10 years. Again, they are substantial savings which, in the present climate, we could not possibly not take. We had to take them. No convincing rationale has been advanced that would justify forgoing them. I will be in touch with the hon. Lady in more detail on the rescue co-ordination centre.
My hon. Friend the Member for Birmingham, Hall Green (Mr. Hargreaves) made a thoroughly well-informed and detailed speech. Again, I am delighted to hear that he had such an excellent visit with the Royal Navy. Of course I shall pass on his thanks. I share his high opinion of those with whom he has been dealing. It is a great joy to deal with service people. Their can-do culture is a refreshing change from the rather banal world in which we live.
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I noted my hon. Friend's views on aircraft carriers, and I shall certainly pass them on to my right hon. Friend. I wholly endorse his views. Early studies into a replacement for our current carriers are in hand. My hon. Friend was pleased with the order for the assault ships and the landing platform helicopter. I note his points about the joint rapid deployment force. He also mentioned a matter relating to the type 23 command system. If I may, I will let him have a letter on that matter.
I am delighted that my hon. Friend is pleased with the news about Tomahawk. As my right hon. and learned Friend the Secretary of State announced on 14 July, we are exploring the procurement of Tomahawk land attack missiles from the United States for fitment to our submarines, and we are grateful for a quick and helpful response from the United States Government. I wholly endorse my hon. Friend's assessment of the brilliance and great success of the Royal Navy and, above all, the fact that that service is in extremely good heart.
I hope that the hon. and learned Member for Fife, North-East will not be embarrassed when I say that he made a first-class speech. I found very little in what he said with which I could disagree. On stability, which he and I have discussed at great length, I refer him to an admirable remark made by the First Sea Lord the other day, that the storm has passed but the swell will be felt for some time. The hon. and learned Gentleman is right. As "Options for Change" continues, as the defence cost studies come to a conclusion and the changes go downstream, plainly there will be turbulence to come.
I wholly agree with the views which the hon. and learned Gentleman expressed in a thoroughly clear way about the defence review. He talked of the Bosnian lift, and he expressed the view—with which we would all agree—that a unilateral lift of the embargo would be a disaster. Plainly, if such an action were to take place we would find ourselves in an untenable position and we would have to withdraw. Everything has been done to try to ensure that that does not happen.
The hon. and learned Gentleman also remarked on the importance of Europe and of a future European security and defence identity. He will be reassured by the fact that, for the Government, NATO remains the bedrock of the UK's defence policy. For nearly half a century, we have chosen to organise our collective defence against major external threats through NATO, which is the only security organisation with the military means to back up its security guarantees. A good deal of work must be done in Europe, and it must enable us to retain our ability to respond in a flexible manner.
The hon. and learned Gentleman mentioned combined joint task forces, and plainly they will help to develop a European security and defence identity which is fully compatible with NATO. He spoke of the need for a balanced Navy and, in the judgment of my right hon. and learned Friend the Secretary of State and the service chiefs—particularly the First Sea Lord—we have an effective and balanced Navy which is adequately trained and equipped. I entirely agree with his view about the requirement to maintain absolutely our ability to fight at the very highest end of the spectrum. We are wholly and irrevocably committed to that.
The hon. and learned Gentleman welcomed the decision on Tomahawk. I acknowledge his views on Rosyth which he shares with the hon. Member for Dunfermline, West. I am sorry that that part of the world

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has had such a rough time. My right hon. and learned Friend has made the matter of allocation refits known to the hon. and learned Gentleman, and I again join him in paying tribute to the work of the Royal Navy.
My hon. Friend the Member for Plymouth, Sutton (Mr. Streeter) gave me notice that he had to do go down to his constituency tonight. I pay tribute to him for an excellent speech, and for the admirable work which he has done in representing to me and to all of my colleagues at the Ministry of Defence in a robust and vigorous manner the real concerns of his constituents. I acknowledge the difficulties which are being faced in the west country, and my hon. Friend was quite right to draw attention to the lamentable record of the Labour party on defence matters.
I noted with great sympathy my hon. Friend the Member for Sutton's calls for stability in Devon and Cornwall. I know of the anxieties about base-porting and assault ships, and I should like him to know that, following my visit to Plymouth, I have passed on the concerns to the First Sea Lord. I know that the Navy planners are looking at the matter.
I assure my hon. Friend and all those who represent the Plymouth area that, whatever happens at Chivenor, there will always be a substantial Royal Marines presence in Plymouth. I noted my hon. Friend's strictures about Bickleigh, which I visited the other day. It is an excellent camp which does need some work, and I will make sure that the matter is carefully considered.
The hon. Member for Plymouth, Devonport (Mr. Jamieson) made a breathtakingly trivial and ineffective speech. It was a ridiculous tirade which I am going to gloss over as it did not even dignify a serious reply.
My hon. Friend the Member for Romsey and Waterside (Mr. Colvin) dealt with a number of important points, including the questions of the EH101s and of the chaplains' school, which are receiving consideration.
I am sorry that the hon. Member for Greenwich (Mr. Raynsford) has found that our correspondence has been rather more prolonged than it should have been. I have noted the points he has made tonight, and I shall study his latest letter with the greatest care. I should be
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pleased if he would come in to have a talk to me about the letter. I wholly agree with his views on the beauty of Greenwich.
The hon. Member for Barrow and Furness (Mr. Hutton), as one would expect, made a thoroughly polished and sensible speech. He was, however, a little churlish about the Navy programme. One cannot possibly exclude Trident from the procurement programme, and by any stretch of the imagination, the programme has done extremely well. VSEL has done a marvellous job on Trident, and the Navy has a handsome procurement programme in the pipeline. I shall study the other points which he made about the reserves, and let him have a letter.
The hon. Member for Denton and Reddish (Mr. Bennett) made some important and significant points about the non-proliferation treaty. It is a sad loss for all of us that, even though he is still a member of CND, he fails any longer to wear his button. We do understand that, in these politically correct times, he must no longer wear the single battle honour or medal he is ever likely to win.
The hon. Member for Motherwell, North in, as usual, an excellent and sensible speech—except when he started being silly towards the end—endorsed almost everything that the Government believe about the need for a stable front line. I wish to tell the hon. Gentleman that the Government have made it absolutely plain that the major cuts in defence are over and finished; the front line is now safe and secure; we are delivering a stable front line, which will represent well-trained men and well-equipped ships. That is vital, because only with a stable front line can we build and plan for the future, for a Royal Navy that we can continue to be proud of and grateful for.
It has been an excellent debate. I congratulate almost everyone who has spoken, and I look forward to the Army debate next week.
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

PUBLIC ACCOUNTS COMMITTEE
Resolved,
That Mr. Richard Page be discharged from the Committee of Public Accounts and Sir Kenneth Carlisle be added to the Committee.—[Mr. Burns.]

Rural Dispensing
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Burns.]
10 pm
Mr. Edward Leigh: The present regulations on rural dispensing are outdated and, in my belief, need reforming. They do not serve the purpose for which they were originally designed, they do not implement present Government policy of encouraging care in the community and patient choice, and they are divisive of the professions of medicine and pharmacy.
In Lincolnshire, there is a greater proportion of dispensing doctors than in any other part of the country, so my constituency of Gainsborough and Horncastle is especially affected. I can best illustrate the problems by referring to the health centre in Welton, slightly north of the city of Lincoln.
There has been an excellent health centre there for many years. A patient could visit the doctor, who prescribed the medicine required, having all the patient's records at his fingertips. The prescription was immediately relayed to the pharmacy department in the same building, and the patient collected the medicines with little delay. The system worked well and to everyone's satisfaction.
When the villages were small, no pharmacist would consider the district profitable enough in which to open a shop. The doctors were obliged to prescribe and dispense. Now that the villages have expanded, there is sufficient business to make it viable for a chemist to set up. That has made it attractive for an independent pharmacist to apply to open a pharmacy—in Welton's case, a large supermarket, which has a branch in the village and which already has a near-monopoly of the pharmacies in the Lincoln area. I think that that alone is worrying.
As the regulations stand, if the application succeeds, the pharmacy department in the health centre must, by virtue of the regulations, close to all patients except those who live outside a one-mile limit. In Welton's case, that is a very small percentage. However, the first criterion to be considered, as stated in the regulations, is that no loss of service to the patients should be caused by the opening of the pharmacy. Indeed, the intention of Government, as I know, is to improve and extend services.
The procedure was as follows. In 1990, the chain store applied to open a pharmacy. Then it had to prove that the village was rural. Although it would have taken an Act of Parliament to change Welton's status from rural to urban, apparently for pharmaceutical purposes it could simply be declared urban at a hearing. Then the family health service authority considered the situation and turned down the application, on the grounds that, if the pharmacy at the health centre was closed down with the loss of income, services to the public—which should concern us in the House—were bound to deteriorate.
Predictably, the chain store appealed. The appeal was heard by the drugs committee of the Yorkshire—not Lincolnshire—health authority. It consisted of two doctors, two pharmacists and a chairman. Bearing in mind the constitution of the committee, obviously the result turned on the chairman's casting vote, and he, not being a local person, could not possibly have been aware of the strength of local feeling, and anyway he was restrained in his decision by the regulations.
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The decision—in favour of the pharmacist in that case—was relayed to the FHSA, which then had to decide whether the new pharmacy, in the words of the regulations, was "necessary or desirable". In so doing, it was not allowed to take into account the wishes of the patients and the doctors or to take note that pharmaceutical services were already available from the health centre.
Let me emphasise how the patients felt about the decision. At a public meeting, nearly 600 people turned up—just in one village—and only six voted for the opening of the new pharmacy. The wishes of the majority were ignored. If I called a public meeting in the village of Welton on whether we should join a single currency, six people would turn up, but 600 people turned up to the meeting on the pharmacy and all but six voted to keep the status quo.
A huge number of letters on the issue were written to me—my postbag was overloaded with them—to councillors and to the FHSA, but I, as the Member of Parliament, the councillors, the FHSA, the local doctors and local people could not do anything.
The regulations give the FHSA no choice but to uphold the appeal, even though the FHSA obviously knew from its earlier decision that the outcome of the appeal would adversely affect local services. It was left with no authority: everything was a foregone conclusion.
The whole process took two and a half years and resulted in thousands of letters, public meetings and a huge amount of antagonism. What is worse, public expectations were built up. People felt that, if they were consulted, as they were, their views would have some effect. In fact, the whole process was a total waste of money and a total sham. It did not offer proper consultation.
It is not surprising that a huge amount of resentment has been built up in just one village on one issue alone. That is what has happened in peaceful, rural and contented Lincolnshire. I hope that my hon. Friend the Minister is aware of that, and will do something about it.
New regulations should incorporate a clause requiring the FHSA or the appropriate health authority to act in an advisory capacity. Many of the current problems could have been avoided if the FHSA had brought the doctors and the pharmacy applicants together to discuss the situation to their mutual advantage. The FHSA should have knocked heads together. The practice had applied to employ a pharmacist, but that application was refused by the FHSA. The doctors were not advised about alternative solutions that would have involved co-operation and avoided all the confrontation that has led to such angst and unhappiness.
The process is now concluded. What has been the result in the health centre? Let us remember that we are not talking just about regulations, pharmacies, doctors or their renumeration. What should concern us in the House is what has happened to the services provided by that particular health centre. First, four partners were reduced to three. Secondly, the senior nurse, who ran the pharmacy department and whose knowledge and advice was well-respected, could no longer be financed.
Thirdly, two other receptionists had to go, and fourthly, surgery times had to be reduced, including before and after work surgeries. Patients attending surgeries must now take time off work which they and their employers

1233
can ill afford. In addition, facilities and security for dispensing at the health centre and maintained by that centre are not now available to approximately 80 per cent. of patients. That process, when repeated many times in the county as well as throughout the country, must represent a huge waste of resources.
All in all, the regulations have produced a system exactly the opposite of that for which they were designed, and of that which is Government policy as stated by my hon. Friend. I urge my hon. Friend that the Government should reform their regulations to allow an open, free market. That is what Conservative Back Benchers and our colleagues on the Treasury Bench presumably believe in—an open, free market. That is our philosophy of government. It is a ridiculous position which allows a grocer to employ a pharmacist while a doctor may not. How absurd that we have got into such a position.
If there was an open market, in which all Conservatives believe, urban doctors as well as those in rural areas would benefit, because they too could employ a pharmacist and open a pharmacy if they so wished. I am not suggesting that it would be possible to move to such a beneficial open, free market throughout the country straight away—I know the pressures that my hon. Friend is under—but perhaps we could start with rural areas.
Until one has experienced the difference between an in-house pharmacy and a trip to the chemist's shop, it is hard to convey what it means to the patient—convenience, privacy, consultations between patient, doctor, pharmacist and patient records; and, perhaps most important, the co-operation between doctor and pharmacist at all levels where now there is division.
Like other professions, pharmacists are fighting for their continued existence, and I have considerable sympathy with them. Outside the NHS, they are obliged to waste their undoubted talents being shopkeepers in order to make a living. Inside the NHS, they can concentrate on being pharmacists.
The argument that doctors should prescribe and pharmacists should dispense is sound, and I am sure that my hon. Friend will make that point when he replies to the debate. It should be used not to separate the two professions, but to bring them together and encourage co-operation between them.
If over-the-counter medicines were available at chemists' shops or health centre pharmacists, there would be simple competition and we believe in that. A great many common drugs, such as aspirin, are available in ordinary shops. The enormous number of drugs now available off prescription would then be available in rural districts. If health centres are to be run on business lines, as encouraged by the Government, the regulations need to be changed.
Dispensing by rural doctors is said to be more expensive than dispensing by pharmacists, because doctors over-prescribe to their own profit, use brand drugs instead of generic drugs, and prescribe more than urban doctors. However, rural doctors claim that; by being able to dispense, they can reduce hospital costs and thus the total cost of providing health services in rural areas. They say that prescribing brand drugs reduces their legal liability when things go wrong.
If the regulations allowed for pharmacists to be incorporated into health centres, a new system could be devised that would be less costly to the NHS and fair to both professions.
1234
As more pharmacy applications are made, legal loopholes in the regulations are being found. Those loopholes do not allow any consultation with doctors and patients, so the views of those most affected may not be taken into account. That increasingly shows that the principles of the legislation have been so totally lost that it is being used merely for commercial purposes, often by retail multiples with potential losses to NHS.
A large number of villages in Lincolnshire—Welton is just one example—have the same problem. Applications are constantly being made throughout the country. There is, therefore, a serious national problem and clearly reform is needed. It is not just a constituency problem, but I am delighted to come to the House and use the example in my constituency to illustrate it.
In preparing my speech, I was anxious to be fair to both sides. Of course, I have had a great deal of pressure from local doctors and local people, but I have also spoken to the secretary of the Lincolnshire local pharmaceutical committee, Mr. Noel Baumber, because I wanted to be fair to his side of the case.
It is worth while to relay the views of pharmacists, as they are also unhappy with the present system. They believe that pharmacists and doctors need to be remunerated on the same basis to remove any incentive on the part of doctors to overprescribe. They say that doctors benefit from a 10.5 per cent. margin on the cost of the drugs they provide, that their fee income is related to the number of prescriptions they prescribe, and that their dispensing income is added to their superannuation.
The chemists argue that such a conflict could not arise if GPs were not given incentives to dispense. They say that Baroness Cumberlege has confirmed that GPs can double their income by dispensing. They also say that dispensing is sometimes delegated to unqualified staff, who are not supervised. I cannot confirm the accuracy of those statements, but I relay them to the House. Lastly, the chemists say that pharmacy dispensing is better and less expensive. That is the views of the two sides.
Let us deal with what is important—us, the patients, the people, the country and the Government. It seems to me that we—the patients and the Government—must find a way to end the dispute between doctors and chemists.
First, the service should be run for the patients, and not for those working in the NHS. We should all believe that cliché, but the chairman of the local drugs committee, Mr. George Sutton, to whom I talked yesterday, told me that, as he attempts to hold the line between doctors and pharmacists, the protagonists seem to forget it as they argue over their remuneration.
It is no longer good enough for the Government to wash their hands of the dispute, Pontius Pilate-like, and say, "Come back to us when you have sorted it out yourselves". The Government should act; at the very least, they should reform the system, so that the FHSA is given proper discretion and the powers to respond to local opinion about what is best for the community. It should give reasons why it accepts or rejects local opinion, so that we can avoid the farcical situation in the village of Welton.
Local doctors have told me that the Minister needs to examine the apparent loophole in regulation 12 of 1992, which appears to allow the free entry of locally established pharmacies without recourse to a hearing. According to Mr. Sutton, the NHS appeals unit should

1235
be discouraged from reviewing a case unless the original hearing is clearly flawed. The FHSA sometimes wonders whether it or the appeals unit is the authority, because apparently all cases go to appeal.
The next step would be to ensure that a doctor's decision about whether to employ a pharmacist will affect only the viability and income of his practice and not him personally. The third step would be to allow rural doctors to continue dispensing, even if a pharmacy opens up in the village. Why not? We believe in competition. The fourth step would be to introduce a full, free and fair market, so that the consumer can make his or her own choice about where to get a prescription. I urge the Minister to reform the regulations, before further damage is done to the rural NHS.
10.16 pm
The Minister for Health (Mr. Gerald Malone): I am extremely grateful to have the chance to respond to the Adjournment speech of my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh). It is an extremely important matter, and I congratulate him on securing the opportunity to raise it.
My hon. Friend always addresses himself to matters in this House with a great degree of elan. He often assaults the establishment, and, sadly, tonight I have the role of the dullard Minister who must respond to him about the technicalities and complex matters which govern how people in rural areas have reliable access to the dispensing of drugs.
Although it may be boring to go through all the complex policy matters, it is important to set them out. As my hon. Friend said, it is a complicated issue. There are tensions between pharmacists and dispensing doctors, because a prime policy role is involved in ensuring that all national health service patients receive the treatment they require. The public must also secure value for money in the way that drugs are dispensed. That has been the continuing policy of the NHS since its inception, regardless of where patients may reside—in urban or rural areas.
I will briefly set out the policy on dispensing. Principally, doctors diagnose and prescribe medication—that is their proper role, as my hon. Friend said—and pharmacists dispense medication. In the Government's view, that makes the best use of the complementary skills and experience of members of both professions, to the benefit of all patients. There should be no question of competition between the two professions, although I know that my hon. Friend has set out a case suggesting that that may exist.
It is Government policy to establish co-operation between the members of an integrated primary care team, particularly in rural areas. It is sometimes difficult to achieve that co-operation, and there may be tensions, but the Government must overcome them and ensure that the patient benefits in the long term.
Pharmacists are, of course, best placed to advise a patient how best to use his or her medicine to get the maximum benefit with the minimum side effect. That is extremely important in a number of contexts, not least of which is the conclusion of a course of drugs. Pharmacists can also advise on the use of medicines that are purchased
1236
over the counter—not only drugs that are dispensed but the increasing range of self-medication to which many people turn instead of using the primary care sector, and that is vital.
Mr. Leigh: What if the doctor at the health centre employs a pharmacist? Does not the patient then get the benefit of the advice of both a doctor and a pharmacist on the same premises?
Mr. Malone: As I go around the health system, I see a number of examples. It is not always the case that pharmacists and doctors, be they prescribing doctors or not, are in conflict.
I was, for example, in a health centre in Purfleet, Essex, seven or eight days ago, which was a general practice of six or seven partners and contained a pharmacy. I would suggest that the rules do not prevent that. It is quite possible for such a set-up to work quite happily together, not only to dispense the drugs that the primary carer prescribes but to provide the over-the-counter medication, which I believe will become increasingly important and which is becoming increasingly recognised.
There are models. The rules and regulations do not militate entirely against what I presume my hon. Friend is suggesting—a good market answer to the problems.
Let us move on to NHS dispensing in rural areas. It will be worth while to set out for the House where we are. I shall touch first on the one-mile rule—when pharmacists come into an area in which there are dispensing practices, dispensing practices are obliged to dispense only to those who live outside one mile of the immediate area. That rule was introduced in the early part of the century. Part of the problem that I suppose my hon. Friend is addressing is that there is a great history behind all this. In the 1970s, there were major problems between the professions, and that led to the Clothier committee, which reported in 1977.
It is probably not without significance that the difficulties and the tensions between those involved in primary care and pharmacists is that it took six years before controls on entry in rural areas were introduced in the House, in 1983. I am not quite certain, but I have a suspicion that my hon. Friend and I were probably unwitting partners in 1983—when we both entered the House—to the regulations that implemented those rules. I certainly do not remember precisely when it was, and I suspect that my hon. Friend does not either.
The main features of the controls were that a pharmacy or doctor wishing to start dispensing had to show that it would not prejudice the proper provision of medical or pharmaceutical services. If permission to dispense is granted, it may come into effect over a period, and that is carefully put in place to ensure that the change in income of those who previously dispensed is not sudden. The controls are an attempt to strike a balance between providing the important services of a pharmacist wherever possible and ensuring that patients continue to have access to a dispensing service in areas where a pharmacy could never be viable.
I would ask my hon. Friend to bear in mind the history of the regulations. In the days when there were communities in which no pharmacist wished to set up, because there was no reason to do so, the regulations were introduced to allow GPs to dispense, which was a very important service.

1237
The present arrangements allow doctors to dispense to patients who live in rural areas that are not served by pharmacies, who would have serious difficulty in obtaining the necessary medication from a pharmacy, or who require immediate medication in the course of emergency treatment. In practice, however, the rules also allow doctors to dispense to patients who could easily visit a pharmacy at the same time as visiting their doctor.
In recent years, there has been a gradual increase in the number and proportion of dispensing doctors. During the same period, the average number of dispensing patients per dispensing doctor fell; so the number of dispensing patients has remained virtually the same.
As for the operation of the Clothier regulations, family health service authorities are required to consult—among others—local community health councils. My hon. Friend mentioned consultation; this consultation is important, because it allows patients to express their views. There is also the prejudice test, with which my hon. Friend will be familiar. A family health service authority must consult any person on the medical list who is likely to be affected.
I know—not only from what my hon. Friend tells me, but from the correspondence I receive—that there has been what I would describe as an uneasy truce between the two professions. The relationship is difficult: as my hon. Friend pointed out, tensions exist, and there are two debates. My hon. Friend set out one side of the argument, which is that dispensing doctors benefit unfairly from the arrangements.
I suggest that that is not so. My Department subjects the margins in relation to payments that doctors are able to receive in connection with drugs to close examination, on a continuing basis. My hon. Friend may think that that is a source of tension between dispensing doctors and pharmacists, but it is regularly a source of even greater tension between my Department and dispensing doctors.
I strongly disagree with my hon. Friend's assertion that the system favours the needs of individual pharmacists rather than those of patients. We aim to ensure that
1238
patients living in rural areas enjoy the same range of services as are available to people living in urban areas. That has been difficult to achieve.
My hon. Friend may think that it is simple to make a bonfire of regulations, but it is more difficult than he imagines. A balance of provision has grown up over time; if we simply tore up the regulations that have developed, it would be to the detriment of patients, and would lessen their ability to gain access to and make use of a dispensing service. That is not to say that we should not listen to both sides of the argument—the pharmacist's case and that of the dispensing doctor—and decide how to proceed; that is perfectly proper.
My hon. Friend rightly referred to the free market. With the development of new health centre communities, we are seeing new ways in which dispensing services are provided, and they are free of the tensions that have existed between the professions before. I cited an example earlier that I expect to be repeated increasingly across the country: circumstances in which the medical profession and pharmacists decide that they have mutual interests in regard to both prescribing and dispensing.
I hope that, as time moves on, the tensions to which my hon. Friend referred will diminish. I am alert to the fact that those tensions exist, and have received a number of representations from both sides of the argument. As my hon. Friend knows, a number of issues are currently being considered by the courts, and I shall not comment on those. I shall return to them, however, once the courts have delivered a view.
Finally, I reassure my hon. Friend that it is the Government's overriding intention that all those who require access to drugs, by either prescription or dispensing—the patients—can get them in the most convenient way. I hope that we can proceed in a way that will diminish tensions between the two professions of pharmacy and medicine.
Question put and agreed to.
Adjourned accordingly at half-past Ten o'clock.

FOREIGN AND COMMONWEALTH AFFAIRS

  Public Appointments
  Mr. Milburn
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many public appointments have been made by his Department in the last year; and how many of those appointed were identified by the Public Appointments Unit.

  Mr. Goodlad
  Nine public appointments were made in the last year by the diplomatic wing of the Foreign and Commonwealth Office, of which one was identified by the Public Appointments Unit.

  Four public appointments were made in the last year by the Overseas Development Administration wing of the Foreign and Commonwealth Office, of which one was identified by the Public Appointments Unit.

  Corfu
  Mr. Etherington
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many complaints by British holiday makers have been received by the British consul in Corfu regarding(a) unprovoked attacks and (b) attacks involving theft.

  Mr. Baldry
  Our records do not show whether attacks were provoked or not. In 1994, our consulate in Corfu were notified of five robberies with assault, and 16 assaults, including five rapes.

  Lebanon
  Mr. Simpson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what advice is currently being given to British citizens wishing to visit Lebanon.

  Mr. Baldry
  Foreign Office travel advice to British nationals wishing to visit Lebanon is not to travel outside the main towns. We also advise against travel to the southern suburbs of Beirut, south Lebanon and the north and west of the Bekaa valley, particularly the area around Baalbeck and Hermel.

  We strongly advise our nationals to register with the embassy.

  Mr. Simpson
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the progress of the Lebanese track of the middle east peace negotiations.

  Mr. Douglas Hogg
  Progress on the Lebanese track of the middle east peace process is vital if there is to be a comprehensive settlement. We continue to call for the full implementation of UN Security Council resolution 425.
  730

  Middle East Peace Process
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what suggestions for a comprehensive peace in the middle east were put forward by the EU troika in its recent mission to Syria; and what was the response of the Syrians.

  Mr. Douglas Hogg
  The EU troika reaffirmed the EU's support for a just, lasting and comprehensive peace based on UN Security Council resolutions and the principle of land for peace. They urged both Syria and Israel to reach a negotiated settlement as soon as possible. The EU's support for the peace process was welcomed by Syria.

  Syria
  Sir Teddy Taylor
  To ask the Secretary of State for Foreign and Commonwealth Affairs when the Council of Foreign Ministers of the European Union agreed to remove the arms embargo on Syria; what considerations led to the decision; and how he informed the House of the decision.

  Mr. Douglas Hogg
  I refer my hon. Friend to the reply given by my noble Friend Baroness Chalker of Wallasey, Minister of State for Foreign and Commonwealth Affairs in another place, on 7 December 1994 Official Report, House of Lords, column 85. The arms embargo was lifted as the original grounds for imposing the restrictions no longer existed and to provide a signal of encouragement to Syria with regard to progress in the middle east peace process.

  Sir Teddy Taylor
  To ask the Secretary of State for Foreign and Commonwealth Affairs if the removal of the arms embargo on Syria required parliamentary consent.

  Mr. Douglas Hogg
  No.

  Sierra Leone
  Ms Harriet Harman
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is his policy in respect of British citizens in Sierra Leone.

  Mr. Baldry
  Since 26 January, the Foreign and Commonwealth Office has been advising dependents and those with no pressing need to stay in Sierra Leone, to leave. Many have already done so, but we estimate that 200 British nationals with the right of abode in the United Kingdom remain in Sierra Leone.

  Ms Harman
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the situation in Sierra Leone.

  Mr. Baldry
  I refer the hon. Lady to my written answer of 30 January, columns 493–94 to the hon. Member for Clydebank and Milngavie (Mr. Worthington).

  The security situation in Sierra Leone continues to give cause for concern. Seventeen abducted foreign nationals, including six Britons, remain in captivity: we are working to secure their release. Large numbers of Sierra Leoneans have been displaced by the conflict, with damaging consequences for the economic and social structure of the country. We have given some £500,000 in emergency aid this financial year to help Sierra Leonean victims of this war, and stand ready to provide further such help. Special representatives of the UN and Commonwealth Secretaries-General have now arrived in Sierra Leone, and we continue to give our strong support to efforts to bring about a settlement to the conflict.
  731
  Ms Harman
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many people have been killed in Sierra Leone since disturbances started in 1991.

  Mr. Baldry
  There are no official figures, but unofficial estimates vary between 15,000 and 20,000 deaths.

  Sudan
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has on the kidnapping of aid workers in southern Sudan.

  Mr. Douglas Hogg
  Twelve aid workers, including one British national, were kidnapped on 8 February by a rebel group in southern Sudan. By 11 February, all the aid workers had been released unharmed.

  Angola
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what practical arrangements have been made to transport UNAVEM III troops to Angola.

  Mr. Douglas Hogg
  The UN is discussing the practical arrangements for the deployment of UN peacekeeping troops in UNAVEM III with potential troop-contributing countries.

  Mrs. Christina Nevan Gando
  Mr. Madden
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the current position concerning the application by Mrs. Christina Nevan Gando—Ref: R250794—made to the United Kingdom post in Abuja to join her husband in the United Kingdom; and if he will make a statement.

  Mr. Baldry
  I have asked the entry clearance officer in Abuja to let me have a report on the application by Mrs. Christina Nevan Gando. I shall arrange for the hon. Member to receive a substantive reply from the migration and visa correspondence unit of the Foreign and Commonwealth Office as soon as possible.

  Mrs. Ushaben Sunil Bhai Patel
  Mr. Madden
  To ask the Secretary of State for Foreign and Commonwealth Affairs when a decision is going to be made on the application made by Mrs. Ushaben Sunil Bhai Patel—Ref: AP/94/10/38—to the post in Bombay to join her husband in the United Kingdom; when her application was made; when was she interviewed at the post; if she has been notified of the outcome of her interview; and if he will make a statement.

  Mr. Baldry
  I have asked the entry clearance officer in Bombay to let me have a report on the application of Mrs. Ushaben Sunil Bhai Patel. I shall arrange for the hon. Member to receive a substantive reply from the migration and visa correspondence unit of the Foreign and Commonwealth Office as soon as possible.
  732

LORD CHANCELLOR'S DEPARTMENT

  Benzodiazepine Litigation
  Mr. Etherington
  To ask the Parliamentary Secretary, Lord Chancellor's Department if he will give(a) the total cost to date to the legal aid fund of the Benzodiazepine litigation, (b) the total number of legal aid certificates issued for Benzodiazepine litigation, (c) the average cost per certificate where no proceedings were issued, (d) the average cost per certificate where proceedings had commenced and (e) total generic costs associated with the Benzodiazepine litigation.

  Mr. John M. Taylor
  The estimated cost to date to the legal aid fund of the Benzodiazepine litigation is £28.6 million. Some 13,500 certificates were issued in total. Of these, approximately 5,000 claims resulted in the issue of proceedings. The average cost per certificate where no proceedings were issued is estimated to be £1,590. The average cost per certificate where proceedings have been commenced is difficult to estimate because taxations are currently proceeding in these cases and a substantial number of cases have yet to be taxed. Some 3,200 cases have so far been taxed at an average cost of £3,500. This figure is expected to rise as the 1,800 outstanding cases are likely to contain a higher proportion of more expensive cases. The total generic costs paid out to date are £3.9 million.

  The costs are now being taxed and, as with all other legal aid bills, the amount to be paid out of the legal aid fund will be that which the court determines to be reasonable. All the above figures include solicitors' costs, counsel fees, disbursements, court fees and VAT.

  Judges (Training)
  Mr. Redmond
  To ask the Parliamentary Secretary, Lord Chancellor's Department what plans the Judicial Studies Board has to introduce additional training for judges on managing rape cases.

  Mr. John M. Taylor
  The Judicial Studies Board determines what training is appropriate for judges. The courses which it provides cover rape cases. I understand that the board has no plans to introduce additional training.

  Legal Aid
  Mr. Redmond
  To ask the Parliamentary Secretary, Lord Chancellor's Department what plans he has to order re-examination of all cases where legal aid costs have exceeded £1 million to establish the justification for approving the legal aid to recover the sums involved in cases where resource statements are found to be false.

  Mr. John M. Taylor
  The grant and discharge or revocation of civil legal aid certificates is the responsibility of the Legal Aid Board. The grant and revocation or withdrawal of criminal legal aid is the responsibility of the court dealing with the case. Legal aid regulations say what may be done if the assisted person's circumstances change or new information about his or her circumstances comes to light.

  Mr. Redmond
  To ask the Parliamentary Secretary, Lord Chancellor's Department what assessment he has made of the amount of public funds available(a) to conduct prosecutions and (b) to conduct defences by barristers.
  733
  Mr. John M. Taylor
  The amount of public funds available to conduct prosecutions is a matter for the various prosecuting agencies. It is estimated that the net cost of criminal legal aid paid to barristers in the current financial year to conduct defences is £158 million.

  Revenue (Fines)
  Mr. Llwyd
  To ask the Parliamentary Secretary, Lord Chancellor's Department how much revenue was collected by way of fines imposed by magistrates courts and the Crown court in England and Wales in each year since 1989; and if he will make a statement.

  Mr. John M. Taylor
  Figures relating solely to fine revenue are not available. The revenue collected by way of fines, fees, confiscation orders, compensation orders and fixed penalties imposed by magistrates courts and the Crown court in England and Wales in each year since 1989 was:

  Year

  £ million

  1989–90

  241

  1990–91

  269

  1991–92

  241

  1992–93

  232

  1993–94

  233

  Justices of the Peace
  Mr. Gerrard
  To ask the Parliamentary Secretary, Lord Chancellor's Department pursuant to his answer to the hon. Member for Walthamstow of 6 February,Official Report, column 10, if he will make it his policy to instruct area advisory committees on justices of the peace to record the ethnic origin of all those applying to become a JP.

  Mr. John M. Taylor
  The Lord Chancellor is reviewing his policy. He has already made it clear that he wishes to see more ethnic minority candidates recommended for appointment. Suitability for appointment remains the overriding consideration.

SOCIAL SECURITY

  National Insurance
  Mr. Frank Field
  To ask the Secretary of State for Social Security when the upper limit on employer's national insurance contributions was abolished; if he will state the additional revenue gained each year since; and if he will make a statement on the outcome of research the Government commissioned on the impact of this change on the employment patterns of higher and lower-paid earners.

  Mr. Arbuthnot
  An estimate of the amounts raised each year following the abolition of the upper limit on employer's national insurance contributions is in the table.

  Year

  £ billion2

  1985–19861

  0.50

  1986–1987

  1.50

  1987–1988

  1.75

  1988–1989

  2.25

  1989–1990

  2.75

  1990–1991

  3.00

  734

  Year

  £ billion2

  1991–1992

  3.00

  1992–1993

  3.00

  1993–1994

  3.00

  1994–1995

  3.25

  1 Upper Earnings Limit abolished on 6 October 1985.

  2 Figures are founded to nearest £¼ billion.

  Abolition of the upper earnings limit for employer's national insurance contributions made it possible for the rates of employees' and employers' national insurance contributions to be reduced, especially at lower levels of pay. This was aimed at improving job prospects for the low paid, particularly among the young and unskilled, by reducing individuals' national insurance payments and reducing the business costs of prospective employers.

  Research commissioned by this Department shows that a fifth of employers consider national insurance contributions when setting wage levels and that some employers take contribution rates into account when fixing staffing levels. This supports the view that reducing employers' wage costs in respect of lower-paid workers helps to promote their employment prospects.

  Occupational Deafness
  Mr. Chidgey
  To ask the Secretary of State for Social Security what was the total amount spent on disablement benefit for occupational deafness in 1993.

  Mr. Hague
  Information is not available in the precise format requested. Estimates based on a 10 per cent. sample suggest that in 1992–93, the latest available year, occupational deafness accounted for around £25 million of disablement benefit expenditure.

  Notes:

  (i) This figure has been rounded to the nearest £5 million, but is not accurate to that degree.

  (ii) This figure includes cases with aggregate assessments, where occupational deafness was the first, or highest assessment.

  (iii) This figure does not include any expenditure on reduced earnings allowance/retirement allowance or any of the additional allowances such as constant attendance allowance or exceptionally severe disablement allowance.

  Invalidity Benefit
  Mr. Gordon Prentice
  To ask the Secretary of State for Social Security when his appeal to the European Court over the social security commissioner's April 1992 decision about the rate of invalidity benefit payable to women over the age of 60 years is expected to be finally resolved.

  Mr. Hague
  The appeal against the social security commissioner's decision—CS 27/91—was made to the Court of Appeal jointly by the Secretary of State and the chief adjudication officer. At a hearing on 18 January 1994, the Court of Appeal decided to refer the case to the European Court of Justice for a preliminary ruling on questions of European law. A date for the European Court hearing has been set for 6 April 1995, but the court's ruling is not expected before July 1995. The case will be referred back for a decision by the Court of Appeal following this ruling.

  Mr. Gordon Prentice
  To ask the Secretary of State for Social Security if he will ensure that the invalidity benefit claimants affected will receive the real value of
  735
  back payments of invalidity benefits made to them should the European Court uphold the social security commissioner's decision in respect of the payment of the benefit to women over 60 years.

  Mr. Hague
  Increased awards of invalidity benefit made as a 'result of the social security commissioner's decision—CS27/91—are being suspended pending the outcome of the appeal by the Secretary of State and the chief adjudication officer, except in cases of hardship. Any benefit which has been suspended will be paid in full if the commissioner's decision is upheld. There is no provision for the payment of interest in these circumstances.

  Mr. Gordon Prentice
  To ask the Secretary of State for Social Security how many claimants for invalidity benefit have been granted a suspension of his decision in respect of women over 60 years on grounds of hardship, while his appeal to the European Court over the social security commissioner's April 1992 decision is being resolved.

  Mr. Hague
  The available information is in the table.

  Suspensions of increased Invalidity Benefit awarded as a result of Commissioner's decision CS27/91

  Cases in which suspension applied

  Hardship applications

  Cases in which suspension lifted on hardship grounds

  41,560

  1,604

  994

  Notes:

  1. Figures relate to 31 March 1994, the latest date for which information is available centrally.

  Source:Manual count in Benefits Agency offices.

  Disabled People
  Mr. Jim Cunningham
  To ask the Secretary of State for Social Security what plans he has to publicise the independent living fund for disabled people.

  Mr. Hague
  The provision of information to potential clients of the independent living (1993) fund is a matter solely for the trustees. I understand from the fund's director that the trustees have a carefully focused programme to ensure that potential clients of the fund, and local authority social services departments which must support applications to the fund, are aware of the eligibility criteria and application procedures.

  Social Fund
  Mr. Gordon Prentice
  To ask the Secretary of State for Social Security what assessment he made of the regional variations in the cost of a(a) new grave and (b) funeral in making his decision about funeral payments under the social fund.

  Mr. Roger Evans
  We took account of a range of factors, including regional variations in costs, before making our proposals. These are now with the social security advisory committee. We expect to receive its report shortly.

  Mr. David Shaw
  To ask the Secretary of State for Social Security whether he will make a further allocation of funds to the discretionary social fund budget.

  Mr. Roger Evans
  I am pleased to announce that due to further improvements in the recovery of social fund loans we have been able to make another additional 736
  allocation in the current financial year. A total of £2 million in equal amounts of £100,000 is to be made available to the Benefits Agency's area directorates on 16 February 1995. This is on top of the £13 million in additional allocations we were able to make in November 1994.

  The whole of the additional allocation will be devoted to social fund loans. We believe that social fund loans offer excellent value for money. They enable us to target available resources on those in most need and to recycle funds to help more applicants.

  Since the scheme started, we have been able to make nearly £1.3 billion worth of loans for an outlay of only £286 million. This expansion of the social fund loans budget will ensure that more people receive help and that the fund continues to play a valuable role in complementing mainstream social security provision.

  Details of individual district allocations have been placed in the Library.

  Mortgages (Insurance Cover)
  Mr. Battle
  To ask the Secretary of State for Social Security what representations he has received about insurance cover on home mortgages from the insurance ombudsman; and if he will make a statement.

  Mr. Roger Evans
  None, but we will be seeking the views of the insurance ombudsman as part of the consultation process.

  Personal Assistants
  Mr. Jim Cunningham
  To ask the Secretary of State for Social Security what discussions he has had with his colleagues on the employment status of personal assistants, with special reference to personal assistants employed by(a) local authorities and (b) other bodies.

  Mr. Arbuthnot
  We have had no discussions on this subject.

  Jobseeker's Allowance
  Mr. Jim Cunningham
  To ask the Secretary of State for Social Security if he will make it his policy that people who leave their job because of discrimination or exploitation at work should not be obliged to live on reduced income support or no benefit at all while their case is being investigated.

  Mr. Roger Evans
  The Government have considered this issue in the context of the introduction of the new jobseeker's allowance. Where a doubt arises as to whether a claimant has left his job without just cause, but the claimant satisfies the conditions of entitlement for jobseeker's allowance, the Government propose to pay benefit in full until a decision is reached on the case by an independent adjudication officer. This change will be introduced from April 1996.

  Unemployment Benefit
  Mr. Jim Cunningham
  To ask the Secretary of State for Social Security if he will make it his policy that suspension from unemployment benefit will not prejudice applications for hardship payments, and that each application will be decided on its merits alone.

  Mr. Roger Evans
  Unemployment benefit is suspended where a question arises over the claimant's
  737
  entitlement. In such cases, hardship payments of income support are made at the discretion of an adjudication officer on a case-by-case basis. However, hardship payments may be made only to people who are not actively seeking work if they have children, are pregnant or have a pregnant partner, or a sick or disabled or have a partner who is sick or disabled.

  Mr. Frank Field
  To ask the Secretary of State for Social Security how many unemployed claimants(a) immediately draw income support, (b) draw only unemployment benefit, (c) draw unemployment benefit and means-tested support and (d) draw income support as the right to draw unemployment benefit ceases in the last year for which figures are available.

  Mr. Roger Evans
  The available information is contained in tables 1.1 of the "Quarterly Analyses of Unemployed Claimants", copies of which are in the Library.

  Housing Benefit
  Mr. Donohoe
  To ask the Secretary of State for Social Security how many successful housing benefit applications for each district council in Scotland there have been in each financial year since 1985–86; and if he will make a statement.

  Mr. Roger Evans
  Information is not available in the format requested. I refer the hon. Member to the answer I gave to him on Thursday 27 October,Official Report, column 801. The available case load information for 1994 is set out in the table.

  Average housing benefit caseload for each district in Scotland 1994 (based on February, May and August 1994 data)

  District

  Average housing benefit caseload

  Aberdeen

  16,379

  Angus

  6,769

  Annandale and Eskdale

  2,517

  Argyll-Bute

  5,306

  Badenoch

  823

  Banff and Buchan

  5,531

  Bearsden and Milngavie

  923

  Berwickshire

  1,342

  Caithness

  2,033

  Clackmannan

  5,759

  Clydebank

  6,726

  Clydesdale

  4,540

  Cumbernauld

  2,656

  Cumnock and Doon

  5,329

  Cunninghame

  13,498

  Dumbarton

  7,421

  Dundee

  23,257

  Dunfermline

  10,977

  Housing benefit expenditure

  Scottish authorities

  1985–86 £

  1986–87 £

  1987–88 £

  1988–89 £

  1989–90 £

  1990–91 £

  1991–92 £

  1992–93 £

  1993–94 £

  Aberdeen

  8,730,000

  10,650,000

  13,280,000

  13,290,000

  14,760,000

  14,530,000

  15,580,000

  16,570,000

  18,330,000

  Angus

  4,110,000

  4,580,000

  4,880,000

  4,440,000

  5,160,000

  5,390,000

  5,740,000

  6,250,000

  6,970,000

  Annandale and Eskdale

  1,760,000

  1,890,000

  2,010,000

  2,040,000

  2,160,000

  2,260,000

  2,570,000

  2,970,000

  3,380,000

  Argyll-Bute

  3,670,000

  3,890,000

  4,160,000

  4,230,000

  4,970,000

  5,510,000

  6,470,000

  7,900,000

  9,240,000

  Badenoch

  510,000

  600,00

  620,000

  640,000

  660,000

  670,000

  830,000

  1,090,000

  1,310,000

  Banff and Buchan

  3,500,000

  4,020,000

  4,110,000

  4,250,000

  4,790,000

  5,000,000

  5,170,000

  5,970,000

  6,470,000

  Bearsden and Milngavie

  520,000

  630,000

  750,000

  790,000

  870,000

  930,00

  1,140,000

  1,340,000

  1,510,000

  738

  Average housing benefit caseload for each district in Scotland 1994 (based on February, May and August 1994 data)

  District

  Average housing benefit caseload

  East Kilbride

  1,233

  East Lothian

  6,950

  Eastwood

  1,278

  Edinburgh

  41,671

  Ettrick and Lauderdale

  2,246

  Falkirk

  14,297

  Glasgow

  124,771

  Gordon

  2,746

  Hamilton

  11,483

  Inverclyde

  11,058

  Inverness

  4,470

  Kilmarnock

  8,563

  Kincardine and Deeside

  1,670

  Kirkcaldy

  14,520

  Kyle and Carrick

  10,078

  Lochaber

  1,507

  Midlothian

  4,920

  Monklands

  13,659

  Moray

  5,487

  Motherwell

  18,488

  Nairn

  790

  Nithsdale

  4,346

  North East Fife

  3,729

  Orkney Isles

  964

  Perth and Kinross

  8,230

  Renfrew

  21,121

  Ross and Cromarty

  4,089

  Roxburgh

  3,069

  Shetland Isles

  1,038

  Skye and Lochalsh

  784

  Stewartry

  1,416

  Stirling

  6,695

  Strathkelvin

  3,948

  Sutherland

  1,015

  Tweeddale

  936

  West Lothian

  10,522

  Western Isles

  1,728

  Wigtown

  3,247

  Source:

  Housing Benefit Management Information System

  Notes:

  1. The above figures refer to benefit units which may be a single person or a couple.

  2. The average case-load is based on 100 per cent. inquiries taken at the end of February, May and August 1994. November 1994 figures are not yet available.

  3. When a local authority has failed to send in a return, figures have been estimated.

  Mr. Donohoe
  To ask the Secretary of State for Social Security how much money was spent on housing benefit, for each district council area in Scotland in each financial year since 1985–86; and if he will make a statement.

  Mr. Roger Evans
  The available information is set out in the table.
  739

  Housing benefit expenditure

  Scottish authorities

  1985–86 £

  1986–87 £

  1987–88 £

  1988–89 £

  1989–90 £

  1990–91 £

  1991–92 £

  1992–93 £

  1993–94 £

  Berwickshire

  980,000

  1,010,000

  1,080,000

  1,120,000

  1,170,000

  1,220,000

  1,340,000

  1,530,000

  1,740,000

  Caithness

  1,200,000

  1,300,000

  1,490,000

  1,590,000

  1,730,000

  1,830,000

  2,060,000

  2,380,000

  2,660,000

  Clackmannan

  2,470,000

  2,780,000

  3,050,000

  3,110,000

  3,850,000

  4,330,000

  4,720,000

  5,180,000

  5,660,000

  Clydebank

  3,760,000

  4,530,000

  5,270,000

  5,840,000

  7,040,000

  7,670,000

  7,860,000

  8,110,000

  8,710,000

  Clydesdale

  2,390,000

  2,590,000

  2,750,000

  2,940,000

  3,280,000

  3,540,000

  3,930,000

  4,540,000

  5,170,000

  Cumbernauld

  1,190,000

  1,400,000

  1,600,000

  1,760,000

  2,110,000

  2,550,000

  3,180,000

  3,580,000

  3,830,000

  Cumnock and Doon

  2,440,000

  2,770,000

  3,130,000

  3,090,000

  3,430,000

  3,640,000

  4,290,000

  5,310,000

  5,980,000

  Cunninghame

  5,950,000

  7,340,000

  9,060,000

  9,240,000

  10,670,000

  11,580,000

  13,100,000

  15,450,000

  17,680,000

  Dumbarton

  3,160,000

  3,920,000

  4,990,000

  5,900,000

  6,960,000

  8,000,000

  8,660,000

  9,710,000

  11,090,000

  Dundee

  12,220,000

  14,340,000

  16,680,000

  18,890,000

  24,220,000

  27,750,000

  31,000,000

  34,600,000

  37,570,000

  Dunfermline

  5,170,000

  6,100,000

  6,870,000

  7,790,000

  9,130,000

  10,020,000

  11,290,000

  12,800,000

  14,290,000

  East Kilbride

  570,000

  670,000

  690,000

  670,000

  930,000

  1,090,000

  1,310,000

  1,670,000

  2,020,000

  East Lothian

  3,910,000

  4,540,000

  5,170,000

  5,560,000

  6,430,000

  6,800,000

  7,940,000

  8,410,000

  9,120,000

  Eastwood

  620,000

  680,000

  700,000

  720,000

  840,000

  910,000

  1,040,000

  1,560,000

  1,820,000

  Edinburgh

  33,380,000

  38,890,000

  49,370,000

  50,600,000

  57,520,000

  60,470,000

  65,160,000

  73,400,000

  79,750,000

  Ettrick and Lauderdale

  1,360,000

  1,400,000

  1,480,000

  1,470,000

  1,550,000

  1,680,000

  1,890,000

  2,290,000

  2,550,000

  Falkirk

  8,240,000

  9,150,000

  9,910,000

  10,060,000

  11,420,000

  12,040,000

  13,110,000

  14,600,000

  16,300,000

  Glasgow

  66,190,000

  81,480,000

  96,050,000

  106,050,000

  136,220,000

  153,520,000

  175,490,000

  194,090,000

  207,080,000

  Gordon

  1,520,000

  1,810,000

  1,940,000

  1,890,000

  2,190,000

  2,180,000

  2,630,000

  3,360,000

  3,690,000

  Hamilton

  5,820,000

  6,880,000

  7,980,000

  7,860,000

  9,350,000

  9,860,000

  10,680,000

  12,750,000

  14,100,000

  Inverclyde

  5,860,000

  6,770,000

  7,480,000

  7,760,000

  9,500,000

  10,610,000

  11,580,000

  13,550,000

  14,720,000

  Inverness

  2,340,000

  2,760,000

  3,230,000

  3,360,000

  4,600,000

  4,480,000

  4,960,000

  5,950,000

  6,980,000

  Kilmarnock

  4,420,000

  5,240,000

  5,940,000

  6,070,000

  6,970,000

  7,360,000

  8,230,000

  8,920,000

  9,910,000

  Kincardine and Deeside

  850,000

  1,020,000

  1,120,000

  1,060,000

  1,080,000

  1,210,000

  1,290,000

  1,610,000

  2,060,000

  Kirkcaldy

  7,780,000

  8,910,000

  9,880,000

  10,790,000

  12,810,000

  14,220,000

  15,890,000

  19,700,000

  22,080,000

  Kyle and Carrick

  5,680,000

  6,410,000

  7,020,000

  6,810,000

  8,450,000

  9,280,000

  10,320,000

  11,940,000

  15,170,000

  Lochaber

  1,090,000

  1,160,000

  1,220,000

  1,170,000

  1,230,000

  1,310,000

  1,520,000

  1,790,000

  2,180,000

  Midlothian

  2,960,000

  3,140,000

  3,310,000

  3,760,000

  4,330,000

  4,020,000

  4,180,000

  4,720,000

  5,530,000

  Monklands

  7,120,000

  9,430,000

  10,250,000

  10,920,000

  12,150,000

  12,580,000

  13,920,000

  15,060,000

  16,480,000

  Moray

  3,440,000

  3,770,000

  4,230,000

  4,480,000

  5,140,000

  5,310,000

  5,190,000

  6,000,000

  7,090,000

  Motherwell

  9,590,000

  10,730,000

  12,210,000

  12,710,000

  14,180,000

  15,030,000

  15,640,000

  17,910,000

  20,830,00

  Nairn

  460,000

  550,000

  620,000

  670,000

  680,000

  590,000

  690,000

  900,000

  1,050,000

  Nithsdale

  2,200,000

  2,540,000

  2,680,000

  2,790,000

  3,240,000

  3,600,000

  4,190,000

  5,220,000

  5,900,000

  North East Fife

  2,710,000

  3,190,000

  3,420,000

  3,520,000

  3,810,000

  3,790,000

  4,190,000

  4,830,000

  5,270,000

  Orkney

  530,000

  630,000

  740,000

  760,000

  930,000

  950,000

  1,100,000

  1,260,000

  1,420,000

  Perth and Kinross

  4,910,000

  5,440,000

  5,790,000

  5,550,000

  6,390,000

  7,160,000

  7,930,0000

  9,440,000

  10,320,000

  Renfrew

  9,800,000

  11,820,000

  13,510,000

  13,720,000

  15,980,000

  18,930,000

  21,810,000

  25,680,000

  28,620,000

  Ross and Cromarty

  2,370,000

  2,750,000

  3,000,000

  3,040,000

  3,380,000

  3,570,000

  4,210,000

  5,150,000

  6,160,000

  Roxburgh

  2,010,000

  2,190,000

  2,200,000

  2,240,000

  2,440,000

  2,520,000

  2,920,000

  3,840,000

  4,120,000

  Shetland

  590,000

  690,000

  730,000

  730,000

  840,000

  970,000

  1,160,000

  1,410,000

  1,550,000

  Skye and Lochalsh

  430,000

  520,000

  590,000

  580,000

  690,000

  790,000

  950,000

  1,140,000

  1,340,000

  Stewartry

  930

  1,020,000

  1,050,000

  1,060,000

  1,180,000

  1,260,000

  1,530,000

  1,800,000

  2,000,000

  Stirling

  3,930,000

  4,680,000

  5,320,000

  5,280,000

  6,030,000

  6,530,000

  7,360,000

  8,460,000

  9,890,000

  Strathkelvin

  2,480,000

  3,100,000

  3,510,000

  3,790,000

  3,970,000

  4,270,000

  4,860,000

  5,660,000

  6,450,000

  Sutherland

  610,000

  700,000

  730,000

  750,000

  780,000

  880,000

  1,010,000

  1,220,000

  1,460,000

  Tweeddale

  520,000

  620,000

  640,000

  730,000

  780,000

  850,000

  950,000

  1,100,000

  1,290,000

  Western Isles

  1,270,000

  1,300,000

  1,370,000

  1,560,000

  1,710,000

  1,810,000

  2,490,000

  2,650,000

  2,880,000

  West Lothian

  5,880,000

  6,520,000

  6,920,000

  6,560,000

  7,510,000

  7,890,000

  8,820,000

  10,180,000

  11,310,000

  Wigtown

  2,140,000

  2,300,000

  2,310,000

  2,390,000

  2,770,000

  2,920,000

  3,560,000

  4,510,000

  5,160,000

  Total

  280,340,000

  329,720,000

  380,090,000

  400,440,000

  476,970,000

  519,660,000

  580,630,000

  659,000,000

  727,220,000

  All figures rounded to the nearest £10,000.

  Source:

  Audited subsidy claims, except 1993–94 which is final subsidy claim.

  Mr. Frank Field
  To ask the Secretary of State for Social Security how many people were claiming(a) housing benefit and (b) council tax rebate at the last available date.

  Mr. Roger Evans
  At the end of August 1994, there were 4,667,000 recipients of housing benefit and 5,606,000 recipients of council tax benefit. A recipient may be a single person or a couple.

  Income Support
  Mr. Simon Hughes
  To ask the Secretary of State for Social Security what is the current policy of his Department regarding payment of deductions from benefits for rent arrears to local authorities; and what changes to the policy he is considering.
  740
  Mr. Roger Evans
  Deductions from income support for rent arrears are paid to local authorities at intervals of 13 weeks and credited to tenants' rent accounts. There are no plans to change this policy.

  Ms Harman
  To ask the Secretary of State for Social Security (1) what is the total amount of income support annually given to families with(a) one adult working, (b) two adults working and (c) three or more adults working, specifying the amount given to people aged 18 to 24 years in each category; and how much is given to single parents in category (a);

  (2) how many families currently receiving income support have (a) one adult working, (b) two adults working and (c) three or more adults working, specifying

  741
  the number of people aged 18 to 24 years each category includes; and how many single parents are included in (a).

  Mr. Roger Evans
  The available information is in the table.

  Information relating to part (c) is not available, as any working adults living in the same household as the claimant and their partner would claim income support in their own right.

  Number of families

  Average weekly income support £

  Estimated annual income support £ million

  One adult worker

  117,000

  72.88

  442

  of which:

  — single parents

  74,000

  67.08

  257

  — 18–24 year olds

  7,000

  56.16

  21

  Two adult workers

  1,000

  90.17

  2

  of which:

  — 18–24 year olds

  0

  0

  0

  Figures rounded to nearest thousand.

  Notes:

  1. Estimated annual income support is calculated as total weekly income support—number of families in the inquiry week multiplied by average weekly income support—multiplied by 52.

  2. Families have been taken to mean a single person or couple with dependants. Expenditure figures in the departmental report for families are benefits for lone parents only.

  3. Adult workers can be either the claimant or partner.

  4. Figures may not sum to totals due to rounding.

  5. There may be some 18 to 24-year-old lone parents who will be included in both categories but will only be counted once i n the overall total.

  Source:

  6. Income support quarterly statistical inquiry—February 1994.

  Contribution Conditions
  Mr. Frank Field
  To ask the Secretary of State for Social Security, pursuant to his answer of 10 February,Official Report, columns 433–35, if he will publish the calculations of his Department on the number of claimants who lost (a) unemployment benefit, (b) sickness benefit or (c) retirement pension as a result of the changes in the contributory conditions since 1975.

  Mr. Arbuthnot
  Information relating to unemployment benefit and sickness benefit is not yet available. I will let the hon. Member have such information as becomes available as soon as possible.

  The information available in relation to retirement pension is as follows.

  No existing beneficiary lost entitlement to retirement pension as a result of the changes to the contribution conditions since 1975.

  For new beneficiaries, comparisons between notional entitlement under the pre-1975 legislation and actual entitlements are not available.

  In general, the 1975 changes made it easier for a person to qualify for retirement pension. The financial and explanatory memorandum to the 1972 Social Security Bill stated that the extra cost of the overall changes to the contribution conditions for benefits was likely to be small.

  Similarly, no financial savings were anticipated from the 1978–79 change to the definition of a qualifying year; I refer the hon. Member to the Official Report, 29 April 1975, column 355.
  742

  Fraud
  Mr. Frank Field
  To ask the Secretary of State for Social Security what are the organisational links between his Department and other departments which are concerned with countering benefit fraud.

  Mr. Arbuthnot
  Close and effective links are maintained between the Benefits Agency, the Employment Service, local authorities and the police to combat benefit fraud. Through its work with the ministerial group on crime prevention and other initiatives, the Department has also established contact with a number of other Departments and agencies.

  Asbestosis
  Mr. Worthington
  To ask the Secretary of State for Social Security how many sufferers from asbestosis paid back benefits to the compensation recovery unit of his Department in the period 1 April 1994 to 31 January 1995; and what was the range of repayments they made.

  Mr. Roger Evans
  I refer the hon. Member to the reply I gave him on 13 February,Official Report, column 542.

  Residential Care and Nursing Homes
  Mr. Hinchliffe
  To ask the Secretary of State for Social Security what is his estimate of the number of residents of care or nursing homes with preserved entitlements to Department of Social Security benefits who have currently insufficient personal resources to meet the costs of their care.

  Mr. Roger Evans
  The number of residents with preserved rights to the higher limits of income support whose total entitlement to social security benefits does not meet the fees is about 78,500.

  Some of these residents may have disregarded benefits, income or capital which could be used to meet any shortfalls.

  Source: February 1994 quarterly statistical inquiry.

  Benefits Agency Medical Service
  Mr. Bradley
  To ask the Secretary of State for Social Security (1) how many claimants in each region, for each quarter ending March 1994, were examined by the Benefits Agency medical service; and how many were found capable of(a) all work and (b) alternative work;

  (2) how many claims for sickness and invalidity benefit were referred to the Benefits Agency medical service in each quarter since March 1994; how many of these resulted in an examination; and what were the outcomes (a) where examinations took place and (b) where they did not.

  Mr. Roger Evans
  The administration of Benefits Agency medical services is a matter for Mr. Michael Bichard, the chief executive of the Benefits Agency. He will write to the hon. Member with such information as is available.
  743
  Letter from Michael Bichard to Mr. Keith Bradley, dated 15 February 1995:
  The Secretary of State for Social Security has asked me to reply to your recent Parliamentary Questions about examinations made by the Benefits Agency Medical Services (BAMS). This was with regard to the number of customers found capable of work for each quarter ending March 1994; also from March 1994 with regard to the number of sickness and invalidity benefit cases referred to BAMS and the outcomes.
  The BAMS are asked to give an opinion on capacity for work by the independent Adjudication Officer (AO). The decision on the claim to benefit is made by the AO and whilst the AO may take the opinion of the BAMS into account in making a decision the AO is not bound by that opinion. An opinion that a customer is fit for work is not given by the BAMS without the customer being examined. If the evidence available to the BAMS suggests that the customer is incapable of all work, then there will usually be no need for an examination.
  For the year ending March 1994 I have provided information in respect of those cases referred to the BAMS to ask for an opinion on incapacity in relation to Sickness Benefit and Invalidity Benefit. The information for the four quarters ending March 1994 is provided in Annexes A,B,C and D.
  The information requested from March 1994 is provided in Annexes E and F. Figures for the quarter ending 31 December 1994 will not be available until the end of February.
  It should be noted that the figures given may not accurately reflect cases referred to the BAMS within each quarter at each centre because relevant statistics are compiled at the date a case is cleared rather than the date it is received. All of the Annexes have been placed in the Library.
  I hope you find this reply helpful.

PRIME MINISTER

  Private Office Staff
  Mr. MacShane
  To ask the Prime Minister how many of his private office staff are fluent in European languages and which ones.

  The Prime Minister
  A number of my staff are fluent in a number of European languages.

  Phoenix Project
  Mr. Chidgey
  To ask the Prime Minister what response he has made to the letter dated 19 May 1994 from the leader of Somerset county council concerning the Phoenix project.

  The Prime Minister
  My office has no trace of the letter.

  Sustainable Development
  Mr. Dafis
  To ask the Prime Minister if he will set out the conclusions or recommendations of paragraphs 11, 19, 20, 23, 29, 31, 35, 40 and 50 of the first report of the British Government on sustainable development, together with the Government's response in each case.

  The Prime Minister
  My right hon. Friend the Secretary of State for the Environment has welcomed the first report from the Government panel on sustainable development. The Government will consider the recommendations and respond in due course.
  744

  Lockerbie
  Mr. Dalyell
  To ask the Prime Minister what representations he has had from Dr. David Fieldhouse, former police surgeon at Bradford, on the discrepancies between the Foreign Secretary's explanation of events concerning himself in relation to Lockerbie in December 1988 and Dr. Fieldhouse's own account of duties as a police surgeon as agreed by the Dumfries and Galloway police.

  The Prime Minister
  None.

  Knighthoods
  Mr. Sedgmore
  To ask the Prime Minister how many hon. Members have received knighthoods since the 1979 general election.

  The Prime Minister
  One hundred and twenty two hon. Members have received knighthoods since the 1979 general election.

  Oxfordshire Education Authority
  Mr. Spearing
  To ask the Prime Minister, following his recent statement, how Oxfordshire education authority will be able to maintain its current pupil to teacher ratio in the financial year 1995–96.

  The Prime Minister
  Under local management of schools, it is for governing bodies to determine school staffing levels within the resources available to them, including reserves.

  Climate Change Convention
  Mr. Dafis
  To ask the Prime Minister, if he will be attending the meeting of the conference of the parties of the climate change convention, in Berlin in March.

  The Prime Minister
  No. However, my right hon. Friend the Secretary of State for the Environment hopes to attend.

  Engagements
  Sir Peter Tapsell
  To ask the Prime Minister if he will list his official engagements for Thursday 16 February.

  Mr. Harry Greenway
  To ask the Prime Minister if he will list his official engagements for Thursday 16 February.

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

  Special and Political Advisers
  Mr. Hutton
  To ask the Prime Minister how many ministerial special and political advisers were paid salaries in excess of the highest salary payable to a civil servant in each of the last five years; and what were the total annual salary payments to those advisers in each of those years.

  The Prime Minister
  None.
  745

  Single European Act
  Mr. Madden
  To ask the Prime Minister if he will arrange for a copy of a report he commissioned from the head of the Cabinet Office European Secretariat, concerning the policy implications arising from the opt-out negotiated by Her Majesty's Government in 1985 to the Single European Act to be placed in the Library.

  The Prime Minister
  No. It has been the practice of successive Administrations not to disclose policy advice.

  Mr. Madden
  To ask the Prime Minister, what representations he has received expressing concern at the requirement under the Single European Act on non-British citizens settled in the United Kingdom, to obtain visas before making short visits to other member states of the European Union; and if he will make a statement.

  The Prime Minister
  As far as I am aware, none. The Single European Act contained no provisions relating to visa requirements.

  Intergovernmental Conference
  Mr. Madden
  To ask the Prime Minister, what action he proposes, in relation to the forthcoming intergovernmental conference, concerning the maintenance by the United Kingdom of its frontier immigration controls; and if he will make a statement.

  The Prime Minister
  We shall take whatever steps are necessary to maintain our frontier controls. It is too soon to decide whether we shall need to take action on this during next year's intergovernmental conference.

TREASURY

  Pool Betting Duty and Lottery Duty
  Mr. Alton
  To ask the Chancellor of the Exchequer what measures he is taking to address the tax anomaly between football pools operators and the national lottery in respect of the aggregate out-take from receipt for duty and good causes.

  Mr. Heathcoat-Amory
  I have no present plans to change the rates of either pool betting duty or lottery duty. In his Budget speech on 16 March 1993, my right hon. Friend the member for Kingston upon Thames (Mr. Lamont) said that, in deciding the tax rate of the national lottery, account was taken of the level of tax on other forms of gambling and the extent to which spending was likely to be diverted from other taxed activities. He went on to say that much would depend on how the lottery developed and the position would be kept under review. In his recent Budget speech, the Chancellor announced that the 1991 reduction in pools betting duty of 2.5 per cent., to help fund the Foundation for Sport and the Arts, should continue for another five years provided that the pools companies also continue to fund sport and the arts at their present level. HM Customs and Excise is monitoring the effect of the national lottery on receipts of pool betting duty and other gambling duties.

  Iraq (Sanctions)
  Mr. Cousins
  To ask the Chancellor of the Exchequer what lists Customs and Excise prepared of countries or destinations which were possible diversionary routes for 746
  the evasion of sanctions at the time of, or after, the passing of the Iraq sanctions orders in 1990.

  Mr. Heathcoat-Amory
  Customs and Excise has prepared a number of lists at different times, based on intelligence currently available, to assist its officers to prevent breaches of the Iraq sanctions orders. It is not Customs' policy to make public such information provided in confidence to support operational effectiveness.

  Civil Servants (Rail Travel Costs)
  Ms Jowell
  To ask the Chancellor of the Exchequer what was the cost of rail travel incurred by civil servants in the course of their duties; and what proportion of this total represents the cost of(a) first class and (b) standard class travel for each year since 1991.

  Sir George Young
  Government Departments and agencies are responsible for the travel arrangements of staff travelling on official business. Details of the costs of rail travel and the class of travel used by civil servants are not held centrally.

  UK Residents
  Ms. Jowell
  To ask the Chancellor of the Exchequer how many people were United Kingdom residents for tax purposes but not domiciled in the UK for each year since 1991.

  Sir George Young
  This information is not available and could be obtained only at disproportionate cost.

  European Community Budget
  Mr. Hain
  To ask the Chancellor of the Exchequer when he expects the final adopted version of the EU budget for a 15-member Community; and if he will publish figures showing the level of expenditure for 1995 for all 15 members.

  Mr. Heathcoat-Amory
  The 1995 EC budget was adopted by the President of the European Parliament on 15 December 1994 on the basis of 15 member states. It will be published soon in the Official Journal.

  The total commitments in 1995 amount to 80.9 billion ecu, or £63.8* billion and total payments to 76.5 billion ecu, or £60.4 billion. The budget does not give details of expenditure receipts by member state.
  *Throughout this reply an exchange rate of £1=1.2675 ecu has been used.

  Mr. Hain
  To ask the Chancellor of the Exchequer if he will make a statement on the process of Her Majesty's Treasury's drawing up a supplementary and amending budget which allocates the additional expenditure to the detailed EU budget headings among new member states.

  Mr. Heathcoat-Amory
  The 1995 EC budget which was adopted by the President of the European Parliament on 15 December 1994 includes provision for additional expenditure to take account of enlargement.

  The Commission will shortly be proposing a preliminary draft supplementary and amending budget which will allocate the additional expenditure to individual EC budget headings, as necessary. The Government will carefully consider the proposal, which will be subject to the usual parliamentary scrutiny procedure.
  747

  Review Body on Senior Salaries
  Mr. Andrew Smith
  To ask the Chancellor of the Exchequer if he will estimate the cost to the Exchequer in 1995–96 of implementing the review body on senior salaries 17th report.

  Mr. Aitken
  The estimated cost in 1995–96 of implementing the seventeenth report of the review body on senior salaries is £5.7 million, which includes salary increases and associated national insurance and pension contributions. It will be met from the existing public expenditure provision.

  Group of Seven Meeting
  Mr. Dafis
  To ask the Chancellor of the Exchequer how much time the Group of Seven Finance Ministers and central bank governors spent discussing the long-term ecological sustainability of economic activity at their recent meeting in Toronto.

  Mr. Heathcoat-Amory
  There was no discussion of this issue.

  Advertising
  Mr. Malcolm Bruce
  To ask the Chancellor of the Exchequer what was the total expenditure on all forms of advertising by his Department and its agencies for each year since its 1979, in 1994 prices.

  Mr. Nelson
  [holding answer 13 February 1995]: Expenditure by HM Treasury and the Chancellor's agencies on advertising in the period 1988–89 to 1993–94 at 1993–94 prices, and the spend to date in 1994–95 is shown in the table. Figures for other years could be obtained only at disproportionate cost.

  Year

  HM Treasury £

  Privatisation for which HMT responsible £

  Agencies £

  1988–89

  64,900

  —

  —

  1989–90

  70,822

  —

  434,550

  1990–91

  49,671

  —

  779,087

  1991–92

  112,096

  13,976,853

  82,255

  1992–93

  50,204

  —

  399,420

  1984

  1985

  1986

  1987

  1988

  1989

  1990

  1991

  1992

  1993

  1994 (part)

  Cattle

  2

  0

  0

  0

  246

  0

  0

  0

  0

  0

  0

  Sheep

  0

  0

  0

  0

  0

  265

  0

  0

  334

  0

  287

  Pigs

  285

  1,041

  717

  598

  643

  817

  859

  796

  264

  184

  1,032

  Poultry

  43,944

  110,141

  151,232

  229,701

  273,240

  325,835

  471,649

  718,366

  762,625

  183,018

  662,126

  Source:

  HM Customs and Excise

  British Beef (German Import Restrictions)
  Sir Teddy Taylor
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the continuing German restrictions on the import of British beef, what representation he has received concerning the legality of the restrictions; and what action the Government can take to resolve the issue.

  Mrs. Browning
  The German Government have implemented the European Commission decision on BSE rules for the export of UK beef to other member states,
  748

  Year

  HM Treasury £

  Privatisation for which HMT responsible £

  Agencies £

  1993–94

  19,651

  10,810,000

  536,046

  1994–95

  2,373

  7,603,000

  446,071

  Tiger Products
  Mr. Tony Banks
  To ask the Chancellor of the Exchequer if he will give details of all tiger products seized in 1994 and in 1995 to date by Her Majesty's Customs and Excise.

  Mr. Heathcoat-Amory
  [holding answer 15 February 1995]: The figures are as follows:

  1994

  1 tiger skin

  9 tiger teeth

  41 packets of tigerbone plasters

  1,726 individual tigerbone plasters

  20 x 70 cl bottles of tigerbone tincture

  96 bottles of tigerbone pills

  1995 (to date)

  10 packets and 1 bottle of tigerbone pills.

AGRICULTURE, FISHERIES AND FOOD

  Live Animal Exports
  Mr. Elliot Morley
  To ask the Minister for Agriculture, Fisheries and Food, if he will list the number and type of livestock exported for(a) slaughter and (b) further fattening to Greece in each year since 1984.

  Mr. Jack
  Official trade statistics for total numbers of livestock exported to Greece between 1984 and 1993, and in the first nine months of 1994, are given in the table. These statistics do not distinguish animals for slaughter or for fattening. However, information derived from 'the Animo computer system in 1994 shows that health certification issued for sheep and pigs being exported to Greece has been for breeding animals only.

  which exempt meat from animals born after 1 January 1992 from any special trade conditions. In some German Lander, however, there are voluntary trade bans on the importation of UK beef. The European Commission has written to the German authorities questioning the legality of these voluntary bans under Community law. I welcome this prompt action by the European Commission.

  The Government have received no representations about these developments, but will continue to seek the respect of EC law in this area.
  749

EMPLOYMENT

  Earnings Statistics
  Mr. Nigel Evans
  To ask the Secretary of State for Employment what was the real increase in take-home pay of a single man at the lowest 10 per cent. of the earnings distribution, between(a) 1973–74 and 1978–1979 and (b) 1978–79 and 1993–94.

  Mr. Oppenheim
  Real take-home pay for a single man at the lowest 10 per cent. of the earnings distribution fell by 1 per cent. between 1973–74 and 1978–79 and increased by 23 per cent. between 1978–79 and 1993–94.

  Jobseeker's Allowance
  Mr. McCartney
  To ask the Secretary of State for Employment whether benefit can be reclaimed if a claimant who was taking steps to carry out a reasonable direction for purposes of seeking entitlement to jobseeker's allowance benefit fails to do so.

  Miss Widdecombe
  If a claimant fails to carry out a jobseeker's direction which was reasonable having regard to his circumstances, the adjudication officer will consider whether he had good cause for doing so in deciding whether to impose a sanction. Jobseeker's allowance will be paid in full until the adjudication officer has made the decision.

  If the adjudication officer decides that the claimant failed without good cause to carry out the direction, a sanction will be applied for two weeks. Vulnerable groups will have access to hardship payments during a period of sanction.

  Unemployment
  Ms Harman
  To ask the Secretary of State for Employment how many people, and what proportion of the unemployed, left unemployment in each quarter since 1974 to(a) go into work and (b) leave the labour force altogether; and what figures he has for those in each category who had been unemployed for (i) 0 to six months, (ii) six to 12 months, (iii) one to two years and (iv) two years or more.

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

  Ms Harman
  To ask the Secretary of State for Employment, how many people were unemployed in each quarter since 1974 for(a) under a year, (b) between one year and two and (c) more than two years.

  Mr. Oppenheim
  The information on claimant unemployment by duration is available on a quarterly basis from October 1983 and can be obtained from the NOMIS database in the Library. Information on ILO unemployment by duration can be obtained via the quantime labour force survey service in the Library and is available annually from spring 1984 until spring 1992 and quarterly thereafter.

  Ms Harman
  To ask the Secretary of State for Employment how many persons and what percentage of the work force have been unemployed for(a) under six months and (b) six to 12 months, (c) 12 to 24 months and (d) over 24 months, in Islwyn in each year since 1979 expressing the figure quarterly and breaking the data down by gender.
  750
  Mr. Oppenheim
  Information on the unadjusted level of claimant unemployment by duration in each local authority district or parliamentary constituency is available from October 1983 onwards, for the months of January, April, July and October, and can be obtained from the NOMIS database in the Library. Claimant unemployment by duration cannot be calculated as a percentage of the work-force below the level of travel-to-work-areas.

  Ms Harman
  To ask the Secretary of State for Employment how many people entered unemployment in each quarter since 1974; and what are the figures as a proportion of the labour force.

  Mr. Oppenheim
  Unadjusted figures for claimant unemployment flows in the United Kingdom are available monthly from June 1986 and can be obtained, together with work force denominators, from the NOMIS database in the Library. No information is available on ILO unemployment flows.

  Ms Harman
  To ask the Secretary of State for Employment how many and what percentage of people were unemployed in Islwyn in each quarter since 1979, breaking the data down by gender.

  Mr. Oppenheim
  Information on the unadjusted level of claimant unemployment in each local authority district or parliamentary constituency is available from July 1983 and can be obtained from the NOMIS database in the Library. Claimant unemployment rates are not available below the level of travel-to-work areas.

  Mr. Jim Cunningham
  To ask the Secretary of State for Employment what EU schemes or projects to assist areas of unemployment have benefited Coventry and the west midlands; how much the United Kingdom has benefited from these schemes over the last five years; and what assessment he has made of whether the formulae used by France, Germany and Holland over the last five years to calculate unemployment would have increased the amounts of money coming in the form of grants to Britain to help the unemployed.

  Miss Widdecombe
  Information on funding from the European social fund from 1990 to 1993 is set out in the table. It covers Warwickshire, the west midlands and Great Britain. It is not possible to produce comprehensive figures below county level except at disproportionate cost. The 1994 figures at regional and county level are not yet available.

  In so far as unemployment levels are a factor in determining allocations from ESF, the European Commission uses the International Labour Organisation measure of unemployment published by the Statistical Office of the European Communities. This is an international standard across all European Union countries. Allocations to the UK are thus made on the same basis as those to every other member state.
  751

  ESF funding in Warkwickshire, West Midlands and Great Britain, 1990–1993

  £ pounds

  Year

  Warwickshire

  West Midlands

  Great Britain

  1990

  476,152

  12,034,653

  287,936,452

  1991

  489,787

  22,878,238

  361,623,462

  1992

  517,319

  16,658,843

  361,157,739

  1993

  614,524

  24,795,153

  494,417,781

  Note:

  (i) The figures cover payments made under all the EC Structural Fund Objectives but exclude payments made under Community Initiatives.

  (ii) Warwickshire and West Midlands also benefitted over the period from ESF support for National Government training programmes, figures for which are included in the third column but not the first two.

  Mr. Jim Cunningham
  To ask the Secretary of State for Employment what are the differences in calculating figures for unemployed people in the United Kingdom and in France, Germany and Holland; how Britain benefits by using a different calculation; and whether the use of a different formula for calculating the unemployed puts Britain at an advantage or disadvantage regarding assistance from European funds in the form of grants to fund schemes for unemployment.

  Mr. Oppenheim
  The United Kingdom, in common with most other European Union countries produces two official measures of unemployment: an administratively based count and a labour force survey measure based on the internationally standard measure of unemployment defined by the International Labour Organisation and which forms the basis for international comparisons. Details of the measures of unemployment used by the United Kingdom, France, Germany and Holland can be found in an article in the September 1992,Employment Gazette entitled, "How Unemployment is Measured in Different Countries".

  The European Commission allocates money from the European social fund to member states using the ILO unemployment measure, published by the Statistical Office of the European Communities. This is an international standard across all EU countries. Allocations to the UK are, thus, made on the same basis as those to every other EU member state.

  Trade Union Membership
  Ms Harman
  To ask the Secretary of State for Employment if employers are required to inform employees who do not re-authorise the renewal of their trade union membership subscriptions under the terms of the Trade Union Reform and Employment Rights Act 1993 that they will cease to be members of their trade union.

  Mr. Oppenheim
  No. An employee who does not authorise the continuance of deductions from pay for trade union subscriptions may have moved to another means of payment.

  Labour Statistics
  Ms Harman
  To ask the Secretary of State for Employment pursuant to his answer of 2 February,Official Report, columns 769–70, if he will list for each region in the United Kingdom, since 1979, the number of persons in (a) full-time work and (b) part-time work
  752
  earning (i) less than £1.50 an hour, (ii) between £1.50 and £2.50 an hour and (iii) between £2.50 and £3.50 an hour, also breaking these figures down by gender and the percentage each figure is of the work force.

  Mr. Oppenheim
  Information on the distributions of hourly earnings of full-time adult workers in the regions of Great Britain is shown in table 115 of part E of the new earnings survey reports. Similar information on part-time women workers is shown in table 117 of part F. Copies of these reports are available in the Library.

  Mr. Llwyd
  To ask the Secretary of State for Employment (1) what was the ratio between the UK activity rate and the UK unemployment rate for each year since 1970; and if he will make a statement;

  (2) what was the ratio between the Welsh activity rate and the Welsh unemployment rate for each year since 1970; and if he will make a statement;

  (3) what was the ratio between the UK female activity rate and the UK female unemployment rate for each year since 1970; and if he will make a statement;

  (4) what was the ratio between the UK male activity rate and the UK male unemployment rate for each year since 1970; and if he will make a statement;

  (5) what was the ratio between the Welsh male activity rate and the Welsh male unemployment rate for each year since 1970; and if he will make a statement;

  (6) what was the ratio between the Welsh female activity rate and the Welsh female unemployment rate for each year since 1970; and if he will make a statement.

  Mr. Oppenheim
  I will write to the hon. Member and place a copy of my reply in the Library.

  Job Opportunities
  Dr. Lynne Jones
  To ask the Secretary of State for Employment pursuant to the oral answer on 10 January to the hon. Member for Gateshead, East (Ms Quin),Official Report, column 7, if he will list the international evidence in support of the assertion that ore regulated economies are less successful in creating job opportunities; and what other information he has on this issue.

  Mr. Oppenheim
  I refer the hon. Member to the reply given to the hon. Member for Gateshead, East (Ms Quin) on 10 February 1995,Official Report, columns 473–74.

  Unfair Dismissal
  Ms Eagle
  To ask the Secretary of State for Employment if he will make a statement on the effect of the proposals to change the law on unfair dismissal for part-time workers and on those working fewer than eight hours per week.

  Mr. Oppenheim
  Following the coming into effect on 6 February of the Employment Protection (Part-Time Employees) Regulations 1995, all employees, including those working fewer than eight hours per week, qualify to bring complaints of unfair dismissal after completing two years' continuous service. The effect of this change on business and employment opportunities will be carefully monitored.
  753

  South Thames Training and Enterprise Council
  Ms Harman
  To ask the Secretary of State for Employment when Central London TEC will agree new contracts with the former providers of training and services to South Thames TEC.

  Mr. Paice
  CENTEC is currently drawing Lip its proposals to undertake training and enterprise council responsibilities in the boroughs of Lambeth and Southwark. If these negotiations go well, CENTEC should be able to complete contracting arrangements for the beginning of the new contract year on 27 March 1995.

  Ms Harman
  To ask the Secretary of State for Employment who is responsible for paying the money owed by South Thames TEC to Community Industry in Peckham for work up to 7th November 1994.

  Mr. Paice
  All payments owed to providers by South Thames training and enterprise council prior to 7 November 1994 are a matter for the receiver.

  Ms Harman
  To ask the Secretary of State for Employment if he will publish the Grant Thornton report on the circumstances that led up to the failure of South Thames TEC.

  Mr. Paice
  The Grant Thornton work was commissioned on the basis that it was for the internal consideration of the Department only and was not intended as a public document. However, for the information and inspection of hon. Members, a copy of the report is available in the Library.

HOUSE OF COMMONS

  Disabled People (Access)
  Mr. Cox
  To ask the Chairman of the Accommodation and Works Committee, pursuant to his answer a 8 February,Official Report, columns 243–46, if he visited Westminster Hall on 9 February; and if he will make a statement on the means of access and the facilities that were made available to disabled people attending the lobby by disabled people held on that day.

  Mr. Ray Powell
  I visited Westminster Hall during the course of the mass lobby and was satisfied that the arrangements for access to the hall itself were satisfactory. The Committee's proposals to improve access for disabled people to the Grand Committee Room from Westminster Hall are described in my answer to my hon. Friend on 8 February, columns 243–46. The facilities provided for the organisation of a mass lobby are a matter for the Administration Committee and my hon. Friend may wish to refer any specific matter of particular concern to that Committee.

HOME DEPARTMENT

  Doncaster Prison
  Mr. Redmond
  To ask the Secretary of State for the Home Department what is the current number and annual cost of staff at Doncaster prison; and what are the figures in respect of the agreed tender.
  754
  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. Martin Redmond, dated 16 February 1995:
  The Home Secretary has asked me to reply to your recent Question about the number of and annual cost of staff at Doncaster prison.
  The Prison Service pays a fee to Premier Prison Services Ltd to manage Doncaster prison. It is not broken down into elements such as pay. It is therefore not possible for us to say how much the annual cost of staff is. This is a matter for the company.
  The tender assumed a staffing level of 356 staff. The contract signed with Premier Prison Services Ltd anticipated that additional staff or other resources might be necessary and allowed for the employment of further staff. Costs of additional staff who are authorised by the Prison Service are borne largely by the Prison Service. The price paid by the Prison Service is, however, limited to the maximum permitted by the contract, which equates to the cost per place of £295 per week published at the time of contract award. The Prison Service has authorised the employment of a further 55 staff.
  I understand that Premier Prison Services has employed a further 24 staff for whom they have not sought reimbursement from the Prison Service and the costs of whose employment are borne entirely by the company. This brings the total number of staff to 435.

  Next Steps Agencies
  Mr. Kaufman
  To ask the Secretary of State for the Home Department why he has not yet provided the information about the next step agencies requested by the right hon. Member for Manchester, Gorton in his question of 20 January.

  Mr. Howard
  I wrote to the right hon. Member on 9 February.

  Sikhs (Refugees and Asylum Seekers)
  Mr. Robert Ainsworth
  To ask the Secretary of State for the Home Department (1) how many Sikhs have been granted exceptional leave to remain in each year since 1984.

  (2) how many sikhs have been granted political asylum since 1984.

  Mr. Nicholas Baker
  Information on Sikhs is not separately identifiable in the statistics. The number of Indian nationals recognised as refugees and granted asylum during the period 1 January 1994 to 31 December 1994 was five, and 30 were granted exceptional leave during the same period. Information for the years 1985 to 1993 is given in tables 3.1 and 3.2 of the Home Office Statistical Bulletin: "Asylum Statistics United Kingdom 1993", issue 17/94 published on 14th July 1994, a copy of which is in the Library.

  Long Lartin Prison
  Mr. Cohen
  To ask the Secretary of State for the Home Department if he will make a statement on the death in Long Lartin prison of Mr. Norman Manning; if he has established whether it was racially motivated; and if he will instigate further police investigations into the causes of his death.

  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.
  755
  Letter from Derek Lewis to Mr. Harry Cohen, dated 16 February 1995:
  The Home Secretary has asked me to reply to your recent Question about the death of Mr. Norman Manning in Long Lartin prison on 29 September last year.
  Mr. Manning's death was immediately reported to the police and their investigation started straight away. These inquiries are still in progress and as yet nobody has been charged with any offence. The conduct of the police investigation is a matter for the Chief Officer of the West Mercia Constabulary.
  I am unable to say whether or not further inquiries may be necessary, nor in these circumstances can I comment on the motive for the killing.

  Asylum Seekers
  Mr. Churchill
  To ask the Secretary of State for the Home Department pursuant to his answer of 3 February,Official Report, columns 896–98, (1) how many and what proportion of in-country asylum seekers who were refused both asylum and exceptional leave to remain in 1992 to 1994 have been removed; how many of the balance remain in detention; how many others are required to report regularly to the police or immigration authorities; and in how many cases their addresses are unknown to the authorities;

  (2) how many and what proportion of those citizens of foreign countries, whose in-country application for asylum or exceptional leave to remain were refused in the years 1992 to 1994 have not been removed or left voluntarily; what assessment he has made of the reasons for this; what steps he proposes to take to secure their removal; what reasons underlie the exclusion of people in this category from the statistics published by his Department for inward immigration to the United Kingdom; and if he will now publish revised figures in respect of each of the past five years including those and other categories of illegal entrants known to his Department

  Mr. Nicholas Baker
  I refer my hon. Friend to the reply given to his question on 3 February 1995,Official Report, columns 896–98, which provided the available information on the number of refusals of in-country applications for asylum in 1992–1994, and the number of removals and voluntary departures in 1992–94, of failed in-country asylum applicants. Information before 1992 is not available. Those removed are not necessarily included in the figures for those refused in the same time period and thus it is not possible to determine the proportion of refusals who were not removed.

  In-country asylum applicants are included in the Department's statistics on the number entering the United Kingdom who are subject to immigration control, most of whom enter as visitors or students. These figures are published in table 3.1 of the Command Paper "Control of Immigration Statistics 1993". In addition, separate statistics on asylum applications are published annually in the Home Office statistical bulletin "Asylum Statistics UK 1993". Copies of both are available in the Library.

  The available figures for departures relating to those refused asylum or exceptional leave to remain are for those removed or who embark voluntarily after deportation or illegal entry action has commenced against them. The difference in the published statistics between the number refused asylum or exceptional leave to remain and the number removed or who voluntarily departed in a given year will include persons who are awaiting the
  756
  outcome of an appeal; are allowed to remain after a successful appeal; have withdrawn their claim for asylum; have left the country before steps had been taken to enforce their departure; and those granted permission to stay in another capacity, for example, marriage.

  Removal of failed asylum seekers who fail to leave of their own volition is possible only after all rights of appeal in this country have been exhausted. At that stage, the immigration service will take the appropriate steps to trace and remove failed asylum seekers.

  As at 30 January 1995, 225 persons who had applied for asylum in country were detained, pending the outcome of an appeal or awaiting removal. In addition, as at 13 February 1995, 1,773 persons who had applied for asylum in-country and had been refused asylum or exceptional leave between 1992 to 1994, were placed on restriction orders or granted temporary admission, requiring them to report to the police on a regular basis and/or restricting their place of residence. A further 220 persons are known to have absconded or are classified as missing.

  Mr. Churchill
  To ask the Secretary of State for the Home Department, pursuant to his answer of 3 February,Official Report, columns 896–98, by what date at the present rate of progress, he expects to clear the backlog of 55,255 applications for asylum dependants, outstanding at 31 December 1994; of these how many entered the United Kingdom claiming some grounds other than as asylum seekers; and how many are being detained under secure conditions.

  Mr. Nicholas Baker
  The rate at which the backlog of undecided asylum applications can be reduced will depend in part on the number of applications received in the future. It is therefore not possible to give a reliable forecast of when it might be reduced to a minimum working level. Information is not available on the proportion of the backlog that applied in country for asylum.

  As at 30 January 1995, 139 persons were detained who are awaiting an initial decision on their asylum applications.

  Wild Birds
  Mr. Morley
  To ask the Secretary of State for the Home Department how many offences against wild birds were alleged, and how many of these resulted in successful prosecutions, in each year since 1990;

  (2) how many cases of the persecution of birds of prey have been recorded in each year since 1990.

  Mr. Maclean
  The number of cases of persecution of birds of prey is not recorded centrally.

  The numbers of defendants prosecuted and convicted under the Wildlife and Countryside Act 1981 from 1990 to 1993, latest available, for offences related to birds are given in the table. Information is not collected centrally as to the species involved.
  757

  Number of defendants prosecuted and convicted under the Wildlife and Countryside Act 1981 of offences related to birds, 1990–93 England and Wales

  Prosecutions

  Convictions

  Offence description

  1990

  1991

  1992

  1993

  1990

  1991

  1992

  1993

  Wildlife and Countryside Act 1981

  Protection of wild birds [Section 1]

  35

  45

  44

  48

  24

  33

  33

  32

  Protection of nests and eggs of wild birds [Section 1]

  5

  14

  9

  16

  2

  12

  7

  8

  Illegal entry into bird sanctuaries [Section 3]

  2

  3

  —

  2

  —

  2

  —

  2

  Protection of wild birds in sanctuaries [Section 3]

  —

  1

  —

  —

  —

  1

  —

  —

  Protection of the nests and eggs of wild birds in sanctuaries [Section 3]

  3

  1

  —

  1

  3

  —

  —

  1

  Prohibition of certain methods of lulling or taking wild birds [Section 5]

  11

  7

  7

  10

  9

  6

  5

  8

  Protection of captive birds [Section 8]

  7

  1

  4

  3

  7

  —

  4

  2

  Fire Service College
  Mr. McAllion
  To ask the Secretary of State for the Home Department what is the present financial position of the Fire Service college; what assessment he has made of its future position and if he will make a statement.

  Mr. Nicholas Baker
  The Fire Service college became a next steps agency, operating as a trading fund on 1 April 1992. The published accounts for the financial year 1993–94 show a deficit of £2.7 million. A similar loss is predicted for 1994–95.

  Number of defendants prosecuted and convicted of offences under The Football (Offences) Act 1991, 1992 and 1993 England and Wales

  1992

  1993

  Offence description

  Prosecutions

  Convictions

  Prosecutions

  Convictions

  Throwing a missile at or towards the playing area or any area in which spectators or other persons may be present [Section 2]

  34

  27

  31

  24

  Taking part in indecent or racialist chanting [Section 3]

  31

  21

  17

  10

  Going onto the playing or adjacent area without lawful authority or lawful excuse [Section 4]

  275

  246

  268

  218

  Metropolitan Police Committee
  Mr. Austin-Walker
  To ask the Secretary of State for the Home Department (1) if he will list the names of nominees to the Metropolitan police committee from the London Boroughs Association and the Association of London Authorities;

  (2) which serving members of local authorities in London were appointed to the Metropolitan police committee; and what was the source of their nomination or recommendation;

  (3) if the local authority associations for London were consulted on the composition of, or invited to submit nominations for the Metropolitan police committee: and if he will make a statement;

  (4) how many nominations to the Metropolitan police committee submitted by the Association of London Authorities or London Boroughs Association were accepted.

  Mr. Maclean
  I would refer the hon. Member to the reply given to a question from the hon. Member for East
  758
  With the assistance of external consultants, a review is being undertaken of options for the college's future status and financial structure.

  Football Offences
  Mr. Pendry
  To ask the Secretary of State for the Home Department how many criminal proceedings involving alleged offences contained in sections 2, 3 and 4 of the Football (Offences) Act 1991 were pursued in 1993 and 1994; and how many convictions were secured.

  Mr. Maclean
  Information for 1992 and 1993 is given in the table below.

  The 1994 data will not be available until the autumn.

  Hampshire (Mr. Mates) on 9 February, columns 382 –83. Two of the 11 members of the Metropolitan police committee whose appointment my right hon. and learned Friend announced on 9 February are also serving members of local authorities in London. Councillor Heaster was suggested by the leader of Wandsworth borough and Councillor Mrs. O'Neill applied directly. A large number of organisations with an interest in the policing of London, including the London local authority associations, were invited to suggest the names of people who might be invited to apply for membership of the Metropolitan police committee but we made it clear that members would be appointed individually, and not as representatives of any particular body. There was no system of nomination. The names suggested by the London Boroughs Association were Councillor Mrs Hanham, Councillor Tope and Councillor Ms Walker; and those by the Association of London Authorities were Councillor Sawyer, Councillor Harris, Councillor Colman and Councillor Ms Hughes. None were appointed.
  759

  Criminal Injuries Compensation Board
  Mrs. Roche
  To ask the Secretary of State for the Home Department (1) how many payments have been made to applicants to the Criminal Injuries Compensation Board in 1993–94; and how much was paid out;

  (2) how many payments have been offered to applicants to the Criminal Injuries Compensation Board in 1994–95; and how much in total has been offered;

  (3) what was the average time taken to make an offer under the criminal injuries compensation scheme in 1994–95: and what has been the average time taken to make an offer under the tariff scheme.

  Mr. Maclean
  The Criminal Injuries Compensation Board made 40,635 monetary awards in 1993–94, paying out £165.111 million in compensation.

  In the period 1 April 1994 to 31 January 1995, approximately 33,000 offers of payment totalling £129 million were made under the old, 1990 scheme, and some 1,560 offers of award totalling £4 million were made under the tariff scheme.

  Comparable information about the average time taken to make awards under the two schemes is not available.

  Horseracing Betting Levy
  Mr. Pendry
  To ask the Secretary of State for the Home Department what sums were raised by the off-course levy collected by the Horseracing Betting Levy Board in 1993 and 1994; and what sums were collected via the 0.25 per cent. duty reduction available to horseracing over the same periods.

  Mr. Michael Forsyth
  The yield for the 32nd levy scheme was £51.6 million; figures for the previous two schemes were £46.9 million—31st levy scheme—and £36 million—30th scheme. The amount made available to the horseracing industry from the reduction in general betting duty in 1992 is not calculated centrally. The effect of the reduction was taken into account in determining the structure of the 31st levy scheme and in subsequent levy settlements.

  British Greyhound Fund
  Mr. Pendry
  To ask the Secretary of State for the Home Department (1) what receipts have been paid into the British Greyhound Fund for 1994, or to the latest available date: and if he will estimate the percentage that they represent of the total sum that would have been available if all off-course betting shops had contributed their 0.25 per cent. of betting duty during that period;

  (2) what have been the main areas to benefit from the distribution of funds by the British Greyhound Fund since its establishment.

  Mr. Michael Forsyth
  I understand that the fund received income of £1.9 million in 1993–94 as payments from bookmakers in respect of the voluntary agreement arising from the duty concession in the 1992 Budget. Figures are not available centrally for the sum which would have been raised if all off-course bookmakers were contributing in full to the fund.
  760
  I understand that the fund allocates money to benefit areas such as prize money, integrity services and improvements to tracks, including maintenance and lighting.

  Mr. Habid Ur Rehman
  Mr. Madden
  To ask the Secretary of State for the Home Department when Mr. Habid Ur Rehman, the sponsor of his wife, Mrs. Amina Bibi, who has applied to the United Kingdom post in Islamabad to join her husband in the United Kingdom—Ref: IMM/C 3835—will be interviewed by immigration officials at Leeds/Bradford airport; when his Department recorded any request from Islamabad for Mr. Rehman to be interviewed; and if he will make a statement.

  Mr. Nicholas Baker
  The request from the British high commission in Islamabad for an interview with Mr. Rehman was received by the Home Office on 7 November 1994 and the papers are, at present, in a queue at Leeds/Bradford airport awaiting the arrangements of an interview. There are other similar cases at Leeds/Bradford airport which have been awaiting a sponsor interview longer than Mr. Rehman and to offer him an earlier interview date would serve only to disadvantage others in the queue.

  Prison Escapes
  Mrs. Roche
  To ask the Secretary of State for the Home Department pursuant to his answer of 2 February,Official Report, column 810, into which prison category escapes from prison in (a) 1979, (b) 1984–85 and (c) 1993–94 figures fell; and if the escapes include escapes from escorts to prison.

  Mr. Michael Forsyth
  [holding answer 13 February 1995]: 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 Mrs Barbara Roche, dated 16 February 1995:
  The Home Secretary has asked me to reply to your recent Question, pursuant to his Answer of 2 February, Official Report, Column 810, into which prison category escapes from prisons in (a) 1979, (b) 1984–85 and (c) 1993–94 figures fell; and if the escapes include escapes from escorts to prisons.
  The tables below show the revised figures for the escapes from Prison Service establishments and prison escorts that occurred in the calendar year 1979, the period 1 January 1984 to 31 March 1985 and for the financial year ending 31 March 1994. The figures for 1979 and 1984–85 have been revised in line with my answer to your Question F01470 I.

  1 January 1979–31 December 1979

  Escapes from Category B Prisons

  12

  Escapes from Category C Prisons

  94

  Escapes from Closed Borstals

  118

  Escapes from Closed Detention Centres

  8

  Sub Total

  232

  Escapes from Escort

  94

  Note:

  Information on Borstal and Detention Centres Escapes from Escort is not available.
  761

  Fifteen month period due to change from calendar to Financial Year 1 January 1984–31 March 1985

  Escapes from Category B Prisons

  15

  Escapes from Category C Prisons

  105

  Escapes from closed YCCs

  73

  Escapes from Closed Detention Centres

  14

  Escapes from Closed Female Establishments

  4

  Sub-total

  211

  Escapes from escort

  195

  Total

  406

  1 April 1993–31 March 1994

  Escapes from Category B Prisons

  24

  Escapes from Category C Prisons

  96

  Escapes from Closed YOIs

  50

  Escapes from Closed Female Establishments

  1

  Sub-total

  171

  Escapes from escort

  1102

  Total

  273

  1 This figure does not include 23 escapes from escorts which were not the responsibility of the Prison Service prior to Agency status.

  Prisoners
  Mrs. Peacock
  To ask the Secretary of State for the Home Department what notice is given to prisoners in Her Majesty's prisons in the United Kingdom before a cell search takes place.

  Mr. Michael Forsyth
  [holding answer 14 February 1995]: 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 Mrs. Elizabeth Peacock, dated 16 February 1995:
  The Home Secretary has asked me to reply to your recent Question about the searching of prisoners' cells.
  If a prisoner is available when a cell is to be searched, he or she will be informed that the search is to take place. He or she will be allowed to view the search from the cell doorway, under the observation of staff.
  The Woodcock enquiry recommended that in future at all closed prisons prisoners should be excluded from the cell during search, to avoid intimidation. This was part of a wider recommendation on changes to searching procedures.

WALES

  Local Government Employees
  Mr. David Shaw
  To ask the Secretary of State for Wales if he will list the(a) population, (b) number of employees, (c) number of employees per 1,000 population and (d) political party in control in each local authority; and if he will post the answer on his Department's pages on the Government's world wide web server,"www.open.gov.uk".

  Mr. Redwood
  The latest available information is shown in the following table. Local authority staffing figures are maintained by the Local Government Management Board. There are currently no arrangements for providing the information in the way requested.
  762

  Population, number of staff employed and political control of each local authority in Wales

  Population1 (000s)

  Total Staff

  Staff per 1,000 population

  Political control

  County Councils

  Clwyd

  416

  14,041

  33.8

  LAB

  Dyfed

  352

  14,733

  41.9

  IND

  Gwent

  450

  17,988

  39.9

  LAB

  Gwynedd

  240

  9,342

  38.9

  IND

  Mid Glamorgan

  544

  21,578

  39.6

  LAB

  Powys

  120

  3—

  3—

  IND

  South Glamorgan

  413

  14,531

  35.2

  LAB

  West Glamorgan

  371

  14,109

  38.0

  LAB

  Borough/District Councils

  Aberconwy

  54

  483

  8.9

  NOC

  Alyn and Deeside

  75

  601

  8.0

  LAB

  Arfon

  57

  561

  9.9

  PC

  Blaenau Gwent

  77

  1,119

  14.5

  LAB

  Brecknock

  42

  251

  6.0

  IND

  Cardiff

  299

  3,630

  12.2

  LAB

  Carmarthen

  56

  454

  8.1

  IND

  Ceredigion

  69

  559

  8.1

  IND

  Colwyn

  57

  465

  8.2

  LDEM

  Cynon Valley

  65

  634

  9.7

  LAB

  Delyn

  70

  661

  9.4

  IND

  Dinefwr

  39

  246

  6.4

  LAB

  Dwyfor

  27

  258

  9.5

  IND

  Glyndwr

  42

  345

  8.2

  IND

  Islwyn

  67

  736

  11.0

  LAB

  Llanelli

  74

  732

  9.9

  LAB

  Lliw Valley

  65

  568

  8.8

  LAB

  Meirionnydd

  33

  349

  10.7

  PC

  Merthyr Tydfil

  60

  771

  12.9

  LAB

  Monmouth

  78

  570

  7.3

  CON

  Montgomeryshire

  54

  460

  8.5

  IND

  Neath

  66

  626

  9.5

  LAB

  Newport

  137

  1,426

  10.4

  LAB

  Ogwr

  135

  1,259

  9.3

  LAB

  Port Talbot

  51

  533

  10.4

  LAB

  Preseli Pembroke

  71

  585

  8.3

  IND

  Radnorshire

  24

  207

  8.5

  IND

  Rhondda

  78

  975

  12.4

  LAB

  Rhuddlan

  55

  495

  9

  IND

  Rhymney Valley

  104

  1,188

  11.4

  LAB

  South Pembroke

  43

  331

  7.7

  IND

  Swansea

  189

  2,528

  13.4

  LAB

  Taff Ely

  101

  804

  7.9

  LAB

  Torfaen

  91

  905

  10.0

  LAB

  Vale of Glamorgan

  115

  868

  7.6

  LAB

  Wrexham Maelor

  117

  1,297

  11.1

  LAB

  Ynys Mon

  69

  536

  7.7

  IND

  1 OPCS 1993 mid-year estimate.2 Joint staffing watch data, June 1994 (provisional) except for Aberconwy (March 1993 figure) and Cynon Valley (March 1994 provisional figure); number of persons, full or part-time, in general services (excluding law or order).

  3 —denotes data not available for 1993 or 1994.

  Cadw
  Mr. Llwyd
  To ask the Secretary of State for Wales when Cadw will reopen an office in Gwynedd; and if he will make a statement.

  Mr. Gwilym Jones
  This is a matter for the agency and I have asked the chief executive, Mr. John Carr, to write to the hon. Member.
  763
  Letter from E. A. J. Carr to Mr. Elfyn Llwyd, dated 13 February 1995:
  The Secretary of State has asked me to reply to your Question in which you asked when Cadw would re-open an office in Gwynedd.
  The Agency has never had a public office in Gwynedd although it does have a Works management unit at Caernarfon. Our professional and field staff, however, travel frequently throughout Wales, providing a direct point of contact for members of public who may be potential grant applicants; offering advice to local authorities on statutory procedures and best practice in conservation; and also liaising with a range of bodies and organisations which have an interest in preserving and promoting the built heritage of Wales.
  Cadw is committed to improving the standard of services it provides to the public generally and its customers, in particular, across the range of Agency activities. The views of customers on how well they feel we deliver those services, and suggestions for how we may better meet their needs, are always welcome and given careful consideration.
  At present, however, the Agency has no plans to open a public office in the North Wales area.

  Nature Conservation
  Mr. Llwyd
  To ask the Secretary of State for Wales when he will issue planning policy guidance on nature conservation in Wales; and if he will make a statement.

  Mr. Gwilym Jones
  Draft guidance is being prepared and I intend to consult Welsh interests before the summer.

  Mr. Dafis
  To ask the Secretary of State for Wales when he intends to publish a Welsh Office equivalent of planning policy guidance 9, "Nature Conservation".

  Mr. Gwilym Jones
  Draft guidance is being prepared and I intend to consult Welsh interests before the summer.

  Sustainable Development
  Mr. Llwyd
  To ask the Secretary of State for Wales if it is his policy to implement in Wales the United Kingdom strategy for sustainable development in January 1994; and if he will make a statement.

  Mr. Gwilym Jones
  The Government's strategy for sustainable development, published in January 1994, covers all parts of the United Kingdom; and provides a framework for action. In line with this, on 31 January 1995, my right hon. Friend published "The Environmental Agenda for Wales" setting out our plans for striking a sensible balance between development and conservation needs in the Principality. A copy of the agenda is available in the Library of the House.

  Environmental Agenda
  Mr. Llwyd
  To ask the Secretary of State for Wales, what is the status of his statement on the environmental agenda for Wales in the planning system; and if he will make a statement.

  Mr. Gwilym Jones
  The agenda reflects existing planning policies and should be taken into account by local planning authorities, where relevant, together with detailed planning policy guidance.

  Community Areas and Councils
  Mr. Llwyd
  To ask the Secretary of State for Wales if he will publish for each county and district council area in Wales and for Wales as a whole the number of(a) community areas, (b) community and town councils and (c) community ix town councils which have (i) ceased
  764
  to exist or (ii) been established during each of the last 10 years.

  Mr. Gwilym Jones
  The information requested by the hon. Member at(c) can be obtained only at disproportionate cost. The information requested at (a) and (b) is set out in the following table.

  Numbers of community areas and town/community councils in Wales

  County Councils

  District borough councils

  Numbers of community areas

  Numbers of town community councils

  Clwyd

  127

  122

  Alyn and Deeside

  13

  13

  Colwyn

  19

  16

  Delyn

  21

  21

  Glyndwr

  35

  35

  Rhuddlan

  10

  8

  Wrexham Maelor

  29

  29

  Dyfed

  202

  202

  Carmarthen

  41

  41

  Ceredigion

  51

  51

  Dinefwr

  23

  23

  Llanelli

  9

  9

  Preseli

  Pembrokeshire

  52

  52

  South Pembrokeshire

  26

  26

  Gwent

  82

  66

  Blaenau Gwent

  9

  5

  Islwyn

  12

  0

  Monmouth

  31

  31

  Newport

  14

  14

  Torfaen

  16

  16

  Gwynedd

  122

  122

  Aberconwy

  18

  18

  Arfon

  17

  17

  Dwyfor

  17

  17

  Meirionnydd

  30

  30

  Ynys Mon

  40

  40

  Mid Glamorgan

  100

  50

  Cynon Valley

  11

  3

  Merthyr Tydfil

  12

  1

  Ogwr

  22

  22

  Rhondda

  31

  0

  Rhymney Valley

  14

  14

  Taff Ely

  10

  10

  Powys

  108

  108

  Brecknock

  36

  36

  Montgomeryshire

  45

  45

  Radnorshire

  27

  27

  South Glamorgan

  54

  28

  Cardiff

  30

  5

  Vale of Glamorgan

  24

  23

  West Glamorgan

  68

  42

  Port Talbot

  12

  0

  Lliw Valley

  14

  14

  Neath

  14

  14

  Swansea

  28

  14

  Total for Wales

  863

  740

  765

  Departmental Staff
  Mr. Alex Carlile
  To ask the Secretary of State for Wales what is the total number of staff employed by his Department(a) in Cardiff and (b) the rest of Wales.

  Mr. Redwood
  At 1 February, my Department, including Cadw, employed 1,701 permanent full-time equivalent staff in Cardiff and 566.5 permanent full-time equivalent staff throughout the rest of Wales.

  Departmental Expenditure
  Mr. Alex Carlile
  To ask the Secretary of State for Wales what was the total budget of his Department in(a) 1979, (b) 1986 and (c)

  Mr. Redwood
  Public expenditure within the responsibility of the Welsh Office totalled £1,769 million and £3,028 million in 1979–80 and 1986–87 respectively and that for 1994–95 is estimated to be £6,585 million.

  Quangos
  Mr. Alex Carlile
  To ask the Secretary of State for Wales what was the total remuneration paid to members of quangos in Wales in 1993–94.

  Mr. Redwood
  The remuneration paid to members of executive non-departmental public bodies in 1993–94 was £773,226.57—excluding national insurance and pension contributions—made up as follows:

  £

  Agricultural Wages Committees

  992.95

  Arts Council of Wales

  nil

  Cardiff Bay Development Corporation

  102,000.00

  Countryside Council for Wales

  96,760.00

  Curriculum and Assessment Authority

  24,909.62

  Development Board for Rural Wales

  112,479.00

  Further Education Funding Council

  132,358.00

  Higher Education Funding Council

  131,417.00

  Housing for Wales

  57,965.00

  Land Authority for Wales

  78,500.00

  National Library of Wales

  nil

  National Museum of Wales

  nil

  Royal Common Ancient and Historical Monuments

  nil

  Sports Council for Wales

  24,753.00

  Wales Tourist Board

  71,000.00

  Wales Youth Agency

  4,900.00

  Welsh Development Agency

  1121,407.00

  Welsh Language Board

  24,785.00

  Welsh National Board for Nursing Midwifery and Health Visiting

  9,000.00

  1 Excludes chief executive.

  2 £1,712 was paid to chairman prior to the board's inception as an executive NDPB.

  Artificial Limb and Appliance Service
  Mr. Morgan
  To ask the Secretary of State for Wales if he will place in the Library a copy of the letter dated 31 January from the British Limbless Ex-Servicemen's Association concerning the future management organisation of the artificial limb and appliance services Wales.

  Mr. Redwood
  With the agreement of the British Limbless Ex-Servicemen's Association, a copy of its letter of 31 January has been placed in the Library of the House.
  766

  Prescribing
  Mr. Morgan
  To ask the Secretary of State for Wales, pursuant to his answers of 23 January,Official Report, column 66, 26 January, Official Report, columns 379–80, and 30 January, Official Report, column 535, what was the aggregate cost of prescribing for each family health services area authority divided by generic and brand name prescribing and for the total of fundholding GPs and non-fundholders.

  Mr. Redwood
  Data for October 1993 and October 1994 are as follows:

  £'000

  October 1993

  Oct0ber 1994

  Generic

  Other

  Generic

  Other

  Clwyd Fundholders

  583

  583

  693

  599

  Non-fundholders

  705

  1,037

  764

  1,028

  Dyfed Fundholders

  202

  180

  501

  469

  Non-fundholders

  914

  1,183

  791

  929

  Gwent Fundholders

  314

  403

  427

  489

  Non-fundholders

  929

  1,277

  994

  1,209

  Gwynedd Fundholders

  18

  14

  174

  202

  Non-fundholders

  708

  1,051

  665

  1,080

  Mid Glamorgan Fundholders

  283

  250

  368

  265

  Non-fundholders

  1,403

  1,879

  1,556

  1,981

  Powys Fundholders

  104

  128

  174

  209

  Non-fundholders

  206

  296

  178

  230

  South Glamorgan Fundholders

  114

  99

  353

  351

  Non-fundholders

  1,071

  1,299

  990

  1,088

  West Glamorgan Fundholders

  560

  608

  702

  644

  Non-fundholders

  605

  867

  619

  816

  Note:

  Data for October 1992 are not readily available.

  Child Abuse
  Mr. Morgan
  To ask the Secretary of State for Wales on what date his Department was first informed in writing by a child care officer of allegations relating to wide spread child sex abuse at north Wales children's homes; and what steps his Department took to investigate the allegations.

  Mr. Redwood
  The Department received in June 1991 allegations from a child care worker formerly employed by Gwynedd county council, about sexual abuse of children in children's homes in north Wales. These matters became the subject of inquiries by the North Wales police.

  Mr. Morgan
  To ask the Secretary of State for Wales what proposals he has for the Queen's counsel to be appointed to read the papers relating to child sex abuse cases in north Wales from the files of the Clwyd and Gwynedd county social services departments and the North Wales police also to be given duties to interview individuals who wish to volunteer statements to the Queen's counsel; and if he will make a statement.
  767
  Mr. Redwood
  Details of the investigation will be announced as soon as possible.

  Local Agenda 21
  Mr. Dafis
  To ask the Secretary of State for Wales what action he proposes to take to promote the drawing up of local agenda 21s.

  Mr. Gwilym Jones
  Action by councils in this general area is being taken forward under their local Agenda 21 initiative, co-ordinated at the United Kingdom level by the local authority associations. Although local strategies under agenda 21 are for individual councils to develop, the environmental agenda for Wales, recently published by my right hon. Friend, encourages Welsh councils, and others, to take a range of practical "green" measures.

  Minerals Planning Guidance
  Mr. Dafis
  To ask the Secretary of State for Wales what is the latest version of minerals planning guidance on aggregates provision which applies to Wales; when it went out of print; and what steps he intends to take to ensure that the guidance on this subject issued by his Department will be taken fully into account by local authorities in Wales.

  Mr. Gwilym Jones
  Minerals planning guidance note 6—MPG 6—"Guidelines for Aggregates Provision in England and Wales", is extant in so far as it relates to Wales: it went out of print in July 1994, although Her Majesty's Stationery Office can still supply copies through an out-of-print service. In October 1993, my right hon. Friend wrote to the leaders of all local authorities in Wales reminding them that government guidance must be fully taken into account when discharging their planning responsibilities.

  NHS Suppliers (Payment)
  Mr. Morgan
  To ask the Secretary of State for Wales, pursuant to his answer of 26 January,Official Report, column 377, if he will place a copy in the Library of the guidance issued on prompt settlement of bills to NHS organisations; if he will list which NHS organisations have been sent a copy of this guidance; and if he will make a further statement.

  Mr. Redwood
  The guidance has been placed in the Library of the House.

SCOTLAND

  Objective 1 Funding
  Mrs. Ray Michie
  To ask the Secretary of State for Scotland (1) if he will list the projects that have been approved for European Union objective 1 funding for the highlands and islands in the first round of(a) the European regional development fund and (b) the European social fund; what was the expenditure approved for each project and what was the total expenditure; and if he will place this information in the Library;

  (2) what limitations apply to Government Departments for applying for European Union objective 1 funding for projects in the highlands and islands;
  768
  (3) how much finance from objective 1 funds for the highlands and islands has so far been earmarked for (a) energy supply networks and (b) transport infrastructure; and if he will list the relevant projects;

  (4) if he will list the projects that were not approved for European Union objective 1 funding for the highlands and islands in the first round of (a) the European social fund and (b) the European regional development fund;

  (5) if he will list the successful applications for European Union objective 1 funding for the highlands and islands which are located in Argyll and Bute;

  (6) what has been the total level of funding from objective 1 funds for the highlands and islands that has so far been earmarked for each Scottish Office Department; and what this is as a percentage of the total expenditure so far committed to projects.

  Lord James Douglas-Hamilton
  Government Departments are able to compete for objective 1 funding on the same basis as other potential project sponsors.

  To date, no funds have been allocated to the Scottish Office from the European regional development fund. Contributions from the European agricultural guidance and guarantee fund and the financial instrument for fisheries guidance of 47.08 million ecu, about £37 million, and 19.80 million ecu, about £16 million, respectively are expected over the life of the programme—1994 to 1999—in relation to schemes administered by the Scottish Office Agriculture and Fisheries Department for the benefit of farmers, crofters, food processors, fishermen, fish farmers, fishing industry organisations and local fishing port authorities and enterprises. Applications for support from the European social fund towards Government training programmes is made by Highlands and Islands Enterprise. These programmes will not take up any more than 40 per cent. of the European social fund resources.

  In relation to the more specific questions on the first round of project consideration, as the information requested is lengthy, I shall arrange for copies of the tables to be placed in the House Library.

  Cochlear Implants
  Mr. Worthington
  To ask the Secretary of State for Scotland (1) what calculation he has made of the numbers of profoundly deaf children who would benefit from cochlear implants;

  (2) what is the cost of a cochlear implant operation for a profoundly deaf child; and how many children in Scotland have received this operation in the current financial year;

  (3) what representations he has received from the surgeons carrying out cochlear implants in Scotland about the best age for carrying out this operation; and what he is doing to match funding to the number of children needing this operation.

  Lord James Douglas-Hamilton
  The national services division of the common services agency, which is responsible for purchasing this service, has commissioned an assessment of need for paediatric cochlear implantation in Scotland which will be published shortly. The findings of this report will inform future provision and funding levels for the service.

  No representations have been received from surgeons carrying out cochlear implants in Scotland about the best age for undertaking the operation. A recent Medical

  769
  Research Council evaluation study has indicated that, in general terms, cochlear implantation has favourable outcomes up to the age of seven years.

  The cost of a paediatric cochlear implant operation is £28,725 in 1994–95. Five children have received this operation in Scotland in the current financial year. The numbers of children referred for operation to centres outwith Scotland is not held centrally.

  Coastal Policy
  Mr. Macdonald
  To ask the Secretary of State for Scotland (1) what is the expected publication date for the Scottish Office coastal discussion paper;

  (2) what progress has been made on producing national planning policy guidance on the coast;

  (3) what initiatives the Scottish Office is undertaking to promote coastal zone management in Scotland.

  Sir Hector Monro
  My officials are working on a discussion paper on coastal policy issues, which will be published as soon as possible. The paper will provide an overview of existing policies affecting the coast and will consider the need for planning guidance. It will also discuss the concept of coastal zone management as it applies to Scottish circumstances putting particular emphasis on partnership and the voluntary principle.

  NHS Abortions
  Mrs. Bridget Prentice
  To ask the Secretary of State for Scotland how many NHS abortions were performed under 13 weeks of pregnancy on women resident in each health board in 1993; and of these operations, how many involved admission and discharge on the same day.

  Lord James Douglas-Hamilton
  The information is shown in the table below.

  NHS therapeutic abortions performed in 1993 with an estimated gestation of under 13 weeks; by health board of residence

  Health board of residence

  Total

  Number discharged on day of admission

  All Areas

  9,963

  8,846

  Argyll and Clyde

  518

  422

  Ayrshire and Arran

  633

  623

  Borders

  152

  146

  Dumfries and Galloway

  193

  47

  Fife

  667

  576

  Forth Valley

  445

  418

  Grampian

  1,189

  997

  Greater Glasgow

  1,974

  1,858

  Highland

  405

  332

  Orkney/Shetland/Western Isles

  85

  13

  Lanarkshire

  848

  642

  Lothian

  1,877

  1,826

  Tayside

  977

  946

  Note:

  Abortions performed on Scottish residents in England and Wales are excluded. All figures are provisional.

  Mrs. Bridget Prentice
  To ask the Secretary of State for Scotland how many abortions were performed on women resident in each health board in 1993; and, of these operations, how many were performed in NHS hospitals.

  Lord James Douglas-Hamilton
  The information requested is shown in the table.770

  Therapeutic Abortions in 1993; by health board of residence

  Health Board of Residence

  Total

  Number performed in NHS hospitals

  All Areas

  11,048

  10,922

  Argyll and Clyde

  601

  594

  Ayrshire and Arran

  671

  668

  Borders

  164

  164

  Dumfries and Galloway

  216

  214

  Fife

  761

  759

  Forth Valley

  493

  485

  Grampian

  1,363

  1,317

  Greater Glasgow

  2,142

  2,115

  Highland

  453

  451

  Orkney/Shetland/Western Isles

  96

  96

  Lanarkshire

  906

  896

  Lothian

  2,093

  2,084

  Tayside

  1,089

  1,079

  Abortions performed on Scottish residents in England and Wales are excluded. All figures are provisional.

  Sheriff Court Houses
  Mr. Home Robertson
  To ask the Secretary of State for Scotland if he will list the Sheriff court houses in Scotland which do not satisfy the objectives set out in the justice charter for Scotland in respect of(a) accessibility for disabled people, (b) adequate and comfortable accommodation, (c) refreshment facilities and (d) services for defence witnesses and lawyers.

  Lord James Douglas-Hamilton
  Work is currently being undertaken to establish an independent assessment of the facilities provided in Sheriff court houses against the aims and objectives set out in the justice charter for Scotland. In recent years, a major programme of capital investment amounting to some £20 million per annum has been undertaken to improve facilities by providing new and refurbished court accommodation and this programme of work continues.

  Scottish Avalanche Information Service
  Mr. Charles Kennedy
  To ask the Secretary of State for Scotland what plans he has to increase funding to the Scottish avalanche information service following the recent avalanche on Liathach, Torridon, Wester Ross; and if he will make a statement.

  Sir Hector Monro
  The Scottish avalanche information service is administered by the Scottish Sports Council and is funded from the grant in aid total provided to the council by the Scottish Office. Any increase in funding is therefore a matter for the council in the first instance. The coverage of the scheme is reviewed regularly and at the end of this winter season, the council will be considering whether changes to the existing arrangements are necessary.

  Local Authority Schools (Recruitment)
  Mr. Worthington
  To ask the Secretary of State for Scotland if he will list the local authority schools in Scotland that seek to recruit nationally.

  Lord James Douglas-Hamilton
  This information is not held centrally. However, I am not aware of any local authority school that recruits nationally, either as regards staff or pupils, although education authorities do place advertisements from time to time.
  771

  Local Authority Schools (Funding)
  Mr. Worthington
  To ask the Secretary of State for Scotland if he will list the schools in Scotland that he directly funds independently of local authorities.

  Lord James Douglas-Hamilton
  The Scottish Office Education Department provides annual grants for the operation of the following schools:

  Dornoch academy, Sutherland

  Jordanhill school, Glasgow

  and provides grants towards the costs of operating the following schools:

  Royal Blind school, Edinburgh

  Donaldson's college, Edinburgh

  Harmeny school, Balerno, Midlothian

  East Park Home school, Glasgow

  Stanmore House residential school, Lanark

  Corseford residential school, Kilbarchan

  Craighalbert centre, Cumbernauld

  The New school, Butterstone, Dunkeld

  The Scottish Home and Health Department provides occasional grants towards the capital costs of secure accommodation provision at St. Mary's Kenmure, Bishopbriggs and at Rossie school, near Montrose.

  Local Government Reorganisation
  Mr. Worthington
  To ask the Secretary of State for Scotland whether the special circumstances of the music school attached to Douglas academy in Milngavie will be fully taken into account when he decides the financial allocation to the new East Dunbartonshire council.

  Lord James Douglas-Hamilton
  As the October 1992 consultation paper "Shaping the New Councils" made clear, the distribution of aggregate external finance to the new councils following local government re-organisation will be subject to consultation with Convention of Scottish Local Authorities in the distribution committee of the working party on local government finance. As at present, the distribution will be determined by the client group assessment methodology. The distribution committee will be considering during the course of this year the preparation of grant aided expenditure assessment for each of the new councils.

  Mr. Worthington
  To ask the Secretary of State for Scotland if he will make a statement on his policy with regard to the music school attached to Douglas academy in Milngavie and similar establishments; and what plans he has to give special financial help to such ventures when the new councils are set up.

  Lord James Douglas-Hamilton
  The Government recognise the important contribution which the music school and other similar schools in Scotland make to the education system. It was following recommendations in a report by the Scottish Education Department in 1976 that these schools were set up.
  772
  The framework in the Local Government etc. (Scotland) Act 1994 should ensure maximum continuity between the existing and the new authorities in terms of provision of education services.

  Provisions already exist under section 23(2) of the Education (Scotland) Act 1980 to safeguard the financial position of an authority which, as in the case of Douglas academy, is providing education for pupils from another authority's area. Section 23(2) provides a mechanism whereby such an authority may recoup the costs incurred by so doing.

  Procurator Fiscals
  Mr. Salmond
  To ask the Secretary of State for Scotland how many procurator fiscals or deputy procurator fiscals were attached to each procurator fiscal office in Scotland and if he will provide a breakdown of the average number of cases per procurator fiscal or deputy procurator fiscal in each office in(a) 1974, (b) 1984 and (c) 1994; and if he will make a statement.

  Mr. Lang
  Precise staffing figures for 1974 are not available. In any event, the procurator fiscal service took over prosecution in the district court between 1975 and 1976 and this makes comparison of staffing levels prior to then inappropriate. The figures requested are provided below for the years 1976, 1984 and 1994. Little significance can be attached to them, since scope for comparison between staffing levels and bare case numbers is restricted by differing degrees of complexity and duration of cases, geographical considerations, and inter-office assistance.

  1976

  PF

  Deputes

  Cases

  Average per staff member

  Aberdeen

  1

  5

  10,207

  1,701

  Airdrie

  1

  4

  6,547

  1,309

  Alloa

  1

  —

  1,478

  1,478

  Arbroath

  1

  —

  1,929

  1,929

  Ayr

  1

  2

  5,246

  1,749

  Banff

  1

  —

  1,401

  1,401

  Campbeltown

  1

  —

  826

  826

  Cupar

  1

  —

  1,690

  1,690

  Dingwall/Tain

  1

  1

  2,526

  1,263

  Dornoch

  1

  —

  546

  546

  Dumbarton

  1

  4.5

  5,663

  1,030

  Dumfries

  1

  2

  5,311

  1,770

  Dundee

  1

  4.5

  11,104

  2,019

  Dunfermline

  1

  1

  4,716

  2,358

  Dunoon

  1

  —

  1,349

  1,349

  Duns

  1

  —

  902

  902

  Edinburgh

  1

  13.5

  31,330

  2,161

  Elgin

  1

  1.5

  3,268

  1,307

  Falkirk

  1

  2

  5,143

  1,714

  Forfar

  1

  —

  1,805

  1,805

  Fort William

  1

  —

  904

  904

  Glasgow

  1

  35

  63,852

  1,774

  Greenock

  1

  4

  7,281

  1,456

  Haddington

  1

  1

  2,761

  1,381

  Hamilton

  1

  7.5

  12,366

  1,455

  Inverness

  1

  2

  5,395

  1,798

  Kilmarnock

  1

  4

  7,468

  1,494

  Kirkcaldy

  1

  2

  5,578

  1,859

  Kirkcudbright

  1

  —

  747

  747

  Kirkwall

  1

  —

  612

  612

  Lanark

  1

  1

  1,726

  863

  Lerwick

  1

  —

  598

  598

  773

  1976

  PF

  Deputes

  Cases

  Average per staff member

  Linlithgow

  1

  2

  5,259

  1,753

  Oban

  0.5

  —

  993

  993

  Paisley

  1

  7

  11,334

  1,417

  Perth

  1

  3

  5,527

  1,382

  Peterhead

  1

  —

  1,368

  1,368

  Portree

  1

  —

  434

  434

  Rothesay

  1

  —

  601

  601

  Selkirk/Jedburgh/Peebles

  1

  1

  4,676

  2,338

  Stirling

  1

  2

  3,987

  1,329

  Stonehaven

  1

  —

  1,821

  1,821

  Stornoway/Lochmaddy

  1

  —

  575

  575

  Stranraer

  1

  —

  1,113

  1,113

  Wick

  1

  —

  1,204

  1,204

  1984

  PF

  Deputes

  Cases

  Average per staff member

  Aberdeen

  1

  7.5

  14,888

  1,752

  Airdrie

  1

  5

  7,817

  1,303

  Alloa

  1

  1

  2,510

  1,255

  Arbroath

  1

  1

  2,467

  1,234

  Ayr

  1

  3

  7,316

  1,829

  Banff

  1

  —

  910

  910

  Campbeltown

  1

  —

  704

  704

  Cupar

  1

  —

  2,212

  2,212

  Dingwall

  1

  —

  1,513

  1,513

  Dornoch

  1

  —

  641

  641

  Dumbarton

  1

  5

  7,112

  1,185

  Dumfries

  1

  3

  7,295

  1,823

  Dundee

  1

  7

  14,061

  1,758

  Dunfermline

  1

  3

  5,912

  1,478

  Dunoon

  1

  —

  1,565

  1,565

  Duns

  1

  —

  743

  743

  Edinburgh

  1

  19.5

  57,952

  2,827

  Elgin

  1

  1

  3,909

  1,955

  Falkirk

  1

  3

  8,000

  2,000

  Forfar

  1

  —

  2,822

  2,822

  Fort William

  1

  —

  1,200

  1,200

  Glasgow

  1

  54.5

  71,948

  1,296

  Greenock

  1

  4

  6,641

  1,328

  Haddington

  1

  1

  3,211

  1,606

  Hamilton

  1

  11

  18,720

  1,560

  Inverness

  1

  3

  6,004

  1,501

  Jedburgh

  1

  —

  1,435

  1,435

  Kilmarnock

  1

  6

  11,230

  1,604

  Kirkcaldy

  1

  3

  7,294

  1,824

  Kirkcudbright

  1

  —

  919

  919

  Kirkwall

  1

  —

  592

  592

  Lanark

  1

  1

  2,168

  1,084

  Lerwick

  1

  —

  880

  880

  Linlithgow

  1

  3

  6,987

  1,747

  Oban

  1

  —

  1,499

  1,499

  Paisley

  1

  8.5

  11,541

  1,215

  Peebles

  1

  —

  611

  611

  Perth

  1

  3

  7,951

  1,988

  Peterhead

  1

  1

  2,204

  1,102

  Portree/Lochmaddy

  1

  —

  708

  708

  Rothesay

  1

  —

  605

  605

  Selkirk

  1

  —

  1,639

  1,639

  Stirling

  1

  2

  4,870

  1,593

  Stonehaven

  1

  —

  2,581

  2,581

  Stornoway

  1

  —

  817

  817

  Stranraer

  1

  —

  2,164

  2,164

  Tain

  1

  —

  1,443

  1,443

  Wick

  1

  —

  1,116

  1,116

  774

  1994

  PF

  Deputes

  Cases

  Average per staff member

  Aberdeen

  1

  12

  13,436

  1,034

  Airdrie

  1

  6

  6,645

  949

  Alloa

  1

  1

  2,588

  1,294

  Arbroath

  1

  1

  3,060

  1,530

  Ayr

  1

  4.5

  7,353

  1,337

  Banff

  1

  —

  923

  923

  Campbeltown

  1

  —

  693

  693

  Cupar

  1

  1

  2,111

  1,056

  Dingwall

  1

  —

  1,295

  1,295

  Dornoch/Tain

  1

  —

  1,738

  1,738

  Dumbarton

  1

  5.5

  7,339

  1,129

  Dumfries

  1

  4

  6,457

  1,291

  Dundee

  1

  6.5

  11,044

  1,473

  Dunfermline

  1

  3

  7,035

  1,759

  Dunoon

  1

  —

  1,145

  1,145

  Duns/Jedburgh

  1

  —

  3,323

  3,323

  Edinburgh/Peebles

  1

  26.5

  30,243

  1,100

  Elgin

  1

  1

  3,658

  1,829

  Falkirk

  1

  5

  7,348

  1,225

  Forfar

  1

  —

  2,235

  2,235

  Fort William

  1

  —

  1,524

  1,524

  Glasgow

  1

  61

  69,451

  1,120

  Greenock/Rothesay

  1

  4

  5,504

  1,101

  Haddington

  1

  1

  3,997

  1,999

  Hamilton

  1

  17

  17,255

  959

  Inverness

  1

  3

  6,634

  1,659

  Kilmarnock

  1

  7

  9,489

  1,186

  Kirkcaldy

  1

  3.5

  7,687

  1,708

  Kirkwall/Lerwick

  1

  —

  1,487

  1,487

  Lanark

  1

  1

  3,723

  1,861

  Linlithgow

  1

  2.5

  6,973

  1,992

  Oban

  1

  —

  1,123

  1,123

  Paisley

  1

  11

  10,746

  896

  Perth

  1

  4.5

  7,623

  1,386

  Peterhead

  1

  —

  2,617

  2,617

  Portree/Lochmaddy

  1

  —

  721

  721

  Selkirk

  1

  —

  1,781

  1,781

  Stirling

  1

  3.5

  4,656

  1,035

  Stonehaven

  1

  —

  2,008

  2,008

  Stornoway

  1

  —

  904

  904

  Stanraer/Kirkcudbright

  1

  1

  3,481

  1,741

  Wick

  1

  —

  1,038

  1,038

  Mr. Salmond
  To ask the Secretary of State for Scotland what resources were allocated to each procurator fiscal's office in Scotland for each of the last 10 years; and if he will break down this figure to show the average amount allocated per case dealt with by each office; and if he will make a statement.

  Mr. Lang
  Resources are not allocated to individual offices on a per-case basis; they are allocated and managed regionally for the departmental settlement on a basis of past performance, local factors and forecast work load. Allocations per case would be unreliable, there being no meaningful comparison to be made on such a basis because of differing degrees of complexity and duration of cases, geographical variations and inter-office assistance.

  Mr. Salmond
  To ask the Secretary of State for Scotland if he will list the number of cases dealt with by each procurator fiscal's office giving the numerical and percentage breakdown of cases which(a) were marked no proceedings, (b) were dealt with through fiscal fines, (c) proceeded to court, (d) resulted in charges being proved and (e) resulted in persons receiving a custodial sentence for the last 10 years for which figures are available; and if he will make a statement.
  775
  Mr. Lang
  As the information requested is lengthy I have arranged for it to be placed in the Library of the House.

  GP Fundholders
  Mr. Godman
  To ask the Secretary of State for Scotland how many general practitioner fundholders in(a) Inverclyde, (b) Strathclyde and (c) Scotland as a whole have over-run their budgets; and what was the average amount of the over-run in each of the last two years.

  Lord James Douglas-Hamilton
  [holding answer 15 February 1995]: There are as yet no operational fundholders in Inverclyde area. In 1992–93, of a total of 10 GP fundholding practices in Scotland, one fundholding practice, located in the Grampian health board area, spent in excess of its allocated fund. The overspend was £4,754, approximately 0.5 per cent. of the allocated fund.

  In 1993–94, 12 GP fundholding practices of a total of 70 throughout Scotland spent in excess of their allocated sum. One of these practices was located in the Argyll and Clyde health board area within Strathclyde region. The average overspend was £17,840 which represented approximately 1 per cent. of the average fund allocated by the health board.

  In each case, the health board reviewed the reasons for these small overspends and considered them acceptable under the regulations governing the scheme.

  Scottish Early Music Consort
  Mr. Dalyell
  To ask the Secretary of State of Scotland how much Scottish Office sources contribute to the Scottish Early Music Consort; and what help he will give the Glasgow International Early Music Festival in 1996.

  Sir Hector Monro
  [holding answer 10 February 1995]: The Scottish Arts Council, which is the main channel of Scottish Office support for the arts in Scotland, will contribute £15,600 to the Scottish Early Music Consort in 1995–96. It is for the Scottish Arts Council to determine whether it should support the Glasgow International Early Music Festival in 1996.

  M77
  Mrs. Ray Michie
  To ask the Secretary of State for Scotland if he will place a copy of the informal letter of inquiry from the European Commission about the Ayr road route, M77, in the Library; and if he will make available the response to this letter.

  Lord James Douglas-Hamilton
  [holding answer 15 February 1995]: No. Correspondence between the European Commission and member states on infraction proceedings, including preliminary contacts of this sort, is regarded as confidential between the parties.

  Local Government Finance
  Mr. Welsh
  To ask the Secretary of State for Scotland what studies he has undertaken in the Scottish water industry to compare build own and operate, and build own operate and transfer schemes with traditional methods of local government financing; and if he will make a statement.

  Mr. George Kynoch
  [holding answer 8 February 1995]: In November 1994, a commentary on the benefits of build own and operate schemes was prepared by the
  776
  Scottish Office in response to a study produced by Strathclyde regional council. A copy of the commentary is in the Library. It concludes that the private sector should offer terms which compare favourably with public funding costs. Under current rules, build own operate and transfer schemes would count as public expenditure.

NORTHERN IRELAND

  United Kingdom Integrity
  Mr. Bill Walker
  To ask the Secretary of State for Northern Ireland what is the policy of his Department in the maintenance of the United Kingdom.

  Mr. Ancram
  I refer my hon. Friend to the answer I gave earlier to my hon. Friend the Member for Gravesham (Mr. Arnold).

  Public Bodies
  Mr. Llwyd
  To ask the Secretary of State for Northern Ireland how many non-departmental public bodies there are in Northern Ireland; how many people serve on two or more of them; and if he will make a statement.

  Sir John Wheeler
  I refer the hon. Member to the answers I gave him on 6 February,Official Report, columns 44–5.

  Criminal Justice
  Mr. Mullin
  To ask the Secretary of State for Northern Ireland what plans he has to bring the criminal justice system into line with that elsewhere in the United Kingdom; and if he will make a statement.

  Sir John Wheeler
  We are preparing a range of measures to improve the working of the criminal justice system in Northern Ireland. They reflect Northern Ireland's circumstances, though drawing on experience in the rest of the United Kingdom, and elsewhere.

  Town Centres
  Mr. Robert Ainsworth
  To ask the Secretary of State for Northern Ireland what assistance his Department is giving to regenerate town centres in Northern Ireland.

  Mr. Moss
  In Belfast and Londonderry the urban development grant scheme encourages private sector investment in development projects. Regeneration in town centres other than Belfast and Londonderry is encouraged through grant assistance, totalling around £4 million annually, for comprehensive development, environmental improvement, pedestrianisation and conservation schemes. My Department also administers and co-funds with the international fund for Ireland, IFI, the community regeneration improvement special programme.

  Benefit Applicants
  Mr. Clifford Forsythe
  To ask the Secretary of State for Northern Ireland how many Social Security Agency offices located in Northern Ireland administer
  777
  cases for applicants residing in Great Britain in addition to applicants from Northern Ireland.

  Mr. Moss
  None.

  Peace Process
  Mr. McFall
  To ask the Secretary of State for Northern Ireland what further discussions he has had with the Dublin Government on the progress of the peace process.

  Sir Patrick Mayhew
  I met Mr. Spring in Belfast on 14 February. This was a regular meeting of the intergovernmental conference and we discussed a range of issues.

  Mr. Thurnham
  To ask the Secretary of State for Northern Ireland what recent representations he has received about future prospects for peace and prosperity in Northern Ireland.

  Mr. David Evans
  To ask the Secretary of State for Northern Ireland what proposals he has for hon. Members to further the peace process in Northern Ireland.

  Mr. Canavan
  To ask the Secretary of State for Northern Ireland what recent discussions he has had about furthering the peace process; and if he will make a statement.

  Mr. Patrick Mayhew
  I refer hon. Members to the answer I gave earlier today to my hon. Friend the Member for the Isle of Wight (Mr. Field).

  Northern Ireland-Scotland Bodies
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland what proposals he has to create joint Northern Ireland-Scotland bodies with executive powers.

  Mr. Ancram
  None.

  Tourism
  Mr. Simon Coombs
  To ask the Secretary of State for Northern Ireland what is his estimate of the increase in tourism and visitor bookings in Northern Ireland since the ceasefire last year.

  Mr. Ancram
  It is estimated that since the ceasefire, visitor bookings have increased by 30 per cent. over the same period in 1993. During the period September to December 1994, hotel room occupancy figures rose by an 778
  average of 8 percentage points when compared with the same period in 1993. The occupancy figures recorded in October, November and December 1994 were the highest for those months since records began in 1973.

  The Northern Ireland tourist board's Dublin office has reported a 155 per cent. increase in bookings since the ceasefire.

  Figures for travel to Northern Ireland have also risen since the ceasefire. Sea passenger movements have increased by 6.3 per cent. over the same period in 1993. Belfast international airport and Belfast harbour airport reported inward passenger increases of 3 per cent. and 6 per cent. respectively on the figures for December 1993.

  Local Government Employees
  Mr. Harry Greenway
  To ask the Secretary of State for Northern Ireland how many people are estimated to be currently employed in local government; in how many local authorities they are operating and at what overall cost per head of the population; and if he will make a statement.

  Mr. Moss
  The total number of people employed by the 26 district councils in Northern Ireland at 31 March 1994 was 8,607. The average cost per head of the total population of the Province, based on the salaries and wages for the financial year ended 31 March 1994, was £61.12. It is not possible to compare this figure with the position of local authorities in Great Britain in any meaningful way because of the much smaller range of functions undertaken by district councils in Northern Ireland.

  Framework Document
  Rev. Martin Smyth
  To ask the Secretary of State for Northern Ireland how far the cross-border initiatives in tourism, health and the arts, announced by his Ministers in November last year, are a precursor for the all-Ireland bodies proposed in the framework document.

  Mr. Ancram
  The initiatives announced in November were made on their own merits. I will not be drawn on the proposals likely to be contained in the joint framework document, except to reiterate that they will be for the consideration and agreement of the parties. Obviously if there has already been a declared mutual interest, these might be suitable subjects for north-south co-operation.
  779

  Unemployment
  Mr. John Marshall
  To ask the Secretary of State for Northern Ireland how many people are currently unemployed; and what was the figure in December 1992.

  Mr. Ancram
  The latest available seasonally adjusted figures show that at January 1995 there were 91,100 people unemployed in Northern Ireland. The corresponding figure for December 1992 was 105,900.

  Irish Republic
  Mr. Madden
  To ask the Secretary of State for Northern Ireland if he will make a statement regarding relations between his Department and the Government of the Irish Republic.

  Sir Patrick Mayhew
  I am glad to say that relationships are close and constructive.

  Environment Protection Agency
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland what consideration is being given to the establishment of an environment protection agency in Northern Ireland; and if he will make a statement.

  Mr. Moss
  The Environment Service of the Department of the Environment for Northern Ireland has responsibility for the control of pollution, the conservation of the natural environment and the protection of the man-made heritage. The service is currently the subject of a prior options study. The Government will decide whether any proposals for change in the implementation of environmental policy in Northern Ireland should be made when the results of the study are known shortly.

  Scottish Transport Links
  Mr. Foulkes
  To ask the Secretary of State for Northern Ireland what discussions he has had with the Secretary of State for Scotland about transport links between Scotland and Northern Ireland.

  Mr. Moss
  In view of the satisfactory arrangements for discussing these matters at official level I have not needed to discuss the subject of transport links between Northern Ireland and Scotland with my right hon. Friend the Secretary of State for Scotland.

  Firearms
  Mr. Nicholas Winterton
  To ask the Secretary of State for Northern Ireland what is his estimate of the number of firearms currently illegally held by terrorist organisations in Northern Ireland.

  Sir John Wheeler
  Terrorist organisations have access to a considerable quantity of weapons and equipment of various types; however, it would not, on security grounds, be appropriate to provide detailed estimates. The Government continue to regard substantial progress on the question of decommissioning paramilitary arms as a vital element in advancing the political process in Northern Ireland.

  Housing
  Mr. Raynsford
  To ask the Secretary of State for Northern Ireland what are his priorities for action to improve housing conditions and prospects in Northern Ireland.
  780
  Mr. Moss
  The Government's housing priorities for Northern Ireland are set out in Command Paper No. 2516 "Expenditure Plans and Priorities", a copy of which is available in the Library.

  The Government are committed to building on the significant progress made over the last 20 years in terms of increasing home ownership, improving housing conditions and meeting housing need.

  Mr. William Ross
  To ask the Secretary of State for Northern Ireland what sums he is making available for housing grants in Northern Ireland in the current financial year.

  Mr. Moss
  Government, through the Northern Ireland Housing Executive, is making £32.5 million available for housing grants to the private sector in this financial year.

  Training Courses
  Mr. Kirkwood
  To ask the Secretary of State for Northern Ireland if he will list each training and tuition course with a total cost exceeding £5,000 paid for by(a) his Department and (b) his agencies during the last 12 months, showing the title and objectives of each course, the name of the organisations engaged, the total cost of each course, a summary of the responsibilities of staff members taking part and the process for course evaluation by the Department or agency.

  Sir John Wheeler
  The information has been placed in the Library.

  Generating Companies
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland what assessment he has made of the level of efficiency improvements achieved in generating companies since privatisation; and what consideration he has given to requiring these companies to absorb more costs rather than pass them on to electricity consumers.

  Mr. Ancram
  None. Following the privatisation of'the electricity industry in Northern Ireland efficiency improvements achieved in generating stations are matter for the private company concerned. The absorption of the costs of generating electricity is a matter for negotiation and contractual agreement between the generating companies and Northern Ireland Electricity plc.

  The Director General of Electricity Supply for Northern Ireland has responsibility for ensuring that consumers' interests as regards price and quality of service are protected.

  Islander Marine
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland if the contracted crew from Islander Marine Strangford, on the Portaferry-Strangford ferry service, is operating to the satisfaction of the Marine Safety Agency; and if he will make a statement.

  Mr. Moss
  Crewing arrangements on the Portaferry-Strangford ferry service have been approved by the Marine Safety Agency.

  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland what is the postal address of Islander Marine in the village of Strangford; if the premises are occupied; and if he will make a statement about the
  781
  contribution of Islander Marine to the operation of the Portaferry-Strangford ferry.

  Mr. Moss
  The registered postal address of Islander Marine (Ireland) Ltd is 1 the Slip, Strangford, County Down, BT30 7NE. The Department is not aware if these premises ate occupied. Islander Marine (Ireland) Ltd provides part of the crew of the Strangford-Portaferry service.

  Transport Companies
  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland if he will make a statement on the studies which have been conducted into the re-organisation of the transport companies in Northern Ireland including Northern Ireland Railways, Ulsterbus and Citybus; and when a report is due to be published.

  Mr. Moss
  My Department commissioned a study into the scope for introducing a private element into the management and operation of Northern Ireland Railways and I refer the hon. Gentleman to the answer I gave the hon. Member for Colchester, North (Mr. Jenkin) on 11 January,Official Report, column 146. In addition, the Northern Ireland Transport Holding Company commissioned a study into the potential for the co-ordination of bus and rail services in Northern Ireland and any necessary restructuring required for this to be achieved.

  Following consideration of a report of that study, and of the study into Northern Ireland Railways, I announced in Belfast on 17 January 1995 plans for co-ordinating bus and rail services; restructuring the boards of Northern Ireland Railways, Ulsterbus and Citybus on the basis of common membership; unifying the senior management structure of these companies; and selling their non-core services and applying market tests and contracting out where appropriate. There are no plans to publish reports of either study.

DUCHY OF LANCASTER

  Public Appointments
  Mr. Milburn
  To ask the Chancellor of the Duchy of Lancaster, pursuant to his answer of 17 January,Official Report, column 400, how many appointments to public positions have been made by his Department in the last year.

  Mr. Robert G. Hughes
  Seventy-five appointments have been made to Cabinet Office and Office of Public Service and Science public bodies in the last year. Of these, 57 were to the new research councils announced in the White Paper "Realising Our Potential".

  Sick Leave
  Mr. Chidgey
  To ask the Chancellor of the Duchy of Lancaster, pursuant to his answer to the hon. Member for Eltham (Mr. Bottomley) of 7 February,Official Report, columns 125–28, what factors underlie the disparity between the figure given for sick absence at the Department of Social Security in 1993 and the figure given in the answer from the Secretary of State for Social Security to the hon. Member for Eastleigh of 23 January,
  782
  Official Report, column 85; and if he will make a statement.

  Mr. Robert G. Hughes
  The figure given in my answer to the hon. Member for Eltham on 7 February represents the average number of days sick leave taken by staff in DSS headquarters—excluding staff in DSS agencies. The figure given in the answer of 23 January by the Minister of State for Social Security and Disabled People to the hon. Member for Eastleigh represents the average number of days sick leave taken by staff throughout DSS.

  Mr. Chidgey
  To ask the Chancellor of the Duchy of Lancaster, pursuant to his answer to the hon. Member for Eltham (Mr. Bottomley) of 7 February,Official Report, columns 125–28, what factors underlie the disparity between the figure given for sick absence at the Office of Public Service and Science in 1993 and the figure given in his answer to the hon. Member for Eastleigh of 2 February, Official Report, column 754; and if he will make a statement.

  Mr. Robert G. Hughes
  The sickness absence figure given in my answer to the hon. Member for Eastleigh on 2 February inadvertently used an incorrect figure for staff in post. The correct figure for OPSS excluding any weekends and public holidays which occurred within a single period of sickness absence is as given in my answer of 7 February to the hon. Member for Eltham. I apologise for any inconvenience caused.

  Mr. Chidgey
  To ask the Chancellor of the Duchy of Lancaster, pursuant to his answer to the hon. Member for Eltham (Mr. Bottomley) of 7 February,Official Report, columns 125–28, what factors underlie the disparity between the figure given for sick absence at the Treasury Solicitor's Department in 1993 and the figure given in the answer from the Attorney-General to the hon. Member for Eastleigh on 27 January, Official Report, column 409; and if he will make a statement.

  Mr. Robert G. Hughes
  The absence figure given in my answer to the hon. Member for Eltham on 7 February is based upon working days lost—excluding weekends and public holidays—solely due to sickness. The figure given in the answer of 27 January by the Attorney-General was calculated including weekends, public holidays and certain absences which were not attributable to sickness.

  Mr. Chidgey
  To ask the Chancellor of the Duchy of Lancaster, pursuant to his answer to the hon. Member for Eltham (Mr. Bottomley) of 7 February,Official Report, columns 125–28, what factors underlie the disparity between the figure given for sick absence at the Department of Transport in 1993 and the figure given in the answer from the Secretary of State for Transport to the hon. Member for Eastleigh on 31 January, Official Report, column 585; and if he will make a statement.

  Mr. Robert G. Hughes
  The calculations which produced the figures given in the answer of 31 January by the Secretary of State for Transport inadvertently omitted one category of sickness absence. The correct figure for sickness absence at the Department of Transport in 1993 is given in my answer of 7 February.

  Mr. Chidgey
  To ask the Chancellor of the Duchy of Lancaster, pursuant to his answer to the hon. Member for Eltham (Mr. Bottomley) of 7 February,Official Report, columns 125–28, what factors underlie the disparity between the figure given for sick absence at the

  783
  Department of Trade and Industry in 1993 and the figure given in the answer from the President of the Board of Trade of 30 January, Official Report, column 477; and if he will make a statement.

  Mr. Robert G. Hughes
  The sickness absence figure given in my answer to the hon. Member for Eltham on 7 February is based on working days lost—excluding weekends and public holidays. The figure given in the answer of 30 January by the President of the Board of Trade to the hon. Member for Eastleigh was calculated using data which for reasons of administrative control, included both weekends and public holidays.

  Mr. Chidgey
  To ask the Chancellor of the Duchy of Lancaster, pursuant to his answer to the hon. Member for Eltham (Mr. Bottomley) of 7 February,Official Report, columns 125–28, what factors underlie the disparity between the figure given for sick absence at the Recruitment and Assessment Services Agency in 1993 and the figure given in his answer to the hon. Member for Eastleigh of 2 February, Official Report, column 755; and if he will make a statement.

  Mr. Robert G. Hughes
  The sickness absence figure given in my answer to the hon. Member for Eltham (Mr. Bottomley) on 7 February is based upon working days lost—excluding weekends and public holidays. The figure given in my answer of 2 February was calculated including both weekends and public holidays.

EDUCATION

  Learning Difficulties
  Mr. Butcher
  To ask the Secretary of State for Education if she keeps central statistics about the specific details of individual learning difficulties in accordance with the recommendations of the Warnock committee.

  Mr. Forth
  A key recommendation of the Warnock report in 1978 was that statutory categories of handicap should be abolished. Central statistics giving details of pupils' individual learning difficulties are not collected.

  Departmental Employees
  Ms Estelle Morris
  To ask the Secretary of State for Education how many(a) full-time employees and (b) part-time employees were employed in her Department in each of the last five years for which figures are available.

  Mr. Forth
  The number of staff in post at 1 April was as follows:

  Full-time

  Part-time

  Total

  1990

  2,514

  155

  2,669

  1991

  2,607

  182

  2,789

  1992

  2,645

  186

  2,831

  1993

  1,962

  148

  2,110

  1994

  1,915

  150

  2,065

  784
  These figures include throughout staff in post in the Teachers Pensions Agency. The figures for 1990, 1991 and 1992 include HMI and staff responsible for science and sport. Those responsible for science and sport transferred respectively to the Cabinet Office and the Department of National Heritage in July 1992. The majority of Her Majesty's inspectorate and their support staff transferred to the Office for Standards in Education in September 1992.

  Further Education Funding Council
  Ms Estelle Morris
  To ask the Secretary of State for Education how many(a) full-time employees and (b) part-time employees were employed in the Further Education Funding Council for each quarter since it commenced operation.

  Mr. Boswell
  The questions raised by the hon. Member are matters for the funding council. I have asked the chief executive to write to the hon. Member.

  Funding Agency for Schools
  Ms Estelle Morris
  To ask the Secretary of State for Education how many(a) full-time employees and (b) part-time employees were employed in the Funding Agency for Schools in each quarter since it commenced operation.

  Mr. Robin Squire
  This is a matter for the Funding Agency for Schools. I have asked its chairman to write to the hon. Member.

  Ministerial Travel (Hong Kong)
  Mr. MacShane
  To ask the Secretary of State for Education what plans she has to travel to Hong Kong in 1995.

  Mrs. Gillian Shephard
  None.

  Schools, London
  Ms Jowell
  To ask the Secretary of State for Education what was the actual spending per child at(a) primary and (b) secondary schools in the London boroughs of (i) Camden, (ii) Southwark, (iii) Westminster and (iv) Haringey for (i) 1993 and (ii) 1994.

  Mr. Robin Squire
  The table shows expenditure by these local education authorities on pre-primary and primary pupils combined, and on secondary pupils, for 1992–93, and provisional figures for 1993–94. Equivalent information on grant-maintained schools is not available.

  Net institutional spending per pupil cash terms

  Nursery/Primary 1992–93 £

  Nursery/Primary 1993–94 £

  Secondary 1992–93 £

  Secondary 1993–94 £

  Camden

  2,067

  2,047

  2,726

  2,721

  Southwark

  1,846

  1,806

  2,506

  2,421

  City of Westminster

  2,292

  2,592

  2,486

  2,739

  Haringey

  2,102

  2,236

  2,897

  3,041

  785

  School Teachers Review Body
  Mr. Andrew Smith
  To ask the Secretary of State for Education if she will estimate the cost to her Department's budget in 1995–96 of implementing in full the recommendations of the School Teachers Review Body, assuming no changes in staff numbers; and how much of the cost would be borne by(a) direct expenditure by her Department and (b) grants and loans to local authorities.

  Mr. Robin Squire
  The School Teachers-Review Body has recommended an increase of 2.7 per cent. in teachers' pay for 1995–96. The cost of this to local authorities in England is likely to be in the order of £275 million. There will be no costs borne directly by the Department.

  Oxford and Cambridge Universities
  Mr. Bryan Davies
  To ask the Secretary of State for Education what plans she has to change the system of the payment of college fees to the universities of Oxford and Cambridge.

  Mr. Boswell
  My right hon. Friend has been reviewing the experience of the last college fee settlement and expects to make an announcement shortly.

  Teachers
  Mr. David Nicholson
  To ask the Secretary of State for Education what were the percentage increases for the main grades of local education authority school teaching staff for each year since 1989.

  Mr. Robin Squire
  The percentage increases in the main pay scales for heads and deputies and classroom teachers since 1989 are set out in the table:

  Year

  Heads and deputies

  Classroom teachers

  1989

  7.5

  6.0

  1990

  10.4

  8.3

  1991

  12.75

  9.5

  1992

  7.5

  7.5

  1993

  1.5

  1.5

  1994

  2.9

  2.9

  1995 (proposed)

  2.7

  2.7

  Independent School Closures
  Mr. David Nicholson
  To ask the Secretary of State for Education what information her Department has of the number of independent schools which(a) opened and (b) closed in each year since 1988.

  Mr. Robin Squire
  The number of independent schools which have registered with the Department upon opening, and the number which have been removed from the register because of closure, are given, for each calendar year, in the following table:

  Year

  Number of independent schools opened

  Number of independent schools closed

  1988

  40

  30

  1989

  65

  33

  1990

  50

  45

  1991

  60

  59

  1992

  56

  68

  1993

  63

  51

  786

  Year

  Number of independent schools opened

  Number of independent schools closed

  1994

  67

  79

  Note: The numbers relate to England only and from 1990 include city technology colleges.

  Local Education Authorities
  Mr. Blunkett
  To ask the Secretary of State for Education if she will list, for each local education authority, the average amount of capital expenditure per pupil for 1995–96.

  Mr. Robin Squire
  The information requested is not yet available.

  Mr. Byers
  To ask the Secretary of State for Education what is her estimate of actual spending on education by local education authorities(a) nationally and (b) by individual local education authority in 1994–95; and what is the education standard spending assessment (i) nationally and (ii) by individual local education authority for 1995–96.

  Mr. Forth
  [holding answer 10 February 1995]: Total current spending on education by English local authorities in 1994–95, as recorded on their revenue accounts returns, is estimated to be £17.510 billion. This figure includes expenditure funded by current education specific grants within aggregate external finance, but excludes expenditure funded by specific grants outside AEF. Education standard spending in 1995–96 is £17.204 billion; within that, education standard spending assessments, which include neither current education specific grants within AEF nor specific grants outside AEF, total £17.024 billion. The table gives for each local education authority budgeted spending in 1994–95, and its SSA for 1995–96.

  £ million

  LEA

  1994–95 budget

  1995–96 SSA

  Corporation of London

  2.2

  0.8

  Camden

  64.7

  78.8

  Greenwich

  100.3

  114.3

  Hackney

  109.1

  92.8

  Hammersmith and Fulham

  61.5

  57.2

  Islington

  79.8

  80.4

  Kensington and Chelsea

  41.5

  37.3

  Lambeth

  125.4

  102.1

  Lewisham

  102.2

  108.0

  Southwark

  100.3

  109.9

  Tower Hamlets

  119.0

  120.2

  Wandsworth

  93.9

  88.7

  Westminster

  53.5

  59.9

  Barking and Dagenham

  71.0

  65.7

  Barnet

  106.6

  113.7

  Bexley

  77.9

  84.5

  Brent

  107.0

  106.3

  Bromley

  100.5

  99.6

  Croydon

  118.7

  114.3

  787

  £ million

  LEA

  1994–95 budget

  1995–96 SSA

  Ealing

  114.8

  108.9

  Enfield

  114.1

  112.1

  Haringey

  96.5

  89.1

  Harrow

  76.1

  70.4

  Havering

  85.3

  84.1

  Hillingdon

  85.8

  88.9

  Hounslow

  81.1

  90.2

  Kingston upon Thames

  44.0

  45.9

  Merton

  57.4

  56.3

  Newham

  110.8

  123.8

  Redbridge

  85.9

  94.2

  Richmond upon Thames

  39.2

  44.3

  Sutton

  61.4

  64.5

  Waltham Forest

  95.6

  94.1

  Birmingham

  448.0

  427.2

  Coventry

  120.8

  115.7

  Dudley

  108.3

  98.9

  Sandwell

  117.2

  113.8

  Solihull

  67.2

  69.2

  Walsall

  103.1

  103.7

  Wolverhampton

  103.2

  96.1

  Knowsley

  74.1

  69.6

  Liverpool

  199

  202.7

  St. Helens

  70.6

  63.3

  Sefton

  102.9

  102.3

  Wirral

  126.8

  124.1

  Bolton

  99.0

  95.7

  Bury

  63.9

  57.8

  Manchester

  173.5

  182.5

  Oldham

  88.8

  90.3

  Rochdale

  84.3

  79.7

  Salford

  82.6

  78.7

  Stockport

  95.7

  86.1

  Tameside

  82.1

  76.3

  Trafford

  74.8

  72.5

  Wigan

  108.3

  104.9

  Barnsley

  73.3

  73.1

  Doncaster

  115.5

  113.7

  Rotherham

  93.5

  96.3

  Sheffield

  167.4

  162.8

  Bradford

  196.2

  201.9

  Calderdale

  72.0

  72.8

  Kirklees

  146.6

  136.7

  Leeds

  262.7

  240.4

  Wakefield

  106.4

  106.4

  Gateshead

  74.3

  68.2

  Newcastle upon Tyne

  102.4

  97.3

  North Tyneside

  69.0

  65.4

  South Tyneside

  57.0

  56.3

  Sunderland

  113.2

  110.9

  Isles of Scilly

  1.2

  1.2

  Avon

  329.3

  298.0

  Bedfordshire

  208.5

  212.0

  Berkshire

  260.8

  273.3

  Buckinghamshire

  250.7

  244.5

  Cambridgeshire

  238.9

  226.1

  Cheshire

  353.6

  332.0

  Cleveland

  223.1

  219.0

  Cornwall

  163.8

  156.2

  Cumbria

  168.3

  161.5

  Derbyshire

  333.3

  302.8

  Devon

  329.0

  328.4

  Dorset

  204.5

  198.0

  Durham

  219.5

  206.9

  East Sussex

  216.8

  212.5

  Essex

  549.6

  540.5

  Gloucestershire

  172.5

  174.5

  Hampshire

  541.6

  502.6

  Hereford and Worcester

  217.3

  219.8

  Hertfordshire

  360.6

  371.4

  Humberside

  334.4

  310.8

  788

  £ million

  LEA

  1994–95 budget

  1995–96 SSA

  Isle of Wight Council

  43.2

  43.6

  Kent

  539.3

  559.1

  Lancashire

  521.6

  484.0

  Leicestershire

  326.8

  316.4

  Lincolnshire

  223.3

  199.2

  Norfolk

  252.3

  234.8

  North Yorkshire

  234.7

  223.6

  Northamptonshire

  214.5

  209.8

  Northumberland

  110.9

  107.6

  Nottinghamshire

  378.7

  346.7

  Oxfordshire

  188.8

  186.6

  Shropshire

  141.8

  137.1

  Somerset

  160.0

  143.5

  Staffordshire

  349.6

  348.8

  Suffolk

  215.1

  205.9

  Surrey

  303.3

  299.4

  Warwickshire

  168.0

  156.2

  West Sussex

  235.0

  226.8

  Wiltshire

  198.0

  188.6

  Total

  17,510.1

  17,024.1

ATTORNEY-GENERAL

  European Union Frontiers
  Mr. Madden
  To ask the Attorney-General what representations he or his predecessor have received since 1991, concerning the legality of the opt-out negotiated by Her Majesty's Government to the Single European Act in 1985 relating to frontiers; what such representations he has conveyed to the Prime Minister; and if he will make a statement.

  The Attorney-General
  By convention, neither the advice of the Law Officers nor whether they have advised on a particular issue is normally disclosed.

NATIONAL HERITAGE

  Museums Policy
  Mr. Chris Smith
  To ask the Secretary of State for National Heritage when he expects to announce the results of his Department's review of museums policy.

  Mr. Dorrell
  I am currently considering the results of the consultation process undertaken last year.

  Oflot
  Mr. Chris Smith
  To ask the Secretary of State for National Heritage, pursuant to his answer to the hon. Member of Hexham (Mr. Atkinson) of 2 February,Official Report, columns 779–80, what are the extra costs for consultancy, professional and legal advice associated with the grant of licences by Oflot; and which firms have provided the advice.

  Mr. Dorrell
  This is a matter for the Director General of the National Lottery. I have therefore asked him to write to the hon. Member, placing copies of his letter in the Library of the House.
  789

  Radio Broadcasts (Monitoring)
  Mr. Gapes
  To ask the Secretary of State for National Heritage (1) what monitoring he carries out of radio broadcasts to ensure that they comply with the Race Relations Acts or Public Order Acts;

  (2) how many staff are employed in monitoring radio broadcasts to consider whether they are racially offensive or incite racial hatred.

  Mr. Dorrell
  None. These are matters for the Radio Authority or the BBC.

  Hotel and Tourism Industry
  Mr. Jim Cunningham
  To ask the Secretary of State for National Heritage what proposals he has to tackle low motivation in the hotel and tourism industry caused by low pay.

  Mr. Dorrell
  I have no such proposals; pay and personnel issues are a matter for the industry itself.

  Mr. Jim Cunningham
  To ask the Secretary of State for National Heritage what plans he has to encourage investment in the tourist industry to offset jobs lost in the manufacturing industry in(a) Coventry and (b) the west midlands.

  Mr. Dorrell
  Funding is made available to the Heart of England tourist board through the English tourist board to undertake marketing and development activities in its regions, which includes Coventry and the west midlands. In the 1994–95 financial year, the HETB will receive £364,000—indicative figure. In addition, RTBs may bid for funding from the ETB's £2.25 million tourism development fund for specific projects. The public funds made available to the RTBs lever in substantial funding from the private sector.

  Local authorities and the regional tourist boards are also eligible to bid for support from the European structural funds and the single regeneration budget. The Government office for the west midlands has allocated £28.4 million—indicative figure—from the European regional development fund for projects in the cultural, media and tourism industries in its programme for 1994–96.

  English Tourist Board
  Mr. Sheerman
  To ask the Secretary of State for National Heritage what assessment his Department has made of the impact of reduced funding for the English tourist board on the number of holidays taken in Britain.

  Mr. Dorrell
  Recent changes, upward and downward, in funds provided to the ETB and British Tourist Authority reflect the Government's view of spending priorities in the tourism sector.

  Muslim Community Radio
  Mr. Gapes
  To ask the Secretary of State for National Heritage what information he has on the connection between Muslim Community radio and Hizb ut Tahir.

  Mr. Dorrell
  None.

  Television Licence Fee
  Mr. Allen
  To ask the Secretary of State for National Heritage if he will bring forward proposals to authorise the increase in the television licence fee.
  790
  Mr. Dorrell
  Regulations to bring into force from 1 April the new fees which I announced on 1 December of £86.50 for a colour licence and £28.50 for a black and white licence—Official Report, column 805, will be laid before the House at the beginning of March.

  Television (Digital Licences)
  Mr. Allen
  To ask the Secretary of State for National Heritage when he is required to bring forward proposals to allocate digital licences for television channels.

  Mr. Dorrell
  The Government intend to ensure that television broadcasters are in a position to take advantage of new digital technology, and are seeking their views before bringing forward proposals.

  Channel 4
  Mr. Allen
  To ask the Secretary of State for National Heritage when he is next required to review Channel 4 funding.

  Mr. Dorrell
  The Broadcasting Act 1990 does not require me to review Channel 4 funding. However, the threshold percentages in the funding formula may be amended by order, but not before the end of 1997.

  Football Transfers
  Ms Hoey
  To ask the Secretary of State for National Heritage what discussions he has had with the Australian Government in respect to the Australian inquiry into football transfers, with particular reference to transfers affecting English clubs.

  Mr. Sproat
  None.

  Millennium Commission
  Mr. Dafis
  To ask the Secretary of State for National Heritage if the promotion of environmental education falls within the remit of the Millennium Commission.

  Mr. Dorrell
  Under the National Lottery etc. Act 1993, the Millennium Commission may make grants to such projects as it considers appropriate to mark the year 2000 and the beginning of the third millennium. More detailed information on the kinds of project which the commission will fund can be found in the commission's guidelines for applicants, copies of which are available in the Library of the House.

  Arts Grants, Wales
  Mr. Rhodri Morgan
  To ask the Secretary of State for National Heritage, pursuant to his answer of 31 January,Official Report, column 619, if he will list the sponsor company which made the corresponding application to the Association for Business Sponsorship for the Arts for each of the cultural organisations or events listed in the answer.

  Mr. Dorrell
  The information requested is in the following table:
  791

  Organisation

  Award £

  Sponsor company

  Theatr Bara Caws

  4,000

  Cwmni'r Castell

  7,200

  Penadur

  Y Faner

  5,000

  Ffilmiau Elidir

  10,000

  Delwyn Sion

  Dalier Sylw

  4,000

  Cambrensis

  5,000

  Atsain

  Ewrosgol

  2,500

  Dime Goch

  Creu Cof

  2,500

  Ffilmiau Matinee

  Cwmni Dawns Camre Cain

  4,000

  Fflic

  Welsh International Film Festival

  3,000

  Y Wennol

  3,000

  Ffilmiau'r Ty Gwyn

  4,000

  Eurofocus

  5,000

  Ffilmiau'r Bont

  Wales Actors Company

  4,750

  Tiger Bay Productions

  Arad Goch

  4,000

  Pendefig Dyfed

  2,000

  Intrada

  Hwyl a Fflag

  7,500

  Ffilmiau Eryri

  8,000

  FiTi-TiFi

  National Film and Video Archive of Wales

  6,500

  Hel Straeon

  Clwyd Arts and Exhibition Service

  3,000

  Ffilmiau Llifon

  Taliesin Trust

  2,500

  Llun y Felin

  Theatr Gorllewin Morgannwg

  7,500

  Dyffryn

  Barddas: Y Gymdeithas Gerdd Dafod

  2,000

  Cwmni'r Gannwyll

  Theatr Had

  2,000

  Mintai

  Model House Llantrisant

  1,500

  Cartwn Cymru

  Rhiniog

  1,500

  Ffilmiau Hiraethog

  Welsh Television Channels
  Mr. Barry Jones
  To ask the Secretary of State for National Heritage what measures he will take to enable television viewers in Clwyd to receive the Welsh television channels; and if he will make a statement.

  Mr. Dorrell
  It is for the BBC, the Independent Television Commission and the Welsh Fourth Channel Authority to determine their own engineering priorities for the coverage of their television services in Wales within the resources they have available.

  Mr. Barry Jones
  To ask the Secretary of State for National Heritage what percentage of television viewers in(a) Alyn and Deeside and (b) Clwyd can receive (i) BBC Wales, (ii) Harlech TV and (iii) Granada TV; and if he will make a statement.

  Mr. Dorrell
  This information is not available in the form requested. The BBC, the Independent Television Commission and the Welsh Fourth Channel Authority respectively have responsibility for coverage of their television services in Wales. The Government have no independent figures.

  Consultants
  Mr. Milburn
  To ask the Secretary of State for National Heritage if he will list the occasions during the last five years when his Department or its agencies has taken legal action against a consultancy firm; and what were the reasons in each case.

  Mr. Dorrell
  [holding answer 15 February 1995]: Since it was established in April 1992, neither my Department nor its agencies have taken legal action against a consultancy firm.
  792

  Public Appointments
  Mr. Milburn
  To ask the Secretary of State for National Heritage pursuant to his answer of 19 January,Official Report, column 587, how many appointments to public positions have been made by his Department in the last year.

  Mr. Dorrell
  [holding answer 15 February 1995]: In 1994, my Department made 82 appointments. In addition, the Prime Minister made 40 appointments and Her Majesty the Queen made 23 appointments on the recommendations of my Department.

  Concessionary Television Licence Scheme
  Mr. Byers
  To ask the Secretary of State for National Heritage what plans he has to extend the concessionary television licence scheme to cover all housing schemes which have the services of a warden who is either residential or on call.

  Mr. Dorrell
  [holding answer 14 February 1995]: As indicated in paragraph 5.17 of the White Paper "The Future of the BBC" (Cm 2621) published in July 1994, the Government considers that any review of the concessionary scheme aimed at removing perceived anomalies would most likely have the effect of creating fresh ones. We therefore have no plans for any amendments to the concessionary scheme.

TRADE AND INDUSTRY

  Mortgage Protection Insurance
  Mr. Battle
  To ask the President of the Board of Trade what information he has on the average duration of cover received after claiming against a mortgage protection policy; and what discussions his Department has had with the insurance industry in respect of proposals to extend coverage of benefits beyond the present normal fixed period following Government plans to compel all new mortgagees to take out protection policies.

  Mr. Jonathan Evans
  The Government have no intention to compel purchase of mortgage protection insurance but wish to encourage personal responsibility wherever possible.

  There have been no specific discussions with the insurance industry on extending maximum duration of mortgage protection benefit beyond what is currently available—commonly, a total of 12 months, but up to 24 months in some cases. New, more flexible products are anticipated to arise from wider take-up of the insurance.

  The Government do not collect information on average claims duration. However, soundings taken by the Association of British Insurers suggest average claim payment periods, in excess of a typical 60-day waiting period, of six to eight months for unemployment, four to six months for sickness and five months for incapacity following an accident.

  Television Channels (Access)
  Mr. Allen
  To ask the President of the Board of Trade when he last discussed conditional access to television channels with another EU member state; and if he will make a statement.
  793
  Mr. Ian Taylor
  At the EU Telecommunications Council last November, conditional access was discussed in the context of the draft directive on standards for TV transmission. Agreement was reached on the regulation requiring all conditional access systems used with digital broadcasts to use a standardised scrambling algorithm.

  Steel
  Mr. MacShane
  To ask the President of the Board of Trade what assessment he has made of the level of investment in the United Kingdom steel industry.

  Mr. Eggar
  The figures for treaty of Paris products are as follows:Investment in the UK steel crude industry
  (SIC 221 Iron and steel industry treaty of Paris definition)

  Net capital expenditure

  (£ million)

  1988

  1989

  1990

  1991

  1992

  Land and Buildings

  11.6

  11.7

  9.4

  24.5

  18.8

  Plant and Machinery

  327.7

  413.2

  383.7

  252.2

  182.1

  Vehicles

  2.4

  3

  1.8

  -0.3

  0.8

  Total

  341.7

  427.9

  394.9

  276.5

  201.8

  Source:

  Report on the census of production, PA221.

  In addition, and perhaps more important, the industry has invested in its people and British Steel now spends some 5 per cent. of its employment costs on training. The United Kingdom has a world-class steel industry, but one which is far from complacent and is working with my Department to tackle a whole range of competitiveness issues.

  Mr. MacShane
  To ask the President of the Board of Trade, what was the level of steel in(a) tonnes and (b) percentage terms imported into the United Kingdom from (i) the EU, (ii) east Europe, (iii) the Russian Federation, (iv) Turkey, (v) North America, (vi) Latin America and (vii) Asia in the last year for which figures are available.

  Mr. Eggar
  The information is in the table.

  United Kingdom imports of steel 19931

  Source

  '000 tonnes

  Percentage total

  EU 152

  4,305.60

  87.6

  Eastern Europe3

  131.5

  2.7

  Former USSR4

  89.6

  1.8

  Turkey

  n/a

  n/a

  North America

  46.9

  1.0

  Latin America

  36.4

  0.7

  Asia

  75.4

  1.5

  Others

  231.5

  4.7

  World

  4,916.90

  100

  Source:

  Iron and Steel Statistics Bureau.

  1 Products of the steel industry in the Standard Industrial classification (1980), groups 221, 222 and 223.

  2 EU includes Austria, Finland and Sweden.

  3Not including former USSR.

  4 Figures for Russian Federation alone are not available. n/a: not available.

  Mr. Whitney
  To ask the President of the Board of Trade if he will make a statement about his Department's794
  plans for strengthening the enforcement of European Coal and Steel Community rules on the provision of subsidies to steel producers.

  Mr. Eggar
  I am determined to fight for a level playing field for the United Kingdom steel industry. The exceptional granting of state aid to steel producers in countries such as Italy, Spain and Germany must be rigorously monitored. The Commission has the central role of ensuring that state aid is used only for the agreed purpose of restructuring, but this is a considerable task. It is also important to watch developments which have not yet been considered in the European Council, such as those in Ireland and Germany. I am therefore setting up the steel subsidies monitoring committee to help gather information—including any evidence of illegal subsidies—and to pass this on to the Commission for action. The committee will include representatives of British Steel, the British Iron and Steel Producers Association, Department of Trade and Industry and other Government Departments.

  Mines (Working Facilities and Support) Acts
  Mr. French
  To ask the President of the Board of Trade when a consultative document will be published on the review of the Mines (Working Facilities and Support) Acts.

  Mr. Eggar
  A consultative document on the review of the Mines (Working Facilities and Support) Acts is published today. A copy will be placed in the Library of the House, and further copies can be obtained from my Department.

  As I announced to the House on 2 December 1993, Official Report, columns 735–36, the review has a remit to establish what amendment, revision or reform is needed to the powers to grant compulsory access to minerals in order to provide an integrated regime for all minerals for the next century. Following the privatisation of the coal industry, the special procedures which are available to opencast coal operators—and not to other operators—will expire on 31 December 1999. Subsequently, the procedures for opencast coal are to be unified with the general regime contained in the mines (Working Facilities and Support) Acts. In considering the issues, the review is to have regard to the need to exploit the country's mineral resources, to the perception that the current general procedures are expensive and time-consuming and to the need to protect the rights of landowners.

  The consultative document takes into account representations received following the announcement of the review. It puts forward options on a number of issues which are of concern to those involved in, or likely to be affected by, mineral development activities. It covers the need for rights of compulsory access, and their nature: the system that should be used to determine applications for the grant of such rights; the criteria to be employed; the compensation to be payable; the relationship with the system for determining land planning applications; and a number of subsidiary issues.

  Views on the issues and options set out in the consultative document, and any others relevant to this review, are requested to reach my Department by 31 July 1995.
  795

  Insurance
  Mr. French
  To ask the President of the Board of Trade if he will make a statement on progress towards the implementation of the third Council directive on non-life insurance, 92/49/EEC and the third Council directive on life assurance, 92/96/EEC by the other states of the European Economic Area.

  Mr. Jonathan Evans
  According to information currently available Finland, Greece, Iceland, Italy, Norway, Spain, Sweden have still to complete their implementation of the directives. To the extent that these states have not fully or substantially implemented the directives, the provisions of regulation 71 of the Insurance Companies (Third Insurance Directives) Regulations 1994 or regulation 15 of the Insurance Companies (Amendment) Regulations 1994 will apply to any insurance company whose head office is in one of these states. Such companies will continue to require authorisation under the Insurance Companies Act 1982 to carry on direct insurance business in the United Kingdom. They will also still be required to submit returns to the Department, in accordance with the Insurance Companies (Accounts and Statements) Regulations 1983, in respect of their UK business.

  Consultants
  Mr. Milburn
  To ask the President of the Board of Trade if he will list the occasions during the last five years when his Department or its agencies has taken legal action against a consultancy firm; and what were the reasons in each case.

  Mr. Heseltine
  [holding answer 15 February 1995]: No central records are kept, but as far as I can ascertain, on

  Table A—Expenditure on SRB programmes nationally

  £ million

  1990–91 outturn

  1991–92 outturn

  1992–93 outturn

  1993–94 outturn

  1994–95 estimated outturn

  Single Regeneration Budget (SRB)

  UDCs and Docklands Light Railway

  607.2

  601.8

  515.0

  371.2

  296.6

  English Partnership1 (URA)

  117.4

  97.4

  151.5

  152.9

  193.0

  Housing Action Trusts—

  10.1

  26.5

  78.1

  90.7

  Other SRB

  Estate Action

  180.0

  267.5

  348.0

  357.4

  372.6

  City Challenge2

  —

  —

  52.1

  206.6

  212.7

  Urban Programme

  225.8

  237.5

  236.2

  166.5

  77.2

  Task Forces

  20.9

  20.5

  23.6

  18.0

  16.0

  Business Start-Up Scheme3

  *113.1

  *90.1

  62.1

  82.9

  70.1

  Local Initiative Fund

  9.9

  48.2

  49.7

  47.7

  28.6

  Compacts

  5.8

  5.5

  5.4

  5.7

  5.7

  Teacher Placement Service

  —

  3.7

  3.4

  3.3

  3.3

  Education Business Partnerships

  0.7

  3.2

  2.0

  1.7

  1.4

  TEC Challenge

  —

  —

  —

  9.1

  4.3

  Programme Development Fund3

  *2.1

  1.9

  3.5

  2.9

  3.3

  Regional Enterprise Grants

  8.4

  7.3

  5.8

  8.2

  11.7

  Section 11 programme (part)

  74.1

  61.8

  70.9

  74.8

  60.5

  Ethnic Minorities Grant

  —

  —

  4.0

  5.4

  5.7

  Safer Cities

  —

  —

  —

  —

  2.0

  Ethnic Minority Business Initiative

  0.4

  0.4

  0.3

  0.6

  0.6

  GEST 19

  —

  —

  3.3

  6.1

  4.3

  City Action Terms

  7.7

  8.4

  4.6

  3.4

  0.4

  Total SRB

  1,373.5

  1,465.3

  1,567.9

  1,602.5

  1,460.7

  Notes:

  1 English Partnerships figures include English Estates, City Grant and Derelict Land Grant.

  2 City Challenge—an additional £19 million per year is provided from Housing Corporation provision.

  3 *=pro rata expenditure on related programmes.
  796
  no occasion during the last five years has my Department or its agencies taken legal action against a firm providing consultancy services to the Department.

ENVIRONMENT

  Single Regeneration Budget
  Dr. Lynne Jones
  To ask the Secretary of State for the Environment what is the expected expenditure under the single regeneration budget in 1995–96 and what was the annual expenditure in each of the last five years for each of the schemes that have been incorporated into the single regeneration budget(a) nationally and (b) in Birmingham; and what proportion of those budgets has been spent and will be spent on housing investment.

  Mr. Curry
  Planned single regeneration budget expenditure in 1995–96 is £1,331.5 million. Expenditure nationally and in Birmingham in each of the last five years for each of the programmes brought together in the SRB is set out in tables A and B.

  The proportion spent each year on the specific housing programmes—estate action and housing action trusts—which are now part of the SRB is set out in table C. Housing investment is also achieved through the urban development corporations, city challenge, English Partnerships and from 1995–96 new SRB partnership schemes, although the proportions of these programmes' total budgets spent on housing investment cannot easily be separated out.

  The whole purpose of the SRB is to promote an integrated approach to development with the local parties defining their priorities.
  797

  Table B—Expenditure on SRB programmes in Birmingham

  £ million

  1990–91 outturn

  1991–92 outturn

  1992–93 outturn

  1993–94 outturn

  1994–95 estimated outturn

  Single Regeneration Budget (SRB)

  UDCs

  —

  —

  5.412

  10.191

  7.000

  English Partnerships1 (URA)

  6.467

  4.934

  4.507

  2.673

  2.600

  Housing Action Trusts

  —

  —

  —

  2,000

  6.000

  Other SRB

  Estate Action

  8.074

  15.476

  15.780

  19.100

  26.404

  City Challenge

  —

  —

  —

  6.921

  7.823

  Urban Programme

  21.808

  21.955

  21.819

  13.829

  6.966

  Task Forces

  0.782

  1.089

  1.532

  1.449

  1.238

  Business Start-Up Scheme

  20.356

  3.866

  4.062

  2.282

  1.172

  Local Initiative Fund

  20.122

  1.232

  0.472

  0.661

  0.431

  Compacts

  20.005

  0.109

  0.100

  0.059

  0.050

  Teacher Placement Service

  —

  0.032

  0.054

  0.052

  0.052

  Education Business Partnerships

  —

  0.030

  0.020

  0.024

  0.025

  TEC Challenge

  —

  —

  —

  0.286

  0.105

  Programme Development Fund

  0.063

  0.033

  0.150

  0.155

  0.098

  Regional Enterprise Grants

  —

  —

  0.007

  0.065

  0.425

  Section II programme (part)

  6.539

  7.660

  7.446

  7.991

  5.714

  Ethnic Minorities Grant

  —

  —

  0.050

  0.052

  0.017

  Safer Cities

  —

  —

  —

  —

  —

  Ethnic Minority Business Initiative

  0.030

  0.053

  0.044

  0.076

  0.055

  GEST 19

  —

  —

  0.162

  0.238

  0.408

  City Action Teams

  0.790

  0.940

  0.500

  0.413

  —

  Total

  45.036

  57.409

  62.117

  68.517

  66.583

  Notes:

  1English Partnerships figures include City Grant and Derelict Land Grant but exclude English Estates.

  2 Figures for 1990–91 for BSUS, LIF and Compacts relate only to expenditure from October 1990, the date at which Birmingham TEC became operational.

  Table C—Proportion spent on Estate Action and Housing Action Trusts

  Percentages

  1990–91 outturn

  1991–92 outturn

  1992–93 outturn

  1993–94 outturn

  1994–95 estimated outturn

  1995–96 plans

  Nationally

  13.1

  18.9

  23.9

  27.2

  31.7

  30.3

  Birmingham

  17.9

  27.0

  25.4

  30.8

  48.7

  51.2

  Rural Development Commission
  Mr. Gordon Prentice
  To ask the Secretary of State for the Environment to what extent the Rural Development Commission advised on bids made under the single regeneration budget.

  Mr. Curry
  Government offices for the regions were responsible for making recommendations to Ministers on SRB bids taking account of comments from the Rural Development Commission as appropriate. Where, for example, the Rural Development Commission was a party to the bid, it was not consulted.

  Construction Industry Board
  Mr. Robert Ainsworth
  To ask the Secretary of State for the Environment what were the conclusions of the meeting with the standing strategic group for construction on 7 February on legislation to enact the Latham report; and if he will make a statement.

  Mr. Robert B. Jones
  My right hon. and noble Friend the Minister of State and I agreed with representatives of the construction industry and their clients on 7 February to set up a construction industry board. The first task of 798
  the board—which will be chaired by Sir Michael Latham—will be to take forward proposals of the Latham report for restructuring the construction process.

  We have noted the extent of industry support for legislation, on the basis of which we intend to move to the next stage of full public consultation on detailed proposals. The board will provide a channel to Government for industry and client comment on any legislation proposals.

  Local Plan, Plymouth
  Mr. Streeter
  To ask the Secretary of State for the Environment when his planning inspector's report from the public inquiry into the City of Plymouth local plan first alteration 1992 will be published.

  Sir Paul Beresford
  The inspector's report on objections to the Plymouth city council local plan—first alteration—was issued to the council on 30 December 1994. I understand that the council is currently considering when to publish the report. I have asked the Planning Inspectorate's chief executive to write to the hon. Member.
  799
  Letter from C. J. Shepley to Mr. Gary Streeter, dated 14 February 1995.
  The Secretary of State for the Environment has asked me to reply to your question about the Inspector's report from the public inquiry into the City of Plymouth local plan first alteration 1992.
  The report was issued to the Council on 30 December 1994 and I understand that the Council is currently considering when to publish it.

  Housing
  Mrs. Maddock
  To ask the Secretary of State for the Environment (1) how many households currently on social housing waiting lists have been waiting for more than(a) six months, (b) a year, (c) two years, (d) three years, (e) five years and (f) 10 years in each region of England;

  (2) what is the total number of households currently on social housing waiting lists in each region of England.

  Mr. Robert B. Jones
  Local authorities in England report the number of households on their council housing waiting lists in their annual housing investment programme returns.

  Figures for each region, as at 1 April 1994, can be found in section B of the "1994 HIP1 All Items Print", a copy of which is in the Library.

  Information on the length of time households have been on waiting lists is not collected centrally.

  Mrs. Maddock
  To ask the Secretary of State for the Environment (1) how much of the 1994–95 approved development programme funding was allocated to(a) each region and (b) each housing authority area in England and Wales; and what is the allocation for 1995–96;

  (2) how much of the 1994–95 housing investment programme funding was allocated to (a) each region and (b) each housing authority area in England and Wales; and what is the allocation for 1995–96.

  Mr. Robert B. Jones
  The information requested for England is in the Library. For information about Wales I refer the hon. Member to the Secretary of State for Wales.

  Mrs. Maddock
  To ask the Secretary of State for the Environment how much of the Government's total 1994–95 housing budget was allocated to(a) each region and (b) each housing authority area in England and Wales; and what is the allocation for 1995–96.

  Mr. Robert B. Jones
  For housing investment programme and approved development programme allocations in England, I refer the hon. Member to the answers I gave to her questions earlier today. Housing investment programme allocations comprise local authority credit approvals and resources for private sector renewal.

  The Department is providing additional credit approvals in 1994–95 for the housing partnership fund, £30 million, the cash incentive scheme, £30 million, and the flats-over-shops scheme, £10 million. I have placed in the Library copies of the Department's press notices which announced allocations by English local authority area for these schemes for 1994–95. In 1995–96 the housing partnership fund will again provide £30 million and the cash incentive scheme will provide £60 million. Individual allocations have not yet been made for 1995— 96.
  800
  The estimated cost of housing revenue account subsidy for England in 1994–95 is £4.1 billion. Final claims for the year will not be received by the Department until early in 1996, but I have placed in the Library a list of the latest provisional claim figures for each authority and region. all of these are still subject to validation.

  The estimated cost of housing revenue account subsidy in 1995–96 is £4.2 billion. No claims have yet been received from authorities.

  The remainder of the Government's housing resources for England is allocated through a wide range of smaller programmes, and further information can be found in chapter A6 of the Department's "Annual Report 1994", published in March 1994, and in its "Annual Report 1995" which will be published shortly.

  Housing in Wales is the responsibility of my right hon. Friend the Secretary of State for Wales.

  Mrs Maddock
  To ask the Secretary of State for the Environment in respect of how many social housing units work was started during the last 12 months for which figures are available in(a) each region and (b) each housing authority area in England and Wales.

  Mr. Robert B. Jones
  The publication "Local Housing Statistics" shows estimates of housebuilding starts for each region and each local authority area in England and Wales. It shows starts by sector, including activity by housing associations and by local authorities. Figures for 1993 and provisional figures for the first quarter of 1994 are in issue No. 110, March quarter 1994.

  A copy of this publication is in the Library.

  North Yorkshire County Council
  Mr. Frank Cook
  To ask the Secretary of State for the Environment if he requested an estimate from North Yorkshire county council of the cost to it changing the name of the county council prior to his announcement on 1 February; and what estimate he has now made.

  Mr. Robert B. Jones
  My right hon. Friend the Secretary of State for the Environment has concluded that the county's name should not be changed.

  Homelessness
  Mrs Maddock
  To ask the Secretary of State for the Environment how many households were found to be homeless during the most recent 12 months for which figures are available in(a) each region and (b) each housing authority area in England and Wales.

  Mr. Robert B. Jones
  I have today placed in the Library a table giving the numbers reported by each local authority in England of homeless households for which they had accepted responsibility to secure permanent accommodation in the year ending September 1994, under the homelessness provisions of the 1985 Housing Act. The table includes grossed regional totals which include estimates for missing data.

  For information about Wales I refer the hon. Member to my right hon. Friend the Secretary of State for Wales.

  Mrs Maddock
  To ask the Secretary of State for the Environment what assessment he has made of the effect of homelessness and living in temporary accommodation on children's education.
  801
  Mr. Forth
  I have been asked to reply.

  HM inspectors published "A Survey of the Education of Children Living in Temporary Accommodation" in 1990. It considered the effect of homelessness on the educational attainment of a sample of individual children and the response of the schools and local education authorities to their educational needs. It identified ways in which the educational arrangements for pupils who lived in temporary accommodation could be improved and noted that the national curriculum should ensure greater continuity and progression.

  Woodspring District Council
  Mr. Berry
  To ask the Secretary of State for the Environment if he will make a statement on the future of Woodspring district council under the draft Avon (Structural Change) Order; if it will have the functions currently exercised by(a) county or (b) district councils; how it will be treated for ceremonial purposes; and what assessment he has made as to the effect of the proposed changes on public understanding of local government arrangements.

  Mr. Robert B. Jones
  Under the Avon (Structural Change) Order, Woodspring district council will be a continuing district council on its existing boundaries, but will be renamed North West Somerset district council and will have both county and district functions. The order makes no provision for ceremonial functions in north-west Somerset but the Government's intention is that the area of north-west Somerset will be deemed to be part of Somerset for ceremonial purposes. I believe the creation of a unitary local authority will improve the accountability of local government in the area.

  North West Somerset
  Mr. Berry
  To ask the Secretary of State for the Environment what plans he has for a county council covering north-west Somerset.

  Mr. Robert B. Jones
  None.

  Avon (Structural Change) Order
  Mr. Berry
  To ask the Secretary of State for the Environment what powers are to be given under article 20 of the draft Avon (Structural Change) Order to Bristol city council and Woodspring district council additional to those available to Northavon, Kingswood, Bath or Wansdyke district councils or Avon county council before the preliminary period.

  Mr. Robert B. Jones
  None.

  Debt
  Mr. Devlin
  To ask the Secretary of State for the Environment if he will list by local authority(a) the total level of debt and (b) the level of debt expressed in pounds per head of the local population.

  Mr. Robert B. Jones
  I have today placed the information requested in the Library of the House.

  Council Houses
  Mr. Devlin
  To ask the Secretary of State for the Environment how many council houses have been built in 802
  each local authority in the northern region in each year since 1980.

  Mr. Robert B. Jones
  I will write to my hon. Friend.

  Revenue Support Grant
  Sir David Madel
  To ask the Secretary of State for the Environment what is the average amount of revenue support grant for 1995–96 per dwelling for(a) Bedfordshire county council and (b) each of the four Bedfordshire district councils.

  Mr. Curry
  The average amount of revenue support grant for 1995–96 per chargeable dwelling is as follows:

  £

  (a) Bedfordshire County Council

  757

  (b) Bedford

  114

  Luton

  164

  Mid Bedfordshire

  56

  South Bedfordshire

  81

  The amounts are determined by the relative needs, taxable capacity, and population of each authority, as measured by each authority's standard spending assessment, RSG council tax base, and resident population as at 30 June 1993, respectively.

  Review Bodies
  Mr. Andrew Smith
  To ask the Secretary of State for the Environment (1) if he will estimate the cost to local authorities' self-financed expenditure in 1995–96 of implementing in full the recommendations of(a) the School Teachers' Review Body, (b) the Review Body on Doctors' and Dentists' Remuneration and (c) the Review Body on Nursing Staff, Midwives, Health Visitors, and Professions Allied to Medicine, assuming no changes in staff numbers;

  (2) if he will estimate the cost to his Department's budget in 1995–96 of implementing in full the recommendations of (a) the School Teachers' Review Body, (b) the Review Body on Doctors' and Dentists' Remuneration and (c) the Review Body on Nursing Staff, Midwives, Health Visitors, and Professions Allied to Medicine, assuming no change in staff numbers; and how much of the cost would be borne by (i) direct expenditure by his Department and (ii) grants and loans to local authorities.

  Mr. Robert B. Jones
  The School Teachers' Review Body has recommended an increase of 2.7 per cent. in teachers' pay for 1995–96. The cost of this to local authorities in England is likely to be in the order of £275 million. The recommendations of the Review Body on Doctors' and Dentists' Remuneration and the Review Body on Nursing Staff, Midwives, Health Visitors and Professions Allied to Medicine will not directly affect local authorities' budgets. There will be no direct cost to my Department's other programmes.

  The Government took account of a range of possible pay settlements for all local authority employees, including teachers, in deciding the overall level of the local government settlement.
  803

  Local Government Finance
  Mr. David Nicholson
  To ask the Secretary of State for the Environment if he will make a statement on the amount of government support to county councils in England in the local government financial settlements for 1992–93, 1993–94 and 1994–95 compared with the rate of inflation in each year.

  Mr. Robert B. Jones
  Under the local government finance system in operation prior to 1 April 1993 both revenue support grant and non-domestic rates for an area were paid into the collection funds administered by the charging authorities in that area. It is therefore not possible to provide a figure for the amount of RSG and NDR for county councils for 1992–93.

  The total of RSG and NDR entitlements for county councils in England was £13,287.431 million in 1993–94 rising to £13,641.681 million in 1994–95, an increase of 2.7 per cent.

  The GDP deflator is a general measure of domestically-generated inflation in the economy. In 1994–95 it is estimated to be 2 per cent. higher than in 1993–94.

  Mr. David Nicholson
  To ask the Secretary of State for the Environment what increase took place in the amount of government grant offered to Surrey in the local government financial settlement for 1995–96 as a result of representations received during the consultation period, and for what specific reasons the increase was made.

  Mr. Robert B. Jones
  Surrey county council, in common with a number of other local authorities, made representations that the number of pupils involved in the calculations in the consultation paper was inaccurate. In each case we have incorporated the new figures where they were notified prior to the settlement being laid before the House.

  The effect on Surrey was to increase the revenue support grant by £2.934 million.

  Mr. Tipping
  To ask the Secretary of State for the Environment, pursuant to his answer of 3 February,Official Report, columns 910–11, if he will set out by council the value of the bid for redundancy and new building costs.

  Mr. Robert B. Jones
  [holding answer 15 February 1995]: The bids for redundancy and staff compensation and for accommodation costs, which may include new building costs, are as follows:

  Redundancy and compensation costs £000s

  Accommodation £000s

  Isle of Wight

  Isle of Wight Council

  500

  960

  Avon

  Avon County Council

  2,625

  *Nil

  Bath City Council

  1,020

  *Nil

  Bristol City Council

  2,000

  125

  Northavon District Council

  461

  *Nil

  Kingswood Borough Council

  430

  *Nil

  Wansdyke District Council

  632

  *Nil

  Woodspring District Council

  275

  1,162

  804

  Redundancy and compensation costs £000s

  Accommodation £000s

  Cleveland

  Cleveland County Council

  2,140

  *Nil

  Hartlepool Borough Council

  294

  931

  Langbaurgh on Tees Borough Council

  628

  8,936

  Middlesbrough Borough Council

  600

  250

  Stockton on Tees Borough Council

  544

  3,165

  North Yorkshire

  North Yorkshire County Council

  1,000

  *Nil

  Ryedale District Council

  100

  *Nil

  Selby District Council

  213

  *Nil

  City of York Council

  330

  *Nil

  Humberside

  Humberside County Council

  8,960

  *Nil

  Beverley Borough Council

  583

  *Nil

  Boothferry Borough Council

  600

  *Nil

  Cleethorpes Borough Council

  300

  *Nil

  East Yorkshire Borough Council

  959

  *Nil

  Glanford Borough Council

  500

  *Nil

  Great Grimsby Borough Council

  762

  *Nil

  Holderness Borough Council

  333

  *Nil

  Hull City Council

  Nil

  600

  Scunthorpe Borough Council

  477

  *Nil

  Note:

  A *Nil entry indicates an authority that is to be abolished and that is therefore ineligible under the transitional costs scheme to bid for accommodation costs.

  Mr. Tipping
  To ask the Secretary of State for the Environment what bids he received from local authorities in the Isle of Wight, Avon, Cleveland, North Yorkshire and Humberside for supplementary credit approvals for 1995–96; and what allocation by service block had been made for each authority.

  Mr. Robert B. Jones
  [holding answer 15 February 1995]: The bids to which the hon. Member refers are set out in the answer I gave on 3 February, Official Report, columns 910–11. The allocations—which I shall announce very shortly—are not hypothecated to specific services.

  Mr. Dobson
  To ask the Secretary of State for the Environment what were the usable capital receipts as at 31 March 1994, for each local authority, and in total for England.

  Mr. Gummer
  [holding answer 9 February 1995]: The total of usable capital receipts held by English local authorities at 31 March 1994 was £2.1 billion. The information for each local authority has been placed in the Library of the House. It is open to authorities to spend these receipts or to use them to repay debt. The gross debt of English authorities at 31 March 1994 was £38 billion.
  805

  Century House
  Mr. Barnes
  To ask the Secretary of State for the Environment pursuant to his answer of 24 November 1994,Official Report, column 249, what has been the cost of maintenance of Century house, Westminster Bridge road since 24 November, and what progress has been made in negotiations over the short-term and long-term future of the building.

  Sir Paul Beresford
  The cost of maintenance at Century house since 24 November 1994 amounts to £13,000 plus fees and VAT. The majority of expenditure relates to security cover.

  Property Holdings arranged with the landlord for the building to be offered for use as a winter shelter in 1994–95 as part of the Government's rough sleeper's initiative in central London. The planning application was refused by London borough of Lambeth and the proposal did not proceed. The interest in re-use by a Government Department is no longer current and a marketing campaign is being produced. As an interim measure short-term car parking lettings are under consideration.

  Discussions with the landlord and freeholder about the future of the building are continuing. Progress is hampered by the substantial negative value of the Secretary of State's lease.

  Local Government Reorganisation
  Mr. Harry Greenway
  To ask the Secretary of State for the Environment what resources he will make available to authorities that are to be reorganised on 1 April 1995 or 1996 for reorganisation costs incurred by them in 1995–96, and if he will make a statement.

  Mr. Curry
  I announced on 2 December 1994,Official Report, column 921, that I was inviting authorities in the county areas of Avon, Cleveland, Humberside, North Yorkshire and the Isle of Wight to submit estimates of the amount of expenditure they expect to incur on reorganisation in 1995–96. On the basis, inter alia, of the information provided by the authorities, I have decided the maximum amounts that it would be appropriate to allocate at this stage towards eligible costs incurred in 1995–96.

  I propose to make further allocations during the course of 1995–96 to shadow authorities when they are elected; to all eligible authorities in the light of revised estimates to be submitted at the end of September, especially in respect of redundancy and staff compensation costs; and to some authorities who are being asked to look again at certain expenditures that they are proposing to incur, especially on accommodation. Authorities for whom reorganisation orders are made under section 17 of the Local Government Act 1992 during the course of 1995–96 may also qualify under the scheme. I propose to hold back £27 million out of the total provision of £50 million for these purposes. The balance of £23 million will be allocated to authorities as set out. Authorities will be notified within the next few days of their maximum amount and of the considerations underlying my decision. The amounts are as follows:

  Authority

  Maximum amount £ thousand rounded

  Avon

  Avon County Council

  500

  Bristol City Council

  2,800

  806

  Authority

  Maximum amount £ thousand rounded

  Woodspring District Council

  2,500

  Bath City Council

  250

  Wansdyke District Council

  240

  Kingswood Borough Council

  250

  Northavon District Council

  250

  Cleveland

  Cleveland County Council

  500

  Hartlepool Borough Council

  2,750

  Langbaurgh on Tees Borough Council

  1,850

  Middlesbrough Borough Council

  1,160

  Stockton on Tees Borough Council

  2,280

  Humberside

  Humberside County Council

  500

  Hull City Council

  2,800

  Beverley Borough Council

  250

  Boothferry Borough Council

  300

  East Yorkshire Borough Council

  250

  Holderness Borough Council

  250

  Glanford Borough Council

  250

  Scunthorpe Borough Council

  250

  Cleesthorpes Borough Council

  250

  Great Grimsby Borough Council

  250

  North Yorkshire

  North Yorkshire County Council

  500

  Ryedale District Council

  60

  Selby District Council

  60

  City of York Council

  250

  Isle of Wight

  Isle of Wight Council

  1,450

  Total

  23,000

  Mr. Pickthall
  To ask the Secretary of State for the Environment under what provisions a local authority which is due to change its name may use powers assigned to the authority under the new name before the date of the change.

  Mr. Robert B. Jones
  [holding answer 15 February 1995]: Where a local authority's name is changed, this does not affect the authority's legal status and provisions apply to that authority regardless of its name.

  Mr. Tipping
  To ask the Secretary of State for the Environment if he will set out the estimates he has received from the Local Government Commission for transitional costs connected with proposed reorganisation in the Isle of Wight, Avon, Cleveland, North Yorkshire and Humberside.

  Mr. Robert B. Jones
  [holding answer 15 February 1995]: The Local Government Commission's estimates of transitional costs of reorganisation are:

  Transitional costs £ million

  Isle of Wight

  4–5

  Avon

  13–18

  Cleveland

  13–18

  North Yorkshire

  3–4

  Note:

  They did not publish a separate estimate for Humberside.

  Unitary Authorities
  Mr. Tipping
  To ask the Secretary of State for the Environment if he will make it his policy that no further
  807
  orders will be laid before Parliament under section 17 of the Local Government Act 1992 until he has responded to the letter dated 26 January from the chair of the Association of County Council's regarding the disqualification of new unitary authorities.

  Mr. Curry
  [holding answer 15 February 1995]: I replied to this letter yesterday.

  Tyre Dumping
  Mr. Hinchliffe
  To ask the Secretary of State for the Environment what assessment his Department has undertaken of the dumping of tyres, with particular reference to(a) their environmental impact and (b) the means to combat the practice.

  Sir Paul Beresford
  [holding answer 13 February 19951: The Government are aware that a large number of used tyres need to be disposed of each year and that without proper disposal they can create environmental problems. Used tyres are controlled waste and as such are subject to stringent controls under the Environmental Protection Act 1990. Section 34 of the Act places a duty of care on everyone with a responsibility for waste to ensure that it is properly managed from production to disposal.

  In addition to these controls on the handling and disposal of controlled waste, the Government are supporting a number of initiatives designed to reduce the quantity of used tyres requiring disposal. These have the potential significantly to reduce the problem of scrap tyres in the future.

  A consultation draft of "A Waste Strategy for England and Wales" was published by the Department of the Environment and Welsh Office in January this year. The issue of used tyres is discussed in greater detail in this document. A copy is being sent to the hon. Member.

  Gas Safety Regulations
  Mr. Mills
  To ask the Secretary of State for the Environment if he will issue clear and detailed guidelines on the responsibility for costs to private landlords in the implementation of the requirements of the Gas Safety (Installation and Use) Regulations 1994 in both cases where gas appliances were bought and installed by the landlord or bought and installed by the tenant.

  Mr. Oppenheim
  I have been asked to reply.

  No. However, the Government and the Health and Safety Commission considered the costs to landlords of the specific duties placed upon them by the Gas Safety (Installation and Use) Regulations 1994, and concluded that these would not be significant, and were justified by the benefits that the duties were designed to secure in reduced incidents of carbon monoxide poisoning from dangerous gas appliances. These specific duties do not apply to tenants.

  New Forest Committee
  Mr. Key
  To ask the Secretary of State for the Environment what is the 1994–95 budget of the New Forest committee; and how it is funded.

  Mr. Atkins
  The New Forest committee budget for 1994–95 is £114.500, of which £20,000 is provided by the Department of the Environment and a contribution of up to £18,900 is paid by each of the Forestry Commission,808
  English Nature, the Countryside Commission, New Forest district council and Hampshire county council.

  Mr. Key
  To ask the Secretary of State for the Environment what was the actual expenditure of the New Forest committee in 1993–94.

  Mr. Atkins
  A total of £109,300.

  Mr. Key
  To ask the Secretary of State for the Environment if the boundaries of the proposed New Forest heritage area have now been decided; and if he will place definitive maps in the Library.

  Mr. Atkins
  The boundary of the proposed wider New Forest heritage area will emerge from the preparation and adoption of local plans. Proposals to define the boundary are being carried forward in four local plans in the New Forest district—the Avon valley, the Forest and Downlands villages and the New Forest, east—together with the Salisbury district plan and the Test valley borough plan.

  Copies of the local plans will be deposited in the Department of the Environment's library.

  Mr. Key
  To ask the Secretary of State for the Environment if he will define the duties of(a) the New Forest committee and (b) the New Forest consultative panel.

  Mr. Atkins
  The New Forest committee's terms of reference include the promotion of the conservation of the traditional character of the New Forest heritage area; the review of action to maintain the balance of natural and socio-economic forces which determine its character; and the preparation and promotion of a strategy for co-ordinated management of the area.

  The New forest consultative panel has a membership of 71 organisations to include representatives from the whole of the wider New forest heritage area. It is administered by the New Forest Committee, and contributes to the committee's task of ensuring that its members are working together to promote the conservation of the traditional character of the forest. It encourages monitoring of the practical effects of policies or initiatives carried out in the forest.

HEALTH

  NHS Appointees (Payments)
  Mr. Redmond
  To ask the Secretary of State for Health if she will list by health authority and NHS trust for 1993 payments made(a) to chairmen, (b) to chief executives and (c) to directors.

  Mr. Malone
  Information will be placed in the Library on the remuneration of members of the boards of individual regional and district health authorities and national health service trusts, as extracted from their annual accounts for 1993–94. The figures need to be treated with caution. The payments listed represent remuneration in respect of the total gross salary, bonus payments, monetary value of benefits in kind, taxable expenses allowances and compensation payments in relation to the offices described—rather than to an individual. Thus, payments listed for chairmen and chief executives could well refer to more than one individual.
  809

  Private Patients
  Mr. Bill Michie
  To ask the Secretary of State for Health what is the percentage change in the number of finished consultant episodes on private patients on NHS premises between 1990–91 and the latest period for which figures are available.

  Mr. Sackville
  I refer the hon. Member to the reply I gave the hon. Member for Oldham, Central and Royton (Mr. Davies) on 14 February, column 640.

  Embryos
  Mr. Alton
  To ask the Secretary of State for Health (1) what evaluation she has conducted on the research into the effects of freezing the human embryo on its DNA and the molecular interactions within its cells;

  (2) what contact her Department has had with its French counterparts to study the long-term effects of freezing human embryos in the last two years;

  (3) what research has been undertaken by her Department into the long-term effects of freezing human embryos following test tube baby treatments in the last two years.

  Mr. Sackville
  Recent research at Cambridge on embryo freezing has been reported in a paper entitled "Birth characteristics and perinatal outcome of babies conceived from cryopreserved embryos" by I. Wada et al, published in Human Reproduction Vol.9 No.3, pages

  Total Fundholding - All Regions

  Region

  Pilot Site

  Number of Practices

  Population covered

  South and West6

  Romsey

  3

  29,062

  Plymouth and Torbay

  7

  73,000

  Trowbridge, Bath and Frome

  4

  59,257

  Dorset

  1

  17,105

  North and Mid Hants (Winchester)

  1

  20,000

  Saltash

  1

  17,200

  Trent8

  High Peak Consortia

  5

  39;700

  Keyworth

  1

  11,500

  Belper (South Derby)

  2

  21,930

  Melton Mowbray

  1

  33,132

  Rotherham

  1

  14,668

  North Lincolnshire (Market Rasen)

  4

  29,500

  South Derbyshire (Long Eaton)

  6

  45,664

  Sheffield South

  12

  61,445

  West Midlands6

  Coventry Health

  3

  20,107

  Bromsgrove1

  4

  40,000

  Bridgnorth

  1

  15,024

  Worcester

  1

  12,300

  Bewdley

  1

  12,943

  Solihull

  1

  18,944

  South Thames6

  Kingston and Richmond

  4

  45,000

  West Sussex (East Grinstead)

  3

  32,746

  East Sussex (Bexhill)

  5

  42,000

  Merlon, Sutton and Wandsworth

  8

  80,800

  West Surrey (Byfleet)

  3

  30,000

  East Surrey (Epsom)

  3

  22,800

  North Thames7

  Brent and Harrow

  3

  32,000

  Enfield and Haringey

  5

  59,870

  Essex

  4

  44,300

  Hillingdon

  4

  39,204

  Herts (St. Albans)

  14

  85,018

  Herts (Hemel Hempstead)

  11

  95,839

  Hertford

  7

  35,466

  810
  543–546. A research project entitled "Outcome in children from cryopreserved embryos" at Manchester university has been completed and publication is expected soon. Research under way at the university of York includes consideration of whether biochemical changes accompany human embryo freezing.

  The Human Fertilisation and Embryology Authority keeps developments in research and treatment under review, including reports of work undertaken in other countries. The authority set up a working group on embryo freezing in 1993 to consider the social and ethical issues in this field. The outcome of its work was reported in the authority's 1994 annual report, copies of which are available in the Library.

  GP Fundholding
  Sir Andrew Bowden
  To ask the Secretary of State for Health how many total purchasing general practitioner fundholding practices have been given the ability to purchase residential nursing home care.

  Mr. Malone
  There are four existing national total purchasing pilots, in which general practitioner fundholders purchase all hospital and community health services for their patients. A further 49 sites are now to join the national evaluation programme. The pilot sites are listed below. Fundholders and health authorities working in partnership are demonstrating what can be achieved, and have made clear their commitment to this important project.
  811

  Total Fundholding - All Regions

  Region

  Pilot Site

  Number of Practices

  Population covered

  Anglia and Oxford5

  Berkshire Integrated Purchasing Project1

  6

  65,000

  Bucks

  4

  55,423

  Thatcham

  1

  25,000

  North West Anglia (Kings Lynn) Attleborough

  1 1

  18,086 13,900

  Northern and Yorkshire7

  Wakefield

  5

  54,000

  Newcastle

  2

  25,300

  North Bradford Health Gain Consortium

  3

  30,000

  Durham

  3

  46,053

  Worth Valley1

  8

  60,000

  North Yorks (York)

  1

  21,027

  Tynedale

  12

  55,700

  North West8

  Runcorn1

  1

  12,000

  Ellesmere Port

  7

  67,000

  Newton Le Willows (St. Helens)

  8

  45,664

  Liverpool Neighbourhood

  8

  48,600

  Clitheroe and Whalley

  3

  31,600

  South Lancs (South Bank)

  5

  24,000

  South Cheshire

  3

  20,000

  Wilmslow

  4

  35,000

  1 Existing Projects

  Mr. Devlin
  To ask the Secretary of State for Health how many people in the north of England are registered with fundholding general practitioners.

  Mr. Malone
  Some 34 per cent. of the population in the north of England as defined by the area covered by the Northern, and Yorkshire, and North West regional health authorities and Barnsley, Doncaster, Rotherham and Sheffield family health services authorities, are served by a fundholding general practitioner.

  Mrs. Beckett
  To ask the Secretary of State for Health if she will list the research her Department has done or commissioned in each of the last eight years, on fundholding.

  Mr. Malone
  Research on fundholding has been carried out by the Organisation of Economic Co-operation and Development, King's Fund Institute and individual researchers. No research has been carried out internally.

  Abortions
  Mrs. Bridget Prentice
  To ask the Secretary of State for Health how many abortions were performed on women resident in each district health authority and each regional health authority in England and Wales in 1993; and of these operations, how many were performed in NHS hospitals, and how many in private clinics under agency arrangements.

  Mr. Sackville
  This information will be published in April 1995 in the Office of Population Censuses surveys monitor AB 95/2, copies of which will be placed in the Library.

  Mrs. Bridget Prentice
  To ask the Secretary of State for Health how many NHS abortions were performed under 13 weeks on women resident in each district health authority and each regional health authority in England and Wales in 1993; and of these operations, how many involved admission and discharge on the same day.

  Mr. Sackville
  This information is not yet available.

  Regional Health Authority Finance
  Ms. Jowell
  To ask the Secretary of State for Health what were the outturn figures for each regional health 812
  authority of the revenue and capital expenditure for each year since 1992; and what were the revenue and capital allocations.

  Mr. Sackville
  This information will be placed in the Library.

  Waiting Lists
  Ms Jowell
  To ask the Secretary of State for Health how many people were removed from hospital waiting lists in each regional health authority in each year since 1991.

  Mr. Malone
  The available information is shown in the table. Removals are patients removed from a waiting list for in-patient or day-case treatment for any reason other than admission for treatment from that list. They include patients who have been admitted for treatment as emergencies for the same condition or at hospitals other than those on whose waiting lists they were originally placed.

  Removals from in-patient and day case waiting lists

  Region

  1991

  1992

  1993

  Northern

  9,299

  11,890

  18,049

  Yorkshire

  23,383

  24,667

  34,353

  Trent

  19,415

  24,050

  29,446

  East Anglia

  15,277

  17,033

  16,084

  North West Thames

  30,920

  40,941

  34,504

  North East Thames

  44,574

  43,247

  36,007

  South East Thames

  43,242

  52,482

  54,052

  South West Thames

  19,858

  24,716

  21,473

  Wessex

  21,188

  18,033

  20,568

  Oxford

  13,735

  20,291

  18,861

  South Western

  25,359

  26,470

  24,767

  West Midlands

  35,039

  44,942

  50,520

  Mersey

  22,641

  22,870

  31,523

  North Western

  24,275

  34,279

  42,255

  Childhood Leukaemia
  Mr. Temple-Morris
  To ask the Secretary of State for Health how many cases of childhood leukaemia were
  813
  treated as in-patients at Birmingham children's hospital in each of the last five available years.

  Mr. Sackville
  This information is not available centrally. My hon. Friend may wish to contact Mr. Bryan Stoten, chairman of South Birmingham health authority for details.

  Junior Doctor Ratios
  Ms Jowell
  To ask the Secretary of State for Health what was the ratio of junior doctors, defined as house officer, senior house officer, registrar and senior registrar to consultant posts in each year since 1991.

  Mr. Malone
  The ratio of junior doctors to consultants in England at 30 September each year is as follows:

  1991: 1.53:1

  1992: 1.52:1

  1993: 1.53:1

  Note:The figures above are based on numbers

  Minimally Invasive Treatment
  Ms Jowell
  To ask the Secretary of State for Health if she will list the surgical procedures now carried out by minimally invasive treatment; and what was the average length of hospital stay for patients undergoing these procedures in each year since 1991.

  Mr. Sackville
  This information is not available centrally.

  HIV/AIDS London
  Ms Jowell
  To ask the Secretary of State for Health what was the incidence of AIDS and HIV per 1,000 population in the London boroughs of(a) Southwark, (b) Hammersmith, (c) Wandsworth, (d) Haringey, (e) Sutton, (f) Kingston, (g) Waltham Forest and (h) Ealing in each year since 1991.

  Mr. Sackville
  Information on the incidence of HIV and AIDS per 1,000 population is not collected by the Public Health Laboratory Service. Currently the PHLS does not make public numbers of cases of HIV and AIDS below regional health authority level to protect the confidentiality of individuals with HIV/AIDS and in order not to deter people from coming forward for testing.

  Transaction Costs
  Ms Jowell
  To ask the Secretary of State for Health what was the total budget allocated to health authorities for transaction costs rather than the clinical treatment and care for each year since 1991; and what proportion of health authority spending these costs represented.

  Mr. Sackville
  There is no specific allocation to health authorities for transaction costs and the proportion of health authority spending which these costs represent is not available centrally.

  Pregnancy (Screening Tests)
  Mrs. Beckett
  To ask the Secretary of State for Health, (1) what guidance her Department has on the provision of the triple test as a screening test for abnormalities in pregnant women;

  (2) if she will indicate the percentage of purchasers and hospitals who are providing the triple test for abnormalities in pregnancy.
  814
  Mr. Sackville
  A report by a working party of the Royal College of Obstetricians and Gynaecologists into maternal serum screening for the detection of fetal Down's Syndrome, including the triple test, was published in 1993 to assist those in the national health service who are considering the introduction of such a screening programme, or who are already running one.

  Information about the percentage of purchasers and hospitals providing the triple test is not available centrally. The provision of ante-natal screening for abnormalities remains a matter for individual health authorities, which decide what tests are offered as part of antenatal care in the light of local needs and circumstances.

  Patients Charter
  Mrs. Beckett
  To ask the Secretary of State for Health if she will list all the organisations with whom she consulted about the new patients charter before its publication; what were the methods of consultation with these organisations; what account was taken of their views in the final document; and if she will make a statement.

  Mr. Malone
  Consultation on the new patients charter has taken place since spring 1994. Organisations we consulted on the draft patients charter are as shown in the table. These consultations were both written and oral and all comments were carefully considered in finalising the text.

  Action for Sick Children

  Action for Blind People

  Action for Victims of Medical Accidents

  Age Concern

  Alzheimer's Disease Society

  Arthritis and Rheumatism Council

  Arthritis Care

  Association of Optometrists

  Association for Management, Education and Development

  Association of Community Trusts and Foundations

  Association of Community Health Councils for England and Wales

  Barnado's

  Bereavement Support Services

  Birthright

  Blind Association

  Bobath Centre

  Bridges

  British Diabetic Association

  British Health Care Association

  British Epilepsy Association

  British Heart Foundation

  British Cardiac Society

  British Association for the Hard of Hearing

  British College of Optometrists

  British Dietetics Association

  British Red Cross Society

  British Medical Association

  British Lung Foundation

  British Dental Association

  Campaign for Freedom of Information

  Cancer Care Society

  Cancer Relief Macmillan Fund

  Cancerlink

  Carers National Association

  Caring for Children in the Health Service

  Centre for Health Service Management

  CHAMP

  Co-operative Technical Panel

  College of Health

  815

  Company Chemists Association

  Consumers Association

  Contact a Family

  CRUSE

  Disabled Living Foundation

  Disablement Information and Advice Lines

  Disability Alliance

  District Nursing Association UK

  English National Board for Nursing, Midwifery and Health Visiting

  Family Planning Association

  Federation of Independent British Optometrists

  Federation of Opthalmic and Dispensing Opticians

  General Medical Services Committee

  General Dental Council

  General Optical Council

  Greater London Association of Community Health Councils

  Health Rights

  Health Visitors Association

  Health Service Commissioner

  Health Services Management Services

  Health Service Management Unit

  Help for Health

  Help the Aged

  Home from Hospital: Continuing Care

  Hospital Caterers Association

  Institute of Health Service Management

  Institute for Health Policy Studies

  Institute for Health Studies

  International Voluntary Health Association

  Joint Consultants Committee

  Kings Fund College

  Lifeline

  Long Term Medical Conditions Alliance

  MENCAP

  Mental Health Foundation

  MIND

  National Childbirth Trust

  National Forum for Coronary Heart Disease Prevention

  National Council for Voluntary Organisations

  National Association for Health Care Security

  National Association of Health Authorities and Trusts

  National Consumer Council

  National Association of Fundholding Practices

  National Eczema Society

  NHS Trust Federation

  NHS Health Advisory Service

  Nuffield Institute for Health Services Studies

  Parkinson's Disease Society

  Patient's Association

  Royal College of Midwives

  Royal College of General Practitioners

  Royal College of Nursing

  Royal College of Physicians

  Royal College of Surgeons

  Royal National Institute for the Blind

  Royal National Institute for Deaf People

  Royal Society for Mentally Handicapped Children and Adults

  Scottish Consumer Council

  Special Hospitals Service Authority

  Stroke Association

  Stroke Support Group

  The Pharmaceutical Services Negotiating Committee

  The National Pharmaceutical Association

  The Royal Pharmaceutical Society of Great Britain

  United Kingdom Central Council for Nursing, Midwifery and Health Visiting

  York Health Economics Consortium

  816

  Private Finance
  Mrs. Beckett
  To ask the Secretary of State for Health if she will list those NHS projects involving private finance initiative which(a) have been completed and (b) are in progress.

  Mr. Sackville
  I refer the right hon. Member to the reply I gave the hon. Member for Sheffield, Attercliffe (Mr. Betts) on 3 November 1994, column 1269, for the latest information available.

  Mrs. Beckett
  To ask the Secretary of State for Health if she will list those projects that Newchurch has advised her Department are suitable for private investment.

  Mr. Sackville
  Newchurch and Co. does not advise the Department on the suitability of projects for private investment.

  It was engaged to set up and operate a database and inquiry point. This database provides market intelligence on both new and existing private finance experience in the national health service.

  Colchester General Hospital
  Mrs. Beckett
  To ask the Secretary of State for Health how many geriatric beds and psychiatric beds were available in the district health authority area containing Colchester general hospital in each of the last five years.

  Mr. Bowis
  The number of geriatric beds and mental illness beds in the North Essex district health authority area is shown in the table:

  Average available beds, wards open night and day

  Geriatric

  Mental illness

  1989–90

  876

  698

  1990–91

  708

  643

  1991–92

  666

  598

  1992–93

  668

  580

  1993–94

  626

  532

  Note:

  For 1991–92 and earlier years, figures are for three district health authorities Mid Essex, North East Essex and West Essex. In 1992–93 Essex Rivers Healthcare trust was formed 1993–94 figures are for Mid Essex Hospital Services trust, Essex Rivers Healthcare trust, Essex and Herts health services, and Mid-Essex mental health services.

  Source:

  KHO3 returns.

  Bed numbers have declined because of the move from secondary care to care in the community, through for example nursing home contracts and general practitioner managed beds.

  Mixed Wards
  Mrs. Beckett
  To ask the Secretary of State for Health if she will make a statement on mixed wards containing acute medical, geriatric and psychiatric patients; and what guidance she issues on the mix of such patients.

  Mr. Bowis
  Hospital doctors are responsible for making decisions about the appropriate placement of individual patients, based on what is best for the patient's condition and in the light of available beds.

  General Practitioner Savings
  Mrs. Beckett
  To ask the Secretary of State for Health what assessment she has made of the advertisement placed
  817
  in the East Anglian Daily Times on 4 February by the Brett-Stour non-fundholding consortium in respect of savings it claims to have achieved for public funds.

  Mr. Malone
  None.

  Drug Addiction
  Mrs. Beckett
  To ask the Secretary of State for Health if she will indicate what percentage of general practitioners provide a comprehensive service for patients with drug addiction problems.

  Mr. Bowis
  General practitioners are contracted to provide general medical services to all their patients, including those with drug addiction problems.

  Core Values
  Mrs. Beckett
  To ask the Secretary of State for Health if she will make a statement on care values in the NHS.

  Mr. Sackville
  I understand the question refers to core values. The core purpose of the national health service is to secure through the resources available the greatest possible improvement in the physical and mental health of the people of England by promoting health, preventing ill health, diagnosing and treating injury and disease and caring for those with long-term illness and disability.

  Hospital and Community Health Services
  Mrs. Beckett
  To ask the Secretary of State for Health what were the cash allocations for hospital and community health services in total and for each district health authority and health commission purchase trust and special health services authority for(a) 1994–95, (b) 1995–96 and (c) subsequent financial years.

  Mr. Sackville
  The 1994–95 initial revenue cash allocations for each district health authority and in total will be placed in the Library. From 1994–95, the postgraduate special health authorities acquire the status of provider, and we no longer make allocations to them, beyond the specific funding for research and development. The 1994–95 initial revenue cash allocations for the remaining special health authorities are:

  National Blood Authority—£5,185,000

  UK Transplant Support Services Authority—£3,706,000

  Information for 1995–96 has not been collected yet and for subsequent years decisions have not been taken.

  Trusts and health commissions receive no direct allocations: trusts because they must earn all their income; and health commissions because they exist only as a managerial arrangement for some district health authorities and family health services authorities, arid are not statutory bodies.

  Pay Awards
  Mr. Andrew Smith
  To ask the Secretary of State for Health if she will estimate the cost to her Department's budget in 1995–96 of implementing in full the recommendations of the Review Body for Nursing Staff, Midwives, Health Visitors, and Professions Allied to Medicine, assuming no changes in staff numbers; and how much of the cost would be borne by(a) direct expenditure by her Department, (b) national health service trusts and (c) grants and loans to local authorities.

  Mr. Malone
  The cost in England of implementing in full the recommendations of the Review Body for Nursing 818
  Staff, Midwives, Health Visitors, and Professions Allied to Medicine amounts to between £105 million and £211 million for national health service trusts and health authorities, of which between £800,000 and £1.6 million is direct expenditure by the Department. The costs represent the upper and lower levels of the range of improvements expected by the review body. Information is not available centrally in respect of grants and loans to local authorities.

  Mr. Andrew Smith
  To ask the Secretary of State for Health if she will estimate the cost to her Department's budget in 1995–96 of implementing in full the recommendations of the Review Body on Doctors' and Dentists' Remuneration, assuming no changes in staff numbers; and how much of the cost would be borne by(a) direct expenditure by her Department, (b) national health service trusts and (c) grants and loans to local authorities.

  Mr. Malone
  The cost in England of implementing in full the national recommendations of the Review Body on Doctors' and Dentists' Remuneration amounts to £120 million for national health service trusts and health authorities of which £160,000 is direct expenditure by the Department. Information is not available centrally in respect of grants and loans to local authorities.

  Residential Care
  Mr. Hinchliffe
  To ask the Secretary of State for Health, if she will review her policy on local authorities making top-up payments towards the cost of residential or nursing home care for residents with preserved entitlements to Department of Social Security benefits; and if she will make a statement.

  Mr. Bowis
  We have no plans to bring forward legislation to amend local authorities' current powers to provide financial support for people with preserved rights to the higher levels of income support. Levels of benefits to which preserved rights apply are a matter for my right hon. Friend the Secretary of State for Social Security.

  Residential Child Care
  Mr. Hinchliffe
  To ask the Secretary of State for Health (1) if she will establish a formal inquiry into residential child care provision run by Buckinghamshire county council social services department; and if she will make a statement;

  (2) what reports she has received from the social services inspectorate with regard to child care provision in Buckinghamshire; what action has been taken as a consequence; and if she will make a statement.

  Mr. Bowis
  I have not received any reports from the social services inspectorate with regard to child care provision in Buckinghamshire. I have received a copy of a letter from Buckinghamshire social services to the editor of The Independent in response to newspaper stories in that paper, which I understand has been copied to the right hon. Member for Derby, South (Mrs. Beckett).

  The social services inspectorate will be carrying out one of its regular inspections in Buckinghamshire in the next few months and will, no doubt, report back to me if it has any concerns.

  If the hon. Gentleman has any evidence of which he thinks it or I should be aware, I should be grateful if he would forward this to me without delay.
  819

  Generic Prescribing
  Mr. Morgan
  To ask the Secretary of State for Health pursuant to her answer of 3 February,Official Report, column 874, if she will give the aggregate cost of (a) generic and (b) brand named prescriptions for each year for each family health service authority, broken down by fundholders and non-fundholders.

  Mr. Malone
  The information could be provided only at disproportionate cost.

  NHS Trusts
  Mr. Milburn
  To ask the Secretary of State for Health if she will list the total surpluses and deficits made by trusts in each region in 1993–94.

  Mr. Sackville
  This information is shown in the table.

  Total Surpluses and Deficits made by Trusts in each Regional Health Authority in 1993–94

  Regional health authority1

  Total surpluses £000s

  Total deficits £000s

  East Anglia

  8,740

  0

  Oxford

  7,161

  332

  Mersey

  10,256

  2,144

  North Western

  6,697

  0

  North East Thames

  27,771

  2,713

  North West Thames

  28,585

  5,078

  Northern

  10,656

  0

  Yorkshire

  10,490

  447

  South East Thames

  12,494

  0

  South West Thames

  9,142

  1,538

  South Western

  24,196

  437

  Wessex

  7,740

  1,441

  Trent

  17,806

  0

  West Midlands

  21,107

  3,259

  Total

  202,842

  17,389

  Source:

  1993–94 NHS Trust Published Accounts.

  Note:

  1 Regional Health Authority boundaries as existed in the financial year 1993–94.

TRANSPORT

  Security Services
  Mr. Tyler
  To ask the Secretary of State for Transport what precise proportion of the posts identified in the efficiency savings exercise for security services provided by Transec is currently engaged on inspectorial and investigatory duties.

  Mr. Norris
  Forty three per cent. The reduction in posts is part of my Department's general drive for increased efficiency, and will be achieved through a combination of more efficient working practices and the fact that several projects are nearing completion. It is the responsibility of industry to provide front-line security staff and equipment, the level of which will not be affected by these changes.

  Tyre Pressure Gauges
  Mr. Mills
  To ask the Secretary of State for Transport what monitoring he is carrying out of the accuracy of tyre pressure gauges at garages and service stations.
  820
  Mr. Jonathan Evans
  I have been asked to reply.

  None. Under Council directive 86/217/EEC on tyre pressure gauges, some garage forecourts may be equipped with gauges carrying the mark of EEC initial verification, in which case their performance would be monitored by trading standards officers.

DEFENCE

  Tendering Process
  Mr. Redmond
  To ask the Secretary of State for Defence if he will make it his policy to give greater weight to the assessment of the quality of bids during the tendering process; and if he will make a statement.

  Mr. Freeman
  We would expect tenderers to present their proposals in the format requested in the invitation to tender, and to a standard commensurate with a professional organisation. Tender evaluation takes into account all relevant factors and the quality or standard of a tender would be one such factor. In a close competition in which bidders' proposals were evenly matched, the quality of a proposal could offer an indication of the commitment and management capabilities of the competitors and assist in final selection.

  Mr. Redmond
  To ask the Secretary of State for Defence what action he is taking so that tendering procedures are improved by allowing greater flexibility in the choice of procurement route; and if he will make a statement.

  Mr. Freeman
  To secure the best value for money, taking account of quality, performance, delivery, risk and cost, it has been our practice with market testing exercises positively to encourage tenderers to submit solutions which, through a reasonable relaxation of the terms of the invitation to tender, or the adoption of an alternative approach to meeting the essential requirement, might prove cost effective. We are now extending that approach to equipment procurement to ensure contractors are aware of our willingness to consider innovative bids in this area also.

  Mr. Redmond
  To ask the Secretary of State for Defence what measures he is taking to streamline tendering procedures; and if he will make a statement.

  Mr. Freeman
  A number of initiatives from a comprehensive review of contractual policy and procedures carried out in 1992, and more recently the defence costs study, are in the course of implementation. These include the use of pre-qualification procedures to reduce the number of tenderers to those best qualified to meet the requirement; providing greater visibility of tender evaluation criteria; and making increased usage of the "Possible Future Purchases" section in the "Defence Contracts Bulletin".

  Mr. Redmond
  To ask the Secretary of State for Defence what action he is taking to improve the standard of specifications in tendering procedures; and if he will make a statement.

  Mr. Freeman
  We recognise the importance of stating our requirements in clear and unambiguous terms and will continue to work to improve the quality of specifications and related material such as acceptance criteria and configuration control arrangements, supported by taut contractual terms. This can include consultation with
  821
  industry on draft specifications to encourage innovation and optimise possible trade-offs between performance and price. We have also taken steps to improve training for staff in the preparation of specifications.

  Mr. Redmond
  To ask the Secretary of State for Defence if he will make it his policy to restrict tender lists to no more than three companies; and if he will make a statement.

  Mr. Freeman
  Our aim in producing tender lists is to select a field that is likely to lead to the keenest competition between firms which are considered capable of meeting all the obligations set out in the invitation to tender. To achieve this aim, and reduce the cost of the competitive process to both the Department and industry, we would normally develop tender lists of around six bidders for each competition. We consider that this approach, which was agreed in consultation with industry, strikes the right balance.

  Rhine Forces (Returning Personnel)
  Mr. Redmond
  To ask the Secretary of State for Defence (1) what arrangements are being made in respect of married quarters in the United Kingdom for service personnel formerly serving in the Rhine forces and posted to the United Kingdom; and if he will make a statement.

  (2) how many married families will return to Britain from the Rhine forces in the next 12 months.

  Mr. Soames
  An estimated 7,500 Army families will return from Germany this year, and around 1,400 RAF families are expected to return between 1 April 1995 and 31 March 1996. There are at present no significant numbers of naval personnel serving in Germany.

  A number of accommodation options are open to service personnel returning to the United Kingdom on posting from Germany. They may either move into their own homes or seek to purchase their own property; move into vacant service families accommodation at or near their place of duty; or, if no suitable vacant SFA is available, they may claim excess rent allowance which will allow them to rent a property in the private sector. A number of SFA properties have been held vacant to accommodate returning families.

  Three Para
  Mr. Mullin
  To ask the Secretary of State for Defence for how long the mock-up from of the Vauxhall Astra car involved in the incident for which Private Lee Clegg was jailed was on display in the mess of Three Para; why it was removed; what disciplinary action was taken against(a) the soldiers who made it and (b) the officers who allowed it to be displayed; and if he will make a statement.

  Mr. Soames
  The mock-up of the Vauxhall Astra was put up in the cookhouse shortly before the battalion's Christmas lunch. It was noticed by officers in the battalion during the lunch and it was immediately ordered to be removed. No disciplinary action was taken against the soldiers involved in making it, but the officer who should have taken steps to prevent the mock-up from being displayed was not permitted to convert his short service commission to become a regular officer.
  822

  Nuclear Programme
  Mr. Simpson
  To ask the Secretary of State for Defence what work is carried out by(a) the Sandia National Laboratories, (b) the Lawrence Livermore National Laboratories and (c) the Los Alamos National Laboratories on behalf of the United Kingdom Government.

  Mr. Freeman
  The United Kingdom defence nuclear programme benefits from some of the work carried out in these laboratories by virtue of technology exchanges under the 1958 United States/United Kingdom mutual defence agreement.

  Agreement
  Mr. Simpson
  To ask the Secretary of State for Defence if he will list all the exchange of information and visit reports that have occurred in the last five years as part of the 1958 United States/United Kingdom mutual defence agreement, the Polaris sales agreement and the Trident sales agreement.

  Mr. Freeman
  This information could be produced only at disproportionate cost.

  Mr. Simpson
  To ask the Secretary of State for Defence how many British personnel are stationed in the United States as part of(a) the 1958 United States/United Kingdom mutual defence agreement, (b) the Polaris sales agreement and (c) the trident sales agreement; and where they are located.

  Mr. Freeman
  The number of British personnel stationed in the United States as part of the 1958 United States/United Kingdom mutual defence agreement is five; they are located in the United Kingdom embassy, Washington DC. There are 20 British personnel stationed in the United States as part of the Polaris sales agreement, as amended for Trident; they are located as follows:

  Number of Personnel

  Lawrence Livermore National Laboratory

  —1

  Crystal City, Arlington, Virginia

  —15

  King's Bay, Georgia

  —1

  New London, Connecticut

  —1

  Laurel, Maryland

  —1

  Dahlgren, Virginia

  —1

  Mr. Simpson
  To ask the Secretary of State for Defence how many personnel were employed in the renegotiation of the 1958 United States/United Kingdom mutual defence agreement; and what was the total cost of the renegotiation.

  Mr. Freeman
  A number of officials were involved in the amendment to the 1958 United States/United Kingdom mutual defence agreement. It is not possible to identify separately the costs of this work.

  Mr. Simpson
  To ask the Secretary of State for Defence if he will list all the joint working groups that are at present operating as part of the 1958 United States/United Kingdom mutual defence agreement, the Polaris sales agreement and the Trident sales agreement.

  Mr. Freeman
  The joint working groups are the means for technical exchanges under the 1958, United States/United Kingdom mutual defence agreement. Full details of their activities are classified, but I can confirm that the current programme of exchanges includes the following subject areas:
  823

  Neutron Sources

  Irradiation Effects on Materials and Components

  High Explosives for Nuclear Weapons

  Chemistry and Compatibility of Materials

  Test Diagnostics

  Test Monitoring

  Metallurgy of Weapons Materials

  Non-Nuclear Components

  Underground Effects Testing

  Non-Metallic Materials

  Weapons Material Management

  Nuclear Weapons Engineering

  Physics Design

  Weapons Hydrodynamics

  Computational Technology

  Penetration Aid Technology

  Aircraft Hardening

  Nuclear Weapons Physics

  Nuclear Forces and Counter Proliferation Studies

  Manufacturing Technology

  Experimental Activities

  Nuclear Warhead Accident Response Technology

  Nuclear Weapon Computer Code Development

  Nuclear Weapon Environment and Damage Effects

  There are separate arrangements for exchanges under the Polaris sales agreement, as amended for Trident.

  Mr. Simpson
  To ask the Secretary of State for Defence how many people have visited(a) the Pantex plant in America, (b) the Sandia national laboratories, (c) the Los Alamos national laboratories, (d) the Lawrence Livermore national laboratories, (e) the Nevada test site and (f) the Rocky Flats plant on behalf of the United Kingdom Government in each of the last five years as part of the 1958 United States/United Kingdom Mutual Defence Agreement.

  Mr. Freeman
  This information is not held centrally and could be obtained only at disproportionate cost.

  Atomic Co-ordinating Offices
  Mr. Simpson
  To ask the Secretary of State for Defence how many staff are employed in the atomic co-ordinating offices in London and Washington; and what are their civil service grades.

  Mr. Freeman
  The information requested is given in the table below:

  Grade

  Number

  Atomic control office (London)—(6 staff)

  Senior Executive Officer

  1

  Executive Officer

  1

  Administrative Officer

  2

  Administrative Assistant

  1

  Atomic co-ordinating office (Washington)—(5 staff)

  Unified Grade 6

  1

  Unified Grade 7

  1

  Executive Office

  1

  Administrative Officer

  1

  Personal Secretary

  1

  It should be noted that all staff employed in the atomic control office, London have additional duties as members of the assistant chief scientific adviser, nuclear's organisation.

  Mr. Simpson
  To ask the Secretary of State for Defence what are the annual running costs of the atomic 824
  co-ordinating offices in London and Washington; and out of which budget they are taken.

  Mr. Freeman
  Running costs of the atomic co-ordinating office, Washington, are £300,000, under the budget of the vice-chief of the defence staff. Running costs of the atomic control office, London, fall within the assistant chief scientific adviser, nuclear's intermediate higher level budget, and are not separately identified.

  Mr. Simpson
  To ask the Secretary of State for Defence if he will make a statement on the role and function of the atomic co-ordinating offices in London and Washington.

  Mr. Freeman
  The staff of ACO(L) and the administrative staff of ACO(W) are responsible for the transmission of information, documents and material, arrangements of visits and submission of clearances as required by the 1958 United States/United Kingdom mutual defence agreement. Professional staff of ACO(W) represent UK interests in technical and procurement matters pertaining to the UK defence nuclear programme by liaison with the United States Department of Defence, Department of Energy, and their contractors.

  Defence Export Service Organisation
  Mr. Cousins
  To ask the Secretary of State for Defence which(a) foreign Governments and (b) British companies were the source of the DESO administrative receipts shown in the supply estimates for 1993–94 under the headings vote 1, section ABC, vote 2 subhead A2 and vote 2 subhead H4 and H2(1).

  Mr. Freeman
  There are no DESO receipts shown in the supply estimates 1993–94 under the headings quoted. DESO receipts are shown in table 2.

  Mr. Cousins
  To ask the Secretary of State for Defence if the administrative expenses of the DESO shown in the supply estimates for 1986–87 and 1987–88 are a net figure; and what was the expenditure on an expenses and receipts basis.

  Mr. Freeman
  The administrative expenses shown in the supply estimates for 1986–87 and 1987–88 gross expenditure figures. The DESO receipts are included within paragraph 6 of table 4.

  Mr. Cousins
  To ask the Secretary of State for Defence how the receipts in respect of administrative expenses for the DESO were generated in 1994–95.

  Mr. Freeman
  The receipts for administrative expenses shown in table 2 of the supply estimates 1994–95 are generated by fees paid by overseas customers to cover project management work undertaken on their behalf.

  C-130J Programme
  Mr. Cousins
  To ask the Secretary of State for Defence what export licences in respect of 130J purchases have been granted by the United States of America.

  Mr. Freeman
  The United States Department of State has granted Lockheed Aeronautical Systems Co. an exception to the 1994 export licence suspension in respect of the C-130J programme.

  Dispersal Programme, Glasgow
  Mr. Galloway
  To ask the Secretary of State for Defence what will be the cost to public funds of the dispersal programme to Glasgow between 1982 and 1989,
  825
  inclusive of redundancy, early retirement and relocation costs.

  Mr. Freeman
  This information is not held centrally and could be provided only at disproportionate cost.

  Mr. Galloway
  To ask the Secretary of State for Defence if he will list the numbers and grades of civil servants relocated to Ministry of Defence, Glasgow during the dispersal programme.

  Mr. Freeman
  Some 1,400 posts relocated to Glasgow as part of the dispersal programme by 1987, of which over 1,000 were filled by local recruitment. Records of the numbers and grades of staff relocated are not kept centrally, and could be provided only at disproportionate cost.

  Mr. Galloway
  To ask the Secretary of State for Defence what will be the cost to public funds of the current proposals to relocate existing Ministry of Defence jobs in Glasgow, away from the city.

  Mr. Freeman
  Plans to collocate support staff throughout the United Kingdom where it is most sensible and cost-effective to do so are an integral part of the defence costs study. Among other things, present plans include moves of posts into as well as out of Glasgow. Although final costs are not yet known, they are expected to be outweighed significantly by the savings in running costs which will accrue.

  Mr. Galloway
  To ask the Secretary of State for Defence if he will list the numbers and grades of posts in the Glasgow headquarters buildings, after the establishment of the Army personnel centre.

  Mr. Freeman
  The numbers and grades of posts at present in Glasgow headquarters is set out below. The exact staffing of the Army personnel centre requires further work before it is finalised and it would not be possible at this time to say how the expected substantial increase in staff will affect these figures.

  Number of non-industrial posts in Glasgow as at 31 December 1994

  Grade

  Numbers

  5

  2

  Naval Regional Officer

  1

  6

  4

  7

  15

  SEO

  55

  HEO

  127

  EO

  200

  Retired Officer 2

  10

  AO

  403

  AA

  171

  Typing Manager

  4

  PS

  7

  Typist

  47

  Librarian

  1

  Assistant Librarian

  1

  Support Manager 2

  1

  Support Manager 3

  7

  Support Grade Band 1

  27

  Support Grade Band 2

  65

  CO3

  1

  CO4

  4

  Technical Grade 1

  1

  Total

  1,154

  Note: Administration Grade numbers include Technical equivalents.
  826

  Departmental Employees, Scotland
  Mr. Galloway
  To ask the Secretary of State for Defence how many employees of his Department are located in Scotland; and what that figure will be when the full effect of the defence costs study is implemented.

  Mr. Freeman
  As at 1 January 1995, more than 10,900 of my Department's 117,450 UK-based civilian staff were located in Scotland. Although these figures can be expected to reduce as a result of the defence costs study, the implementation of the study is not complete and its full effects cannot be judged at this stage.

  Courts Martial
  Mr. Galloway
  To ask the Secretary of State for Defence if he will set up an inquiry into the courts martial system of justice.

  Mr. Soames
  No. The system of discipline in the armed forces, including courts martial, is provided for in the Service Discipline Acts approved by Parliament. The quinquennial Armed Forces Bills are an opportunity to review the Service Discipline Acts. The next such Bill is due to be introduced in the 1995–96 Session.

  Chemical Warfare Agents, RAF Llandwrog
  Mr. Wigley
  To ask the Secretary of State for Defence pursuant to his answer of 31 January,Official Report, column 562, what was the chemical composition of the chemical warfare agents which were stored at RAF Llandwrog.

  Mr. Soames
  The chemical warfare agent stored at RAF Llandwrog was the nerve agent Tabun. The chemical composition of this agent is Ethyl N, N—Dimethylphosphoramidocyanidate.

  Helicopter Accident, Llanberis Lake
  Mr. Wigley
  To ask the Secretary of State for Defence if he will make a statement about the progress that has been made on the inquiry into the fatal accident involving a helicopter which crashed into Llanberis lake in August 1993; what changes in safety regulations have been made following the inquiry; and if he will make a statement.

  Mr. Soames
  The board of inquiry process into the accident is continuing. RAF boards of inquiry are necessarily comprehensive and exhaustive to ensure all circumstances are investigated. The board has been protracted by the complex nature of the technical investigation carried out by the air accident investigation branch. In the meantime, a number of precautionary engineering inspections have been introduced. As explained in the letter from the then Under-Secretary of State for Defence of 13 August 1993, an advance copy of the military aircraft accident summary will be sent to the hon. Member as soon as it is available.

  Pay Awards
  Mr. Andrew Smith
  To ask the Secretary of State for Defence if he will estimate the cost to his Department's budget in 1995–96 of implementing in full the recommendations of the Review Body on Armed Forces Pay, assuming no changes in staff numbers.

  Mr. Soames
  We estimate that the cost of implementing in full the recommendations of the Review Body on Armed Forces Pay will be some £140,000,000.
  827

  Service Accommodation
  Sir Thomas Arnold
  To ask the Secretary of State for Defence pursuant to his answer of 10 February to the right hon. Member for Fareham (Sir. P. Lloyd),Official Report, columns 465–67, if he will publish in the Official Report, the full list of residences where significant failures of budgetary control were found; and if he will make a statement on the two occasions when wrong information was provided to Parliament.

  Mr. Soames
  The relevant information on residences where significant failures of budgetary control were found are contained in paragraphs 5 and 11 to16 of the paper on official service residences, which I have placed in the Library of the House.

  The two occasions on which the House was provided with incorrect information on this subject were in the answers given by the then Minister of State for the Armed Forces, first to the hon. Member on 9 February 1994, Official Report, columns 362–63, which put the figure at some £250,000 and, subsequently to the hon. Member for Cheltenham (Mr. Jones) on 29 March, Official Report, column 732, which gave a figure of around £260,000. In his answer to the hon. Member for Dorset, West (Sir J. Spicer) on 4 July 1994, Official Report, column 85, the then Minister of State for the Armed Forces provided the revised figure of £387,000 and expressed his regret that an incorrect figure had been given in the preceding answer.

  Dr. David Clark
  To ask the Secretary of State for Defence pursuant to his answer to the right hon. Member for Fareham (Sir P. Lloyd) of 10 February,Official Report, columns 465–67, if he will provide a full breakdown of expenditure at the official residence known as Air house, Rheindahlen in Germany during the financial years 1991–92 and 1992–93.

  Mr. Soames
  The figures are as follows:

  £000s

  1991–92

  1992–93

  Maintenance

  34

  17

  Improvement

  6

  8

  Furnishings and Equipment

  33

  3

  Security

  115

  38

  Utilities

  17

  18

  Total

  205

  84

  Dr. David Clark
  To ask the Secretary of State for Defence (1) if he will list the reasons that led him not to publish the full text of the KPMG Peat Marwick report into service accommodation for senior officers;

  (2) pursuant to his answer to the right hon. Member for Fareham, (Sir P. Lloyd), Official Report, columns 465–67, if he will specify the name of those people who were shown an advance copy of the KPMG Peat Marwick report into service accommodation; and what assurances of confidentiality were made to them;

  (3) what assessment he has made of the legal implications in relation to the publication in full of the KPMG Peat Marwick report into official accommodation for senior officers; and if he will make a statement.
  828
  Mr. Soames
  The report by KPMG Peat Marwick on the outcome of its investigation into expenditure at Haymes Garth is a confidential report that was prepared for the use of senior management and Ministers, not for publication. That was the clear basis on which, as I explained in my reply of 27 January,Official Report, columns 445–46, those named in it were shown in confidence draft extracts to enable them to comment on the passages that dealt with their involvement. I have no intention either of naming the individuals concerned or of publishing the full report. The question of legal implications does not therefore arise.

  Dr. David Clark
  To ask the Secretary of State for Defence (1) if Mr. David Hart was shown an advance copy of the KPMG Peat Marwick report into service accommodation for senior officers; and what undertakings he was required to give in respect of the report;

  (2) on what occasions Mr. David Hart briefed journalists on the KPMG Peat Marwick report into service accommodation for senior personnel.

  Mr. Soames
  Mr. David Hart was not shown a copy of the KPMG Peat Marwick report into Haymes Garth, and he has not briefed journalists on it.

  Mr. David Clark
  To ask the Secretary of State for Defence if Sir Peter Cazelet will be provided with an unedited copy of the KPMG Peat Marwick report into official accommodation for senior personnel.

  Mr. Soames
  Sir Peter Cazalet has been provided with a copy of the Ministry of Defence paper on the maintenance of official service residences which was issued last week. The terms of his study, which cover the requirement to entertain and how this entertainment is to be carried out, do not require him to have further detailed knowledge of the KPMG Peat Marwick report.

  Dr. David Clark
  To ask the Secretary of State for Defence how much the report by Sir Peter Cazelet has cost to date; and what is the estimated total cost of the report.

  Mr. Soames
  Sir Peter Cazalet is generously undertaking his study into representational entertainment in the armed forces without reimbursement. Costs for travel and accommodation during the study for Sir Peter and for MoD officials accompanying him, amount to some £3,000.

  Dr. David Clark
  To ask the Secretary of State for Defence what plans he has to hold investigations into expenditure at official residences of senior officers which were not part of the audited sample in the KPMG Peat Marwick report.

  Mr. Soames
  Twelve residences, accounting for some 40 per cent. of expenditure in the relevant period, have been audited to evaluate systems and control. A comprehensive programme of measures to improve control over expenditure on official service residencies has been set in motion, but there are at present no plans for further audit work.

  Mr. David Clark
  To ask the Secretary of State for Defence if Mr. David Hart will be providing advice for the report by Sir Peter Cazelet.

  Mr. Soames
  Sir Peter Cazalet has not consulted Mr. David Hart during the preparation on his report.
  829
  Mr. David Clark
  To ask the Secretary of State for Defence on what date his Department's attention was brought to the allegations concerning expenditure at the official residence known at(a) Haymes Garth and (b) Air house, Rheindallen.

  Mr. Soames
  The question of expenditure at Haymes Garth was raised in the summer of 1993—after completion of most of the work. The extent of the problem only became clear, however, when the results of an internal audit investigation started to become available in the spring of 1994. KPMG Peat Marwick was then commissioned to undertake a high-level independent external investigation. In parallel, a separate audit of expenditure on other official service residences was set in hand, and Air house was one of a sample of residences chosen for examination. The results of both investigations were reported to Parliament on 10 February 1995.

  Mr David Clark
  To ask the Secretary of State for Defence which consultants are being used on the report by Sir Peter Cazelet; and what is the total cost of these services.

  Mr. Soames
  No consultants have been employed on Sir Peter Cazalet's report into representational entertainment in the armed forces.

  Mr. David Clark
  To ask the Secretary of State for Defence, pursuant to his answer to the right hon. Member for Fareham, (Sir P. Lloyd) of 10 February,Official Report columns 465–67, if he will specify the exact date on which he received the KPMG Peat Marwick report into service accommodation for senior officers.

  Mr. Soames
  My right hon. and learned Friend the Secretary of State for Defence and I first received the report by KPMG Peat Marwick on the results of its investigation into expenditure at Haymes Garth on 16 December 1994.

  Air Chief Marshall Sir Andrew Wilson
  Mr. David Clark
  To ask the Secretary of State for Defence what were the full terms and conditions of the early retirement settlement for Air Chief Marshal Sir Andrew Wilson; and what is the total cost of the settlement including pension rights.

  Mr. Soames
  In accordance with standard regulations, precise details of individual pension benefits are. confidential between my Department and the recipient. He will, however, receive the normal benefits of an officer of his rank who seeks voluntary retirement.

  The scale of retired pay for an Air Chief Marshal currently runs from £41,875 at 30 years' service to a maximum of £46,099 at 34 years' service. The terminal grant is three times the annual rate of retired pay.

  Land Mines
  Mrs. Clwyd
  To ask the Secretary of State for Defence (1) if he will urgently make an assessment of the report, "The Military Utility of Landmines: Implications for Arms Control", published by the United States Department of Defence; and if he will publish his findings;
  830
  (2) for what reasons he has not made an assessment of the report published by the United States Department of Defence in June 1994 entitled the "Military Utility of Landmines: Implications for Arms Control".

  Mr. Freeman
  We have noted that the basic conclusion of this report—which was carried out by the Institute for Defence Analyses—is that issues of military utility need not preclude further consideration of any form of land mine arms control. That is the United Kingdom's position: we are at the forefront of international efforts to introduce tighter restrictions on the use and export of anti-personnel land mines.

  My Department intends to assess the report later in the year as part of its continuing review of our military requirements for land mines. Following completion of this review, I will consider what information might be published.

  Millbay Docks
  Mr. Jamieson
  To ask the Secretary of State for Defence how many Ministry of Defence police have been deployed at Millbay docks recently during protests against live animal exports; and what cost; and for what purpose.

  Mr. Soames
  Up to 14 Ministry of Defence policemen have been deployed in the vicinity of Millbay docks during recent protests against live animal exports. Their purpose was to assist Devon and Cornwall police with particular regard to the protection of adjacent Ministry of Defence property. Provision for this was made from existing resources and no additional costs were incurred.

  Drug Offences
  Mr. Hutton
  To ask the Secretary of State for Defence if he will update the figures referred to in his answer of 5 February 1993,Official Report, columns 371–72, for the number of service personnel who have been discharged for drugs-related offences.

  Mr. Soames
  In 1992, 229 personnel were dismissed from the services following court martial, summary proceedings or civilian court conviction for importing, supplying or possessing drugs. Figures for 1993 and 1994 are not yet available. Updated figures for Army and Royal Air Force personnel discharged administratively for drug offences are as follows:

  1992–93: 333

  1993–94: 200

  1994–95: 122 (to date)

  Flag Officer Scotland, Northern England and Northern Ireland
  Mr. Raymond S. Robertson
  To ask the Secretary of State for Defence if he will make a statement on the future of Flag Officer Scotland, Northern England and Northern Ireland's operational headquarters based at the Maritime Headquarters, Pitreavie.
  831
  Mr. Freeman
  A consultative document was issued on 21 October 1994 setting out proposals to transfer the operational headquarters of Flag Officer Scotland, Northern England and Northern Ireland from Pitreavie to Faslane. Having given careful consideration to all the views expressed on these proposals during the consultation period, I have decided to proceed with the relocation of FOSNNI's operational headquarters to Faslane by April 1996. This measure will save some £22 million over the next 10 years. Of the service and civilian posts affected some 70 service and 52 civilian posts will no longer be required. We will continue to consult with staff and the trade unions about the detailed implementation of the measure and its implications. The 832
  move of FOSNNI's operational headquarters will entail the closure of the maritime headquarters at Pitreavie which is expected to become surplus to defence requirements. My officials have been in close contact with the Scottish Office and Fife Enterprise concerning the future development of the site, and I am pleased to be able to announce that the opportunity has arisen for MOD to make available to Fife Enterprise a 5.5 acre site to the south of the Pitreavie estate that is needed by the BSkyB company in connection with its inward investment project on an adjacent site. This area can be released in advance of the remainder of the Pitreavie site which will also be sold to Fife Enterprise, at open market rates, when MOD finally withdraws from Pitreavie in 1996.

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Portsmouth): The LORD CHANCELLOR on the Woolsack.

Performance Pay: Relevance to Ministers
Lord McCarthy Lord McCarthy asked Her Majesty's Government:
What proposals they will introduce to establish a regular and direct link between the rewards of members of the Government and their contribution to improved levels of performance.
The Ministry of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, the Government have no plans to introduce such a link.
Lord McCarthy: My Lords, I thank the Minister for that reply, which is even more unsatisfactory than that which his noble friend Lord Caithness gave me three years ago. Does he agree that it is disgraceful that the Government are now forcing performance-related pay on to everyone who receives government money, from the Civil Service to the Tate Gallery? They are forcing neurosurgeons, lighthouse keepers and others on to performance-related pay. Apparently, the only group to which that does not apply is the Government. How can that be?
Lord Mackay of Ardbrecknish: My Lords, I am sorry that the noble Lord feels that my performance was not adequate. He has probably given me nothing out of 10 on his score sheet. But, as my noble friend Lord Caithness said when the Question was last asked, the roles of government Ministers would be very difficult to quantify and relate to performance. In any case, unlike most of the other groups that he mentioned, the Government carry a fairly drastic performance-related index, which is a kind of political snakes and ladders. You can climb up the ladder from junior whip to senior whip, to parliamentary under-secretary to minister of state and maybe even higher; then, with a bit of bad luck, you fall off and go down the snake to the Back Benches. That is a fairly dramatic way to judge performance.
Lord Hailsham of Saint Marylebone: My Lords, having regard to the fact that all Ministers of whatever government hold their office during pleasure, that is to say, without any right to notice at all, is not this Question the silliest that has ever been asked in recent years?
Lord Mackay of Ardbrecknish: My Lords, my noble friend makes roughly the same point that I made but is slightly blunter. Indeed, Ministers in another place
786
can find themselves having to serve two masters: one, the Prime Minister; and secondly, their electorate. Sometimes that can cause very sudden falls from grace.
Lord Avebury: My Lords, can the Minister say why the Home Secretary and the Minister who deals with prisons are still paid the same amount after having devolved all responsibility for the prison system to Mr. Derek Lewis? If, as he said, it is a game of snakes and ladders, does he agree that the Government should find the nearest snake to slide down?
Lord Mackay of Ardbrecknish: My Lords, I recall that the noble Lord found more or less the same kind of snake as I once found. With regard to his more substantive point about the Home Secretary and Ministers at the Home Office, they take the policy decisions regarding the whole question of penal policy and the Director of the Prison Service runs the service itself. It is a perfectly understandable division of responsibilities.
Lord Boyd-Carpenter: My Lords, will my noble friend confirm that the difficulty in adopting the proposal suggested in the Question is that it would involve paying Ministers enormous increases in salary, which would be rather embarrassing?
Lord Mackay of Ardbrecknish: My Lords, my noble friend makes a very good point. I might have to declare an interest in this matter. If performance were judged on the amount of legislation in this Parliament, for example, I might hit the top of the league.
Lord Eatwell: My Lords, is the Minister aware that the salary of the Governor of the Bank of New Zealand is linked inversely to the rate of inflation? In a week which has seen a sharp rise in inflation in this country, does he agree that it would be appropriate to reduce the Chancellor's salary? Or does he feel that perhaps it would be even more appropriate to reduce the salary of the man who really runs Britain's economic policy; namely, Mr. Eddie George?
Lord Mackay of Ardbrecknish: My Lords, I shall not take any lessons on the levels of inflation from a member of the party opposite, given the fact that for many months now our inflation rate has been at quite historically low levels. When looking for performance indicators, we might, for example, see how successful a Minister is in controlling and reducing public spending. Indeed, the party opposite might consider that the proper indicator is by how much public expenditure has been increased. That is what they would do if ever they had the chance to sit on this side of the House.
Lord Renton: My Lords, is my noble friend aware that the British people will continue to expect Ministers to do what is in the people's interest, irrespective of its effect on the Ministers' interests?
Lord Mackay of Ardbrecknish: My Lords, my noble friend is absolutely right. All Ministers carry out their responsibilities in a way that they believe will further the interests of the British people.
Lord Molloy: My Lords, does the Minister agree that many skilled artisans and professional men and women

787
believe that they do not get a fair deal when the work that they do is compared, not necessarily with Ministers, but with some senior civil servants whose rises seem so easy to get?
Lord Mackay of Ardbrecknish: My Lords, I am not entirely sure whether senior civil servants or civil servants generally would quite agree with the noble Lord's remarks. The simple truth is that many people, especially inside their own professions or occupations, feel that there ought to be an element of performance-related pay as otherwise people who do very well are not rewarded over those who do not do very well at all. The idea that the Government have introduced that concept, say, into the National Health Service, is at variance with the facts. For many years consultants have had "merit awards", which they all decide among themselves.
Lord McCarthy: My Lords, do the Government deny that every single voluntary organisation receiving government money, as a condition of continuing to receive that money, now has to introduce some system of appraisal and performance-related pay? They all do it and they all hate it. The only place where it does not apply is in the Government. Is the only argument they can offer that their jobs are uncertain? Everyone's job is uncertain but only the Government have no performance-related pay.
Lord Mackay of Ardbrecknish: My Lords, with due respect to the noble Lord, he overstates his case. In fact, there would be very few people not running to someone like the noble Lord if they suddenly found themselves sacked by evening time. Government Ministers and Members of Parliament are in exactly that position. All Ministers could be out of a job by the end of the evening without recourse to an industrial tribunal or the employment protection that other people have.

Leg Shackles
3.7 p.m.
Lord Dubs Lord Dubs asked Her Majesty's Government:
What action they are taking to prevent the export of leg shackles and other items that might be used to impose degrading and inhuman punishment or to facilitate torture.
The Minister of State, Department of Trade and Industry (Earl Ferrers): My Lords, the export of leg shackles is controlled and export licences would not be granted. It is impossible, of course, to control the use to which perfectly legitimate goods may be put in other countries.
Lord Dubs: My Lords, in view of the "Dispatches" programme on Channel 4 television last month which indicated that leg shackles and electric shock batons were being exported by this country, will the Minister look again at that vile trade and give us an assurance that it will stop immediately?
Earl Ferrers: My Lords, I understand that the Channel 4 programme, to which the noble Lord referred,
788
consisted of a person who set up other companies to try to supply various pieces of equipment. He tried to get the Royal Ordnance and ICL Technical Plastics to supply electric batons. The Royal Ordnance offered to supply from abroad but did not do so. ICL Technical Plastics offered to supply various equipments and implied that it could assemble them on its own premises. Hiatts was asked to supply leg irons, neck restraints, gang chains and other items but declined because it considered neck restraints not to be a civilised form of restraint. I understand that that particular programme was designed to try to entrap people and they were not entrapped.
Baroness Jeger: My Lords, can the Minister confirm that this country is not exporting land-mines, which continue to kill and maim indefinitely? We should all be relieved to know that we are not playing any part in the export of those instruments.
Earl Ferrers: My Lords, the export of military equipment is another matter. I can only say that, in general, military equipment is exported only for military purposes and not where it is likely to be used for internal repression.
Lord Ennals: My Lords, having seen the results of some of these torturous weapons and the use made of them in other countries, I must ask why the Government do not decide that Britain should not export such items? Why cannot they end this wicked trade?
Earl Ferrers: My Lords, perhaps the noble Lord, Lord Ennals, did not listen as carefully as he usually does to my initial Answer. The export of leg shackles is controlled and export licences are not granted. On the other hand, one cannot control the purposes for which other perfectly normal pieces of equipment are used in other countries. For example, 5-amp electric flex can be used in a vicious way. Bicycle chains or even cigarettes can be used as elements of torture and it would be wrong to exclude the export of those items.
Lord Peston: My Lords, I am disappointed that the noble Earl is not taking the Question as seriously as he ought. These are such loathsome objects that I would not even suggest that they be used to control English football supporters.
Can the noble Earl explain why objects which are as loathsome as those mentioned can be hidden under the heading, "They are legitimate if they are controlled"? I understand that the noble Earl said that they are controlled. His department should be doing something a lot more positive so that, if for no other reason than our national honour, "Made in England" does not appear on those objects when they are used by repressive regimes abroad.
Earl Ferrers: My Lords, unusually for the noble Lord, Lord Peston, he is being slightly emotive on this subject. He referred to "loathsome objects", and did not say what they were. I said that the export of leg shackles—if that is what he means by "loathsome objects"—is controlled; that export licences would be required and would not be given. I can also say that under the export and controls order, licences are

789
required for acoustic devices, for anti-riot shields, for leg irons and shackles, for portable anti-riot devices, for water cannon, for riot control vehicles, and so forth. I cannot understand why the noble Lord, Lord Peston, feels that the Government are encouraging those exports when they are totally and perfectly correctly controlled.
Lord Peston: My Lords, can the noble Earl clarify his answer? Is he saying that the Government have powers to control the export and that the items are not being exported? That is the point at issue. I refer to leg shackles and similar repressive objects. Can the noble Earl assure the House that the British Government are not allowing those things to be exported? That is the only question at issue. It is nothing to do with 5-amp cord or anything like that. It concerns something much more serious.
Earl Ferrers: My Lords, it is difficult to explain to the noble Lord exactly what I mean when I have already said it twice, but I am happy to repeat it for a third time. The export of leg shackles is controlled and export licences would not be given. Full stop. If the noble Lord then asks whether other things are exported from this country which in other circumstances may be used as offensive weapons, I am bound to say that perfectly legitimate items which can be and are exported nevertheless may be used for offensive purposes. We cannot control that.
Lord Dubs: My Lords, will the Minister look again at the transcript of the Channel 4 programme? He will see a quotation from a businessman referring to electric shock weapons where he says,
"We went to China and sold to China with the government's blessing".
Will the Minister look again at the whole issue with specific reference to electric shock batons.
Earl Ferrers: My Lords, the noble Lord, Lord Dubs, should not take every television programme at its face value. Certain people are prepared to make programmes and entrap people into making certain comments. They then broadcast them as programmes in which they purport to show that people are behaving in an untoward way. I explained that that particular programme involved three firms and those firms acquitted themselves reasonably.

Intergovernmental Conference: Agenda
3.15 p.m.
Lord Bruce of Donington Lord Bruce of Donington asked Her Majesty's Government:
What steps they propose to take, prior to the first meeting of the Intergovernmental Conference study group representatives to be held in Messina in June, to ensure that the whole question of a radical review of the present functions, structure and powers of the respective institutions of the European Union is placed firmly on the agenda.
Lord Inglewood: My Lords, a number of agenda items for the Intergovernmental Conference were established in the Maastricht Treaty itself and in
790
subsequent European Councils with the unanimous agreement of the member states of the Union. Other items may be added to the agenda.
Lord Bruce of Donington: My Lords, while thanking the noble Lord for that reply, which contains no information whatever, may I draw his attention to the evidence which the Minister of State for the Foreign Office gave to the House of Lords Select Committee on 10th January last as reproduced in the House of Lords Paper No. 19 of this year in which she lists a whole series of matters, at page 16, that will be raised at the conference to which I referred? The only item missing from that list is the item contained in my Question. Will the noble Lord take note of the fact that, throughout the United Kingdom, there is a strong sense of dissatisfaction with the way in which some members of the institutions are behaving? High up in the bureaucracy in the Commission in particular there is a tendency to act like little more than puppets for the French and German Governments.
Lord Inglewood: My Lords, as I explained, certain parts of the agenda for the Intergovernmental Conference are specified in the Maastricht Treaty. There are six items and three others have subsequently been decided on by the European Council. The Government are aware of the comments of the noble Lord, Lord Bruce of Donington, and his views on the activities of the European institutions. They will no doubt give them the weight they consider appropriate in bringing forward proposals at the IGC that they believe will be in the interests of this country as a whole.
Baroness Elles: My Lords, does my noble friend agree that though the noble Lord, Lord Bruce of Donington, is always extremely fair when talking about the other institutions of the Community, nevertheless his attack on members of the Commission is regrettable? We should remember that David Williamson is a leading member of the British Civil Service and is doing an excellent job as Secretary-General.
Lord Inglewood: My Lords, my noble friend Lady Elles is absolutely right. Mr. Williamson is doing a first rate job at the European Commission.
Lord Richard: My Lords, speaking as somebody who was not a puppet of the French or German Governments when he was Commissioner, may I ask whether the Minister is aware that the picture presented by my noble friend of the activities of the European Commission is frankly a travesty and unrecognisable by anyone who has any intimate knowledge of the workings of that institution? Will the Minister confirm that whatever else the Government intend to try to achieve at the IGC, it does not involve the repeal of the Treaty of Rome.
Lord Inglewood: My Lords, I can confirm that.

Rowntree Study: Standards of Living
3.19 p.m.
Lord Dahrendorf Lord Dahrendorf asked Her Majesty's Government:
How they propose to respond to the view arising from the Rowntree Foundation sponsored inquiry into income and wealth that growing inequality in Britain is a competitive handicap and a danger for the economy and for business.
Lord Inglewood: My Lords, government policies provide a firm basis for lasting economic recovery and are the best way to safeguard living standards of all groups, including the least well off. In addition, the Government are providing considerable help for the poor and vulnerable. Extra help, worth more than £1 billion a year in real terms, has been made available to low-income families since the social security reforms of 1988. The 1994 Budget included a package worth around £700 million aimed at getting unemployed people back to work.
Lord Dahrendorf: My Lords, I thank the Minister for that Answer, which clearly addresses itself to one core issue. Is it not, however, a clear finding of the Rowntree study, as well as other studies, that in the medium term the most important instrument for bringing people back to the labour market and away from benefits is education for, on the one hand, pre-school and primary school children and, on the other hand, 16 to 19 year-olds?
Lord Inglewood: My Lords, the noble Lord is correct that both the factors that he mentioned are important in bringing people into the labour market. But it is also important that we are clear that they are by no means the whole story. It is important that we have a labour market which can respond flexibly to the requirements of the world, not merely the single market but the wider world in the post-GATT era. We believe it is necessary to ensure that we have a structurally flexible labour market which will respond to the requirements of commerce and business, because it is commerce and business which provide jobs.
Lord Clark of Kempston: My Lords, does my noble friend agree that it is quite illogical to think that there is any connection between the competitive position of our economy and the so-called difference between the rich and the poor? Does he further agree that one thing that would certainly hit our competitive position in world markets is the adoption of the social chapter? Finally, does he not agree that, compared with the standard of living in 1979, the standard of living today has increased for everyone?
Lord Inglewood: My Lords, I can confirm that the standard of living under this Government is substantially greater than it was under their predecessor.
Lord Eatwell: For everyone, my Lords?
Lord Inglewood: My Lords, across the board. We believe that the best way to increase it is to have a flexible labour market. We further believe that the fossilisation and ossification that would result from the
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imposition of the policies contained in the social chapter would be detrimental to the interests of the British people as a whole.
Lord Jenkins of Putney: My Lords, is it not the case that it is the Government's policy that the poor should have great aspirations and that the trickle-down policy should have a long way to trickle? Should not the Government be congratulated on the remarkable degree to which they have carried out this policy?
Lord Inglewood: My Lords, we believe that the policies we have been pursuing are those which will act to the best benefit of society as a whole.
Lord Skelmersdale: My Lords, is it not a fact that the poverty line is a very arbitrary line? What matters is what a given amount of work in terms of minutes and hours will buy. The cost of a bottle of whisky has fallen substantially over the past 20 years in terms of minutes of work, and other products bought by people—for example, pints of beer—also fall into that category.
Lord Inglewood: My Lords, my noble friend is right that it is the value of what one earns that is crucial. But we must not forget in this debate that there is the problem which must be addressed of those who are at the least prosperous end of the income spectrum. That is why we have focused the efforts that we are making to help people on those whom we consider and identify as being most disadvantaged. That has been the thrust of cur policy and we believe it is an appropriate complement to a policy of encouraging incentives.
Baroness David: My Lords, reverting to the Minister's earlier answer to the noble Lord, Lord Dahrendorf, about nursery education and education for 16 to 19 year-olds, if education is so important to the Government, does the noble Lord not think it very odd that the pay review body's recommendation on teachers' pay has not been followed? A great many children who would have had nursery education in the coming year will not be able to have it as the funding has not been granted.
Lord Inglewood: My Lords, with regard to the detail of the teachers' pay round, that matter is still outstanding. But it is the case that family credit child care allowance will help around 150,000 low-income families to combine work with family responsibility. In addition, there is a £10 top-up for those on family credit working more than 30 hours, announced in the 1994 Budget, which will further help those who wish to combine full-time work with family responsibilities. We believe that this shows the Government's commitment in that direction.
Lord Barnett: My Lords, perhaps I may be allowed to congratulate the noble Lord on carrying out his duties as Deputy Chief Whip which, with all the other work that he does in your Lordships' House, certainly ensures that we get value for money from him, if not from any other Minister. Reverting to the noble Lord's answer to the noble Lord, Lord Clark, that there has been an increase in living standards overall in the past 16 years,

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can he tell us whether in any other developed country over the past 16 years there has not been such an increase?
Lord Inglewood: My Lords, I thank the noble Lord for his kind comments. We could probably agree that the definition of a civilised country is one where the standard of living has gone up.
Lord Rea: My Lords, with regard to the standard of living, does the noble Lord know of important work that has been done at the Trafford Institute of the University of Sussex which shows that there is a greater increase in expectation of life in those developed countries which have the most fair distribution of income as distinct from ours, which has an increasing divide between the extremes of income?
Lord Inglewood: My Lords, I am not aware of the study to which the noble Lord alludes, but I am interested to hear his comments about what it contains.
Lord Hooson: My Lords, does the noble Lord agree that the inequality regarding educational opportunity at the lower end of the spectrum is the key question disturbing people of all parties who have any concern about the future of this country? Is that not what the Rowntree Report is really concentrating on?
Lord Inglewood: My Lords, the Rowntree Report addresses a number of matters. As I said earlier, the matter of education and educational opportunities is exercising the country as a whole. It is because we on these Benches have been concerned about these matters that we have over the past 10 years introduced a number of changes in education which we believe will be to the advantage of the nation as a whole.
Lord Eatwell: My Lords, does the Minister recall that in his Mais Lecture on 4th May 1994 the Chancellor of the Exchequer said:
"The gap between the highest paid and the lowest paid will continue to widen"?
He then said:
"This is inevitable and probably desirable".
Does the Minister agree with the Chancellor of the Exchequer that inequality is set to increase; and how much more inequality does he think is desirable?
Lord Inglewood: My Lords, what is desirable is to improve the lot of all of our citizens, and in particular to improve the lot of those who are least well off. The policies which we on these Benches advocate are ones which will achieve that in the world rather than tinkering along the lines suggested by the noble Lord, Lord Eatwell, which will not create wealth. We cannot help those who are most disadvantaged in society if we destroy wealth. We must apply wealth.
Lord Eatwell: My Lords, am I to take it that the Minister's answer is that he disagrees with the Chancellor of the Exchequer?
Lord Inglewood: No, my Lords, not with the Chancellor of the Exchequer.
Lord Molloy: My Lords, in addition to the foundation mentioned by the noble Lord, Lord Dahrendorf, there are
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many foundations which examine all kinds of issues. Do the Government take notice of any of them? Should they not at least examine their recommendations, or do they regard their work as a waste of time?
Lord Inglewood: No, my Lords. The Government listen; and on the basis of what they have heard they form their policies.
Lord Richard: My Lords, we should not leave this Question without congratulating the Minister on something which he said. We are inventing a new category of people in our society. I think he called them "the least prosperous end of the income spectrum". Is it not a fact that in the old days they were called "the poor"?
Lord Inglewood: Yes, my Lords.

World War II: 50th Anniversary Commemoration
3.30 p.m.
The Lord Privy Seal (Viscount Cranborne): My Lords, with the leave of the House, I should like to make a short statement about the commemoration of the 50th anniversary of the end of the Second World War. A ceremony is to be held in Westminster Hall, when both Houses will attend and Addresses will be presented to Her Majesty the Queen, to which she will reply. The date and time of the event is Friday, 5th May, at noon. It is proposed that a reception be held in the hall after the ceremony.
It is hoped by my noble friend the Lord Chancellor and the Speaker that as many Members of both Houses as possible will participate. It is intended that spouses and other family members will be able to accompany them. Representatives of veterans and other organisations will also be invited.
To help with the planning of this event, a notice will be circulated to all Peers in the next few days asking whether they will be attending and whether they wish to be accompanied by up to two members of their families. If demand for places is high, there may need to be a ballot. I know that all your Lordships will wish to be as helpful as possible and to make the ceremony a memorable one for all who participate.

Crown Agents Bill [H.L.]
Lord Inglewood: My Lords, on behalf of my noble friend Lady Chalker of Wallasey, I beg to introduce a Bill to provide for the vesting of the property, rights and liabilities of the Crown Agents in a company nominated by the Secretary of State, and for the subsequent dissolution of the Crown Agents; and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Inglewood.)
On Question, Bill read a first time, and to be printed.

Accommodation Level Crossings Bill [H.L.]
Read a second time, and referred to the Examiners.
King's College London Bill [H.L.]
Read a second time, and committed to an Unopposed Bill Committee.

Pensions Bill [H.L.]
3.32 p.m.
Lord Mackay of Ardbrecknish: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Mackay of Ardbrecknish.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 44 [Annual Increase in rate of pension]:
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 145C:
Page 24, line 21, leave out ("a public service pension scheme or").
The noble Baroness said: With this clause we come to a discussion on indexation of pensions. In a sense this is a probing amendment. Clause 44 refers to annual increases in the rate of pension but for some reason public service pension schemes are omitted from that requirement. It is true that such schemes already largely enjoy total protection against inflation so we seek clarification as to why the exclusion is thought necessary.
Such schemes either comply with the requirement already or they do not. In the former case the public sector schemes already offer something better and perhaps there may be no reason to include the clause in the Bill. However, in future there may be other public sector schemes established which do not have the requirements of some of the existing schemes. If they do not comply with the basic indexation requirement then the Government need to specify and to ensure that there is some provision that they should.
There is no reason to leave out a requirement in relation to public service pension schemes when it comes to indexation simply because a great many of them already meet it. There may be cases in future where schemes are established. It is necessary to ensure that future schemes have such indexation arrangements. Perhaps the Government will tell us why it is necessary to put the exclusion into the Bill. I beg to move.
Lord Mackay of Ardbrecknish: Perhaps I may explain to the noble Baroness, Lady Turner of Camden, why it is not necessary to have these words in the Bill. I believe that she is aware of the reasons because she mentioned them herself. It is quite simply that the increases in public service schemes are already guaranteed in statute.
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The Pensions (Increase) Act 1971 provides the mechanism for uprating pensions payable in the vast majority of public service schemes. Were we to take on board the amendment the interaction of two separate pieces of legislation would only serve to confuse the position. Increases under the Pensions (Increase) Act are linked to the full increase in retail prices which is a level of protection at least as good as the minimum level that the Bill currently seeks to require of private sector pensions. With that explanation I hope that the noble Baroness will be able to withdraw her amendment.
Baroness Turner of Camden: I thank the Minister for that explanation and I am very glad to have it on the record. The matter has been raised with me by certain individuals who are concerned about public service pension schemes. There was some concern that this quite specific exclusion was included in the Bill. In view of the fact that there are already legislative requirements which, I presume, will bind future public service schemes if they are introduced, I beg leave to withdraw the amendment.
Baroness Seear: Did I hear the Minister correctly? He said that the great majority of schemes are covered. Presumably, that means that some are not. It may only be a little one, but we do not want the housemaid's baby argument coming forward all the time. The fact that it is a little one does not make it unimportant.
Lord Mackay of Ardbrecknish: There are indeed very few public service schemes which do not index by RPI. However, they index by 5 per cent. of limited price indexation which, as I said, is at least the minimum requirement in the Bill.
Amendment, by leave, withdrawn.
The Earl of Buckinghamshire The Earl of Buckinghamshire moved Amendment No. 145CA:
Page 24, line 21, leave out from ("scheme") to ("and") in line 22.
The noble Earl said: I wish to remind Members of the Committee that at Second Reading I made mention of my professional interests. I am a director of the Wyatt Company and on 1st March this year I shall become a partner in R. Watson & Sons. I wish to make that point quite clear because there are issues which we shall be discussing this afternoon which have a bearing on my professional life and I do not wish to have to repeat my interests each time I speak.
The amendment deals with limited price indexation for free-standing additional voluntary contributions schemes. As the Bill stands, currently employers make available additional voluntary contributions schemes under the trust arrangements of the occupational pensions arrangement. Free-standing AVCs or additional voluntary contributions schemes, are made available outwith the trust arrangements of the schemes.
The clause requires additional voluntary contributions schemes within the trust document to provide limited price indexation. The Bill as it stands does not require the same conditions to apply to free-standing additional voluntary contributions schemes. It seems to me that all forms of pensions provision should operate on an equal footing. It would certainly provide for a greater degree

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of flexibility and choice in the way in which free-standing additional voluntary contributions schemes are operated when an employee retires than under an additional voluntary contributions scheme. That seems a little odd. I should be grateful if the Minister could tell us why that condition should be applied to one form of additional voluntary contribution, but not to the other. Indeed, I hope that he will go further and accept the amendment. I beg to move.
Lord Mackay of Ardbrecknish: I thank my noble friend for the way in which he introduced this important amendment. One of the great merits of your Lordships' House is that people with real expertise in the areas that we discuss—in this case, pensions—are Members of your Lordship's House and can thus participate in our debates.
It is a regrettable fact that many people still do not make adequate provision for their retirement. We all want to change that position, but, even where provision is made, even quite low inflation can erode the value of a pension over time. People live longer and spend more time drawing their pensions. We believe that indexation is necessary to help to maintain an adequate income stream, protected against possible inflation, throughout retirement.
It is also regrettable that, on the basis of all the evidence that is available, individuals retiring with a pot of money from a money purchase arrangement will, if given the option, use that pot to buy a flat rate but higher starting pension rather than one protected against inflation. We are therefore requiring all occupational pension schemes, both salary-related and money purchase, to provide the level of inflation-proofing that we consider appropriate. By doing so, we are both ensuring protection against inflation and maintaining a level playing field between money purchase and salary-related provision.
However, we have to recognise that there are other circumstances where there is a large element of personal choice. Where individuals are not members of an occupational scheme there is no compulsion on them to save for their retirement. Even where they are members of such a scheme they might feel, for whatever reason, that the benefits provided will not give them an adequate income. We do not want to put in place measures that might risk deterring such individuals from setting aside adequate provision. It is possible that a requirement to index such optional arrangements might have just that effect.
Free-standing additional voluntary contributions fall into that category. They are contributions made (purely on the basis of an individual's choice) to a pension provider to purchase benefits over and above those provided by the occupational scheme to which they belong. Deterring such individuals from setting aside adequate provision for retirement is not in anyone's interests.
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I hope that I have explained the reasoning behind our inclusion of those provisions and why I am not able to accept my noble friend's amendment. I hope that, in the light of that explanation, my noble friend will withdraw his amendment.
The Earl of Clanwilliam: Does my noble friend agree that there is discrimination here in that whereas an employer with in-house AVCs is forced to provide indexation, an individual with a private pension plan and with free-standing provision is not required to have that? Surely that is not fair. It discriminates against in-house AVCs. Surely someone with in-house AVCs should have the same opportunities to arrange a pension as someone with free-standing AVCs.
Lord Mackay of Ardbrecknish: I see my noble friend's argument. It has to be a matter of balance. I think I have explained why we have reached the conclusion that we have about additional contributions that are made by choice. We do not think that they should fall inside the indexation rules whereas I believe that we all agree that other types of pension need to build in a certain amount of inflation-proofing. I repeat that we took that view because we should not like to discourage people from making that additional provision if they choose to do so.
Lord Eatwell: I wonder whether the Minister can clarify his position. When replying to the noble Earl he said that it was terribly important that suitable protection against inflation should be provided. With respect to AVCs, he is saying that that is voluntary and that inflation protection should perhaps not be provided in that case. But, surely, if the requirement to provide at least a minimum degree of indexation were written into law the cost of all AVCs (whether within a company or taken out individually) would be included in the cost of the plan. Consequently, by the noble Earl's amendment we would achieve exactly the objective which the Minister says that he holds.
3.45 p.m.
Lord Mackay of Ardbrecknish: We are going round in a circle now. All that I can do is to repeat in other words what I have already said because the noble Lord's argument is the same as that which the two previous speakers put to me. I have underlined the point, with which I am sure we all agree, that indexation is being required for all occupational pension schemes which have tax-approved status. We are looking at FSAVCs, as they are called. They are voluntary top-ups which people decide to make over and above the indexed benefits of the scheme. So there is that considerable difference. We do not want to do anything that makes such voluntary decisions more expensive or leads to the returns not being so great. That is why we have excluded them from the index-linked provision.
The Earl of Buckinghamshire: I thank the Minister for his kind words about my presence in your Lordships' Chamber. However, I find his arguments against doing what I suggest in relation to free-standing additional voluntary contributions completely circular. If you are going to do that for additional voluntary contributions,

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where a member has totally free choice as to whether to invest in them, the same argument applies to free-standing additional voluntary contributions. I wonder what on earth the reason is for that different treatment. Perhaps I shall find out at a later stage.
In the event, however, I should like to thank the noble Lord, Lord Eatwell, for his support. We share rugby football as an interest, as I note from Dod's Parliamentary Companion, and we now share an interest in free-standing additional voluntary contribution schemes. I thank also my noble friend Lord Clanwilliam. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Lindsey and Abingdon The Earl of Lindsey and Abingdon moved Amendment No. 145D:
Page 24, line 25, at end insert (", being the R.P.I. or 7 per cent. whichever is the lesser").
The noble Earl said: I propose to speak to Amendments Nos. 145D, 145E, 145F and 145G. The purpose of the amendments is to clarify the annual increase under an occupational pension scheme. The present wording of subsections (1) (b), (2) (b) and 4(b) refers to an annual increase of,
"at least the appropriate percentage",
which is specified in another Act. I believe that by incorporating the wording of my amendments we arrive at a more realistic and clearer understanding of what is intended. As stated in the minority Goode Report, it should be borne in mind that wages have risen on average by 9 per cent. and prices by 7 per cent. per annum between 1955 and today. Therefore, I think that providing 7 per cent. is reasonable and affordable. I should like to quote the words of leading actuaries, Bacon & Woodrow, who state:
"if inflation were eliminated, rendering increases to pensioners and deferred pensioners unnecessary, this would have the same effect on costs as the provision of increases to counteract inflation".
I beg to move.
Lord Eatwell: I shall speak to the amendments tabled by the noble Earl and refer also to Amendments Nos. 145G and 145M. The amendments relate to the problem of defining limited price indexation and providing suitable protection for pensioners against inflation.
I shall speak first to Amendment No. 145G which, in effect, places the number 10 where the noble Earl places the number seven. In some cases the choice of number for the minimum increase in indexation that must be provided if the RPI reaches that level is something of an arbitrary exercise. It is important to ensure that reasonable protection for pensioners is provided in circumstances in which the rate of inflation can oscillate widely over relatively short periods of time, even when a government pursue a strongly anti-inflationary policy. For example, if we take the current figure of 5 per cent. for limited price indexation and look at the record since 1987, between 1987 and 1993 the real value of a pension which was increased only by the 5 per cent. required rate would have fallen by nearly 10 per cent. That is in the past six years alone.
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If the required limited price indexation rate were increased to 10, the value of the pension would have been preserved over that period. It is also true that there have been periods, such as under the Chancellorship of the noble and learned Lord, Lord Howe, when inflation reached 20 per cent. In those circumstances, even with the figure of 10, the value of a pension would be eroded. Nonetheless, given the need for reasonable actuarial calculations, it would not be unreasonable to increase the figure to 10 and provide for pensioners that degree of protection.
It might be argued that increasing the figure from five to 10 would lead to a significant increase in the cost of schemes. However, I am advised by actuaries—I must say that, having thumbed through my copy of Teach yourself to be an Actuary, I still have to rely heavily on professional advice; the mysteries of that so-called science seem to verge between astronomy and astrology—that such a change would lead to little increase in cost because the actuarial assumptions associated with schemes which are funded predominantly through equities are that when there is an increase in inflation there would be an increase in the scheme's assets as well as its liabilities.
Broadly, I am advised that the proposals I make in Amendment No. 145G would not add significantly, if at all, to the cost of schemes. It seems that that would be a way in which we could offer greater security to pensioners; and that, after all, is the purpose of the entire Bill.
I shall turn now to Amendment No. 145M. Under the current regulations for limited price indexation, we have a rather more pernicious bias against the pensioner than even this little debate we are having about five, seven or 10. What happens at the moment in respect to pensions that are being paid is that the ceiling on limited price indexation applies year by year. It does not apply to the average rate of inflation over the period in which the pension has been accumulated and is to be paid. The significance of that is serious.
Let us suppose, for example, that in one year there was 20 per cent. inflation—the 1981 experience of the noble and learned Lord, Lord Howe—pensions would then be uprated by 5 per cent. If in the following four or five years there was no inflation, pensions would not be uprated. So the entire increase over the period would just be the 5 per cent. There would no way of recovering the loss of the 15 per cent. which was suffered in the one year of high inflation. If, on the other hand, we could institute the evaluation procedure which is used currently for preserved pensions in deferment and apply it to pensions which are being paid, then because the LPI would be referred to an average over a number of years, those very serious losses which could be sustained from just one year's inflation—an oil price rise or a commodity price rise which would mean that no government could possibly control the rate of inflation in just that one year—the inflationary effects upon pensioners of that burst of inflation would be protected up to the LPI rate, averaged over the appropriate years.

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So I believe that taking the two amendments together—with all due respect to the noble Earl, taking the figure of 10 in Amendment No. 145G—and extending averaging from pensions in deferment to pensions in payment, that would give a much more significant protection against the erosion of the real value of pensions than exists at the moment. I turn again to the cost. With respect to the issue of averaging, once again the arguments I presented previously apply: given the typical actuarial assumptions which are made with respect to funds which, as in the UK, are predominantly equity-based, the cost of introducing this significant increase in protection for pensions would be insignificant.
Lord Dean of Harptree: With all these amendments, I believe that Members in all parts of the Committee will agree that we are trying to strike the right balance between encouraging occupational schemes to develop and providing adequate security for the members of schemes. In my judgment the amendments go too far in the direction of discouraging the development of occupational pension schemes. They are too onerous, particularly when one compares them with the existing statutory obligation which is indexation up to 3 per cent. of an element of the pension.
'The amendments suggest indexation, in one case of up to 7 per cent. and in another of up to 10 per cent. on pensions accruing after 1997. We had a similar argument on Tuesday when I suggested to the Committee that one of the factors we have to bear in mind is that, whereas in previous years many final salary schemes were being set up, there is now a tendency for those to be substituted by money purchase schemes. That suggests strongly that there is a warning light that the conditions for setting up and improving occupational schemes are not as favourable as was once the case.
I remember in reply to that point that the noble Baroness, Lady Hollis, thought that if money purchase schemes became more common they would give less security to members of the schemes. I agree with that. She considered that the conditions should be more onerous. With respect to the noble Baroness, I draw the opposite conclusion. I believe that there is a warning light; that if we make conditions too onerous there will be a risk that the highly satisfactory development in occupational pension schemes during the past 20 or 30 years will diminish.
The Committee will remember that 20 or 30 years ago we talked about occupational pension schemes being overfunded. Indeed, at that time the superannuation funds office had to be extremely vigilant to ensure that the Revenue was not defrauded by overfunding. We have not heard much about overfunding in recent years. Again, that is an example of the less favourable climate in which occupational schemes must now operate.
There are many reasons for that and I do not wish to bore the Committee by going into them at length. One reason is that many more schemes have reached a state of maturity and a growing number of pensions are being paid. The ratio of pensioners to contributors is going against the contributors. That is happening in the
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country as a whole and it is a factor that the Government must take into account in deciding at what age pensions should be paid. Furthermore, we must take into account the fact that employers must make good any shortfall that emerges in the pension scheme.
For those reasons, I believe that a jump from the existing indexation requirement to those suggested in either amendment would be a jump too far.
4 p.m.
The Earl of Buckinghamshire: I agree with the noble Lord, Lord Eatwell, that his actuarial advice is good and that the real long-term cost of the provisions would not increase the long-term cost of a pension fund. However, the implications will run through into the minimum solvency area. There are few insurers in the market to buy out deferred annuities. They will make an assumption that in order to buy out limited price indexation they are using a rate of 5 per cent. as their assumption in the purchase price.
If we move the rate of inflation up to, say, 7 per cent. or 10 per cent., they would probably consider that they too must move up their assumptions of limited price indexation in order to mirror the promise that the noble Lord is trying to put into the Bill. That will automatically drive up the cost of buying out deferred annuities; and that will have an immediate impact back onto minimum solvency. For those reasons primarily, I suggest that the amendments relating to that area should not be accepted. The second matter that I wish to deal with is averaging, which is an extremely interesting concept. I can understand why it is being brought forward. I have recently taken over the running of a scheme which contains such a provision; the rate is 5 per cent. or, if inflation is lower, the average of that period. That is a curious way of looking at the matter from the other side—lower than 5 per cent. The problem the company has is with the administration of that averaging. I shall be interested to hear what the Minister has to say about that. I suspect that when we look at the totality of the pensioners we have to look after, averaging may be administratively complex to put into place. I may be wrong and no doubt someone will tell me that for every administrative problem there is a solution. But on that basis I suggest caution in that area.
Lord Mackay of Ardbrecknish: It is obvious from this short debate that not only do we all accept how vital it is to have a pension when we retire but also to have one that as far as possible keeps in pace with the cost of living. However, a balance must be struck between protection against inflation and the ability of the schemes and the employers who stand behind them to afford such protection. We must not lose sight of the fact that it is an entirely voluntary act on the part of an employer to set up and run an occupational pension scheme. My noble friend Lord Dean of Harptree acknowledged that. Imposing significant extra financial burdens, whether actual or potential, on employers must always carry a risk of deterring them from starting schemes or even continuing to run them. Many of the

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measures introduced by the Bill would impose costs on schemes and employers, so the cost of indexation cannot simply be seen in isolation.
During the past 10 years, inflation has on average been below 5 per cent. We certainly are committed to keeping inflation low. Of course, we cannot offer an absolute guarantee about what will happen in the future, and therefore a limit is needed to give schemes and employers the ability to plan their long-term funding needs with confidence. I am not entirely sure whether the noble Lord, Lord Eatwell, was exposing the fact that his party believes that perhaps if it wins the next election its inflation figures and ranges might be significantly above what we are trying to adhere to. But we believe that our proposed 5 per cent. indexation requirement is the right limit and the right balance. It strikes an appropriate balance between affordability and protection against inflation.
The figure of 7 per cent. given by my noble friend Lord Lindsey and Abingdon would result in wrong signals being sent as to the seriousness of the Government's commitment to keep inflation low. The figure of 10 per cent., which was suggested by the amendment of the noble Lord, Lord Eatwell, would further exacerbate the position. Schemes would have to consider how best to take into account in their funding plans the possibility of higher inflation. Extra costs would thus fall on schemes and employers—costs which, taken with the cumulative effect of other measures, might well have a deterrent effect on scheme provision.
I am not sure whether the noble Lord, Lord Eatwell, wants to continue to speak to actuaries; he referred to them as a cross between astrologers and astronomers. All the actuaries I know are profoundly serious and worryingly clever mathematicians. While the point that he made about young schemes may be true, I believe that the more mature schemes with a larger proportion of pensioners might find the proposal more expensive than he envisaged.
As regards Amendment No. 145M, I must confess that I do not find the detailed working of pensions legislation and pension schemes easy and this amendment was a good example. However, if I understand it correctly—and now I have heard the noble Lord, I believe that I do understand it correctly—I congratulate him on the ingenuity of his approach in trying to get round the minimum ceiling we impose for the indexation of pensions and payment. The amendment would have the effect of altering the way in which indexation increases are calculated. It would change the fixed annual minimum ceiling into a cumulative one, in effect, changing annual indexation into something more akin to the revaluation of deferred pensions. It would allow any "unused" part of a revaluation order in one year (where the RPI was under 5 per cent., or in this case, 10 per cent., I imagine) to count towards an increase in pension in payment in the following year if inflation in that second year was higher than, in my case, 5 per cent. and, in the noble Lord's case, 10 per cent.
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It is an ingenious amendment, but I am sorry to tell the noble Lord that it is not one that we can accept. It would just as much amend the rate of indexation as do some of the other amendments; for example, my noble friend's amendment to get to 7 per cent. As was rightly pointed out by my noble friend Lord Buckinghamshire, it would have quite significant complicating effects on the administration of pension schemes. Schemes would end up giving different increases to different pensioners, depending on when in a year they retired. It would be a recipe for complexity and confusion and could well result in pensioners receiving the wrong rate of pension. It would certainly increase the costs of running a scheme.
Therefore, taken as a whole, the amendments may cause employers to reconsider their pension provision both from the point of view of the cost and the administrative complexity. Such consequences would not be in the interests of anyone. I suspect that, whatever figure we had chosen, the noble Lord would seek to double it in one way or another. The figure that we have chosen is sensible and balanced. It gives protection to pensioners and if we can keep inflation low, that protection will be very substantial indeed; but it should not discourage employers from entering and carrying on important occupational pension schemes. Having heard my arguments and those of other Members of the Committee, I hope that my noble friend will withdraw the amendment.
The Earl of Lindsey and Abingdon: I thank the Minister for that reply. I realise that the schemes are voluntary. But taking all considerations into account I still believe that 7 per cent. is a reasonable figure. With all due respect to the noble Lord, Lord Eatwell, to whom I listened with great interest, I believe that 10 per cent. is slightly excessive. I ask the Minister to refer the matter of indexing to the Government Actuary. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 145E to 145G not moved.]
Clause 44 agreed to.
Clause 45 [Restriction on increase where member is under 55]:
The Earl of Lindsey and Abingdon The Earl of Lindsey and Abingdon moved Amendment No. 145H:
Page 25, line 7, leave out ("55") and insert ("50").
The noble Earl said: In moving this amendment I shall speak also to Amendments Nos. 145J, 145K and 145L. The purpose of the amendments is to draw attention to the fate of the over-50s when they are made redundant through no fault of their own. Employees who have given many years' service and who have contributed to their company pension fund may suddenly find themselves surplus to requirements. It is a fact that with the advance of technology and machinery, people in that age group are more vulnerable and expendable. With a few exceptions, they find it increasingly difficult to obtain alternative employment.
It should be borne in mind that the younger a person is, the cheaper he is for an employer to retain. Therefore, I should like to see a 50 year-old given the same rights as a 55 year-old in relation to indexing. I beg to move.
Baroness Hollis of Heigham: In speaking to this group of amendments, I should like to speak also opposing the Motion that Clause 45 shall stand part of the Bill.
The Bill removes provision whereby RPI increases are not required for members under the age of 55. That exclusion applies unless the member is incapable of full-time work or is retired on ill-health grounds. In any event, the pension has then to be increased at the age of 55 to the rate that it would have been had he been entitled to the increases. Therefore, effectively, the provision simply defers the need to make increases until the age of 55, at which age the pension is increased to the level at which it would have been had the increases applied.
That provision is included in the Bill by the Government because it exists already in public sector schemes. We assume that the Government wish to allow private sector schemes to do the same to avoid the criticism that more onerous obligations are being placed on private sector schemes. However, as in practice virtually no private sector schemes include such a provision, we believe that it is both unnecessary and unjustified. Whatever the original justification, the provision should be abolished for private and public schemes alike. Therefore, we oppose the Question that Clause 45 stand part of the Bill.
Lord Burnham: I must declare a personal interest in that I was made redundant at the age of 54½ Because it turned out that I did not obtain further employment for nearly two years, I took my pension at the age of 55. The pension, which of course is based on the expectation of life, was devalued by almost exactly 50 per cent. because it was taken at that time. Nine years later I rather regret that I took it at that time because the pension that I would have taken had I waited until the age of 65 would have been that much greater.
If a pension is to be taken and can be taken at the age of 50, the actuaries referred to by the noble Lord, Lord Eatwell, would be calculating exactly how much more the discount will be in the pension to be paid at that age and what will continue to be paid for the rest of the pensioner's life. I do not have the figure and I should have checked but that discount must be considerable, bearing in mind the expectation of life of somebody at the age of 50. Therefore, I believe that it is against the interests of a pensioner to be able to take the pension at the age of 50. I understand why my noble friend has moved the amendment, but I believe that he is misguided in doing so.
4.15 p.m.
Lord Mackay of Ardbrecknish: My noble friend Lord Burnham has just made a very good point to balance the understandable anxiety which I have heard from a number of Members of the Committee when discussing this part of the Bill in relation to people who find themselves out of a job in their fifties.
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At the risk of repeating myself—and I promise not to use the word too often—that is a matter about which we must try to find a proper balance and avoid imposing more burdens than are absolutely necessary to provide security, whether from malpractice, from future inflation or early retirement situations. We must be careful not to impose such a burden that it makes it unsustainable for the employer and discourages employers from considering starting schemes.
Of course, with early retirement being increasingly commonplace, we accept that pensions taken before normal retirement age need some degree of protection against inflation. But, as with the level of indexation, we need to strike a balance between that need and affordability. As my noble friend Lord Burnham pointed out, if you are allowed to take your pension earlier, the actuaries do their clever mathematical calculations because they still assume that you will die at the same time that they had previously assumed you would die. Therefore, the payments have to be spread out over a longer period of time and, inevitably, the annual payment is thereby reduced. That must be borne in mind as part of the balance.
Equally, as part of that balance, although we do not require indexation until the age of 55 we have introduced what I hope the Committee will accept is a slight bow in the direction of the argument being put to me this afternoon. When somebody reaches the age of 55 and is retired we require a revaluation of the pension at that age to the level at which it would have been had the increases been payable from the age of 50. Such a provision ensures that a pension receives appropriate protection as normal retirement age approaches, reflecting the fact that there will be increasingly less likelihood of individuals either wanting to continue work or necessarily being able to find appropriately remunerated employment. I should point out to Members of the Committee that our proposals relate to a minimum. If a scheme is in a position to afford indexation from the age of 50, we are not seeking to stop that.
However, requiring indexation from the age of 50, as the amendments propose, would add significant extra cost to schemes—up to a maximum of 8.5 per cent. if inflation were ever again to run at 5 per cent. through the period of retirement between the age of 50 and 55. The amendments could also send a message that those drawing a pension from the age of 50 are no longer considered to be in the employment field. We do not believe that such a message is justified.
I should also point out that our proposed revisions do not apply where early retirement is granted on grounds of ill-health. In such circumstances, we will require a pension to be indexed from the point at which it comes into payment, acknowledging the fact that such pensioners are not likely to be in a position to add to their income by gainful employment. I believe that the amendments do not add significantly to scheme members' protection, but they could possibly add to the

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burden on employers. With that explanation, I hope that my noble friend will feel able to withdraw the amendment.
Baroness Seear: We are discussing an extremely difficult point; indeed, there are strong arguments on both sides. Perhaps I may put into the Minister's mind a suggestion for consideration which is not on the Marshalled List. It is an issue which has been raised in some quarters in connection with the studies of pensions. We know that there is an increasing problem with many people who take early retirement. They find themselves in the position outlined by the noble Lord who retired at the age of nearly 55. Would it not be possible to find a way whereby those people who have taken very early retirement and therefore a very low pension and who go on to reach a ripe old age should receive an increase in their pension, recognising that many others, by the nature of things, will no longer be here? In other words, the burden of cost would be much less.
While one is at the age of 50—and it varies with different people—one may be able to obtain part-time work; indeed, one can certainly do things to save money. However, when one becomes really old one cannot do either. That is when the pinch is very hard. The idea is not in the Bill, but I should like to put it to the Minister for consideration.
Lord Mackay of Ardbrecknish: As usual, the noble Baroness, Lady Seear, is fairly ingenious. I understand her point. As I have explained, I am not an actuary. However, if such a provision were to be built into the legislation—the idea that a person who takes early retirement should, when he reaches the age of 70 or 80, receive an extra boost to his pension—I imagine that the inevitable consequences would be that the actuary would advise the scheme that the starting pension for such a person at the age of 51, 52 or 53 should be even lower. The blunt fact of the matter is that we are discussing pots into which—
Baroness Seear: I must tell the Minister that that might be the choice some people would make—the wish for security when one reaches the stage when one cannot look after oneself. Such people may be able to earn quite a bit when they are younger.
Lord Mackay of Ardbrecknish: I understand the noble Baroness's point that some people may prefer that option. However, we are now beginning to stray into rather deeper water. It is possible—and I would certainly have to take advice—that a scheme could have such a policy within it; but the consequences would be those I outlined. There is much evidence to suggest that people do not think in that way regarding, for example, personal pensions. Indeed, some of them rather like to take a larger amount at the beginning and not bother about inflation. That is a point we shall discuss later.
I see the point that the noble Baroness is seeking to make. I believe that my original point when talking about the clause in general—namely, that if people retire very early and the added years come into the actuarial cost, then the pension they receive is reduced—covers
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the position. As regards the amendment, I suggest that we shall achieve a better balance if we continue along the present route. In other words, when a person reaches the age of 55 his pension is revalued for inflation and indexed thereafter.
I believe that my noble friend wants the process to start at the age of 50 and I understand that the Opposition, who have a Motion tabled against the clause standing part of the Bill, have the same view. As I said, it is a question of balance; it is the balance I have outlined. I recommend the Committee to stick with the Government's sensible conclusion.
The Earl of Lindsey and Abingdon: I am grateful to my noble friend for his response. My original intention when tabling the amendments was to draw the Committee's attentions to the increasing problem which confronts people reaching the age of 50. It is unfortunate that, when companies have to make people redundant, they find it economical to pick those aged of 50 to 60 because of the rising costs of contributions.
Before I withdraw the amendment, I should like to read out another quotation. It comes from a report of the Legal & General insurance company dated 1983 and explains the situation. The report says that,
"underlying funding rates for existing final-salary schemes increase with age. Thus the annual cost for an older employee is significantly greater than for a younger employee".
That is the answer. It is an unfortunate situation that if a company has to get rid of staff it is rather more apt to go for the age group referred to in my amendment. However, in view of the contributions made by Members of the Committee, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 145J to 145L not moved.]
Clause 45 agreed to.
On Question, Whether Clause 46 shall stand part of the Bill?
Lord Eatwell: I oppose Clause 46 standing part of the Bill. The clause is yet another weakening of the process of indexation. It introduces a rather peculiar provision. When trustees have made an increase in a tax year which is greater than that which happens to be required under the limited price indexation legislation, in a following or subsequent year they can offset that increase, thus, so to speak, averaging downwards the overall increase.
Let us suppose that we have a year in which the rate of inflation happens to be 8 per cent. The trustees feel comfortable, given the performance of the fund, with increasing the payment by 8 per cent. Then, in the following year, inflation is 5 per cent. and the trustees apply the LPI of 5 per cent. Very roughly, leaving out the power of compound interest, that would give a 13 per cent. increase over the two-year period and would actually protect entirely against inflation.
However, if the clause stands part of the Bill, then, in the second year, the trustees could offset the extra 3 per cent. they previously gave and give only 2 per cent. Therefore, over the two years, pensioners would only enjoy the LPI even though in particular periods the

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trustees had previously been happy to increase pensions at a greater rate. In other words, the Government are trying to encourage levelling down. That is essentially what the clause seeks to do. There appears to be no sensible justification for that. It would be most helpful if the Minister could provide one.
4.30 p.m.
Lord Mackay of Ardbrecknish: This clause deals with the situation, as the noble Lord, Lord Eatwell, explained, where pensions are increased by more than the minimum required under Clause 44 and under Section 109 of the Pension Schemes Act 1993. It will allow, but not require, a degree of offset against the statutory requirement.
Under the current contracting out system guaranteed minimum pensions and payment must, every tax year, be increased in line with retail price inflation up to a ceiling of 3 per cent. Any increase that schemes make above that level in a tax year can be offset against the 3 per cent. increase in the following tax year. This system will continue for the GMP rights accrued before April 1997. We believe that schemes should continue to be allowed to take account of discretionary increases in providing indexation but this clause will ensure that only increases made above the 3 per cent. required for GMP and above the 5 per cent. required for all rights accrued after the appointed day may be offset against the new indexation requirement.
I should point out that this provision does not require schemes to offset; it only permits them to do so. In addition the ability to offset would only apply to cases where a scheme makes discretionary increases above the statutory minimum. If scheme rules already require, for example, full RPI indexation there will be no offsetting calculation from one year to the next as the scheme is already complying with the statutory requirements in full. Where a scheme makes discretionary awards above the statutory requirement we believe it right that some offsetting should be allowed, particularly where the funding position of the scheme might not be so strong the following year. I move that the clause stand part of the Bill on those grounds.
I believe the noble Lord, Lord Eatwell, said that this is encouraging levelling down. I should have thought that it might encourage schemes to make discretionary additions in the knowledge that if they were wrong, and a scheme was not in such good form the following year, they could make this discretionary offsetting. If we go down the road of not allowing them to do that, I suggest they will be more reluctant to use their original discretion.
Clause 46 agreed to.
Clause 47 [Sections 44 to 46: supplementary]:
Lord Eatwell Lord Eatwell moved Amendment No. 145M:
Page 26, line 23, leave out from ("percentage"') to end of line 27 and insert ("means the percentage increase in the appropriate revaluation percentage for the revaluation period which is the same length as the payment period for a pension as compared to the appropriate revaluation percentage for the payment period for that pension in the preceding year.
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"payment period", in relation to an increase in the whole or part of the annual rate of a pension, means the period from the appointed day or the date on which that pension was first paid, whichever is the later, to the last calendar year before the date upon which the increase is to be made.").
The noble Lord said: I refer to the short debate we had earlier on Amendment No. 145M because it seems to me that the arguments that were put against the amendment were not satisfactory except in one important case. The first argument against it, put forward by the noble Lord, Lord Dean of Harptree, and by the Minister, was that it would be terribly expensive and a burden on the scheme. That argument was refuted by the noble Earl, Lord Buckinghamshire, who pointed out that there would not be any increase in actuarial expense as a result of this averaging technique.
Secondly, the Minister said—perhaps the adjective I should use here is "cheekily"—that over the past five years inflation had been on average below 5 per cent. He is, of course, quite right that it has been on average below 5 per cent. but it has not been below 5 per cent. in every year. It is because the calculation of increases is not allowed to be averaged, as the Minister was doing, that the loss to pensioners would over the past five years have been 10 per cent. —a little less than 10 per cent. —of the real value of their pensions. His comment that inflation has been below 5 per cent. in the past five years effectively makes my case.
The third argument made against this amendment by both the noble Lord, Lord Dean of Harptree, and again by the Minister, was that it would be terribly complicated and would increase costs. But neither of them explained why it is perfectly possible to allow averaging in the case of pensions in deferment, and why that is not complicated, but why it would be complicated to increase pensions in payment. Why is it allowed and indeed supported by the Government in one case but not in the other?
I found those arguments about increased costs—the Minister accepted my point about averaging, which was nice of him—and the argument about complications as compared with deferred pensions to be entirely unsatisfactory. The single powerful argument was that put forward by the noble Earl, Lord Buckinghamshire, when he referred to the implications of averaging for the minimum solvency requirement. With that argument I agree.
The Committee will discover that later on this evening I intend to argue that the minimum solvency requirement is creating a major distortion in the entire attempt to create protection for pensions, and high quality pensions, in this country. Here is one of the examples of the distortion that the minimum solvency requirement is introducing into our attempt to provide protection against the effects of inflation.
I ask the Minister to take these arguments back, particularly after we have had the chance to review the issue of the minimum solvency requirement, to consider them carefully and perhaps to come back with some

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proposal which will protect pensions by averaging inflation rates in future years. I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Lord Strabolgi): The noble Lord must move the amendment at this stage.
Lord Eatwell: Thank you. That is kind. I beg to move.
Lord Mackay of Ardbrecknish: I must say I am confused. I just about need an actuary to keep me right. We seem to be having a second bite at this particular cherry. I thought I had made my position clear the first time round. This is a matter of balance. Quite clearly the noble Lord, Lord Eatwell, feels that the balance should be a little more in one direction than do I and some of my noble friends who support me. As I said, of course we want to try to ensure that there are safeguards against inflation, as indeed we have done over the past few years. That is in contrast to when the Party opposite was in Government and there were no requirements to index pensions, or as regards the rights of early leavers and other such matters. Pensions continue to improve. I believe we have an improvement in the Bill as regards the minimum requirement being what is called the LPI, which is the RPI or 5 per cent., whichever is the lesser. I believe that is a sensible and balanced requirement to put into the Bill. I am not sure whether the noble Lord, Lord Eatwell, is withdrawing his amendment but if he is not withdrawing it I would certainly invite my noble friends to support me in the Division Lobby.
Lord Eatwell: I am sorry for all the confusion. I was perhaps trying to hurry things along. I ask the noble Lord to examine, at his leisure, the arguments in Hansard when he has the opportunity after the debate and to consider some of the arguments put forward. In the meantime, at this juncture I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 47 agreed to.
Clause 48 [Section 44: end of annual increase in GMP]:
On Question, Whether Clause 48 shall stand part of the Bill?
Baroness Turner of Camden: I rise to oppose the Question that this clause shall stand part of the Bill because I am rather unhappy about it. I hope that in the course of the debate the Government will perhaps explain why it is in the Bill.
As I understand the position from the Notes on Clauses which were kindly supplied, the intention of the clause is to restrict increases in the guaranteed minimum pension as a result of the changes introduced by Clause 44, which we have already discussed. As we know, that clause provides for an annual increase in the rate of a pension under an occupational pension scheme by a prescribed appropriate percentage, which is presumably the RPI.
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At present, guaranteed minimum pensions must be increased in line with a formula in the Pension Schemes Act. What bothers me is that this clause as it stands could worsen the position of people who are among the lower paid. If people belong to a good occupational scheme they will have good protection, and in many instances are likely to have an index-linked pension. If the rate of increase in GMPs is removed in the future the people who are likely to suffer are those for whom the GMP is the major element in their pension.
We shall discuss the whole matter of the GMP, and the Government's desire to do away with it altogether, under another part of the Bill, and no doubt we shall wish to raise a few issues then because we are not happy about that. In the meantime, I am worried about a provision which I believe will impact unfairly on poorly paid pensioners. For them, the certainty of statutory provision which exists at the moment is being removed. They could be significantly disadvantaged as a result.
Furthermore, it appears that not all employers are happy about it. I note from some briefing that I have received about the LPI that some employers fear that the LPI will add to costs for defined benefit schemes, especially when coupled with the removal of the guaranteed minimum pension element for accruals after April 1997. They foresee added costs to them as a result of this proposal.
I hope that the Minister will be able to satisfy this side of the Chamber that the intention is not, as seems to me to be the case, significantly to worsen the position for the poorer paid pensioner.
Lord Mackay of Ardbrecknish: Clause 48 makes consequential amendments to Section 109 of the Pension Schemes Act 1993 as a result of the changes proposed under Clause 44 of the Bill.
Under the existing arrangements contracted out occupational pension schemes must increase that part of the guaranteed minimum pension element of an individual's occupational pension accrued since the beginning of the 1988–89 income tax year. The degree of inflation-proofing is limited to the increase in the RPI for the relevant period or 3 per cent, whichever is less. But from April 1997, Clause 44 requires occupational schemes to increase all of the pension entitlement accrued from that date by the rate of inflation up to 5 per cent. a year.
Under the new contracting out provisions guaranteed minimum pensions will cease to accrue from April 1997, but pre-April 1997 guaranteed minimum pension accruals will continue to be subject to inflation proofing of up to 3 per cent. by pension schemes.
The amendments to Section 109 will therefore restrict increases in an individual's guaranteed minimum pension entitlement to those earned between the tax years 1988–89 and 1996v97, the last tax year before the commencement of Clause 44. Thereafter, increases in respect of occupational pension rights will be made in accordance with the provisions of Clause 44.
I hope that with that explanation I can reassure the noble Baroness.
Baroness Turner of Camden: I am very much obliged to the Minister for that explanation. I still feel

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unhappy about the Government's attitude to GMPs. We shall no doubt discuss that matter when the appropriate clauses—Clauses 122 onwards—are before the Committee. In the meantime, I shall look closely in Hansard tomorrow at the assurances given by the Minister. I shall not press my opposition to the clause at this stage.
Clause 48 agreed to.
4.45 p.m.
Clause 49 [Minimum solvency requirement]:
The Deputy Chairman of Committees: I have to inform the Committee that if Amendment No. 145N is agreed to, I cannot call Amendment No. 145NA.
Lord Eatwell Lord Eatwell moved Amendment No. 145N:
Page 27, line 9, leave out subsection (1) and insert:
("( ) Every occupational pension scheme to which this section applies is subject to a requirement (referred to in this Part as "the minimum contribution requirement ") that the contributions paid to the scheme by the employer, after taking account of any members' contributions required by the rules, shall not be less than those which will be sufficient to meet the cost of providing benefits under the rules of the scheme for its members.").
The noble Lord said: In moving Amendment No. 145N I shall also discuss a series of consequential amendments—Amendments Nos. 145P, 145Q, 145R, 145S, 145T, 145TA, 145U, 145V, 145X, 145Y, 145YA, 145YB, 145YC, 145YE, 145YG, 163BA and 184G. Members of the Committee may have guessed by this time that this will be a rather wide-ranging discussion.
Perhaps I may remove from the grouping with which the Committee has been provided Amendments Nos. 145W and 145YH, which do not belong in the grouping and would be more appropriately considered later. I have given the Minister notice of my intention.
I must also apologise to the Committee for the introduction of a correction to Amendment No. 145N, of which I informed the Minister earlier today. In the final line of the amendment, as it appears on the Marshalled List, the word "active" should be removed so that the amendment applies to all members and not merely to active members of a scheme.
I shall turn to the full significance of Amendment No. 145N and the consequential amendments in a moment. However, I wish first to discuss the position which the Government have taken in this section of the Bill, which seeks to establish a minimum solvency requirement which must be met by appropriate schemes. This is a major innovation in the Bill. I suggest to the Committee that the Government have not got it quite right. I wish therefore to examine the rationale for a minimum solvency requirement (MSR) with some care, as well as the Government's attempt to establish an MSR as set out in Clauses 49 to 54 of the Bill before us.
I shall pose a number of questions to the Government in an attempt to discover the rationale of the approach they have taken in the Bill. I shall suggest that there are serious questions which need to be asked about the formulation of the MSR, questions so serious that they merit the Government taking away this section of the Bill and thinking again. I was intrigued to receive, just
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before I stood up to speak, a briefing from the National Association of Pension Funds which broadly supports the position which I take this afternoon.
The problem that the MSR seeks to solve is clear. It is a problem well worth solving, and the Government are to be commended for their attempt to find a solution, even though I believe that they have failed in the attempt. The problem is how to provide security for the members of an occupational pension scheme—whether pensioners, active members or deferred pensioners—when the employer who is the sponsor of the scheme becomes insolvent.
The answer which the Goode Committee provided to the problem, which the Government have accepted, is that the scheme should meet a minimum solvency requirement. The case put by Goode is as follows:
"Where there is a risk, however small, of the employer's insolvency, funding will meet the requirements of benefit security only if at all times"—
and I stress "at all times"—
"the assets of the scheme are sufficient to cover its liabilities … a minimum solvency standard [is required] in order to ensure that the rights of scheme members are adequately protected against the insolvency of the employer".
It is that point and the series of serious connected problems which arise that the Government appear to have failed to solve. The key to all the Government's difficulties is the fact that the solvency of a scheme on an ongoing basis and the solvency of the scheme on the basis of immediate discontinuance are totally different. The reason why the solvency of a scheme on an ongoing basis is different from a scheme on discontinuance is as follows. On an ongoing basis, the solvency of the scheme is defined by the relationship between the assets of the scheme and the projected benefits for service to date—its liabilities. The task of the actuary is to assess on the basis of reasonable probabilities the best mix of assets; that is, the best investment strategy to meet the liabilities of the fund.
Typically, such a strategy will involve a substantial investment in equities since the return on equities, although subject to fluctuation and therefore subject to some risk, has greatly exceeded the return on other financial assets over the past several decades. In fact, the Goode Report tells us that on average only about 11 per cent. of the assets of UK pension funds are held in gilts, and the remainder are primarily in equities with, of course, some cash. That is the ongoing evaluation. On the basis of immediate discontinuance, the solvency of the scheme is defined as the cost of buying an insured non-profit annuity for pensioners and deferred pensioners. Such annuities will provide an absolutely certain return compared with the probable, but not totally certain, return on equities. There we have a dilemma, with the ongoing scheme evaluated in terms of equity and the discontinuance scheme evaluated in terms of the insured non-profit annuity which gives certainty.
The Goode Report summed up the dilemma as follows:
"Schemes which are comfortably funded on an ongoing basis may well have insufficient assets to meet their discontinuance liabilities by the purchase of annuities. In an ongoing fund even sharp fluctuations on the price of equities at a particular time are of little

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significance, since values are based on the anticipated income stream of a notional portfolio over the life of the scheme. But where an ongoing scheme has to be valued for testing its solvency on a discontinuance basis, the relevant figure is the market value of the particular investments at the time of the valuation. If there has been a sharp fall in the market, the solvency of the scheme will be correspondingly reduced. At the same time, the cost of purchasing annuities is not responsive to variations in the market value of the equity-oriented portfolio of a typical ongoing scheme".
Added to the difficulty of the fluctuations of equity is the fact that the market for insured annuities is extremely thin and therefore the purchase is likely to be very expensive indeed.
Let us remember that the whole objective of the MSR is to ensure that schemes are solvent on discontinuance. It is a kind of snapshot test: at every moment those schemes must be solvent on discontinuance. Let us suppose that schemes were indeed required to be truly solvent—sufficient to purchase insured annuities which cover promised benefits (that is, to meet what I call the true MSR) —then, as Goode recognises, serious problems would be created for the pensions industry. The Goode Report states:
"[The true MSR] could force intrinsically healthy schemes to reduce benefits and increase contributions substantially in order to be able to meet liabilities on a hypothetical discontinuance which in the ordinary way would be very unlikely to occur. A scheme's investment managers might feel constrained to move from an equity-based to a fixed-interest or index-linked portfolio so as to be certain of covering its wind-up liabilities, with the likelihood that over the long term it would lose both income and the prospects of capital growth, and benefits would go down".
So there we have it: a true solvency—a certainty of solvency—will result in higher costs and lower benefits.
Given this major difficulty with the imposition of a true MSR, it might have been expected that the Goode Committee and the Government—they have followed broadly the approach of the Goode Committee in this matter—would have sought new ways to provide the security for pensioners which we all seek. But they did not. Instead of looking for new ways to solve the problem they decided to stick with the idea of the MSR and simply watered down the definition of solvency. Even this afternoon, the noble Lord, Lord Mackay, will move new amendments to the Bill on Clauses 50 and 51 which will yet further water down the strength of the solvency requirement. I believe that the result before us has all the disadvantages of the true MSR—higher costs, lower benefits—and few of its advantages. The MSR, as now defined, does not guarantee the solvency of a pension scheme. Yet it is likely to result in significant distortions of the investment strategy of pension funds to the detriment of employers and members.
How does the Government's minimum solvency requirement—I shall call it the false minimum solvency requirement—differ from the true insured annuity MSR? The Government have decided to define liabilities on the basis of the so-called cash equivalent of benefits of the pension fund, typically determined with respect to the interest on long-term gilts. At a later stage the Government weakened that position still further by permitting "very large schemes", as they called them, to evaluate 25 per cent. of their liabilities to existing pensioners with respect to the rate of return on equities—a rate of return typically higher than on gilts.
That further lowered the cash equivalence. However, the vital point to make is that that cash equivalence will not typically be enough to purchase an insured annuity. By that definition, the scheme will not be truly solvent. This is the first vital failing of the government scheme. On 8th December last year the noble Lord, Lord Mackay, wrote to my noble friend Lady Hollis in the following terms:
"Our original proposals envisaged that pensioner liabilities would be valued by reference to the returns on gilt-edged securities. This would provide a reasonable degree of assurance that if their sponsoring employer were to cease trading and the scheme be wound up, benefits could be secured through the purchase of insurance annuities".
I am afraid that that statement is simply false. It is made more false when the calculation of cash equivalence is weakened to include a notional equity return. That is the first major failing of the Government's proposals which must be corrected. The MSR does not guarantee solvency, and it is fundamentally misleading to suggest that it does. That point was made most forcefully at Second Reading by the noble Earl, Lord Buckinghamshire, who suggested, quite rightly, that the Government's requirement is not a minimum solvency requirement but a minimum funding requirement. The noble Earl said:
"It has never been a minimum solvency requirement".— [Official Report, 24/1/95; col. 1021.]
The noble Earl's position has been supported by the Institute of Actuaries and the Faculty of Actuaries. They have all said that this is not a minimum solvency requirement and it is misleading to call it so.
Have the Government made any estimate of the scale of the shortfall that their weakening of the minimum solvency requirement will produce? Can the Minister tell us what is the typical scale of insolvency which will result from the Government's minimum solvency scheme? At the very least, perhaps I may suggest that the Government must change the name of that requirement. The idea of minimum solvency creates a totally false impression. It will undoubtedly encourage some trustees to fund schemes in a manner which satisfies only the false MSR. That is the first major failing which I believe may well exist within the definition of the minimum solvency requirement.
The second major failing of the Government's false MSR is that it is likely to produce many of the undesirable changes in investment strategy—higher contributions and lower benefits—which the Goode Committee associated with the true MSR. The problem was pinpointed again by our local hero, the noble Earl, Lord Buckinghamshire. At Second Reading he pointed out that even the false MSR (as I have called it) as defined by the Government is likely to result in a major change in the pattern of investments from equities to gilts. That position is also supported by the CBI. That point has been reinforced by my conversations with an actuary responsible for a very large pension fund of one of Britain's biggest companies, who assured me that a significant switch in investment strategy in that fund would be necessary, with higher costs and pressure on benefits.
Have the Government made any estimate whatsoever of the likely change in investment patterns as a result of

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introducing their MSR? The Government have, I know, provided estimates of the cost involved in implementing the MSR. Therefore, because they have estimated the costs, they must have made some assumptions about the change in investment policy. What are those assumptions, and on what research findings are they based?
Moreover, have the Government made any calculations of the likely impact of the proposed contributions schedules on the investment patterns of schemes through time? If, for example, we suppose that the MSR as defined by the Government had been in place for the past 10 years, many of the country's well managed pension funds would have oscillated around the MSR, swinging wildly from 80 per cent. fulfilment in one year to 120 per cent. in the next year, as equity prices fluctuate. It is not at all clear that the Government's proposals for smoothing asset values will entirely take care of that problem. As the noble Earl, Lord Buckinghamshire, said at Second Reading:
"the requirement to certify a contributions schedule as sufficient to secure solvency over a prescribed period will be totally unworkable".—[Official Report, 24/1/95; col. 1021.]
That leads me on to the third major problem with the Government's proposals. Pension funds account for nearly half the equity investment in the UK stock market. A significant swing out of equity into gilts, even when extended over the transition period which is likely to follow the imposition of the MSR is likely to cause a significant fall in UK equities. It certainly will relative to the levels they would otherwise have obtained. Is that what the Government want?
Of course, the shifts into gilts will make it easier for the Government to fund their deficit, but surely the distortion of the equity and gilts markets is too high a price just to help pay for Mr. Clarke's profligacy. I am sorry, that was a cheap shot.
Let us get back to the serious business. We are distorting the structure of gilts in equity markets. What are the Government's estimates of the likely impact on equity in gilts markets? Surely, they must have made them if they are going to create that kind of distortion. What, for example, is the likely effect on the venture capital market, which is at the margin of more risky investment strategies and therefore likely to be the first to be abandoned? Yet it is the venture capital market that the Chancellor, by other tax concessions, has been trying to encourage, whereas the MSR will destroy it.
To sum up, it seems that the Government's proposed MSR is seriously flawed. It is not a solvency standard at all and it is misleading to label it so. It is likely to increase costs and reduce benefits of pension schemes. It is likely to cause macro-economic disruption. Surely that requires looking at again.
The amendment which I propose is, I confess, a tentative foray into that complex area. Nevertheless, I believe that it provides the skeleton of a truly viable alternative to the flawed minimum solvency requirement approach. I am quite ready to admit that some of the amendments within the group are not technically entirely satisfactory, but they are there to give the Committee and the Government an overall view of an
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alternative approach to this difficult problem. I am interested to see that the National Association of Pension Funds supports it broadly.
The essential idea is that the pensioner is best protected by the enforcement of best practice funding standards on an ongoing basis. If we examine the best practice UK pension funds, we find that they are well funded and are seldom likely to infringe reasonable solvency standards. We propose a minimum contributions requirement, the calculation of which is to be defined in regulations in line with the actuarial analysis of best investment practice in ongoing schemes.
Definition of the minimum contributions requirement in this manner will immediately overcome the problem of schemes being forced to adopt investment strategies which reduce benefits and raise costs. Moreover, it will catch those rogues whose contributions are too low—he main object, after all, of this entire exercise. Finally, it will greatly economise on actuarial effort, though perhaps lower some actuarial incomes. The actuary will be required only to perform the calculations associated with the best practice investment strategy which he or she should be making anyway.
Of course, it may be objected that, even in the case of best practice contributions and investment strategies, there may still be a risk that at any one moment in a fund with a large equity component assets will be insufficient to cover the benefits defined by the rules of the scheme, if that just happens to be the moment that the employer goes broke. That is the problem of the snapshot.
The way to a solution to the problem has been proposed by the noble Lord, Lord Mackay., in his letter of 8th December to my noble friend Lady Hollis. In it he points out that with respect to large schemes,
"such schemes, if their sponsoring employer went into liquidation, would have to run on as closed funds".
There is no mention any more of insured annuities. They would be run on as closed funds.
"They would have the administrative infrastructure to do so. They would, realistically, be able to run on … delivering pension benefits as they fall due—reliably and cost efficiently".
That is what the noble Lord, Lord Mackay, wrote. If that is right, why are we making all this fuss about cash equivalents and wind-up values? If the Government see the schemes of defunct employers as ongoing, why are they then not valued on an ongoing basis?
Actually, I am not as confident as the noble Lord, Lord Mackay, that trustees would always be willing to take up the long-term responsibilities for a closed fund which may extend way beyond the collapse of a firm. Be that as it may, the Minister has opened up an important aspect of a fruitful approach to the problem of pensioner security, for what is true for large funds can be true for small funds too. All that is necessary for the smaller funds is that they be grouped together as closed funds, combined in a central discontinuance fund.
The Goode Committee examined the possibility of establishing a central discontinuance fund and rejected it. I must say that I find its arguments rather unconvincing. Its main objection was that the fund, by adopting an ongoing investment strategy with a significant equity component, would necessarily have

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some risk attached to it. That is true, but if the fund is taking over schemes which have obeyed the best practice minimum contributions requirement and itself obeys the minimum contributions requirement, the risk would seem to be minimised, as Goode admitted; and, as the noble Lord, Lord Mackay, confidently says in his letter, the schemes will be run "reliably and cost efficiently".
Have the Government studied seriously the possibility of establishing a central discontinuance fund? Have they studied the experience of the Pension Benefit Guaranty Corporation in the United States which does that job? If so, what are their conclusions?
I am well aware that even a well-run central discontinuance fund must have an ultimate guarantor if risk is to be entirely eliminated. That could be achieved by a very small levy on existing funds, rather like the bonding scheme for travel agents. Will the Government give serious consideration to the establishment of a central discontinuance fund?
Finally, our proposal for the minimum contributions requirement has another important advantage. At present all money purchase schemes impose all the risk on the employee, since there is no defined benefit and, therefore, there can be no notion of funding or solvency. With best actuarial practice defining minimum contributions requirements for defined benefit schemes in the way that I have described, the regulator could determine a reasonable average of the minimum contributions requirement which would then be applied to money purchase schemes. Those would be the normal best practice contributions made. The employer would be required to make the minimum contributions, but would still, of course, enjoy the advantage of the absence of risk.
I apologise for taking so much of the Committee's time over the issue, but the minimum solvency requirement is a central part of the Bill and distorts and deforms aspects quite far distant from these clauses in the Bill. I believe that we must pursue two separate but equally important tasks in the discussion of the amendments. First, the Committee must subject the Government's proposals to careful scrutiny, which I believe that they desperately need. In that sense, this is a probing amendment. It seems clear that the watered down minimum solvency requirement that we have at the moment is the worst of all worlds. Secondly, I hope that the Committee will be ready to consider the broad brush merits of the alternative approach to pensioner security by means of a minimum contributions requirement, which I have proposed. I beg to move.
Lord Ezra: As the noble Lord, Lord Eatwell, said before he sat down, this is perhaps one of the most crucial elements in the Bill that we are considering. We are indebted to him for the clarity with which he has set the scene. In my opinion, he has made it much easier for us to debate the underlying issues of this very complex matter.
The noble Lord identified three issues about which many of us were concerned. We expressed that concern at Second Reading. The noble Lord referred in particular
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to the noble Earl, Lord Buckinghamshire. On this side of the Committee we have been most anxious about the way in which the modified MSR, which the Government introduced following the Goode Report, gives and could give a misleading impression to members about solvency which might not exist in the strict meaning of the term. We feel that either the word "funding" or "contribution"—or some other term—should be introduced. That is the first issue to which we should put our minds.
The second issue of concern—my noble friend Lady Seear emphasised this point in her Second Reading speech—was that the way in which this provision is to operate under the Government's proposals could lead to a fundamental shift from equity to gilt investment. The repercussions of that could go way beyond the pension funds themselves. It could have a major economic impact on the country at large. The massive contribution that pension funds make to equity investment is of vital importance. It should not be any part of the Bill to diminish that. On the contrary, it would be better if it could be increased. That is another aspect.
The third aspect mentioned by the noble Lord and which I thought very interesting was the possibility of a discontinuance fund. If we limit the burdens on employers, as we are trying to do by not having them over-fund the schemes in order to meet the minimum solvency requirement, there must be some safeguard. That safeguard, particularly for smaller firms, could well be a discontinuance fund.
The noble Lord set the scene for three vital aspects of this clause which merit very detailed consideration. I am glad he said that his amendment is basically a probing amendment. I believe that the Committee will have many views on it. I am much obliged to him for the way in which he introduced this part of the debate.
5.15 p.m.
The Earl of Buckinghamshire: I almost blush to hear the references to myself. I particularly liked the reference to being the local hero. I wish that I had the same returns on my investments as the film of that name produced. I should also like to thank the noble Lord, Lord Eatwell, for an extremely thorough resume of the situation facing the Government and everybody in the industry. His was an interesting and extremely innovative approach which has considerable merit. At this point I should say that Hansard will probably come back and bite me at the next meeting of the Committee or at Report stage. Nevertheless, I feel that it was an extremely interesting and innovative approach.
I have a twofold difficulty with this provision. First, I feel that members have a real expectation that promises will be met. That point was very adequately covered by the noble Lord. Members cannot understand why a scheme which is solvent on an ongoing basis should suddenly become insolvent on wind-up. Being very sympathetic to that view, I can quite understand why they think in that way: the situation does not seem very rational. If I understand him correctly, the noble Lord, Lord Eatwell, suggests that a way round that difficulty might be a central discontinuance fund, as in the United States. I thought I had heard a whisper that

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the fund was going bust but that can be verified; my American friends will take me to task if that is not true. However, I should like to have a response from the Minister on that point.
With regard to this being a flawed MSR, my comments at Second Reading did not imply that it was flawed but simply that the wrong word was used. The word should be "funding" instead of "solvency". I did not say that it was flawed. If I did, I should like to take that remark back—at least a little bit.
I feel that perhaps I owe my noble friend the Minister an apology in that I did not bring forward an amendment at this stage to deal with the wording: "solvency" or "funding". I am afraid that the parliamentary draftsman who is helping me on this matter just ran out of steam in view of all the other amendments that we are having to put forward.
There is another issue. We have quoted the professions—the actuaries—and their views. I recall that the noble Baroness, Lady Hollis, spoke at Second Reading about a well known firm of actuaries who said that the Government's new MSR was totally meaningless or ineffectual. I am sure that that can be checked precisely in Hansard. Interestingly enough, I have another quote from the same firm of actuaries, but probably from a different actuary, to say:
"Little by little the solvency proposal is being turned into something sensible and practical".
That tells me that this is an immensely difficult issue on which there will be possibly no common agreement as we move forward.
In conclusion, I believe that the proposals put forward should be considered by my noble friend the Minister. The question of the MSR, which will be debated with other amendments, particularly in the amendments of the noble Lord, Lord Marsh, may have a greater impact than we anticipate. It may be that we do not welcome the impact because of the implied switch from equities to gilts. But that is something that we still need to see. We do not know what will happen as MSR comes into application.
Lord Mackay of Ardbrecknish: As the noble Lord, Lord Eatwell, acknowledged, this is a very complicated issue and yet a very important one. I apologise in advance to the Committee because I shall speak at some length. The subject is serious enough for me to try to address two matters in the course of my response. First, I want to give my views on the minimum contribution requirement outlined by the noble Lord, Lord Eatwell. At the same time I shall try to explain the reasoning behind the minimum solvency requirement and respond to some of the questions and criticisms which have been raised in that regard. Perhaps the easiest matter to respond to is the point made by my noble friend Lord Buckinghamshire about "funding" or "solvency". That is a well balanced argument and I look forward to whatever amendment that he decides to table.
I shall start by looking at the group of amendments which would introduce the minimum contribution requirement. The noble Baroness, Lady Hollis, said at Second Reading that the Opposition would:
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"seek to ensure that minimum solvency means — the ability to secure the pension promise".— (Official Report, 24/1/95; col. 981]
We have here a confusing combination of the proposed minimum contribution requirement and the minimum solvency requirement. But I accept that the noble Lord, Lord Eatwell, indicated that this was by way of probing this specific issue and he was putting forward his suggestion as an alternative to give us, so to speak, something to chew on.
If we look at the minimum contribution requirement, it seems that schemes will be required to pay contributions at a level that would enable them to meet members' benefits. However, given that that is essentially an ongoing funding standard, I was puzzled by the proposal that when producing actuarial valuations and certificates, the actuary will be required to certify that the value of the scheme assets will at least equal the amount of scheme liabilities. While we all agree that we are not exactly up to the high standard of actuaries and actuarial science, it is surely the basic premise on which an ongoing funding standard is founded that the scheme does not need to hold a level of assets that is equal to its accrued liabilities; rather it need only ensure that at some future point in time there will be sufficient assets to meet its future liabilities.
The proposed minimum contribution requirement appears as a curious hybrid of an ongoing funding standard and a minimum solvency test. But I believe also that those proposals would undermine one of the central recommendations of the PLRC report and disregard the fundamentally important point that secure pension scheme funding must provide for rights accrued under the scheme. I am convinced that a measure of solvency that does not address the position of the scheme on discontinuance in some way will not be providing members with adequate security in the event of the scheme being wound up.
The overwhelming argument in favour of a minimum solvency requirement is that if an employer undertakes to provide a pension promise the scheme should be able to secure that promise at all times, especially in the event of the scheme winding up. It is at that time that the members' position is most vulnerable. A minimum solvency requirement should ensure that, irrespective of what happens to the sponsoring employer, the fund will have enough money to meet the value of members' accrued rights which will therefore be protected.
But security has a price and one of the major considerations in deciding the appropriate method of calculating the minimum solvency requirement has always been the need to maintain a balance, to improve security, but avoid creating undue cost for employers. Some commentators on our proposals have taken the view that the minimum solvency requirement should provide an absolute guarantee of security for members at all times. But it is simply not possible, either practically or economically, to require ongoing pension schemes to fund at a level that will enable them to buy out all the liabilities with non-profit annuities. For many schemes the cost would be prohibitive. 'We must also recognise that, because of the size of some pension

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schemes, there would in any case be insufficient capacity in the insurance market to absorb them, even if that were financially possible.
Nor is it possible to use the cost of annuities as a way of valuing pension scheme liabilities. Larger schemes simply cannot get quotes. Against that background the Pension Law Review Committee realised that the cost of deferred annuities was an unrealistic measure for evaluating non-pensionable liabilities and proposed that actuarial valuations should be used instead. It therefore recommended a cash equivalent approach which produces an amount equivalent to the value of the assets the scheme would need to hold to pay the members' accrued benefit. The cash equivalent is, of course, the basis of the transfer value that a scheme would pay for an early leaver moving to another scheme or indeed to a personal pension.
We listened carefully to the representations about the original PLRC proposals. The White Paper announced modifications developed in consultation with the actuarial profession. This method uses the cash equivalent approach for all members. It is based on rates of return from investment in equities for non-pensioners moving to a gilts base for those approaching retirement and for pensioners. An expense allowance will also be added which will be weighted to reflect either the cost of the scheme running off pensioners' liabilities in a closed fund or of buying out an insurance annuity. We also accept the PLRC proposal that assets should be valued by reference to market values.
A consultation exercise was held to test the impact of introducing the minimum solvency requirement on the basis set out in the White Paper and we received nearly 500 responses. The results indicated that the vast majority of private sector defined benefit schemes-86 per cent. of those who participated—would meet the minimum solvency requirement; almost all schemes-96 per cent. —were more than 90 per cent. solvent. Most of those schemes would be less than 100 per cent. solvent on the basis of the proposed minimum solvency requirement and in fact regarded as being funded on an ongoing basis. Nevertheless, on the basis of further analysis and in response to detailed comments made, the Government have already announced three important changes to the original proposals. Though they will be set out in regulations, I hope that it will be helpful if I describe them now.
First, we fully accept that a calculation of asset values should be smoothed over a number of months. That position responds to concerns that the original proposal to value assets at market prices on a particular date could have left schemes vulnerable to short-term movements in the market. Secondly, we also accept that the time limits originally proposed for complying with the minimum solvency requirement —three months to attain 90 per cent. and three years to attain 100 per cent. —should be extended. Those time limits are contained in Clause 51 and no doubt we shall come to that later.
Thirdly, we also accepted that the larger defined benefit schemes should be able to value a portion of their pension liabilities by reference to equity returns.
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That would apply to pensioner liabilities due beyond the next 10 or 12 years. That modification in respect of larger schemes recognises that such schemes would be unlikely to wind up if the sponsoring employer went into liquidation. In practice, they would have the necessary economies of scale to allow them to run on most cost-effectively as a closed fund, delivering pension benefits as they fell.
The modification valuation method will apply, as I said, only to larger schemes which would be unlikely to wind up if the employer became insolvent. We were sensitive to the argument that requiring all pensioner liabilities to be valued by reference to gilt returns would have been both impractical and unnecessarily restrictive for the very large schemes. It was also important that we should directly address concerns that the MSR would precipitate a switch of pension fund investments from equities to gilts, which both noble Lords opposite who spoke mentioned. Extending time limits for restoring solvency and smoothing the valuation should reduce volatility in contribution rates and avoid schemes unnecessarily having to inject funds into a scheme due to short-term market fluctuations.
Perhaps I can turn at this point to the estimate which I was asked about directly by the noble Lord, Lord Eatwell, and perhaps in more general terms but certainly expressing his concern, by the noble Lord, Lord Ezra. I refer to any estimates that we have made of any scale in investment shifts. We made a detailed actuarial assessment of the scale of any potential shifts from equities to gilts as a result of the MSR. We published our conclusions in the compliance cost assessment which was published with the Bill and we believe that the overall impact will be modest. Over the next 12 years, which is the period until the MSR is fully in force, we foresee a shift of between £5 billion and £12 billion from equities into gilts. That is contained in the table at paragraph 36 of the compliance cost assessment, which shows, looking forward, how we see the shift. If Members of the Committee were to look at the table they would see that what shift there is, given an optimistic and conservative range, is modest over the long timescale. I hope that drawing attention to the table will help allay Members' understandable fears about an unnecessary shift from equities into gilts.
We recognise that some schemes are underfunded against their own funding targets and may need to increase their contributions; some funds may need to adjust their funding targets to comply with the new minimum solvency test. There will be a transitional period of five years, as recommended in the PLRC report, before the provisions come fully into effect. Taking account of the modifications to the valuation method and time limits, we estimated again in a compliance cost assessment—I believe this answers the point made by the noble Lord, Lord Eatwell—that employers may need to invest an additional £300 million to £400 million per annum in their pension funds over the 12 years until the minimum solvency requirement is in place. We believe that on balance those proposals should ensure that the minimum solvency requirement will deliver an appropriate level of security for members without imposing unnecessary costs on employers.

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I have argued in favour of the minimum solvency requirement as laid down in the Bill. Perhaps I may go a step further and argue that I believe it is important that any basis for assessing scheme solvency should be consistent. Returning, if I may, to the minimum contribution requirement, which the noble Lord, Lord Eatwell, proposes as an alternative to the minimum solvency requirement, I do not believe that it appears to meet the objective of being able to be applied in assessing scheme solvency in a consistent way. The wording of the proposed test that the actuary would apply when certifying the schedule of contributions as adequate to meet the minimum contribution requirement would be that contributions were "fair and reasonable in all the circumstances". I imagine that the noble Lord, Lord Eatwell, might say that that wording might be improved on or worked on. But "fair and reasonable in all the circumstances" does not suggest to me an objective and consistent evaluation basis. It is by no means clear—it would have to be clear—what measure of security such a requirement would afford scheme members.
I was further puzzled by Amendment No. 163BA which would seek to apply the concept of the minimum contribution requirement to money purchase schemes. That would have the effect of requiring employers who run money purchase schemes to pay a minimum amount into the scheme based on targeting a particular level of benefit. If anything, that appears even more inappropriate for money purchase schemes. Indeed, it is hard to see how such schemes could continue to be called money purchase if such a requirement were to be imposed. The liability of an employer who runs a money purchase scheme is to make a defined level of contributions to the scheme. Those contributions, along with any made by the employee and the investment return on the contributions, determine the benefits provided by the scheme. It is an important part of our proposals for the minimum solvency requirement that schemes should be required to disclose full information to their members about their funding adequacy by reference to the MSR. We shall be returning to that issue later.
With regard to Amendment No. 145YE, I should point out that the schedule of contributions will be a working document which may contain very detailed information. When I asked about that I was threatened with complicated computer print-outs. Some of that could be of a sensitive nature relating to both the financial position of the scheme and of the employer. It would not be appropriate to make that generally available, nor would it convey the kind of information concerning scheme solvency that members require. The key point is that trustees will be required to inform members if the contributions are not paid in accordance with the schedule and to disclose the regular solvency certificates.
It appears to me that the minimum solvency requirement which we propose will afford scheme members a much greater level of protection than would be provided by the minimum contribution requirement proposed in these amendments. In Amendment No. 145TA, the noble Lord, Lord Eatwell, proposed, as an
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alternative method of providing security for accrued rights in the event of a scheme wind-up, a central discontinuance fund. He prayed in aid American experience. My noble friend Lord Buckinghamshire promptly suggested that there may be some doubts about that. That will be something interesting for us all to try to find out tomorrow. The PLRC concluded, in looking at a central discontinuance fund, that it would not be a viable solution to the problem of discontinuance. The Government have accepted that view and continue to believe that such a fund will not be needed under our proposed minimum solvency requirement. Such a fund would be complicated to operate. Almost all variations of the proposals would require the fund to be underpinned by a guarantee from either the Government—other taxpayers—or from other pension funds. I do not believe it would be appropriate to ask either of them to take on an open-ended commitment of that nature.
We are introducing a new power to enable trustees to secure benefits on wind-up by providing members with a cash value of accrued rights. Where a scheme is funded only at the level of minimum solvency requirement, the calculation for this will be that used for calculating liabilities for the minimum solvency requirement. Other schemes that would not wind-up in the event of employer insolvency will run off as closed funds.
We believe that our provisions, together with the proper operation of the minimum solvency requirement, will substantially reduce the likelihood of schemes winding up in deficit. The central discontinuance fund is therefore neither necessary nor appropriate.
I think I have covered all the main points. Perhaps I may be allowed to try to sum up what we believe the package of measures in the Bill will do and against which the alternative proposal of the noble Lord, Lord Eatwell, has to be judged. First, it will give a new measure of security to scheme members by ensuring that schemes are adequately funded to provide at the least the cash value of members' accrued rights in the event of the scheme winding up. Secondly, and no less importantly, it will provide an objective benchmark for setting contribution levels. Thirdly, coupled with the requirement to maintain a schedule of contributions, it will provide a focus for trustees in monitoring that contributions have been paid at an appropriate rate and by the due date. Finally, it will provide a benchmark for calculating compensation.
I have little doubt that all our words of wisdom will be pored over in Hansard tomorrow by the people who understand all these matters. Our debate about the minimum solvency requirement, the minimum contribution requirement and the central discontinuance fund has been useful. I believe that what we propose is still the better of the two options—one from myself and one from the noble Lord, Lord Eatwell—before us.
Baroness Seear: I speak as a fool in these matters in comparison with all the experts around the Committee. We were very much concerned with the minimum solvency requirement and both the noble Lord, Lord Ezra, and I were extremely impressed with the proposals

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put forward by the noble Lord, Lord Eatwell. The Minister, who had his defence ready before the noble Lord, Lord Eatwell, spoke—who can blame him for that on such a subject—never really grappled with the points put forward by the noble Lord. Do I have it aright that the central problem is that, in order to maintain sufficient funding to meet a bankruptcy in the scheme, more has to be paid into the scheme than is necessary for the scheme, which is not going to go bankrupt and which has to meet ongoing payments in retirement? That is the centre of the matter. More money is being paid in than is necessary to meet the unlikely event in the vast majority of cases that the scheme will go bankrupt.
From the employer's point of view that cannot be desirable. The Minister cannot possibly want companies to have to pay more in than is absolutely necessary. This is where we found the idea of the discontinuance fund extremely encouraging. It seemed a valuable device to help meet the problem of bankruptcy, which would therefore make unnecessary the additional funding which the schemes would have to make under the Minister's programme, which is over-insurance against an event that is very unlikely to take place. Surely from everyone's point of view this is a desirable development.
The Minister said that someone would have to back up the discontinuance fund because there might not be enough money in it. He asked why the taxpayer should do it. That is open to argument. Some of us might want at least to discuss a contribution from the taxpayer. But if one does not like the taxpayer's contribution, there is the example of what happens in the travel industry when travel agents get together to deal with bankruptcy. It is already done in the private sector. We are going to ask them to do that in relation to compensation. Why on earth can we not do it in order to deal with the backing up of the discontinuance fund which will make unnecessary these excess payments which the government scheme will require, as the noble Lord the Minister made clear?
I do not claim to have any knowledge of these matters, but I would like the points put forward by the noble Lord, Lord Eatwell, to be answered by the Minister and for the matters to be discussed far more fully.
The Earl of Buckinghamshire: After 55 minutes I hesitate to speak for the second time. There are some real problems with the discontinuance fund. One is entering into the realm where actuaries will be forced by regulation into adopting standard funding assumptions over all the schemes and every scheme has a different profile. That would not be the correct way to go forward. In any case the actuaries would fight the proposal all the way without my help.
If there is to be a discontinuance fund there will be a move to additional regulation and standard funding assumptions so that all schemes never effectively run the risk of going into insolvency. One is therefore back to square one. I found the contribution made by the noble Lord, Lord Eatwell, extremely interesting and innovative. I recognise it because the actuaries I work
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with employ the same mechanisms at the moment in most of their schemes for the standard contribution rate findings. It is inevitable that if one goes down that route one still has to return to some form of minimum funding or solvency requirement.
As I said, members have an expectation that their rights will be met in full. As I also said, they do not understand ongoing insolvency and insolvency on wind-up. I believe that the noble Baroness, Lady Turner, will be moving an amendment on MSR and reverting it back to the Goode standard. She will put me right if I am wrong about that. We have the interesting concept of a contribution-based standard which ought to be in place in schemes in any case. Later, we shall have a debate on the standard MSR assumptions in any event. There will be other variations which the noble Lord, Lord Marsh, will be speaking about and I shall be supporting them. I do not believe that we are going to make much more progress on this matter. As regards the discontinuance fund, I believe that there are major problems if we go down that route.
Lord Desai: The noble Earl is very knowledgable on these matters. If one has a central discontinuance fund which is financed by other funds there will be risk-pooling. There will be difficulties in calculating the extra sum required when pooling the risks. The noble Earl was making the point that the actuaries may have a great many problems calculating the figures.
I am puzzled that risk-pooling is not cheaper than asking every pension fund to have its own minimum solvency requirement. It seems to be counter-productive. If risks are pooled by the pension funds and not the taxpayer—because the Minister does not want the taxpayer to be disturbed—why cannot it be cheaper than if every pension fund separately bears the cost of meeting the minimum funding requirement?
I am still not convinced that the point made by my noble friend Lord Eatwell about disturbance to the equity market has been adequately dealt with. The Minister said something about it. I believe that my noble friend was on the right lines. The Government are saying that an extra £300 million to £400 million will have to be put in to meet the minimum solvency requirement. The manner in which it is injected will cause a massive shift in the equity as against the gilts market. Have the Government worked out the consequences of having a depressed equity market? It is a serious problem. There will be consequences not only for pension funds but also for the financing of industrial investment in this country. These aspects go beyond technical issues of calculating fund assets and liabilities. It is good that we are having this discussion; we should pursue it further.
5.45 p.m.
Lord Monkswell: There has been discussion about funding the minimum solvency requirement on the basis of cash injections from the firms themselves or from some form of insurance scheme. Over time there is another possible source of funding; namely, the pension fund surpluses which arise from time to time at the other end of the equity market of peaks and troughs. That is

829
not being taken into account. I hope that the Government recognise that the main problem we are concerned with is government constraints in terms of the minimum and maximum funding of schemes in a narrower band than the variations in the value of the scheme assets. That can come about because of variations in the equity market.
One way of resolving the problem is for the Government to increase the range of the bottom and top levels of the scheme funding. The pension fund surpluses which are currently required to be disbursed to employers—or through pension fund holidays to employees—could be retained in some form so that they can balance deficits which require injections of funding to make up the minimum solvency requirement. That mechanism could be used.
There would be a secondary beneficial effect in the trigger for the minimum solvency requirement or the minimum funding requirement, whatever the terminology. There is going to be some mechanism for extra funding to be injected into pension schemes by companies. Generally speaking, that cash injection will be at the downturn of the economic cycle when the value of equities is very low and therefore does not meet the liabilities of the scheme. The implication is that finance has to be taken out of the economy and injected into the pension funds at exactly the wrong point in the economic cycle.
The corollary is almost completely true as well in that at a time when equity markets are high and, generally speaking, there is a high degree of economic activity, pension fund surpluses have to be disbursed because of Inland Revenue rules. Effectively, that injects more cash into the economy and generates more economic activity. That overheats the economy. The Government should think of smoothing over those cycles. They should enable pension fund surpluses at times of high equity valuation to be retained in some form. They should be held in some kind of separate account if necessary and used to make good the deficit in the minimum solvency requirement at the downturn of the equity market. Will the Government comment on that proposal?
Lord Mackay of Ardbrecknish: I have stood at the Dispatch Box almost long enough in this debate. I wish to study what the noble Lord, Lord Monkswell, said before I reply in more detail. I hope that I did answer his noble friend Lord Eatwell about the equity and gilts balance by drawing attention to the table at paragraph 37 of the compliance cost analysis.
The noble Lord, Lord Desai, and the noble Baroness, Lady Seear, seem to be attracted to the central discontinuance fund. I am not entirely sure about that. The noble Lord, Lord Desai, seemed close to suggesting some kind of national occupational pension scheme into which other pensions schemes would become subsumed. I caution Members of the Committee against being too attracted to that idea. If one thinks about it, one realises that the schemes transferred to the discontinuance fund could have many different rules and regulations. Indeed, they could have different benefits. Would the discontinuance fund pick up the benefits as per each scheme or would it attempt to rationalise the benefits?
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If it picked them up as per each scheme, it would be rewarding some schemes and, when it came to asking for the money, it would perhaps be damaging some other schemes.
Employers might be annoyed because they would have to make provision for the discontinuance fund calling on them. If they thought that they ran a good scheme, they might become annoyed if they were constantly called upon to bail out the lesser schemes. We shall do something about that in relation to schemes failing because people have acted illegally, but one is getting into difficult territory if one widens the scope.
I am not an expert on this, but I think that there would be a real temptation for schemes to sail close to the wire—if I heard the argument of the noble Baroness, Lady Seear, correctly—because they would know that they had a back-up if they wobbled on to the wrong side. I remind the Committee that there is a pension promise to each scheme. There is a promise with regard to the contributors and a promise for when members of the scheme become pensioners.
With those few additional thoughts, I hope that I can leave the matter. Clearly, this has been an interesting debate. Now that the noble Lord, Lord Eatwell, has fleshed out his ideas a little more, I can assure him that we shall study them. However, I should not like to give the noble Lord even a glimpse of a hope in relation to the amendment. Although we shall certainly study his comments, we are certain that what we propose is the best way to proceed in this difficult area. We all want to do the same thing. We all want to give solid security to scheme members—I thought that the noble Baroness, Lady Seear, was beginning to take the employers' side when she intervened—but at the same time, we want to ensure that employers will not be put off such schemes, which we all agree are an excellent way for people to provide for their retirement.
Lord Eatwell: I was delighted to hear the Minister say at the end of his summing up that he is confident that he is right. I am not sure that anybody else, having considered all the complexities of the issues, is willing to be totally confident on that. Certainly, I am not.
In proposing the amendments I have simply attempted to present the considerable difficulties that are raised by taking a snapshot approach to the minimum solvency requirement. The reaction to those difficulties, which have become evident since the Goode Report, has been to attempt to water down the solvency requirement precisely because of those enormous difficulties. We have seen the watering down which the Minister described in his reply, and we shall hear about other attempts to rectify the distortions that are created by the minimum solvency requirement when the noble Lord, Lord Marsh, moves his amendments later.
I entirely agree with the Minister that we are all on the same side. This is not a political issue. The noble Baroness, Lady Seear, was right that if an ongoing approach could be found to work, instead of the snapshot approach, that would save employers an enormous amount of money. And who is trying to recommend that ongoing approach? The TUC. It is trying to save employers an enormous amount of money

831
in this respect because it recognises that it would be beneficial to the operation of the economy as a whole, to the general prosperity of us all, and consequently to levels of employment.
I should like to refer briefly to two of the Minister's comments. With respect to our suggestion that one of the virtues of the minimum contributions requirement is that the notion of a minimum contribution could consequently be applied to money purchase schemes, the Minister argued that money purchase schemes would then have to have a defined benefit. I am afraid that the Minister entirely misunderstood me. Any money purchase scheme will have a contribution made by the employer. My amendment merely creates the notion of a minimum contribution which the employer has to make. I am afraid that whether the money purchase scheme performs well or badly is a risk that the pensioners have to take.
There has been some discussion about the central discontinuance fund. I am interested to discover that one operates in Finland with, I am told, considerable success. That is in addition to the fund in the United States. No doubt in the next few weeks we can trawl around, find some more and see how they work. However, I stress that the idea of trying to secure ongoing protection is exactly the idea which the Minister is supporting. Large pension funds become closed pension funds on the insolvency of the employer, for they are then maintained on an ongoing basis. The central discontinuance fund is designed precisely to gather together the small funds which could not then be left when those employers happen to become insolvent.
We have had an enormously interesting debate. We all need to go away and ponder these issues further. Editions of "Teach Yourself to be an Actuary" will become even more well thumbed than they are already. We shall return to these issues on Report and at Third Reading because, if we get this wrong, it will affect all of us for a long time to come. It may well be appropriate to take longer to consider this part of the Bill and not be so concerned to finish our consideration of it within the next couple of months or in this parliamentary Session. It would be much better to get right such major provisions that will affect our pensions over a long period.
Therefore, I urge the Minister to reconsider. I urge him not to be too confident, but to look at the possibilities and the alternatives and to consider adopting an "ongoing" rather than a "discontinuance", "snapshot" approach. In the meantime, however, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 145NA:
Page 27, line 11, leave out from ("("requirement")") to end of line 12.
The noble Baroness said: It is with some trepidation that I come to the Dispatch Box to move this amendment after the erudite presentation by my noble friend Lord Eatwell. He convinced me that he was on to
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something and that his ideas in this area are innovative. I am glad that the Minister said that he will look carefully at what has been said.
When I drafted my amendment I was not sure whether there would be much acceptance from the Minister for what my noble friend suggested so I proceeded to table an amendment, the object of which is to include in the legislation precisely what the Goode Committee recommended. As we all know, the Goode Committee spent a lot of time considering minimum solvency standards and eventually came down in favour of trying to devise such a standard. The committee considered whether there was a need for that and how best it could be achieved. Eventually, it produced the proposition that is contained in my amendment—briefly, that the liabilities for which schemes should be required to meet the minimum solvency requirement are the sum of cash equivalents, calculated on the same basis as for an individual transfer value for active and deferred members, and the cost of immediate annuities for pensioners. It further suggested that the Government should give further consideration to the issue of a new type of security which could provide more appropriate backing for schemes' indexed liabilities. Furthermore, as the Minister has already said, the committee proposed a five-year transitional period to allow schemes to achieve the appropriate standard.
I know that unions representing the interests of members in occupational schemes did not think that the Goode test was good. I am sure that they prefer the contributions test proposed by my noble friend. Nevertheless, the Goode proposition has been watered down by the Government. We have already heard that many actuaries are not happy about what is proposed since they will be required to sign certificates signifying that the minimum solvency standard has been met, and it may well have been, but that will not necessarily mean that the scheme is solvent. So members will have been given a false sense of security. It is for that reason I think that the noble Earl, Lord Buckinghamshire, suggested that it be called a "minimum funding test" rather than a "minumum solvency standard". I hope that the Government are prepared to consider that argument because I should think the last thing we want to do is to give members of schemes a false sense of security.
The Minister is right—Members on all sides of the Committee have said this—there is not much difference between us. We all want to achieve a situation in which members of schemes feel that they have that degree of security. We all know why many of them do not feel that now. We want also to ensure that we maintain the right balance. The Minister has often referred to the necessity of striking the right balance. We on this side of the Committee acknowledge that too. We know that in addition to assuring the membership of a sense of security, we have also to have the type of situation which will not be so off-putting for employers that they cease to provide final salary provision for their employees. It is a fine balance that we need to strike.
Nevertheless, we believe that it is necessary to have an improvement in the solvency standard which the Government have in mind. For that reason, I have drafted an amendment which follows absolutely the line

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of the Goode Committee. It reached that decision after a great deal of discussion and after detailed examination of the issues. I hope that the Government will be prepared to reconsider what they are proposing and in this instance support entirely what the Goode Committee recommended. I beg to move.
6 p.m.
Lord Mackay of Ardbrecknish: As the noble Baroness said, the amendment would provide that the method of calculating the minimum solvency requirement was along the lines of that proposed originally by the Goode Committee. We are now moving in a direction opposite to the one in which we were being tempted to move on the previous amendment. Since the Goode Committee proposals were published, we have received various representations that they would be impractical to operate and would have imposed unnecessary costs on employers.
Very serious concerns were expressed that such a valuation basis would have led to volatility in the solvency requirement arid could have precipitated a substantial shift out of equities. That was one of the key points of the previous debate. It was recognised almost universally that not only would that impose damaging costs on employers; it would ultimately be against the interests of scheme members. Commentators also pointed out that because of limited capacity in the immediate annuity market, the proposal to value pensioner liabilities by reference to immediate annuities was not feasible.
In the White Paper we therefore proposed a number of modifications that were developed in consultation with the actuarial profession. That method uses the cash equivalent approach for all members, but would require the cash equivalent for non-pensioners to be valued by reference to the rates of return from investment in equities, moving to a gilts base for those approaching retirement and for pensioners. An expense allowance will also be added. We have been over some of this ground, and I apologise because we are talking about fairly closely related amendments. We took a decision on the basis of further analysis and more detailed comments that we should move to a slightly different position, which I have described. But because the noble Baroness is inviting me to go back to the original Goode, it is only fair that I encapsulate quickly where we have agreed to move to.
We have accepted fully that the calculation of asset values should be smoothed over a number of months. We accepted also that the time limits of three months and three years proposed originally be extended. We shall come to them when we reach Clause 51. We accepted also that the larger defined benefit schemes should be able to value a portion of their pensioner liabilities by reference to the rates of return on investment.
I know—I believe that this is the burden of the noble Baroness's argument—that some commentators have suggested that these modifications represent a weakening of member security. We do not accept that view. We were sensitive to the argument that requiring all pensioner liabilities to be valued by reference to rates
834
of return on gilts would have been both impractical and unnecessarily restrictive for the very large schemes. It was also important that we should address directly concerns that the minimum solvency requirement would precipitate a switch in pension fund investment from equities to gilts. Extending the time limits for restoring solvency and smoothing the valuation should reduce volatility in contribution rates and avoid schemes unnecessarily having to make injection of funds into a scheme due to short-term market fluctuations. We believe that that is important.
The valuation basis proposed by the noble Baroness, and originally proposed by Goode, is unnecessarily tough, and the basis that we now propose delivers an appropriate level of security for scheme members without imposing unnecessary costs on employers. I suspect that part of my contribution in response to the noble Baroness's noble friend Lord Eatwell also explained why we have moved from the Goode Committee's original proposals. I hope that with that explanation she will withdraw the amendment.
Baroness Turner of Camden: I thank the Minister for that detailed explanation. Of course some of it was dealt with during the course of the debate on the amendment moved by my noble friend Lord Eatwell. I put the amendment down originally because strong representations were made to me, mainly from unions, that in their view the minimum solvency standard proposed by the Government was not much of a security; in fact it was even suggested to me that they would be better off without it because the impression given to members would be that there was a great deal more security available to members than there actually was. To that extent, they were supported by a number of members of the actuarial profession, who, as I have already said, proposed that it should not be called a solvency standard but a minimum funding requirement; that would reflect more truly what it is.
There is still a great deal of concern, despite the Minister's explanation, that the minimum solvency standard that the Government have in mind will not be adequate to provide the necessary security for members—or is it a genuine solvency standard? But, as I said earlier, we have had a long debate on the whole issue of minimum solvency standards, mainly around the amendment moved by my noble friend Lord Eatwell. There is not much point in going into this issue further at this time. I therefore beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 145NB and 145P not moved.]
Baroness Turner of Camden moved Baroness Turner of Camden moved Amendment No. 145PA:
Page 27, line 18, at end insert:
("( ) For the purposes of this section and sections 50 to 54, the value of the assets of the scheme does not (except in prescribed circumstances) include the value of any assets which are employer-related investments for the purposes of section 34.").
The noble Baroness said: This clause establishes that every occupational pension scheme to which the clause applies is subject to the minimum solvency requirement that the value of the assets of the scheme is not less than

835
the scheme's liabilities. The intention of the amendment is to prevent the value of employer-related investments being included in the total value of assets of a pension scheme for the purpose of calculating the minimum solvency requirement.
As we know—we have had some discussion about it, and the Committee knows that we do not feel happy about it—the intention of the MSR is to provide a guarantee that a pension fund has enough assets to meet the demand upon it to pay members' pensions. If a scheme which included employer-related investment was forced to wind up due to the sponsoring company going out of business, that proportion of the fund assets which was employer-related investments would not be available to meet pension requirement demands upon the scheme. We believe that it is not in the interests of the employees of a company, or the members of a pension scheme, to have a situation in which employer-related investments can be counted among the assets of a scheme for the purposes of solvency. The issue is clear and I beg to move.
Lord Mackay of Ardbrecknish: I have a certain sympathy with the arguments made by the noble Baroness about the potential risk of allowing employer-related assets to count in the valuation of assets for the minimum solvency calculation. However, the Government believe that excluding all employer-related investment would not be practical.
We understand that it is the practice for a number of investment managers to track the market and invest in a range of securities which may include the sponsoring employer or those associated with it. It could be difficult in a situation where the investment manager holds a pooled fund to disentangle the specific investments in the sponsoring company.
The Committee may recall that the PLRC recognised these practical problems and consequently recommended that employer-related investments up to the permitted level should count towards the minimum solvency requirement. The PLRC report argued that a 5 per cent. limit on employer-related investment would provide an adequate limitation on any risk. We have also accepted the recommendation that all loans or other financial assistance to an employer or associate companies should be prohibited. This will further limit the potential risk involved in financial' dealings between a pension scheme and its sponsoring employer.
Finally, I remind the Committee that trustees have a duty to ensure that when making decisions about investments (as in all their duties) they must act in the best interests of scheme members. They are therefore expected to consider risk as well as return when deciding on investment policy.
In view of the practical difficulties of excluding employer-related investments, and the fact that we recognise the dangers and have put on a ceiling of 5 per cent., I hope the noble Baroness is satisfied that the issue has been properly and adequately dealt with.
Baroness Turner of Camden: I thank the Minister for that detailed response. We were anxious that there would be a risk to the security of employees if
836
employer-related investments were counted in this way. I well remember that when I was a member of the Occupational Pensions Board we had anxieties about self investment, to which this matter is somewhat related.
However, in view of what the Minister said I do not intend to press the amendment to a Division. I was anxious to know why the Government had proceeded in this way, having realised what the Goode Committee had said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 145Q to 145S not moved.]
Lord Lucas Lord Lucas moved Amendment No. 145SA:
Page 27, line 28, after ("prepared") insert ("and signed").
The noble Lord said: The amendment is necessary to ensure that the operation for the minimum solvency requirement is properly workable. It amends the definition of an actuarial valuation, as introduced under Clause 49(5) (c), by providing that such a valuation is one that has been prepared and signed by the scheme actuary. This is necessary to ensure that clear and effective time limits can be established within which the schedule of contributions must be prepared and within which solvency below 90 per cent. must be restored. These time limits all start from the signing of the valuation. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 145T and 145TH not moved.]
Clause 49, as amended, agreed to.
Clause 50 [Valuation and certification of assets and liabilities]:
The Deputy Chairman of Committees (Lord Broadbridge): I must inform the Committee that if Amendment No. 145U is agreed to I cannot call Amendments Nos. 145UA and 145UB.
[Amendment No. 145U not moved.]
Lord Lucas Lord Lucas moved Amendment No. 145UA:
Page 27, line 40, leave out ("to secure") and insert ("for the purpose of securing").
The noble Lord said: I shall speak also to Amendments Nos. 145UB, 145UD, 145UE, 145VA, 145ZYA and 145ZYE. These amendments address concerns raised by some actuaries that the test to be applied when providing actuarial statements and certificates requires a level of certainty that it is not possible to provide.
Because the certification looks forward over a period we accept that no actuary will be able to state with absolute certainty what will be the position two, three or four years hence and that any judgment must be based on assumptions about the scheme liabilities and economic outturn. We accept that some adjustment of the way the test is described in the Bill is desirable and that these amendments will make the test less absolute by clarifying that any assessment of solvency will be based on actuarial opinion and cannot be a definitive statement.
Amendment No. 145ZYA, which introduces new Section 51(6A), also has the effect of removing the requirement that any increase in contributions, required

837
to restore a scheme to 100 per cent. solvency, should be at a uniform rate. This will allow schemes greater flexibility in taking remedial action to restore their funding position. The amendment will continue to permit schemes to pay a higher rate of contributions at the outset of any period covered by the schedule of contributions. Permitting such "front-loading" of contributions is clearly in members' interests as it would ensure that the solvency position improves more rapidly than would be the case with a uniform rate of contributions.
On the other hand, the circumstances of the sponsoring employer may make it more realistic all round for him to be committed to lower payments in the earlier part of the period and a higher amount thereafter. However, any schedule of contributions drawn up in such circumstances would, as a minimum, need to ensure that there was no deterioration in the scheme's funding position and the trustees would need to be satisfied that the schedule offered sufficient security for members.
Amendment No. 145ZYA is also required to address a practical difficulty with the wording of Clauses 51(6) and 51(7). By referring to action following a valuation, these subsections would have prevented the schedule from being revised and recertified where the scheme met the minimum solvency requirement at the valuation but subsequently suffered a drop in the funding level; for example, by the effect of higher than expected salary increases or benefit augmentations. The new Section 6A overcomes this difficulty and allows the schedule to be recertified following amendment irrespective of whether the amendment has been prompted by a full valuation. Amendment No. 145ZYE is consequential on the new Section 51(6A).
These amendments seek to address concerns that have been expressed about the certification process and to allow schemes greater flexibility in any remedial action to restore a scheme solvency. I beg to move.
Lord Eatwell: The Minister has given the game away. He told us that instead of being able to secure with certainty the scheme must be weakened so that the solvency requirement will not be certain. That is what the amendments are for. Their entire and total purpose is to reduce the certainty of the solvency requirement. Instead of "to secure" solvency it is "for the purpose of securing solvency". The England cricket team went to Australia for the purpose of winning the Ashes. It did not win them. I am afraid that these amendments point to the continual weakening of this solvency requirement.
The noble Lord said that it would be impossible to secure because certainty is impossible; but it is not. It is perfectly possible to buy an assured annuity. It would be jolly expensive but it is possible. The problem is that the Government's minimum solvency requirement is creating so many difficulties and problems for the pensions industry that we have to have this steady weakening of the commitment to insolvency.
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The noble Lord, Lord Lucas, has made our case for us. The minimum solvency requirement is a false solvency requirement.
Lord Lucas: There is no weakening of the solvency requirement. These amendments reflect the reality that even an actuary cannot guarantee what will happen in the future.
Baroness Seear: The reality is that they are weak. The noble Lord has said so.
Lord Lucas: I do not think that we should try to put into legislation something that cannot happen. We have to adjust the wording that we use in our legislation to reflect the reality of the way the world works and to balance, as Members of the Committee have been concerned to do over several hours this evening, the interests of the companies and their employees as employees and pensioners to produce the most effective method possible. I believe that the amendments to which I have spoken improve the situation over what was in the Bill previously.
Lord Eatwell: I know that we are seeking a balance. We have heard that word continuously throughout our discussions. But the point is that we have here a further weakening of the solvency requirement from that which was on the face of the Bill. That is what the amendments achieve.
It seems to me that the Government are bringing forward the amendments, quite reasonably, because their solvency requirements will cause such a mess. Therefore, they are trying to weaken the elements which will cause the mess. But would it not be better to go back to the drawing board and, instead of having that imperfect structure, to start again? I do not wish to refer again to the imperfect English cricket team, but let us get the A team from India to play instead. This sort of amendment would be unnecessary and the complexity involved in continuously weakening the solvency requirement would be unnecessary.
Lord Lucas: If the noble Lord wants a perfect English cricket team, he should look to the women.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 145UB:
Page 27, line 42, after ("if') insert ("it appears to him that").
The noble Lord said: I have spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 145UC:
Page 28, line 3, at beginning insert ("Subject to subsection (2A)").
The noble Lord said: In moving this amendment, I shall speak also to Amendment No. 145VB. Amendment No. 145UC is minor and paves the way for Amendment No. 145VB. That provides that where, when carrying out a solvency check, the actuary is of the opinion that the scheme has dropped to below 90 per cent. of the minimum solvency requirement, an emergency valuation must be obtained.
As I am sure Members of the Committee will appreciate, we do not wish to impose the cost of unnecessary valuations on schemes. Therefore, where the actuary certifies that the schedule of contributions is no longer adequate but he takes the view that the scheme has not dropped below 90 per cent. of the minimum solvency requirement, an actuarial valuation will not be required, provided the rates of contributions in the schedule are revised. The actuary must be able to certify that the revised rates are expected to ensure that the scheme meets the minimum solvency requirement by the end of the period covered by the schedule. Of course, there will be cases where the scheme may prefer to hold a full valuation. However, in any case where the actuary believes that a scheme is less than 90 per cent. solvent, we believe that an emergency valuation must be carried out to establish the exact solvency position. Following the valuation, the schedule must be revised. And if the valuation identifies a shortfall below 90 per cent., the one year time limit for restoring at least to the 90 per cent. level will apply.
Without the amendment, the one year time limit could be sidestepped. We believe that a drop in scheme funding below 90 per cent. represents significant risk to members and that if such a drop is identified, prompt action should follow to remedy the position. I beg to move.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendments Nos. 145UD and 145UE:
Page 28, line 4, leave out ("it appears to him that") and insert ("in his opinion").
Page 28, line 5, leave out ("to secure") and insert ("for the purpose of securing").
On Question, amendments agreed to.
[Amendment No. 145V not moved.]
Lord Lucas Lord Lucas moved Amendments Nos. 145VA and 145VB:
Page 28, line 7, after ("if') insert ("it appears to him that").
Page 28, leave out lines 11 and 12 and insert:
("(2A) In a case within subsection (2) (a), the trustees or managers are not required to obtain an actuarial valuation if—

(a) in the opinion of the actuary of the scheme, the value of the scheme assets is not less than 90 per cent. of the amount of the scheme liabilities, and

(b) since the date on which the actuary signed the certificate referred to in that subsection, the schedule of contributions for the scheme has been revised under section 51(3) (b).").

On Question, amendments agreed to.
Lord Eatwell Lord Eatwell: moved Amendment No. 145W:
Page 28, line 24, at end insert:
("() ) Any valuation or certificate obtained under this section shall be disclosed in accordance with section 113 of the Pension Schemes Act 1993 (Disclosure of information about schemes to members etc.).").
The noble Lord said: In moving this amendment, I should like to speak also to Amendment No. 145YH. The amendments are concerned essentially with the availability of information to members. The clause requires trustees, at prescribed intervals and on
840
prescribed occasions, to obtain valuations and certificates as to the adequacy of contributions by reference to the scheme's overall level of solvency.
The amendments require that such valuations and certificates should be disclosed to members and their independent recognised trade unions in accordance with Section 113 of the Pension Schemes Act 1993. Members would be entitled to information about what contributions their employer should be paying to the scheme on their behalf.
It seems to me that one of the best ways to ensure that the minimum solvency requirement works effectively is by giving members the information as to whether or not it is being met or information as to what the contribution should be. What better means of policing a scheme could there be than providing information to members and particularly to their trade unions, which will be able to analyse such information with expert advice?
There may be a problem of overwhelming members with redundant information but that can be avoided by providing in regulations that such information need be furnished only on request. Essentially we believe that the amendments reinforce what the Government wish to do. They reinforce it by providing a policing mechanism which must be the most effective available. I beg to move.
Lord Mackay of Ardbrecknish: I accept what the noble Lord, Lord Eatwell, says about the importance of making available information to members. We believe that it is essential that certificates and reports relating to a scheme's funding position should be available to members.
However, I should point out that Clause 35(3) provides specifically for regulations to require trustees to make such documents required under the minimum solvency provision available to members and those with an interest in the scheme. We intend to make regulations which will ensure that scheme members are informed regularly of the solvency position of the scheme. The power contained in Clause 35 is sufficient to ensure that that can be done. The noble Baroness, Lady Hollis, will recall the amendment to Clause 35(3) which extends the provision so that it covers certificates provided under Clause 51, as well as those under Clauses 50 and 52. I hope that that explanation of the fact that what the noble Lord seeks to achieve is already contained in the Bill will be sufficient to persuade him to withdraw the amendment.
6.30 p.m.
The Earl of Buckinghamshire: Perhaps I may disagree with my noble friend the Minister and the noble Lord, Lord Eatwell, as regards the very sensible idea of giving out information. Who pays for such information to be sent to members if they make consistent requests for it?
Lord Mackay of Ardbrecknish: The actual details of how often and in what time-scale documents are circulated to members on occupational schemes will be part and parcel of the regulations upon which we shall

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be consulting. However, the cost of distributing information to members will obviously have to be met by the scheme.
Lord Eatwell: I am grateful for the Minister's explanation. However, at the end of his remarks, the noble Lord said that he had demonstrated to me the fact that what I sought to achieve was already contained in the Bill. But that contradicted what the Minister said earlier when he said that what I was seeking would be covered by regulations. Given the importance of the information which goes to members, I believe that it is appropriate for us to invoke legislation which has already been passed by the Government under Section 113 of the Pensions Schemes Act 1993 and put it on the face of the Bill, instead of having yet another element in such an important area being buried in regulations.
I know that the Minister has been nagged continuously about the excessive use of regulations in the Bill. Given the fact that the amendment is simply citing legislation which has already been passed by the Government in another context, I hope that the Minister will take the matter away and think again. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 50, as amended, agreed to.
Clause 51 [Schedules of contributions.]
Lord Lucas Lord Lucas moved Amendment No. 145WA:
Page 29, line 1, leave out ("following") and insert ("before the end of a prescribed period beginning with").
The noble Lord said: Section 51(3)(c) provides that the schedule of contributions must be revised following an actuarial valuation. Amendment No. 145WA will provide that any such revision must be made within a specified period. We will consult on the appropriate period in the context of draft regulations but are minded to propose that revision should be made within two months of the signing of the valuation report. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 145X and 145Y not moved.]
Lord Lucas Lord Lucas moved Amendment No. 145ZYA:
Page 29, leave out lines 15 to 25 and insert:
("(6A) The actuary may not certify the rates of contributions shown in the schedule of contributions—

(a) in a case where on the date he signs the certificate it appears to him that the minimum solvency requirement is met, unless he is of the opinion that the rates are adequate for the purpose of securing that the requirement will continue to be met throughout the prescribed period, and

(b) in any other case, unless he is of the opinion that the rates are adequate for the purpose of securing that the requirement will be met by the end of that period.").

The noble Lord said: I have already spoken to the above amendment. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 145YA to 145YD not moved.]
Lord Lucas Lord Lucas moved Amendment No. 145ZYE:
Page 29, line 27, leave out from ("the") to end of line and insert ("period referred to in subsection (6A)").
On Question, amendment agreed to.
[Amendment No. 145YE not moved.]
Clause 51, as amended, agreed to.
Clause 52 [Determination of contributions: supplementary]:
[Amendment No. 145YF not moved.]
Lord Lucas Lord Lucas moved Amendment No. 145ZYG:
Page 29, line 45, leave out from ("any") to ("that") in line 46 and insert ("prescribed period").
The noble Lord said: Subsection 52(3) provides that, where a scheme has failed to comply with the minimum solvency requirement, the trustees must produce a report explaining to members the reason for that failure. The amendment provides a power to specify when such a report should be completed. It was originally intended to be produced at the end of the period covered by the schedule of contributions but we now accept that, practically, it needs to be tied in with the valuation report. It is a minor change to allow the provision to work simply without the need for additional actuarial enquiries. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 145YG and 145YH not moved.]
Clause 52, as amended, agreed to.
Clause 53 [Serious underprovision]:
Lord Marsh Lord Marsh moved Amendment No. 145YJ:
Page 30, line 7, after ("(2)") insert ("or (2A), as the case may be,").
The noble Lord said: In moving the above amendment I shall, with the leave of the Committee, speak also to Amendments Nos. 145YK, 145YL and 145YN. The effect of the amendments would be to allow an employer the choice of making good smaller deficits in the same way as the larger ones by paying a lump sum into the fund where the shortfall is less than 10 per cent.
As has been said over and over again—and to state the obvious—the main thrust of the Bill is to protect the members of pension schemes from fraud or mismanagement. There is no problem between any of us on that objective. However, the one thing which I have learned from our debates is the fact that achieving such a simple objective is rather more complicated than might have been expected. I believe that we would all agree that it would be disastrous if, in our enthusiasm for protecting existing pension schemes, we succeeded in causing employers to move more to money purchase schemes, for one example, or inhibited the introduction of new schemes. Both of those are real possibilities that we all recognise.
While the amendments relate to the employer's obligations arising from the minimum solvency requirement, I hope to convince Members of the Committee that they are very much in the interests of the employee. As drafted, Clause 53 requires the employer to make good any shortfall in the solvency requirement where it exceeds 10 per cent. Where the shortfall is less than 10 per cent., Clauses 51 and 52 anticipate that that will be met by an increase in contributions. Of course, that increase includes the employee contributions.
The purpose of the amendment is to give the employer the choice to make good the smaller deficits in the same way as the larger ones. In short, the employer should be able, should he wish, to pay a lump sum into the fund where the shortfall is less than 10 per cent. I stress that the amendment continues to protect the fund and provides advantages to the employees. I hope in a moment to argue that cash should not be the only option to employers in these circumstances and that there are real advantages to be gained by allowing the employer to meet shortfalls in the MSR by bank guarantees and other means rather than increase contributions from both employers and employees. This, in my view, is a measure which can only benefit both sides. I accept that the other amendments raise much larger, or at least much more complex, issues than this. I beg to move.
Lord Mackay of Ardbrecknish: We have looked carefully at the amendments of the noble Lord, Lord Marsh, Amendment No. 145YJ and some others with it. However, we seemed to do a bit of sprinting just before we reached this amendment. It is important to recognise that the alternatives to cash contributions were originally proposed in the light of widespread concern that the original minimum solvency proposals, and especially the three-month time limit to get to 90 per cent., could have resulted in employers having to put in large amounts of cash at short notice. I believe that these concerns are now very much less valid. I shall explain why.
As I have already mentioned—I believe twice in the course of today—the statement by my right honourable friend the Secretary of State on 8th December made certain important changes to the proposed method of calculating the minimum solvency requirement which directly addressed fears that stock market fluctuations would force employers to put excessive amounts of money into their pension schemes. Extending the time limit for restoring solvency—which will apply to all schemes—will tend to reduce volatility in required contribution grades.
The further measure to smooth the calculation over a number of months will also avoid the risk of focusing the calculation on a particular day when market values might be unusually depressed. The further modification for large schemes—that is, schemes which would be likely to run as closed schemes rather than be wound up in the event of employer insolvency—allows a proportion of pension liabilities to be valued by reference to rates of return on equity investment. That means that the value of the liabilities—
Lord Marsh: I am grateful to the noble Lord but I am certainly puzzled. I genuinely do not think that the reply is addressed to the amendment. The amendment, as I remember it, is to enable employers to make cash payments rather than contributions.
Lord Mackay of Ardbrecknish: I was saying in a rather longwinded way that originally there was considerable worry in this regard, but I believed that the proposals to make the timescale a bit longer had reduced
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that worry, which concerned the need for schemes to rely on cash contributions. I believe the noble Lord wants alternatives to the need to rely on cash contributions in certain circumstances.
Lord Marsh: That is something that I wish to address on the next amendment, Amendment No. 145YP.
Lord Mackay of Ardbrecknish: I am sorry. They are all in the one group and I am trying to address them all at the one time. I believe that is the problem. They are grouped, are they not? I am in some trouble about that. If the noble Lord wishes me to ungroup them—
Baroness Seear: Perhaps it would help if the noble Lord moved them as a group and then the Minister would have the right brief, would he not?
Baroness Hollis of Heigham: There is a problem. We have had this problem with some of our amendments. Although there is a comma after N, Amendment No. 145YP has not been indented, which is what one would expect. Therefore there is a problem in the typing up of the groupings on the list in several places.
6.45 p.m.
Lord Mackay of Ardbrecknish: My Whip tells me that this is true, which is terribly helpful of him, I must say. I am afraid it is in this grouping and that gives me a slight problem. I shall read out the amendment to enable me to be sure what I am doing and to get my mind into the proper gear. The noble Lord is not speaking to Amendment No. 145YP, is that correct? The noble Lord is speaking to Amendment No. 145YJ which states:
"Page 30, line 7, after ("(2)") insert ("or(2A), as the case may be,")".
That is a huge help, and I shall quickly have to find my place in the Bill.
Baroness Seear: Perhaps the noble Lord, Lord Marsh, can suggest to the Minister how to get out of this problem. I see him rising to his feet.
Lord Marsh: I am not a procedural expert but I wonder whether it would help if I were to move to the next amendment, Amendment No. 145YP, and move that too. No doubt then the Minister could reply to the whole range of amendments.
Lord Mackay of Ardbrecknish: I am sorry to get into this difficulty but it is difficult when one is trying to make a case in the round about a number of grouped amendments if they are disentangled because that makes it rather difficult for me to catch up.
Lord Eatwell: I beg the pardon of the noble Lord, Lord Marsh, but I wanted to speak briefly to the preceding amendment, Amendment No. 145YM, before we reach Amendment No. 145YP. It fits in with some of the issues which the noble Lord, Lord Marsh, was considering in the earlier amendments which he moved, which is this whole question of how the failure to achieve the minimum solvency standard should be made

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up and whether it should be made up with a cash payment—that was the original proposal—or by some prescribed means, whatever that may be.
In the amendment standing in my name, Amendment No. 145YM, I have suggested that the prescribed method be taken out and we settle on cash. I tabled this purely as a probing amendment to see exactly what the Government had in mind. The noble Lord, Lord Marsh, is recommending that there be a variety of methods. I am recommending that there should not be a variety of methods. I am willing to be convinced either way. I found the comments of the noble Lord, Lord Marsh, rather convincing, but I shall also be interested to hear what the Minister says. He is, of course, weakening the solvency requirement again. As President Reagan famously said, "There you go again!". He is weakening the solvency requirement, but this approach may have merit, as the noble Lord, Lord Marsh, has suggested. However, I remain to be convinced and I look forward to hearing the Minister convince me.
Lord Marsh: I am sure that the arguments are so convincing that the Minister will be convincing. I am convinced about this. The noble Lord, Lord Eatwell, believes that he may change his mind on this matter. I think it ill behoves the Minister to say that he disagrees with both of us.
I turn to Amendment No. 145YP which simply seeks to provide employers with more flexibility when they have to cover shortfalls in the fund. It is simple but it would be of major benefit to many first-rate companies and no disbenefit to employees or to pensioners. I accept that this is a much bigger issue in many ways. As far as I am aware, no one challenges the concept here. However, I am not even sure about that now because one of the things which is emerging about the minimum solvency requirement is that people are becoming increasingly disturbed at the possible scale of the implications of the provisions, which are very big indeed.
It certainly seems possible—and some would say probable —that these proposals under the minimum solvency requirement as it stands, in so far as they are clear (some of them have not been spelt out), could inflict great damage on a major section of British industry. Some of the pension funds—some of the closed funds in particular—particularly of the newly privatised industries, are massive, as we know. They are valued at £3 billion or £4 billion or more. They are major investors in British industry and the pension fund investment in total is around £150 billion.
It is against that background that the MSR provisions have to be viewed. Solvency margins are bound to fluctuate, as the noble Lord, Lord Monkswell, said. There is nothing wrong with that. In a perfectly well-managed fund they will fluctuate over a period of time between 85 per cent. and 150 per cent. with no threat whatsoever to the fund. If one takes the period of the past 25 years, for example, there was a major fall in the market in the mid-1970s. In the fourth quarter of 1987 many portfolios lost up to 30 per cent. of their value within a matter of days, and in 1994 the index fell by approximately 10 per cent. over the year. The key
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point is that none of those major setbacks has at any point posed a serious threat to properly-run pension funds. It is not a crisis when that happens. Indeed, those declines were rightly seen as buying opportunities, with consequential gains in the inevitable upswing.
The problem which confronts us with the MSR is that there are two main risks to reasonably well-run pension funds. One is outright, calculated corruption, and the other is massive inefficiency. With the greatest respect to the Bishops' Bench, for the Church of England funds—which were not pension funds as is frequently said—to lose £890 million is not a sign of ideal fund management. On the whole, that does not happen. I see that the noble Lord, Lord Williams, is looking restless. It may well be that he is a trustee of the funds. (If I said that outside this Chamber I would be sued by him!)
The minimum solvency requirement is required as a safeguard against those problems. To achieve that one has to cover the whole spectrum, but it is sensible to give flexibility where one can. In its present form it could do great damage to the economy, as has been said. The proposed reduction, for valuation purposes, of equity investment in favour of gilts reduces fund income and therefore increases the size of the required top up. There is a feasible scenario that at the very moment when we begin to move again, as we shall from time to time, into a temporary economic difficulty, a major part of British industry will be forced to transfer literally hundreds of millions of pounds out of its companies. That cannot make sense.
The amendment seeks to write on the face of the Bill the right of the employer to use a bank guarantee or an unsecured loan, which would be protected against default by the employer but would not deprive the employer of the very large sums of working capital at the very time at which they are needed. That helps both large companies and small companies, because the problem is the same proportionately. It helps to protect jobs and it in no way detracts from the security of pension funds.
I believe that that is the kind of flexibility which we have to look for, unless the Government do as the noble Lord, Lord Eatwell, suggested—and I can see some arguments for that—and start again. 'There is no overwhelming evidence that when their proposals are wrong the Government are persuaded to take note of the arguments and withdraw the offending legislation. That is not in the nature of the beast. However, the Minister is a reasonable fellow and may decide to make a fundamental change. I would applaud that because the provision has serious implications. The reality may be that we have the minimum solvency requirement. There is a need to look at it in order to make it more flexible while maintaining the basic proposition of seeking to protect pensioners in the minority of schemes which may be at fault.
The Earl of Buckinghamshire: I should like to say a few words in support of the amendments of the noble Lord, Lord Marsh.
I have a great deal of sympathy for my noble friend the Minister because if he gives way to these very reasonable amendments he will no doubt be accused of

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weakening the solvency test. I suggest that we see the impact of the MSR as being flawed because it will bite and flawed because it will not bite. The consensus appears to be that we are all floored!
The major problem with the MSR is the uncertainty that will arise in planning one's contribution rate. The valuation period may be three years. One sets one's standard contribution rate, and if in that period one runs into solvency difficulties, for whatever reason, the company will be faced with making up the required solvency amounts. That will rapidly have an impact on the profit and loss. That will not only affect large companies; medium-sized companies will also have problems. Whether the amount involved is £10 million or £2 million, the impact will relate purely to the company's profitability.
The one thing that finance directors dislike most is uncertainty. They are facing a very uncertain situation, particularly in the closed funds which were mentioned by the noble Lord, Lord Marsh. I shall be very interested to know whether the Government have run any models to calculate the effect of the 1974, 1987 and 1990 stock market crashes on some of those closed funds. They may have a liability of 75 per cent. deferred members and pensioners and only 25 per cent. active members. There are many large schemes, and also modest schemes, in which the imbalance between active members and pensioners is great. It is that problem which the amendment of the noble Lord, Lord Marsh, attempts to address.
The impact on company liquidity is significant. I often wonder whether our friends in the stock market will be able to analyse the impact of a pension fund on a company's balance sheet. It will certainly have to take account of this situation.
Lastly, I believe that loans are permitted under the Trustee Act. I take it that companies can still make loans to the trust funds in these situations.
With those few words, which I trust are helpful, I hope that my noble friend the Minister will not regard the amendment as weakening or an attack on the provisions relating to the MSR. I hope that the noble Lord, Lord Eatwell, will be equally kind in his remarks, if he makes any.
Lord Brabazon of Tara: I should like briefly to support the amendments moved by the noble Lord, Lord Marsh. I have been informed by a company for which I have great admiration but in which I have no financial interest whatsoever—and I need to make that clear, particularly in view of present company—that this provision could cause serious problems.
A great deal of the debate on minimum solvency requirements appears to have been centred around companies which have become insolvent and closed pension funds. That is not the case with certain other companies with closed pension funds which are by no means insolvent and are doing extremely well. It occurred to me that these provisions would require that if there were a sudden fall in the stock market more money would have to be put into those pension funds. If the pension fund trust deed does not allow any refund
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to employers, that money would then be stuck in the pension fund and could not be retrieved when, as normally happens and we hope will always happen, the market rises again.
I should like my noble friend who is to answer the debate to give me some reassurance on that particular point.
Lord Monkswell: I rise to support the noble Lord, Lord Marsh, in his powerful argument in favour of his amendments. His exposition of the problems that the British economy would face if some of the scenarios that he painted were to come to pass is important. However, I have a slight reservation about one of the noble Lord's suggestions regarding unsecured company loans to fund the deficit, if I may so put it. The idea of bank guarantees is perfectly acceptable in the sense that the banks would effectively be taking part of the risk. I can imagine that in this scenario the banks should do so.
Lord Marsh: If the noble Lord knows any bank which is prepared to take such a risk, I should like an introduction.
Lord Monkswell: I thank the noble Lord for his intervention. I listened to his remarks and there seemed to be two options: the unsecured loan from the company or some kind of bank guarantee. I may have misheard him. I stand corrected if I did. However, as I understand it, we seek to ensure the security of the pension fund from the point of view of future pensioners. To accept the idea that those pension fund assets which pay the pension could be secured through an unsecured loan by a company which might go bust is asking a little too much. I am not an accountant by profession or, dare I say it, by inclination. I recognise that there are problems which need to be addressed, but I believe that the concept of unsecured loans is a little fragile in this situation.
7 p.m.
Lord Mackay of Ardbrecknish: My noble friend Lord Buckinghamshire made a remark about people disliking uncertainty. I have to tell him that Ministers, too, dislike uncertainty. I apologise for the slight degree of confusion. My only defence is that after two-and-a-half days, with many amendments, having to watch the alphabet as well as the numbers becomes somewhat confusing. I think that I have managed to unbundle the amendments. At the risk of speaking for too long I shall deal with them in groups rather than separately.
While my introduction may have been a little long winded in repeating what had gone before, it was meant to be helpful. We believe that the situation has been improved upon from the original position outlined by Goode and then the White Paper. That was the point I sought to make on timetables.
The whole clause looks at the exceptional circumstances of a scheme failing to meet the minimum solvency requirement by more than 10 per cent.—under 90 per cent. funded. Exceptional measures are required to be taken to ensure that members are given adequate protection. Together with the new clause proposed by

849
the noble Lord, Lord Marsh, later in the debate, those alternatives would run a risk of the fund not being brought up to the 90 per cent. level in an acceptable way. We are not keen on that situation.
The problem relates to a fund which is under 90 per cent. funded for which a considerable amount of cash has to be injected to attain that 90 per cent. within a year, and then from 90 per cent. to 100 per cent. in a further five years. The noble Lord, Lord Marsh, asks whether there are other ways which might be less damaging to the company than requiring it to make those quite major cash contributions, especially in the first year, and how such contributions might be better spread out. A number of ways have been suggested.
We can accept, and have accepted, that a bank guarantee or ring fencing of unencumbered assets would be an acceptable means of providing an underpin to a scheme over the period until it achieves a funding level of 90 per cent. of the minimum solvency requirement. However, scheme security is at risk here. It is essential that the alternatives to cash injection are properly described in regulations. I am advised that the term "bank guarantee" is too imprecise to appear on the face of the Bill.
If I followed the intervention of the noble Lord, Lord Monkswell, an unsecured loan quite rightly would not seem to provide sufficient security to be acceptable. We are not talking of self-investment. The funds or assets would need to be made fully secure from other creditors in the event of the employer becoming insolvent while the scheme was still severely underfunded. Therefore, quite clearly, whatever guarantee was given or whatever amount was ring-fenced would not have to be guaranteed or ring-fenced only against the employer using that money but against other creditors in the event of insolvency.
What we propose by way of regulation is intended to be of practical help to employers in the operation of the minimum solvency requirement, but it has also to offer security for members. To set out the alternatives in regulations allows us a certain amount of definition and clarification of the methods which will be used.
The effect of Amendment No. 145YP will be to extend the circumstance in which it will be permissible for employers to secure are increase in scheme assets by means of other than cash contributions. It would allow the prescribed alternatives to a cash contribution, which by virtue of this clause wall apply if the scheme is less than 90 per cent. funded on the statutory minimum solvency requirement basis, to apply at any time that the scheme was below that minimum solvency requirement. The amendment would also allow the arrangements to be taken into account as an asset of the scheme when the schedule of contributions falls to be revised. That will go a long way towards accepting that those exceptional alternative arrangements should become a part of a scheme's normal funding. I believe that that would be unacceptable because of the difficult problem of balance.
As a basis of pension scheme funding, the importance of the trust fund is that it is distinct from the employer company. Assets of the trust belong indisputably to the trustees, and we do not want to disrupt that arrangement.
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The alternatives permitted by Clause 53(2), which must also be secure, should be seen as an exceptional measure to deal with exceptional circumstances. Where a scheme is less than 100 per cent. solvent it will have five years to restore solvency. I believe that that has to be done by providing the necessary cash contributions, although, as I have sought to explain, in that first year if the figure is below 90 per cent. one might need quite a lot of money over a much shorter period. We are prepared in regulations to look at secure ways in which that might be done.
I feel a little like a pebble on the beach this time because I am being pulled first one way and then another. However, I am pretty sure that we have a reasonably balanced position.
Of course I understand the point made by the noble Lord, Lord Marsh, and my noble friend Lord Buckinghamshire that we have to consider the position of employers. Employers may well need cash at a time when the economy is going through a recession and is in difficulty. But the same is also true of the pensioner. The whole purpose of my arguments in amendment after amendment in the Bill is to protect the interests of the pension scheme members without imposing unnecessary burdens on British industry. I believe that we have the balance about right. The noble Lord, Lord Marsh, may have to read Hansard because of the slightly confused way in which I have had to tackle the provision, for which I apologise. However, I hope that he will find that we have a reasonable balance, and in regulations we shall be able to put forward sensible ways in which employers can be helped, but not at the risk of the security of the scheme.
Lord Marsh: I find the Minister's response—
The Earl of Buckinghamshire: I am sorry to interrupt the noble Lord, Lord Marsh. I referred to the question of loans in my previous intervention. I am not talking of unsecured loans. The pensions business is highly cyclical. In 1981 one bought out annuities at a 15 per cent. rate of interest and we were not facing any of the situations that exist today. If companies are forced to make a cash contribution into the scheme at any one moment in time because the funding dips below whatever we state is the minimum solvency level, in three or four years' time the markets might have recovered and suddenly we shall be looking at a surplus.
Once the employer has made that cash injection, it is difficult for him to get his money back. Is there any possibility in those circumstances of using a loan from the employer to be put into the fund? There is no question of a cash injection on a loan basis with real rates of return paid to the employer. Then, when the fund recovers, he has an ability to recover his loan. He does not have to go through the system of asking the trustees and meeting all the surplus requirements. I wanted to raise that point and make it clear.
Lord Mackay of Ardbrecknish: If that was an intervention before I sat down, I understand my noble friend's scenario. However, I believe that the noble Lord, Lord Marsh, has a later amendment which deals

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with the situation. By the time we reach it I may be able to make comments to my noble friend about the matter of a loan and how one would define it.
Lord Marsh: One needs to read the Minister's reply. As the noble Earl has just said, the whole basis and thrust of the arguments is that the industry is cyclical. The downturns do not place at risk well run pension funds; they never have done and never will. It is important to enable the pensioner to be protected against the depredations of the incompetent and the downright criminal. Therefore, we must cover the broad brush situation.
However, the burden upon industry and companies at times is so enormous that it makes sense not to seek some theoretical balance but to ensure that flexibility is available which enables the employer to retain the cash. He effectively only puts it in as a bridging loan and it will not be called in 99.9 per cent. of cases anyhow. We shall come in a moment to the argument of allowing him to take it back. Any opportunity for him to do that makes sense. The alternative is that British industry in general will suffer. I understand that there are grave anxieties in the Bank, in the CBI and among virtually everyone concerning the potential impact of depriving companies of hundreds of millions of pounds for a time for something which is a cyclical fluctuation and which deprives them of financial backing.
If the problem is one of definition, we all understand that the regulations must be framed in a certain way. It is a pity that so much of the Bill involves regulations because it means that we do not have an opportunity to discuss them. That is a great weakness. If the Bill has to be dealt with in this way, I quite understand that one may suggest different wording and different formulae. However, if a vast organisation is totally solvent and has massive assets but is not allowed to take that into account, then, with the greatest respect, it is a ludicrous situation.
I hope that before the next stage of the Bill the Minister will reconsider the matter. He will continue to receive pressure from many sources on the dangers which are inherent in the Bill. If it is a matter of the definition, he could turn it around. In my view there is no reason why in these circumstances a degree of flexibility should not be available to companies to avoid the pointless transfer of money which they need to make their industries work and for it to sit in a fund for no particular purpose. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 145YK and 145YL not moved.]
The Deputy Chairman of Committees (Viscount Davidson): If Amendment No. 145YM is agreed to, I cannot call Amendment No. 145YN.
Lord Eatwell Lord Eatwell had given notice of his intention to move Amendment No. 145YM:
Page 30, leave out line 14.
The noble Lord said: I wish to suggest to the Minister that in his search for balance with respect to the funding and the provision to make up the minimum solvency
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requirement, he has gone too far in referring to the possibility of ring-fenced assets. So far as I can tell, there is no way of ring-fencing assets other than to put them into a trust. What does the notion of "ring-fenced assets" mean? Cash, we understand; bank guarantees, we understand. I am sure that on mature reflection the Minister will find that ring-fenced assets are not a satisfactory approach to the problem. I leave the point for the Minister to mull over. I shall not move the amendment.
[Amendment No. 145YM not moved.]
[Amendments Nos. 145YN to 145YQ not moved.]
Clause 53 agreed to.
Lord Lucas: I beg to move that the House be now resumed. In moving that Motion, I suggest that the Committee stage begin again not before 8 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Sex Discrimination Regulations: Armed Forces
7.16 p.m.
Lord Lester of Herne Hill Lord Lester of Herne Hill rose to move to resolve, That this House calls on Her Majesty's Government to revoke the Sex Discrimination Act 1975 (Application to Armed Forces etc.) Regulations 1994 (SI 1994, No. 3276), and to make in their place regulations which are fully in compliance with and give full effect to European Community law, by prescribing only such derogations from the Community principle of equal treatment for men and women in employment as are in accordance with Council Directive 76/207/EEC; and by repealing the blanket derogation in Section 1(9) of the Equal Pay Act 1970, so as to ensure and maintain the Community principle of equal pay for equal work for men and women serving in the naval, military and air forces of the Crown.
The noble Lord said: My Lords, before coming to the business in hand perhaps I may deal with two preliminary matters. First, my noble friend Lady Williams of Crosby had hoped to speak in the debate. However, she has asked me to apologise to the House for her absence; her daughter is being called to the Bar this evening and although lawyers are not popular in all parts of the House, I am sure that your Lordships will think that it is an important reason for her to be absent.
Secondly, I should make it clear that this is a topic on which my party does not take a collective position, I speak for myself. Thirdly, I am glad to have the opportunity to introduce the Motion. It is the only means by which the House can perform its important function of scrutinising subordinate legislation, subject to the negative resolution procedure, to do its best to ensure that it achieves its object. In this case, that is properly to implement European Community law.
On 20th December, hastily and, I am afraid, without consultation, just before the Christmas Recess, the Sex Discrimination Act 1975 (Application to Armed Forces etc.) Regulations 1994 were laid before the House. They

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were laid under the powers conferred by the European Communities Act 1972 to give effect to the European Community principles of equal treatment in employment and of equal pay for equal work, without sex discrimination.
The fact that the Government have at last introduced implementing regulations is welcome. Unfortunately, however, I believe that the regulations lack clarity and transparency. Far from removing, they create legal uncertainty and they fail to achieve their purpose of giving proper effect to Community law.
To explain what I mean, I must briefly describe the statutory scheme governing sex discrimination in employment and equal pay. I shall try to do so avoiding legal jargon, but I shall probably fail.
The Sex Discrimination Act 1975 makes sex discrimination unlawful in the employment field. Until amended by these regulations, Section 85(4) contained a blanket exception for service in the naval, military or air forces of the Crown. Section 85(5), which is unaffected by the regulations, still permits sex discrimination in admission to cadet forces administered by the Ministry of Defence.
The other statute, the Equal Pay Act 1970, requires equal pay for equal work without sex discrimination. But Section 1(9) excludes from its scope service in the Armed Forces. Therefore, it is not lawful under the present statutory scheme to deny women employed in the armed services equal pay for equal work. I emphasise that Section 1(9) is untouched by these regulations. The principle of equal pay for equal work, guaranteed by Article 119 of the Treaty of Rome and reinforced by the Equal Pay Directive, contains no such exception. Therefore, I submit that there is a continuing mismatch between the British statute book and Community law.
I turn now to Council Directive 76/207/EEC which came into force as long ago as 9th August 1978. That guarantees the principle of equal treatment without sex discrimination as regards access to employment, including promotion, and to vocational training, and as regards working conditions. Article 6 obliged the member states to introduce into their national legal systems the measures necessary to enable everyone to pursue their claims by judicial process. Article 5(2) obliged the member states to abolish any laws, regulations and administrative provisions contrary to the principle of equal treatment.
Article 2(2) is the key derogation clause. It says that the directive is without prejudice to the right of member states to exclude from its field of application those occupational activities and, where appropriate, the training leading thereto, for which, by reason of their nature or the context in which they are carried out, the sex of the worker concerned constitutes a determining factor.
The European Court of Justice—I hope that I shall be forgiven for mentioning briefly a few of the landmark points —gave an authoritative ruling on the scope of that derogation in a case called Marguerite Johnston v. Chief Constable for the Royal Ulster Constabulary in 1986. The Court there laid down the following important principles. First, that member states must take
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measures which are sufficiently effective to achieve the aim of the directive. Secondly, that Article 2(2), being a derogation from an individual right laid down in the directive, must be interpreted strictly. Thirdly, that in determining the scope of any derogation from the right to equal treatment of men and women the principle of proportionality must be observed. That principle requires that derogations remain within the limits of what is appropriate and necessary for achieving the aim in view. Fourthly, the only provisions in the treaty which provide for relevant derogations, including Article 224, the Court said, deal with exceptional and clearly defined cases. Because of their limited character, those articles do not lend themselves to a wide interpretation.
I should explain to your Lordships, even though it is dull to have to do so, that Article 224 of the Rome Treaty is a quite exceptional derogation clause, catering for extreme circumstances. It states:
"Member States shall consult each other with a view to taking together the steps needed to prevent the functioning of the common market being affected by measures which a Member State may be called upon to take in the event of serious internal disturbances affecting the maintenance of law and order, in the event of war, serious international tension constituting a threat of war, or in order to carry out obligations it has accepted for the purpose of maintaining peace and international security".
Therefore, it is not surprising that the Court of Justice rejected the British Government's reliance in Johnson on Article 244 of the treaty to justify discriminating against women members of the RUC full-time reserve on the basis of their gender, even in the quite terrible conditions of emergency and terrorism then prevailing in Northern Ireland. As the Court made clear, Article 224 is not a general escape clause permitting states to infringe the fundamental right of women to equal treatment. What matters is that a state can bring itself within the derogation clause in Article 2(2) of the directive which permits sex discrimination only where there are particular occupational activities, and, where appropriate, the training leading thereto, for which by reason of their nature, or the context in which they are carried out, the sex of the worker concerned constitutes a determining factor.
In another case, this time against France—Commission v. France in 1988—the Court held that it follows, from the fact that the exceptions provided for in Article 2(2) of the directive may relate only to specific activities, that they must be sufficiently transparent.
Finally, in another case—Emmott v. Minister for Social Welfare in Ireland in 1991—the Court of Justice decided that, so long as a directive (in that .case guaranteeing equal treatment in social security) has not been properly transposed into national law, individuals are unable to ascertain the full extent of their rights. Only the proper transposition of the directive, said the Court, will give the necessary legal certainty. Until such time as the directive has been properly transposed, a defaulting member state may not rely upon an individual's delay in bringing proceedings against the state to protect rights conferred on her by the directive; and national time-limits cannot run unless and until

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there has been proper transposition of the directive into national law. That is a heavy sanction against a defaulting state.
Let us now leave aside the legal framework. In December 1991, two former servicewomen, both nurses, for whom I acted as counsel, obtained declarations from the Divisional Court that their exclusion from the scope of the Sex Discrimination Act was contrary to the directive and that the long-standing policy and practice of dismissing all pregnant women from the Armed Forces breached the directive. That put the Government on notice that servicewomen and men could not be excluded wholesale from the protection of the Sex Discrimination Act and that the statutory exclusion could not stand in its present form. Most unfortunately, for the past three years the Government have done nothing to give effect to the decision by introducing implementing regulations. As a result—I hope that I shall be forgiven for this criticism—they have undoubtedly caused themselves and the British taxpayer, which is more to the point, readily avoidable problems and expense.
What has happened meanwhile? Several thousand women who had been dismissed from the Armed Forces because of pregnancy brought proceedings in industrial tribunals claiming compensation. The ministry admitted liability in all the claims but sought to dispute the quantum of damage, as is its right. Claims are still proceeding in industrial tribunals nationwide.
The ministry estimate that those claims have so far cost it and the taxpayer some £35 million. One reason why that figure is so high is that the ministry is liable to pay compensation to every woman dismissed because of pregnancy between 9th August 1978 (when it should have implemented the directive) and the summer of 1990, when maternity leave was finally introduced for servicewomen. In other words, the ministry had maintained an unlawful sex discriminatory policy for 12 years and thereby blighted the careers of over 5,000 women.
Some 80 per cent. of the cases have been settled, for an average of about £10,000 each. A few of the awards have been very high and that has attracted considerable adverse comment in hostile elements of the media. Those few awards are high because the women concerned have been able to demonstrate that they have been deprived of lengthy and successful careers because of the unlawful actions of the Ministry.
Perhaps I may give just two examples to serve for all. Nichola Cannock was commissioned into the WRAF. She was a mechanical engineer who in the early 1970s had obtained a degree in engineering at a time when almost no women were qualified in that way. While in the WRAF, she was involved in a senior capacity in servicing aircraft taking part in the Falklands campaign. She served on Ascension Island, where special accommodation had to be provided for her because she was the only woman engaged on that job. She became a specialist in the servicing of Tornado fighters. After some nine years of service with the WRAF, she became pregnant and her employment was terminated. Her damages were very substantial because the industrial
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tribunal accepted that she was a career woman of great ability and dedication and that she would have served to the end of her 16-year commission if she had been permitted to do so. At that time she would have been entitled to an immediately payable index-linked pension. There is no civilian employment which could have provided her with equivalent benefits.
Alison Mutton was serving in the WRAC. Her husband left the Army and took various jobs as a driver. She was the primary bread-winner, and she and her husband lived in married quarters that were in her name, which they were entitled to occupy solely by virtue of her service. She became pregnant and was informed that she must choose between the termination of her pregnancy and the termination of her service. She realised that, if she were dismissed, she and her husband would lose their home. They would not be able to remain in Oxfordshire where they were posted because they had nowhere to live, and would have to live with his parents in the north of England. Therefore, her husband would also become unemployed and they would be reduced to living with their in-laws. She decided to have the abortion, and did so at great personal cost.
The following year, as a result of a failure of contraception, she became pregnant again and decided to have a further abortion for the same reason. She went to the hospital and saw the baby move on the scan and realised that she could not go through with the termination. She therefore had the baby, and the consequences which she feared materialised. Within a matter of two weeks she and her husband were reduced from a situation in which they had had two incomes and a home to one in which they were both unemployed, she was pregnant and they were living with his parents in an area of high unemployment. Their marriage was unable to withstand the strain and they eventually separated. She won her case in an industrial tribunal last week, and will receive substantial compensation, probably in the region of £100,000.
The problems of sex discrimination in the Armed Forces are not confined to dismissal on grounds of pregnancy. For example, there is a continuing problem, I understand, about discrimination in redundancy terms under the Options for Change programme. Until 1991, women joining the WRAC were permitted to commit themselves only for a maximum of three years, whereas men joining the Army could commit themselves for three years', six years' or nine years' service. Men who committed themselves to nine years' service were immediately paid on a higher scale. Women could not be paid on that scale until they had actually completed their nine years' service. Applications for voluntary redundancy were invited from service personnel with between six and nine years' service. Women who applied for redundancy but had less than nine years' service found that, because they were on a lower pay scale than men with the same length of service serving in the same trade at the same rank, the redundancy payments they were offered were about £6,000 lower than those which were offered to men in an equivalent situation.
In what respects do these regulations fail to comply with Community law? They permit any acts of sex discrimination done for the purpose of ensuring the combat effectiveness of the Armed Forces. But Community law requires not only the pursuit of a legitimate aim, such as ensuring combat effectiveness; it also requires compliance with the principle of proportionality. The means employed must be no more than is necessary or proportionate to achieve that legitimate aim.
The phrase,
"for the purpose of ensuring … combat effectiveness",
is unclear. It is not clarified by any list of the specific occupational activities affected: for example, two personnel being employed in a tank where plainly for reasons of privacy and personal hygiene it would be inappropriate for members of different sexes to share that close confined space. Individuals will not be able to understand the scope and limits of their rights and unnecessary litigation will result.
Nor is there any reason why "combat effectiveness" should of itself require or justify treating servicewomen less favourably than servicemen. What the law requires is that men and women should be treated by their employers on the basis of their individual skills and abilities and not on the basis of broad gender-based assumptions and generalisations. Last year the United States Government decided to open combat jobs aboard ships and in naval aviation squadrons to women. Last week Secretary of State John Dalton provided departmental guidance explaining why pregnancy and parenthood are compatible with a naval career for women. But under these regulations our Secretary of State could discriminate against women with the aim of promoting combat effectiveness.
I suggest that the blanket derogation in the regulations sweeps too broadly. It goes well beyond the derogation permitted by Article 2(2) of the directive. It fails to give effect to the proportionality principle. It also lacks transparency. It is not related to specific activities, so that members and former members of the Armed Forces of both sexes are able to ascertain the full extent of their rights. It does not ensure that members of the Armed Forces are judged on the basis of their individual skills and abilities. And it manifestly falls outside the very exceptional circumstances envisaged by Article 224 of the Rome Treaty.
Because Section 85(5) of the Sex Discrimination Act is unaffected by the regulations, sex discrimination remains permissible in admission to cadet forces administered by the ministry, even where such discrimination is wholly unrelated to combat effectiveness. Because Section 1(9) of the Equal Pay Act is unaffected by the regulations, the principle of equal pay is not properly transposed into our legal system.
The Government will no doubt argue that the wording of the regulations must be broad to enable account to be taken of changing circumstances, as military technology and equipment change. However, I submit that there is no reason why the regulations cannot prescribe a specific list of exclusions which can be readily amended by subordinate legislation. That would achieve the
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necessary transparency and legal certainty, while permitting the necessary flexibility as circumstances change.
For those reasons, I hope that the Government will think again. Otherwise, I fear that there will be unnecessary litigation in our courts and tribunals, and probably in the European Court of Justice, because of the failure by Parliament to use our much-vaunted sovereignty to enact regulations which enable our fellow citizens to know the proper extent of these important rights. Employment lawyers, like myself, will thrive; the victims of sex discrimination will suffer; and the taxpayer will pay for the ministry's failure to introduce the necessary policies and legislation. I beg to move.
Moved, to resolve, That this House calls on Her Majesty's Government to revoke the Sex Discrimination Act 1975 (Application to Armed Forces etc.) Regulations 1994 (SI 1994, No. 3276), and to make in their place regulations which are fully in compliance with and give full effect to European Community law, by prescribing only such derogations from the Community principle of equal treatment for men and women in employment as are in accordance with Council Directive 76/207/EEC; and by repealing the blanket derogation in Section 1(9) of the Equal Pay Act 1970, so as to ensure and maintain the Community principle of equal pay for equal work for men and women serving in the naval, military and air forces of the Crown.—(Lord Lester of Herne Hill.)
7.37 p.m.
Lord Tebbit: My Lords, I am grateful to the noble Lord, Lord Lester, for finding a more effective means than the one which occurred to me—that of merely praying against this regulation—to ensure that we were able to debate these issues. I did not wish to interfere with the flow of his argument, but in both his Motion and in what he said, the noble Lord referred to Section 1(9) of the Equal Pay Act. That puzzled me. In my copy of the Act it appears to be Section 1(8). Are we talking about the same thing? It is not an important point and the noble Lord need not answer at this moment, but I raise it for greater certainty.
The House will no doubt be relieved to hear that I shall not argue tonight the merits of sex discrimination legislation. That is not my purpose, neither as it applies to the Armed Forces in particular, nor to society in general. I am concerned, as indeed was the noble Lord, Lord Lester, with the effectiveness, and indeed the vires,of the legislation. It may be helpful, not for the benefit of noble Lords, but for those who may read the debate at some stage, for us to remind ourselves how statutory instruments arise and how they work. I believe that to be important to my argument.
The basic rules containing statutory instruments are set out in the Statutory Instruments Act 1946. It is in Section 1 of the Act that they are defined, broadly speaking—I do not quote from the Act but summarise it—as instruments making, under the power granted in an Act of Parliament, orders, rules, regulations, or subordinate legislation. Quite clearly, this statutory instrument does not fall within that definition. It is not

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making orders or regulations in that manner. It is, in fact, repealing part of an Act and amending substantially that Act.
Of course, statutory instruments have been developed to give such power and particularly where it has been granted in a particular Act to amend prescribed provisions of that Act. There is such provision in the Sex Discrimination Act 1975. But it does not apply to the power to amend Section 85. Therefore, this statutory instrument is made—so it tells us on the face of the paper—under Section 2(2) of the European Communities Act 1972. Confusingly, Section 2(2) has nothing to do with the Article 2(2) to which the noble Lord, Lord Lester, has been referring.
When in the other place I voted for the European Communities Act 1972, I never dreamt that Section 2(2) would be used to amend at the diktat of the European Court the law concerning sex discrimination in the armed services. Clearly, I was not alone in that because subsequently, three years later, Parliament, knowing its own mind, knowing it could not be bound by the legislation of a previous Parliament (or can it these days?) made its intentions crystal clear in Section 85 of the 1975 Act, saying in the broadest terms—terms to which the noble Lord, Lord Lester, objects very strongly but they were very clear—that the sex discrimination law did not apply to anything of this kind in the armed services.
Well, Parliament has been bounced. We have been overridden. And why? Does sex discrimination in the armed services have anything whatever to do with the Common Market, the internal market, or the single market? Is it some form of barrier to trade which prevents BMWs being sold in Britain or insurance policies being sold in Germany? Not at all. It has nothing whatever to do with trade or the free movement of goods, people or capital across the internal borders of the European Community. It is about what should or should not be the rights of members of Her Sovereign Majesty's Armed Forces. That surely is not a matter for a treaty which, we were told, was primarily one concerning trade and economic matters. It must surely be a matter for a sovereign state —either this sovereign state or another sovereign state. It is clear that it is now not a matter for this sovereign state, not a matter for Her Majesty's Ministers or her Parliament, to decide in what manner her Armed Forces should be organised, but it is a matter for another body external to this kingdom, over which the people of this kingdom have no control and no rights.
Just to make all these matters rather worse, the Joint Committee on Statutory Instruments in its Eighth Report—we have before the House as HL Paper 27 an extract from that Eighth Report—casts doubt upon the vires of this statutory instrument, the very point which the noble Lord, Lord Lester, made. It suggests—and it argues it well—that it is simply not within our powers to legislate in this matter. It says that we cannot rely on Article 224 of the Treaty of Rome, nor, I take it, on the
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doctrine of subsidiarity, to give to this Parliament the right to legislate in the way that is proposed and to say, as the statutory instrument purports to do, that:
"Nothing in this Act shall render unlawful an act done for the purpose of ensuring the combat effectiveness of the naval, military or air forces of the Crown".
If Article 224 does not allow such a provision, is there some other legal basis on which a provision might be made? How do other member states proceed? Have they abolished sex discrimination in its entirety in their armed forces? We are told—I am sure that the noble Lord, Lord Lester, is right—that this matter has been hanging over our heads since 1978. Are the Greeks in line? Are the Spaniards in line? The French, the Germans? No doubt our Danish friends are—they have always had rather extraordinary views about matters of sex discrimination, as I remember from my time in the Council of Ministers. But I would be intrigued to know whether we are being pushed along rather more quickly, even if it does appear rather slowly, than our fellow member states.
I have to say, however, that it may be that we have been cutting any ground on which we might have stood away from under our own feet. After all, the navy has been putting women sailors to sea in operational ships. There are precedents for that. I understand that there were a number of women on board HMS "Victory" at the Battle of Trafalgar. I do not know whether that had anything to do with the scale of the victory—I mean the outcome of the battle not the scale of the ship itself—but undoubtedly they were there in those days. More recently, the Royal Air Force is now training women as fast jet pilots.
But I should like to come away from that gentle edging towards the merits of the matter—I want to try to avoid getting entrapped into such matters of controversy: they do not come easily to me—and back to the vires of the issue. I note also what the joint committee said in the final paragraph of HL Paper 27 concerning the making of this order under the negative procedure. It is worth quoting a little from that paragraph:
"The Committee notes that these Regulations have been made subject to negative procedure… The Ministry explain their decision to make these regulations subject to negative procedure by saying `Given the content of the Regulations (which essentially amount to regularisation of the statute book)"'—
I emphasise the words "regularisation of the statute book"—
"`it was considered appropriate for the negative resolution procedure to apply'. However, the Committee considers that the content of these Regulations is so significant in embodying a policy choice in the formulation of the new exception from the 1975 Act that it would have been more appropriate to have made the Regulations subject to draft affirmative procedure".
That is certainly true, and, indeed, I might like to go further. It is not my intention—and never was when I set down a Prayer—to seek to challenge the convention that this House does not seek to overturn statutory instruments brought under the negative procedure in particular nor that it should reject those under the affirmative procedure, unless there are somewhat exceptional circumstances.

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A marker should be set down and perhaps the joint committee has done so. When statutory instruments go beyond the implementation of the intentions of an Act already approved after due debate in both Houses of this Parliament and, like this one, reverse the effect of a key section of an Act passed by this Parliament, it seems to me that that is scarcely subordinate legislation at all.
'This statutory instrument is in fact primary legislation and would have been treated as such but for its provenance; that is, that it comes because of the diktat of a foreign court. If this proposal had been brought forward in the normal manner of reforming legislation there is no doubt whatever that it would have been treated as primary legislation with a proper debate in both Houses of Parliament.
As noble Lords will know, as a result of a Prayer laid by the Opposition in the other place, there was a 90-minute debate in a Committee upstairs at the end of which I believe eight members of that Committee voted to say that they had discussed the regulation and considered it and three voted to say that they had not. That was the extent of the democratic procedures to check on what this major piece of legislation was about and in what manner it should be conducted.
Primary legislation is now to be legislated by a means which restricts debate and prohibits amendment otherwise the noble Lord, Lord Lester, would have put down amendments to such a Bill and they could have been properly and fully discussed.
That leads to me to put a direct question to my noble friend who will answer this debate and for whom I have the greatest sympathy. I feel that he is in an almost impossible position. Let us suppose that this statutory instrument proves to be ultra vires or it is rejected. We know it is not going to be rejected tonight, but let us suppose that it is. Let us suppose that it had been rejected in the other place. What effect would that have on the law which is now being imposed in the United Kingdom? I did not ask what effect it would have on the statute book of the United Kingdom because we now know that that statute book is not the law of the United Kingdom. The law of the United Kingdom is what the European Court says is the law of the United Kingdom.
If the joint committee is wrong and the Government right, we would not even have this fig leaf of protection which is set out in Paragraph 2(a) of the order in the event that we reject it. In essence, these proceedings this evening—rightly taken during the dinner hour because the taking of dinner must surely be more important than the consideration of a trifling matter like the operation of sex discrimination within Her Majesty's Armed Forces—are nothing more than a farcical reminder of a very unpleasant fact. This Parliament is no longer a sovereign body. It no longer has the power to legislate on matters which are concerned solely with the management, leadership, effectiveness and good order and discipline of Her Majesty's Armed Forces. How much more is there left for us?
7.54 p.m.
Lord Williams of Elvel: My Lords, I shall not take up much of your Lordship's time because most of the
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arguments that I had in mind to deploy have been deployed either by the noble Lord, Lord Lester, or by the noble Lord, Lord Tebbit.
The major issue here is that of vires and hence the legality of what the Government have done, because this order is now part of the corpus of law. When the Minister comes to reply he will no doubt comment on the report of the Joint Committee on Statutory Instruments. Our view is that the Joint Committee is broadly right that the Government cannot rely on Article 224 of the Treaty of Rome as authority to introduce the order specifying "combat effectiveness" in the terms of the order. Our view is that Article 2.2. of the Equal Treatment Directive does not give the Government power to make this derogation and that therefore it has to be made under some other principle which no doubt the noble Lord will explain to us.
Our view is that the expression "combat effectiveness" in the order, as the noble Lord, Lord Lester, said, goes very much wider than the derogation which is allowed in Article 2.2. of the directive. It is clear from that that the only form of allowable discrimination is contained in the provisions of the Sex Discrimination Act 1975 and that is genuine occupational qualification. That is when, for physical or other reasons, it will not serve for the two sexes either to be jointly in an operation or together in a particular capacity. I believe that those points have been made by the noble Lords, Lord Lester and Lord Tebbit, and I am not going to elaborate on them.
I have only two other points to make. I believe that there are further omissions in the Government's approach which the directive would normally require. For instance, under Section 85(5) of the Sex Discrimination Act recruitment to military cadet forces is excluded from the ambit of the sex discrimination provisions. I believe that to be contrary to the Equal Treatment Directive. I ask the Minister to comment on that.
Then there is protection from victimisation. The Equal Treatment Directive is perfectly clear that if someone complains of discrimination they should be protected. At the moment that does not seem to appear in legislation even as amended by this order. As regards equal pay, there appears to be an omission because, as I understand it—and I stand to be corrected by the noble Lord, Lord Tebbit—under Section 1(9) (a) of the Equal Pay Act, if a member of the Armed Forces believes that the Secretary of State has not met the principle of equal pay set out in Section 7(1) of that Act, he is not entitled to complain, but an ordinary employee is entitled to complain to the Secretary of State. Again, it is likely that that exclusion violates the Equal Treatment Directive. I hope that the Minister will deal with that problem.
In sum, it seems that there is justification for the Joint Statutory Instruments Committee casting very considerable doubt on whether the Government have the vires to do what they have done. I echo the point may by the noble Lord, Lord Tebbit. If challenged, what happens if the courts overturn this particular order? What happens to our general legislative principle then? If Article 224 is the authority for this order, as the noble Lord, Lord Lester, indicated in reading out that article

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in the treaty, member states shall consult each other. Did member states consult each other about the order which we are now discussing or did the United Kingdom act unilaterally?
There are serious doubts about this whole operation. I want to emphasise to the Minister that we certainly believe that we should have combat effectiveness and nothing which I have said casts any shadow of doubt on that principle. It may well be that many women do not want to undertake the risk of combat. The same is true of many men. If they do not wish to do so, they should not volunteer to join the Armed Forces. That seems a simple matter. If they do volunteer, they must expect to be in combat situations. There is no difference between the front line and the second line in modern technological warfare, as was shown by the death of several US women in the armed forces in the second line when they were struck by a Scud missile.
So, where does that get us? Either the Government can justify the vires and can say that they fulfil the terms of the equal treatment directive, or we shall have to say that the Government are wrong and, as the noble Lord, Lord Lester, said, they will be proved wrong. And when they are proved wrong, that will be of great benefit to the noble Lord, Lord Lester, but, as he rightly pointed out, to the great detriment of the taxpayer.
8 p.m.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Henley): My Lords, let me try to respond to the points that have been raised and let me hope that I can respond reasonably briefly. First, perhaps I may remove any misunderstandings about the aim of the regulations which were laid before the House in December and which came into effect six weeks later on 1 February. They remove the complete exemption of the Armed Forces from the provisions of the Sex Discrimination Act 1975 which the noble Lord, Lord Lester will know well—an exemption which has proved to be inconsistent with European law—and replace it with the provision that nothing done for the purpose of combat effectiveness shall be unlawful under national law.
I must stress that it is not our intention to use the regulations to place further restrictions on the areas where women can be employed in the Armed Forces. Indeed, our policy on the employment of women is moving in quite the opposite direction. I should like to say a little about that later.
Following the remarks of the noble Lord, Lord Lester, and others and the comments of the Joint Committee on Statutory Instruments, which were rightly stressed by the noble Lord, Lord Williams, I think it would be right if I said a little about the vires of the regulations and why we consider them to be intra vires I stress that the committee said only that there was a doubt as to whether the regulations were intra or ultra vires. I should like to make our position clear.
As we set out in our memorandum to the joint committee, the essential point is that Article 224 of the treaty, which has been referred to on many occasions, is
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evidence that the treaty does not extend to action taken by a member state to ensure the combat effectiveness of its armed forces. An alternative way of putting the argument is that while certain aspects of such measures might in principle affect some matters that fall within the treaty, a member state is entitled to rely on Article 224 in order to preserve the prerogative of that state to protect its national security.
Article 224 of the treaty contemplates a member state taking measures in a number of specified events. Of particular relevance to the regulations, two of those events are war or serious international tension constituting a threat of war. Article 224 is written on the assumption that the antecedent treaty obligations do not restrict the power of the member states to take action in any of the events described therein.
As I am sure the noble Lord, Lord Williams, will accept, in order to be in a position to take action in relation to war or the threat of war, a member state must be free to organise, recruit and train its armed forces in the manner it considers best calculated to ensure the combat effectiveness of those forces. If that involves a limited departure from the principle of equal treatment, that is a matter for the member state and is beyond the scope of the treaty and any directives made thereunder.
As to the Johnston case, which was referred to in the committee's report and by the noble Lord, Lord Lester, I believe that the court's decision in that case is complex and in places difficult to follow. I should stress that it involved the civil police, not the Armed Forces, and even in that context did not answer the question that was referred to it on Article 224. In so far as the judgment can be interpreted as suggesting that reliance cannot be placed on Article 224, we would not expect the court to maintain that position in the context of the defence of a member state. It should also be noted that the Joint Committee on Statutory Instruments also concluded that the Johnston case might not be followed by the European Court in the context of the defence of a member state.
Our memorandum also makes clear that the ministry would be able to rely on the expressed derogation from the principle of equal treatment contained in Article 2(2) of the equal treatment directive to which the noble Lord referred. The approach which the ministry has taken to new Section 85(4) is consistent with the terminology used in Part V of the 1975 Act. I refer in particular to Section 52 which provides that nothing in the earlier parts of the 1975 Act renders unlawful an act done for the purpose of safeguarding national security. Indeed, it might well have been possible for the ministry simply to have relied on Section 52(1) and repealed the old Section 85(4). It was, however, considered desirable to make the position in relation to combat effectiveness clear by inserting new subsection (4). As the ministry's memorandum made clear, where the ministry proposes to depart from the principle of equal treatment in order to ensure combat effectiveness it would be because of the nature of the activity in question and the context in which it will be carried out. The ministry will accordingly, as a matter of principle, be squarely within the derogation in Article 2(2).

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I should respond to the committee's views on the use of the negative resolution procedure, which was referred to by my noble friend Lord Tebbit. Given the content of the regulations which, I would argue, essentially amount to regularisation of the statute book, the ministry considered it appropriate to use the negative resolution procedure. That was consistent with previous practice. The sex discrimination and equal pay remedies regulations of 1993, which amended the 1975 Act, using the same powers under Section 2(2) of the 1972 Act, were also made using the negative procedure. The ministry had considered that a substantial change was being made to the existing legal position by the regulations and would carefully have considered the use of the affirmative procedure. But we believe that that is not the case with these regulations.
It has been suggested by the noble Lords, Lord Lester and Lord Williams, that the wording of the regulations is too broad and that we should have specified those areas where the nature of the activity makes it inappropriate for one sex or another. I believe that it would be quite impractical and totally unnecessary to do this on the face of the legislation—or for that matter in regulations. The wording is deliberately broad. It needs to be to take account of changing circumstances both now and in the future. Military technology and equipment changes. Society's attitudes change. If there were a specific list of exclusions, we would have to resort to legislation every time we wished to amend it.
Perhaps I can give just one example: the employment of women on ships. That has grown dramatically over the past few years. I stress to the noble Lord, Lord Lester, that something of the order of 700 women in the Royal Navy are now serving at sea. We were certainly ahead of the United States, to which the noble Lord referred, in taking that step. I think everyone will agree that it has been an enormous success, despite considerable misgivings at the time and considerable fears, particularly among the wives of those serving at sea who had been left back at home—and despite the misgivings of some of the tabloid press. I believe that if we had drawn up a list allowing that to be one of the areas into which women could go and it had not been a success, to have had to come back and make a small amendment and then another amendment a few weeks later would not have been the right way forward.
I wish to refer briefly, in response to the noble Lord, Lord Williams, to consultation under Article 224. If the noble Lord looks at the wording of Article 224, he will see that it is quite clear that on an issue such as this, which is not related to the Common Market and such matters, consultation is not appropriate.
Perhaps I may briefly remind the House, as I said I would, of the role of women in the Armed Forces. Servicewomen have always undertaken a wide range of duties, although they did not serve in combat roles. I am sure that all noble Lords would wish to pay tribute to the valuable contributions made by women in the Armed Forces over many years. Indeed, in order to make fuller use of the undoubted abilities of women in the services and to improve their career opportunities, new areas of employment have been opened up to them in recent
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years. Over 20 women are serving as aircrew in the three services and more than 50 others are undergoing training, including training in fast jets.
As I said earlier, about 700 women are serving at sea in the Royal Navy. That is way ahead of America where women were prohibited from serving on naval ships except hospital ships. The case referred to by the noble Lord, Lord Lester, was ruled to be illegal by the American courts. As all noble Lords will know, women are serving with the UN forces in Cyprus and the former Yugoslavia and in ships patrolling the Adriatic.
Other than normal considerations such as privacy and decency, which of course apply also in civilian life, we expect that women will not be excluded from posts in the Armed Forces except where their presence would impair combat effectiveness. It is important that I define what we mean by "combat effectiveness". I mean the ability of a unit to carry out its missions and operations successfully. Obvious examples, which are likely to continue to be for males only, include the infantry and armoured corps. But the Army and other services are keeping those matters under review and are at present looking into means of gender-fair physical testing. We recognise fully the importance of ensuring the maximum equality of opportunity consistent with the maintenance of combat effectiveness.
I shall do all I can, as will my colleagues in another place, to keep this House and another place informed of any further developments, but we are not making any immediate changes. Nor do the regulations require us to do so. There have been suggestions—made outside the House—of reduced opportunities for women in the Armed Forces. I give the House the firm assurance that the general effect of the changes will be towards a further improvement in the overall opportunities for women in the services.
Lord Tebbit: My Lords, before my noble friend leaves the point, if we take all that he has said—I am sure that he is right—about Her Majesty's Government's policies in this area, why do we need an exemption to be able to discriminate on grounds of sex in cadet forces?
Lord Henley: My Lords, I shall be coming later to the subject of cadet forces. The simple point is that cadets are not employed, and so they are not covered by the employment legislation about which we are talking. It does not affect those adults employed supervising cadets; it is purely an exemption from the Act—I shall reach this point in due course—with regard to the admission of cadets and not to their employment. My noble friend will understand that those cadets are not employed.
Lord Lester of Herne Hill: My Lords, I am sorry to take more time, but will the Minister deal with the point that the employment provisions under the Sex Discrimination Act cover training and training organisations. Surely there is no doubt that being a cadet

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is a way of becoming a member of the Armed Forces and falls within the training provisions covered by the relevant part of the statute.
Lord Henley: My Lords, some cadets join the Armed Forces, although not a high proportion. However, to argue that that is a means by which they train to become members of the Armed Forces does not follow the actuality of what is the case. Cadets are totally separate from the Armed Forces. Admittedly the Armed Forces greatly value the cadets. I would offer them a great deal of support as one of our most successful youth movements, but Section 84(5)—the noble Lord will correct me if I am wrong—covers purely the admission of cadets. It does not deal with their employment, because they are not employed.
As I said, I shall return to the subject of cadets in due course. I wish to revert to the regulations. The High Court decision to which the noble Lord, Lord Lester, referred—I believe, as he said, he acted for some of the parties—related to pregnancy dismissals in December 1991, which led to the position that total exemption of the Armed Forces from the Sex Discrimination Act was inconsistent with European law. The policy of compulsory discharge of servicewomen upon pregnancy ceased in 1990 when maternity leave was introduced. In order to act fully and fairly, and in accordance with the law, the Ministry of Defence admitted liability to pay compensation to women discharged on pregnancy between 1978—when the European equal treatment directive came into effect—and 1990. There have since been over 4,500 claims for dismissal during that period. We have made every effort to keep payments to a level consistent with the taxpayer's interests. Although there have been a few high awards by industrial tribunals, about 80 per cent. of the claims have now been settled for an average of about £10,000 each.
The purpose of the regulations, as I argued, is not to make any substantial change in the law but to tidy up national law to reflect the actual position under European law as it applies to the Armed Forces. My noble friend Lord Tebbit asked what was the practical effect of the regulations. The practical effect as regards potential claims for sex discrimination is that claims now have to be brought within three months of any discrimination. That is because the rest of the Sex Discrimination Act, including time limits, applies now to service personnel in the same way as it does to civilians. I can say frankly to my noble friend that had we not passed the regulations the claims about which he complains could continue indefinitely.
The Motion seeks also to repeal the blanket derogation for the Armed Services in Section 1(9) of the Equal Pay Act 1970. We do not believe that there is any need to do so. The Equal Pay Act 1970 does not deal with the Armed Forces in the same way as does the Sex Discrimination Act 1975. Section 7 of the Equal Pay Act specifically precludes the Secretary of State for Defence from making any distinction between servicemen and servicewomen in pay, allowances or leave, unless it is fairly attributable to differences in obligations undertaken. The basic pay of the Armed Forces already complies with the principle of equal pay for equal work.
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Lastly, I shall say a little about the cadets. As I made clear—I sense that the noble Lord, Lord Williams of Elvel, has an element of doubt—there is no direct vocational link between cadet forces and the Armed Forces. Individuals join the cadets for the opportunities offered and for their own personal and social development. As I did earlier, I again pay tribute to the important service that they provide and to the fact that they are an important element in the nation's voluntary youth movement.
I should stress—as I did earlier—that the cadets are not employed. The cadet force exemption is in respect of admission only. It does not cover the employment of adults or the activities of cadets once they have joined. Our legal advice is that because the equal treatment directive imposes no obligations in relation to the cadet forces it would be ultra vires—that is something of which we have been accused in other parts of the regulations—to remove or amend the cadet force exemption under Section 85(5) of the Sex Discrimination Act by virtue of a statutory instrument under the European Communities Act.
The exemption for cadet forces is in line with that available to other bodies, including youth organisations—I believe that that is dealt with under Section 34—but we will obviously consider with the cadet forces the scope for amending or removing the existing exemption for admission to the cadet forces in due course, should it be necessary. Again, I stress that it does not affect the cadets themselves, because they are not employed; it does not cover the employment of all adults or activities once the cadets are in. I hope that with those explanations the noble Lord will feel that we have answered his points and that it is not necessary on this occasion to press his Motion.
Lord Lester of Herne Hill: My Lords, I am grateful to the Minister for that full reply. Indeed, I am grateful to all noble Lords who have participated in the debate. I hope that your Lordships will consider that the subject was appropriate to be raised in this way; there is no other.
Perhaps I may be brief and deal with only one or two points. First, I found myself in agreement with a great deal of what was said by the noble Lord, Lord Tebbit, about the process of law-making. However, I have an important qualification to make with which he might not agree. The European Communities Act 1972 is a brilliant legal conjuring trick devised by Sir Geoffrey Howe, as he then was, to enable the United Kingdom swiftly to comply with its treaty obligations through subordinate legislation, among other things. I doubt whether either House knew exactly what was happening when that provision was passed, any more than it understood Section 2(4) and its effect on the role of the courts in interpreting statutes. As someone sympathetic towards accession to the Community, I cheer the fact that that means was devised. However, there is a need for important safeguards and this debate has shown the lack of effective safeguards in a case of this kind.
Secondly, I believe it to be the view of the House as a whole that women have made a most important contribution to the effectiveness of the Armed Forces

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and the police service and that there should he no more sex discrimination than is necessary in order to achieve the legitimate aims of the Army or the police force.
Thirdly, it would be inappropriate for me in this House to attempt a legal reply on points of law to what was said by the Minister. In my respectful view, the vires of these regulations is doubtful and their compliance with Community law obligations is very doubtful.
I agree entirely with the noble Lord, Lord Williams of Elvel, that what should have happened is that a genuine occupational qualification exception should have been included in the regulations and on their face. The noble Lord, Lord Tebbit, asked what the consequence would be if the Government and Parliament have got these regulations wrong. The consequence would be disastrous. It would mean that the three-month time limit would be quite ineffective, as the Emmott case shows. Therefore, the main purpose for introducing the regulations would have failed. Women or men will be able to complain of sex discrimination without time limit unless and until proper regulations are made and brought into force. I suggest that that will not be in the interest of the Armed Forces, their members or taxpayers. However, it would be inappropriate for me to argue further and I beg leave to withdraw the Motion.
Motion, by leave, withdrawn.

Pensions Bill [H.L.]
8.23 p.m.
House again in Committee.
Lord Marsh Lord Marsh moved Amendment No. 145YR:
After Clause 53, insert the following new clause:
("Repayments
.—(1) In any case where a payment ("the first payment") has been made by any person under section 53 to a scheme following an actuarial valuation of the scheme assets which disclosed a shortfall (within the meaning of that section) and a subsequent actuarial valuation of the scheme assets discloses that the value of the scheme assets exceeds the value of the scheme liabilities, that person shall become entitled, at the time the subsequent valuation is signed, to a refund of an amount—

(a) equal to the amount of the first payment, or,

(b) the excess,

whichever is the less.
(2) Where paragraph (b) of subsection (1) has applied in relation to a scheme, then that subsection may be applied again on a subsequent valuation which discloses a further reduction in the shortfall to permit the person concerned to recover an amount equal to the amount of that further reduction.
(3) In relation to a scheme the terms of which do not permit the trustees or managers to make a refund falling within subsection (1), subsection (1) shall be construed as conferring power on the trustees or manager to make that refund.
(4) The provisions of this section are without prejudice to Schedule 22 to the Taxes Act 1988 or section 33 of this Act.").
The noble Lord said: The proposed new clause is fair, simple and, I am sure, totally non-controversial and I hope that the Minister will say something helpful about it. It allows a company which under the MSR puts money into the fund to get it back again, in particular in the case of a closed fund or where the age profile produces minimal contributions.
The value of pension schemes inevitably fluctuates with the markets. When a scheme's assets eventually rise with the markets, the employer normally takes a pension holiday. That option is not necessarily available in the case of closed schemes. Those schemes are closed to new entrants, with the result that they tail off eventually to zero. As a result, there is little if any scope for recovering the overpayment through a pension holiday.
It may be argued that the overpayment will be returned in due course as a so-called surplus under the Taxes Act 1988. But there are many strings to that bow and this Bill adds a great many more. The process takes so long that, particularly as regards small businesses, it is a nightmare. It is a simple statement of fact that it is neither fair nor sensible that an employer who has had to pay what could well be a large sum of money in order to meet a temporary shortfall should not be able to get the money back and put it to work for the business when the problem for which it was paid in in the first place has ceased to exist. I beg to move.
Baroness Turner of Camden: I have some sympathy with the amendment moved by the noble Lord, Lord Marsh, because I am aware of certain closed funds to which the arguments could apply. The only problem that I have with the amendment is that nothing causes greater anxiety and agitation among scheme members—even scheme members who are not affected—than the belief that repayments can be made or surpluses can be returned to employers. There is often a great deal of agitation in relation to suggestions that that should be done.
I should be happy about the amendment if it included a reference to agreement by the regulatory authority for a repayment to be made. If that were the case, I should give the amendment wholehearted support because one could say that the members of the schemes would have some guarantee that the whole scheme would be exercised with their security in mind.
Lord Mackay of Ardbrecknish: The noble Lord, Lord Marsh, argued strongly in support of his amendment. It covers the same area as the amendments which we dealt with before the dinner break. I wish to begin by reiterating an important point: the minimum solvency requirement is purely that. It is a floor below which scheme funding should not fall. It may be helpful if I introduce a point that perhaps did not emerge before the dinner break. Under the valuation basis that we now propose for a minimum solvency requirement, the liabilities represented by non-pensioner members would be valued largely by reference to equity returns.
Under the modifications announced last December, up to 25 per cent. of the pensioner liabilities of large schemes may be valued by reference to equity returns. The Committee will therefore be reassured to know that this means that the value of the liabilities will move to a certain extent in harness with the value of scheme assets. As such, the risk of schemes being tipped by short-term market movements into making large and unnecessary cash payments will be much lower than some Members of the Committee fear.

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Earlier we discussed ways that might be devised to help an employer who had had to put a great deal of money into the fund. I am advised that there are ways of ring-fencing assets with a legal underpin, which answers the question asked by the noble Lord, Lord Eatwell. I tried to explain that bank guarantees or some similar arrangement could be used to get an employer over the difficulty of the scheme being less than 90 per cent. with contributions continuing on a slightly lower plane over the next four years, going to 100 per cent. Of course, if one were to carry on with the assumption behind those concerns, if the markets picked up there could be another valuation showing that the fund had a clean bill of health and that the payments could stop.
I return to the Amendment No. 145YR. It suggests that in that event the money already paid could be paid back to the employer. That is exactly what the amendment deals with. It would be damaging to the whole concept of trust-based schemes if we enabled funds to pass freely from the scheme to the employer. The importance of the trust fund is that it provides a means of ensuring that, if the employer becomes insolvent, the pension scheme assets are separate from him and are not accessible to his creditors.
Payments from surplus are allowed to be made to an employer but only when certain conditions and criteria are met. Among them is an Inland Revenue criterion that the fund is funded at a level of 105 per cent. of the scheme's liabilities. I do not pray that in aid as a particular comfort because there are a number of hoops in relation to an individual scheme, as well as Inland Revenue criteria, through which an employer would have to go before he could recover some of the surplus. In the circumstances envisaged, he would have a reduced contribution after that kind of calculation. That is an important point because, in those circumstances, there could be an agreed change to the schedule of contributions reflecting the new circumstances.
As I have explained already, I recognise that there has been much nervousness about the potential impact of our minimum solvency proposals on some schemes and their sponsoring employers. As I tried to explain at the beginning of this series of amendments, the changes which we announced to the minimum solvency calculations will provide a more stable measure for assessing the adequacy of scheme funding. Fears that there will be widely fluctuating contribution rates are unfounded. The extended time limits will certainly allow for market recovery if a scheme drops below the minimum simply because of unusual short-term movements in prices. Therefore, it would be wrong to take the fairly dramatic step of making it possible for a scheme to repay money, so to speak, to the employer in the circumstances envisaged.
While I have a great deal of sympathy with the scenario presented by the noble Lord, Lord Marsh, the changes that we have made and some of the explanations that I have given about the ability to use bank guarantees will at least demonstrate that we are
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going some way towards addressing the problem, although I appreciate that we are probably not going as far as the noble Lord wishes to.
8.30 p.m.
Lord Marsh: Inevitably these amendments have produced a somewhat complex and occasionally confusing debate. I believe that we have all found it extremely difficult to follow the debate as it moved at an ever-increasing speed and became ever more complex on the way.
All Members of the Committee interested in this area will wish to read carefully this evening's debate. I suspect that, having read it, there may be those who will wish to discuss matters with Ministers and officials to try to achieve greater understanding. The issues are important and many of us will wish to return to this area on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 54 [Sections 49 to 53: supplementary]:
The Earl of Buckinghamshire The Earl of Buckinghamshire moved Amendment No. 145ZYS:
Page 31, line 4, at end insert:
("(2) The Secretary of State shall take account of employers' views in establishing and modifying—

(a) the prescribed periods referred to in section 51(7), section 53(3a) and section 53(3b); and

(b) the prescribed manner referred to in section 49(3).

(3) Where the Secretary of State determines that the prescribed periods or the prescribed manner referred to in subsection (2), or both, should be modified, he shall prepare and lay before each House of Parliament—

(a) the draft of an order giving effect to his decision; and

(b) a report containing a statement of his reasons for that determination.").

The noble Earl said: This amendment requires the Secretary of State to take account of employers' views in modifying the MSR and requires him to consider the effect on employers and prescribes both the time period and the method of calculation and, when he has done that, requires him to seek the agreement of both Houses of Parliament.
We have had a long debate today on the merits or demerits of the MSR and the various alternatives put forward. I do not wish to go into that debate again. Most companies will not wish to be under-funded either on an ongoing basis or on minimum solvency. But there are anxieties that, if the assumptions are drawn too tight, employers will be extremely anxious because they may have to pay more money into the scheme than would otherwise be the case.
Whether or not we like it, there are anxieties about how the operation of the MSR will work. I suggest that legislation should require consultation to take place with employing companies in certain prescribed periods for returning to solvency and also there should be a prescribed manner for calculating assets and liabilities.
I appreciate that the Committee has expressed considerable disquiet about moving from primary into secondary legislation by using regulations. I suggest in this case that we use regulations for that situation. If those provisions were made in primary legislation, the

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machinery for making changes in the MSR and the time periods would prove quite difficult. We have seen a good example of that this afternoon in view of the time it has taken us to debate the MSR issue.
I suggest that there should be consultation with the employer companies and that, when the consultations take place and the Secretary of State makes his decisions, he should place those before the House and give his reasons for the decisions that he has reached on that issue. I beg to move.
Lord Mackay of Ardbrecknish: I have listened with care to my noble friend. I invite him to look a lot further down the Marshalled List to Amendment No. 171. That is intended to introduce a new clause after Clause 109 which will place a statutory duty on the Secretary of State to consult those he considers appropriate before making regulations under any of the provisions in this part of the Bill.
We fully accept that it is proper for the Secretary of State to consult on the content of regulations—but not only on the minimum solvency requirement and certainly not only employers and employer organisations. We therefore propose this much wider duty to consult in the new clause. I am certain that, in producing regulations on so central a matter as the minimum solvency requirement, the duty to consult such people as the Secretary of State considers "appropriate" will always be interpreted as including employers.
In the past the Government have always consulted widely on .pensions legislation. In that way we have been greatly assisted by the knowledge and experience of employers, pensions professionals, practitioners, members and their representatives. We feel it is right to continue to seek views across a broad spectrum of opinion. Having drawn my noble friend's attention to Amendment No. 171, I hope that he will rest assured that we shall be doing a great deal of consulting on the regulations.
Baroness Seear: Before the noble Lord sits down, will he tell us whether the regulations will be subject to the affirmative resolution procedure?
Lord Mackay of Ardbrecknish: I am almost certain that they are subject to the negative procedure.
Baroness Seear: We may wish to return to that matter.
The Earl of Buckinghamshire: I am extremely grateful to the Minister for drawing my attention to Amendment No. 171. I am just relieved to see that it is not to be moved this evening. On that basis, I beg leave to withdraw the amendment.
Clause 54 agreed to.
Clause 55 agreed to.
Clause 56 [Equal treatment rule: supplementary]:
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 145YS:
Page 31, line 36, at end insert:
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("( ) The reference in subsection 55(3) to treatment which is less favourable is to treatment which for the purposes of the Sex Discrimination Act 1975 constitutes discrimination with the meaning of subsection 1(1) (a) or (b) of that Act.").
The noble Baroness said: In moving this amendment, I shall speak also to Amendment No. 145YUB. I shall speak fully to these amendments and more briefly to subsequent amendments.
Amendment No. 145YS is the first of a series of eight amendments to Clauses 55 to 59. They seek to bring domestic law into line with European law following the six decisions on pensions in the European Court of Justice on 28th September 1994.
The right to equal treatment as regards occupational pensions stems from Article 119 of the Treaty of Rome, which requires equal pay for equal work between men and women. In the absence of domestic legislation to claim equal pay, individuals in all member states may rely directly on Article 119 before their national courts and the courts are required to interpret national law, so far as is possible, so that it is consistent with European law.
The Barber case of 17th May 1990 held that pensions were deferred pay and, therefore, covered by Article 119. Many of the subsequent issues followed from that case. The equal pay act, with which, therefore, pensions are now aligned, allows employees to bring claims to industrial tribunals for discrimination in pensions. However, unlike the Sex Discrimination Act, the equal pay Act does not embody the concept of indirect discrimination (which is the subject of Amendment No. 145YS) where individuals are compared with individuals, whereas many of the problems in pensions are indirect and can be determined only by comparing the experience of one group with another and then seeing how much that difference is attributable to gender.
The obvious example here would be part-time workers. Even if male and female part-time workers were treated similarly, none the less, given the fact that part-time workers are overwhelmingly women—indeed, nearly half of all women work part time, while only about 5 per cent. or 7 per cent. of men do so—if part-time workers enjoy fewer rights than full time workers, they experience indirect discrimination.
At present the Bill follows the equal pay Act and brigades pensions with that and, therefore, does not rectify indirect discrimination. We believe that it must do so. Indeed, that is vitally important to the pension field. The Barber case also left unanswered further questions which the European Court cases tested last year. For example, the first of those concerned the date from which benefits had to be equalised. Secondly, the time limits within which claims had to be made were considered. For example, if the rights of full timers under the Barber case were equalised back to 1990, part-timers could join a scheme backdated to 1976 when Article 119 applied; but on what conditions? Thirdly, the court considered which benefits precisely have to be equalised: public as well as private occupational pensions or state as well as private pensions.
The Bill could have clarified the position in some of those areas. However, it has failed to do so. Therefore, employers and employees will not have a clear understanding of their duties and rights. That is likely to result in more complex cases and higher costs. Moreover, it will probably not end appeals to the European Court of Justice on the grounds that Article 119 will have to be prayed in aid to resolve all of the issues that the Bill fails to address.
Many of the issues are featured in separate amendments. However, perhaps I may now move precisely to Amendment No. 145YS. That amendment would make clear that the equal treatment rule provided for in Clause 55 covers both direct and indirect discrimination. As I said, the Equal Pay Act did not incorporate the concept of indirect discrimination in 1970. However, it was defined by the Sex Discrimination Act 1975.
The clarification is necessary because the ECJ ruled that Article 119 of the Treaty of Rome should be interpreted as incorporating the concept of indirect discrimination, not least, as I said, in the context of part-time workers. Unless we do so, the ECJ's decisions in the cases of Fisscher and Vroege, for example, regarding the position of part-timers will not be incorporated into UK law.
The second amendment, Amendment No 145YUB, is again part of the wider subset. The amendment would ensure protection for a person who raises a question over unequal pension provision. In that sense, it is not dissimilar to an amendment moved by my noble friend Lady Turner on the first day of Committee regarding protection for unfair dismissal of trustees. Under the amendment, the individual would be able to claim damages for victimisation under the Sex Discrimination Act if he or she suffered any detriment as a result of raising specifically issues of equal treatment. The effect of that protection would be that an employer would risk unlimited damages in respect of such victimisation. Therefore, the first two amendments on equal rights, given the judgments of the European Court of Justice, are designed to ensure, first, that the Bill covers indirect discrimination, which we think is vitally important to pension law; and, secondly, that it protects against unfair dismissal and victimisation. I beg to move.
Baroness Seear: I should like briefly to support the amendment and endorse the remarks made by the noble Baroness, Lady Hollis. The issues are implicit and part and parcel of the battle that many of us, including the European Commission, have been fighting for a long time; namely, to get rights for part-time workers. That would include the pension rights that we are discussing. It would also include not only female part-time workers but also male part-time workers. As an increasing number of men—and this is likely to continue—will spend at any rate part of their lives in part-time jobs, we must take on board when considering such matters the fact that we are moving into a situation in the labour market where both men and women will have periods of employment which are much less than full time. Unless the rights of male and female part-time workers
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are covered in the legislation, it will have very grievous effects on the ultimate pensions that people of both sexes will be able to claim when they finally retire.
8.45 p.m.
Lord Mackay of Ardbrecknish: At the risk of bringing the politically correct movement down on my head, I should like to say that it is with some relief that I move from the minimum solvency requirement to something as simple as sex—
Baroness Seear: It is not just a matter of sex.
Lord Mackay of Ardbrecknish: We have looked at Amendment No. 145YS—indeed, the noble Baroness may be more pleased with the second part of my reply to her amendments than she anticipates—and we have concluded that the amendment is unnecessary. We believe that importing a reference to Section 1(1) (a) of the Sex Discrimination Act into Clause 55 will not achieve anything. That provision, which defines what is generally known as "direct discrimination", merely states that that means less favourable treatment of a person on the grounds of a person's sex. Those words can be found in Clause 55. The reference to Section 1(1) (b) of that Act would make explicit that "less favourable treatment" in Clause 55 includes—as the noble Baroness pointed out—what is known as "indirect discrimination". However, I can assure the Committee that there is no doubt that Clause 55 already covers such treatment because, as drafted, it mirrors the wording of the Equal Pay Act 1970. Indeed, the House of Lords, in the form of our noble and learned friends, the Law Lords, has confirmed that indirect discrimination is covered by that Act. The amendment would not limit the scope of those provisions to treatment which is unlawful under the Sex Discrimination Act, but it would narrow the expression, "less favourable treatment" so as to cover only such treatment as is within Section 1 of the Sex Discrimination Act, whereas those words would otherwise bear their normal wider meaning. I hope that that explanation goes some way towards helping the noble Baroness.
It may be helpful to remind the Committee briefly—as the noble Baroness has already done; and, indeed, I repeat the words used by her noble friend earlier when I say that I broadly agree with what she said in her introduction—that the European Court of Justice has made it clear that pensions are pay. We therefore consider it appropriate that domestic legislation should follow the pattern established for equal pay which has now existed for some 25 years, together with a body of case law. I can assure the Committee that adopting that approach will not mean a more restricted approach to equality than that covered by the Sex Discrimination Act—indeed the contrary is true. With those assurances, I trust that the noble Baroness will feel able to withdraw the amendment.
I turn now to Amendment No. 145YUB. As the noble Baroness has explained, the amendment would bring the provisions of this Bill within the ambit of Section 4(1) of the Sex Discrimination Act 1975. That would mean that individuals who wished to bring an equal treatment claim before a tribunal or court would be protected

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against vitimisation on account of the fact that they had done so. I can sympathise with the intention behind the amendment, which is to provide potential claimants with the added security of knowing that they will have protection from any reprisal by their employer, and I shall carefully consider what the noble Baroness has said. However, I am not able to accept the amendment today because the Sex Discrimination Act is worded in very general terms and covers a number of different areas which may have implications for a number of other departments which will need to be consulted. Nevertheless, we shall look most carefully at that aspect because we fully appreciate the argument in favour of the kind of cover that the noble Baroness advocates. We shall certainly look to see how that might best be achieved.
Baroness Hollis of Heigham: For once when we thank the Minister for his reply it is rather more heartfelt than merely perfunctory, certainly as regards Amendment No. 145YUB and unfair dismissal. Any amendment which would seek to protect the position of the individual going before a tribunal would be welcome. I hope that the Minster will bring forward an amendment on that at Report stage. It would be much welcomed.
l heard what the Minster said about the Equal Pay Act in the light of the House of Lords judgment covering situations of indirect as well as direct discrimination. I have certainly not received a briefing to that effect. I am not in any sense challenging the Minister on that because I am simply not aware of how complete or incomplete the House of Lords' judgment is. Would the Minister be prepared to write to me and to spell that out in much greater detail so that if we are unsatisfied on some particulars we can revisit this issue on Report? If the Minister's letter addresses those issues, we shall not need to return to the matter. If I may have those assurances, I shall be happy to withdraw the amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No, 145ZYT:
Page 31, line 42, after ("(2A)") insert ("(save for sections 2(4) and 2(5) and for the amendments to that Act for the purposes of this part of this Act set out at subsection (4) (d) below)").
The noble Baroness said: I move on to the second batch of European law amendments. In moving this amendment, I wish to speak also to Amendments Nos. 145YT, 145YUA and 145YUC. I feel as if I am dealing with an American food chain when I read out the lettering that is adopted by the conventions of this Chamber.
all speak first to Amendment No. 145ZYT. We do not think that applications of Sections 1 to 2A of the Equal Pay Act 1970 are a lawful or appropriate way of ensuring compliance. Perhaps the Minister has a different reading of this in terms of any House of Lords decisions. We also believe that the Bill should allow breaches of the equality rule to come before an industrial tribunal or a county court or the High Court. The EOC and the TUC have both complained to the European Commission that the present tribunal
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procedures are cumbersome, often ineffective and take a long time. They are taking at least 18 months to four years, and something like 40,000 cases are, I understand, currently in the industrial tribunal queue.
It is also the case that tribunals can be dealing with extremely large sums and there is no legal aid for litigants going to a tribunal. Pensioners in particular who may be seeking to recover damages are likely to be poor and not necessarily supported by a trade union or a friend. Amendment No. 145ZYT would allow cases, especially where there are substantial sums involved, to continue to go to the county courts. That seems to us reasonable. Amendment No. 145YUC—the last of the quartet—would refine that by directing claims below £25,000 to tribunals and those above that figure to the civil courts. It would also delete the capping of damages that this Bill would ensure—a capping which we suspect in any case is contrary to European law.
I now move on to Amendment No. 145YT, which deals with some of the time limitation issues. The first point I wish to make is that applying the Equal Pay Act appears to limit damages for pension inequalities to a maximum of two years preceding the point at which the legal action was commenced. The Minister may not be able to answer these points now but I should be grateful for an exchange of letters. What is the situation, as regards time limits, of part-time workers who have already submitted claims to industrial tribunals for damages going back to 1976? How far back can they claim for what damages?
Secondly, what happens to those who claim—not necessarily part-timers but anyone—after the Bill has become law but for periods before it became law? Thirdly, will it introduce a two-year time limit only for those who claim after the Bill has become law for periods after the Bill has become law? I hope the Minister will consider the issue of the interlocking time limits and the time period for which one can claim damages. I have a further question on time limits. Our understanding of the application of the Equal Pay Act is that any action for damages or compensation must be brought within six months of retirement as opposed to six years under, say, trust law. We believe that is far too short and tight a time scale because it takes several months before people may realise the implications of the pension situation. We believe that on all of these issues Clause 56 is hopelessly ambiguous and where it is not ambiguous we suspect that it is contrary to European law.
Finally, on Amendment No. 145YUA we again believe that Clause 56(6) is hopelessly vague. Does it mean that no claim for periods earlier than 17th May 1990—I refer to the Barber case—can be brought, so that a woman cannot claim a right under the equality clause to the same pension now as a comparable man because there were disparities before 17th May 1990, or will she be fully equalised? We need the Minister's thinking on that.
As I say, these are probing amendments. We are happy to accept that these may not be the sort of issues that the Minister wishes to deal with at this stage in Committee, but we need some clarification in the light of these European cases and this Bill, and our reading

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of the Equal Pay Act because we suspect that, as a result of this, there will still continue to be a necessity for many appeals to Article 119 and the European Court of Justice because this Act is incomplete or simply improper. I beg to move.
Lord Mackay of Ardbrecknish: I am grateful to the noble Baroness for explaining what is intended by the amendments we are discussing. I do not think that the noble Baroness used the word "probing" but I believe she wants me to explain what the clause means. I shall do so because this is an important issue.
The European Court of Justice, in the Barber case and subsequent clarification cases, established the principle that equal treatment is to be provided for service from 17th May 1990. Thus all occupational pension schemes must now provide equal treatment from that date. The provisions of Clauses 55 and 56 require just that.
The court also ruled in the Dutch cases of Vroege and Fisscher that the cut off date of 17th May 1990 did not apply in respect of the right to join a scheme and that in appropriate cases access could be granted as far back as 1976. However they went on to make clear that national time limits may be applied to such cases.
As the Committee will know, a great number of part-time and former part-time workers have now made claims for retrospective membership of their employers' schemes. The position is that currently there is no directly applicable national time limit for claims of this kind. It will therefore be a matter for the courts and industrial tribunals to decide in the particular case what limit should be placed on the making of the claim and any limitation on periods of retrospective membership which may be granted.
However, we cannot continue to leave the position of time limits uncertain. The Bill provides for the time limits which apply under the Equal Pay Act to be applied in the event of disputes and enforcement concerning the equal treatment rule. These limits, which will apply in respect of claims made after this Bill is enacted, will require claims to be made within six months of leaving the relevant employment and will place a limitation on retrospective membership of two years before the date of claim. The application of the Equal Pay Act time limits is only logical given that the European Court has ruled that occupational pensions are pay. They have also applied since 1978 to claims under the existing, more limited, equal access regulations.
We do not think it would be appropriate to give industrial tribunals discretion to waive the time limits for bringing claims in cases where they believed it was appropriate to do so. Neither is it right to provide for damages to be awarded for a breach of the equal treatment rule back as far as 1976. This would again break away from the long established limits and rules set out in the Equal Pay Act, which have worked well up to now. And as I have already explained, the European Court has stated clearly that national time limits may be applied to claims for retrospective access to schemes. Furthermore, the proposed amendments would create great uncertainty and potentially enormous costs for employers called upon to pay these damages
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in respect of years long past. It should also be remembered that the Bill's provisions are not intended to provide damages but to ensure that employers grant access retrospectively within the limits laid down in the Equal Pay Act so that individuals can subsequently obtain the benefits of that membership in the form of a pension.
I turn now to Amendment No. 145YUC. This seeks to differentiate between the judicial institutions which should consider equal treatment claims, depending on the level of damages being sought.
I do not agree that it is appropriate to provide for such differentiation. In the case of claims for equality of access to schemes, I have made clear why we consider that the provisions for disputes and enforcement in the Equal Pay Act should apply. In the event of a successful claim we consider that a limitation of two years before the date of claim should be placed on any retrospective membership granted by the tribunal. The effect of a successful claim will not be the award of damages, simply that the employer must provide the employee with membership of the scheme for the period concerned and that the benefits flowing from that membership are payable from the scheme at the appropriate time. That is exactly what would happen under the existing equal access legislation, which has been in force since 1978.
We believe that the route we have chosen to adopt is clear and fair to all concerned. It would be appropriate for industrial tribunals to handle disputes of this kind, as they do equal pay claims, and inappropriate for the civil courts to handle cases involving claims for amounts in excess of £25,000. Industrial tribunal procedures are certainly simpler and easier to follow than formal court procedures. No fees are required. Many people will feel that that is preferable. The idea that there are no delays in the courts is optimistic. There are delays in the court system also.
For the sake of completeness, I should add that before the Bill becomes law it is for the courts and industrial tribunals to decide on the time limit for past periods. As I said, there is currently no time limit. After the Bill is enacted for past periods, under the Equal Pay Act, the time limits will apply if the claim is made after the Bill becomes law. After the Bill becomes law the position for the periods thereafter will be as I indicated—six months and two years.
I have explained the matter at some length, but I know that the noble Baronesses consider it an important issue. I have explained the Government's thinking and how we have arrived at our conclusions on the time limits for this country which we believe are consistent with the Equal Pay Act and the European judgment. I hope that with that rather long explanation the noble Baroness will withdraw her amendment.
9 p.m.
Baroness Seear: Before the Minister sits down I should like to ask him to think again about the six-month period. It is not very long if one is not familiar with these matters. When one retires one does not move in the circles where people talk about how one

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can get equal pay and how tribunals work. It seems a very short period. I cannot think that it would cost any more or cause any great inconvenience to extend it to a year, or even to nine months.
Lord Mackay of Ardbrecknish: It may be because I am so involved in the Bill, but there seems to be plenty of publicity about the issue in the newspapers and on television and radio.
Baroness Seear: They talk about nothing else in my local hairdresser.
Lord Mackay of Ardbrecknish: Yes. I would have thought that they would have talked about the appearances of the noble Baroness in the House of Lords when they see her on television.
I hear what the noble Baroness says, but the ground on which we arrived at our conclusion is the simple ground that the court ruling said that this was pay, and we have taken the time limits from the Equal Pay Act.
Baroness Hollis of Heigham: Before we decide what to do about the amendment, can the Minister clarify one point? I understood—but I may have misunderstood—that the Vroege and Fisscher cases provided only that domestic time limits for bringing claims should be applied but did not say that damages could or should be limited. Therefore, that would still allow individuals to go straight to the European Court of Justice under Article 119, whatever the Minister may have said. Is that correct?
Lord Mackay of Ardbrecknish: I am not entirely sure about the answer to the second part of the question. I know that the two cases made it clear that national time limits may be applied to such cases.
In relation to damages we are talking about access to pension schemes. That is the primary point. I dealt with that as the essence of the matter.
The answer to the second question of the noble Baroness is no. In relation to national time limits I have said that the court clearly decided that national time limits may be applied in such cases.
Baroness Hollis of Heigham: My second question does not permit an answer of yes or no. I wonder what the Minister thinks he is saying.
Lord Mackay of Ardbrecknish: We have now gone some way from the original question. Perhaps the best and tidiest way to proceed is for me to consider the question in some detail and give the noble Baroness a proper response.
Baroness Hollis of Heigham: I thank the Minister. As I said, these are probing amendments and we need further information.
Like the noble Baroness, Lady Seear, I was disappointed. I see the thrust of the Minister's logic. If one says that a pension is deferred pay one applies procedures as though one were in the workplace. However, the Minister is well aware, because the noble Baroness put the point forcefully, that once one is retired one is not in the workplace. One is not tapped into that information. One does not have trade union support.
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One does not receive the literature and information. One does not have the financial resources to pursue claims in the normal way.
While I take on board some of the points that the Minister made, the period in which one should be able to bring an action could at the very least be extended to a year. When one retires one tries to sort out one's money, one's mortgage, domestic arrangements and so on. A great deal happens in a short time. The Bill seems not to reflect the real life situation in which people find themselves.
I am not persuaded about damages, although the Minister will provide further information in his letter. We accept the time limit for bringing claims but not yet in relation to damages. I do not accept his reasoning about the civil courts. While we recognise that tribunals have many virtues, there is a long queue of some 40,000 people. Although tribunals are to some extent the equivalent of small claims courts, once claims are no longer small claims but large claims involving substantial amounts of money—in some cases amounting to six figures—there is an argument for saying that they should be brought within the more formal proceedings of county courts and the High Court, where legal aid is available. I wonder whether we can persuade the Minister at least to give us an undertaking that if he thinks there is sense in the argument he will come back to the matter.
Lord Mackay of Ardbrecknish: Just as the noble Baroness will read what I said, so we shall read the proceedings and pick up the various points because we wish to get the Bill right and fair.
The six-month period to which we refer does not come into effect until the day of enactment. Between now and then current cases are a matter for the court or tribunal. I am happy to study what the noble Baroness said regarding the court point. I am not convinced on that. I shall ask a simple question as to how many cases exceed the limit of £25,000. I suspect that there are not many. Consistent with the Act, which is the context into which we put the provision, I still believe that an industrial tribunal is the best place. However, I shall read with care what the noble Baroness said.
Baroness Hollis of Heigham: As the bulk of cases have still to go through the courts, we do not know what the percentage will be. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 145YT not moved.]
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 145YU:
Page 32, line 12, at end insert ("or such earlier date as provided in subsection (7) below.
(7) If on any valuation day the amount of the scheme assets is greater than 105 per cent of the amount of the scheme liabilities the amount of the excess shall in a prescribed manner be applied in providing equalisation in the terms on which members are treated in relation to pensionable service from a date before 17th May 1990.").
The noble Baroness said: Amendment No. 145YU turns to a slightly different issue and is grouped with Amendment No. 145YX. It seeks to make clear that when trustees make scheme amendments to comply with

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the equal treatment rule those are subject to Clause 60 in the Bill, which places restrictions on amendments which adversely affect members' accrued rights. The effect is to ensure that accrued benefits are equalised on the more favourable terms. The European Court of Justice has ruled that that is required under European law.
Unfortunately, the ECJ said that there was nothing in European law which forbids adverse changes in benefits to be accrued in the future, but there are already strong arguments that that is against our domestic employment law. We wish to know the Government's intentions on the issue. It is a probing amendment. We believe that it is an issue on which there is a case for levelling up.
Amendment No. 145YX proposes that retrospective equalisation should be required to the extent that a scheme has a surplus in excess of 5 per cent. of its liabilities. The only argument that has been used against that proposal is one of costs. We believe that where there is a surplus that argument cannot apply. Again, we shall welcome a response from the Minister on that issue. I beg to move.
Lord Mackay of Ardbrecknish: Amendment No. 145YU would mean that any surplus in a pension fund would have to be used for the purpose of providing equal treatment between men and women for periods before 17th May 1990, the date of the European Court of Justice ruling in the Barber case.
The European Court has clearly ruled, notably in the Ten Oever and Coloroll cases, that equalisation is not required before 17th May 1990, but is required for service after that date. This is a minimum requirement and there is nothing in this Bill which would prevent schemes using a surplus to provide equality for earlier service if they wish to do so. However, we do not believe that it would be right to impose more stringent requirements or a heavier regulatory burden on schemes than European law requires. We do not believe that it should be a matter for Government to dictate that any surplus should be distributed in favour of scheme members in this way. I am therefore unable to support the amendment.
Turning to Amendment No. 145YX, I entirely agree with its sentiments. However, we do not believe that it is necessary. Clause 58 gives trustees or managers of schemes such power as may be necessary to enable them to amend scheme rules to provide equal treatment. The clause does not grant trustees or scheme managers a wide power to amend scheme rules at will. The power under this clause is limited to amendments to provide equality.
The European Court of Justice has made clear that equal treatment is required for periods of service from 17th May 1990, and that where such equality has not been provided benefits are automatically levelled up to the more favourable treatment until such time as the scheme equalises benefits for periods of future service. Clauses 55 and 56 of this Bill are intended to have the same effect.
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Although the court ruled that Community law did not preclude schemes from equalising benefits at a less favourable level for periods of service before 17th May 1990, the provisions of Clause 60 would, in effect, prevent this from happening.
Clause 60 is overriding in effect. It prevents detrimental amendments being made in relation to any rights accrued before the date of the modification unless the trustees have satisfied themselves that the certification requirements or the requirements for consent have been satisfied. I can assure the noble Baroness that Clause 60 provides the necessary safeguards that she is seeking and that there is no need to make Clause 58 explicitly subject to that clause. Perhaps in view of my explanation she may be prepared to consider withdrawing the amendment.
Baroness Hollis of Heigham: I wish to study the Minister's reply. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 145YUA to 145YUC not moved.]
Clause 56 agreed to.
Clause 57 [Equal treatment rule: exceptions]:
[Amendments Nos. 145YV and 145YW not moved.]
Clause 57 agreed to.
9.15 p.m.
Clause 58 [Equal treatment rule: consequential alteration of schemes]:
The Earl of Buckinghamshire The Earl of Buckinghamshire moved Amendment No. 145YWA:
Page 32, line 40, at beginning insert:
("Subject to subsection (1A) below").
The noble Earl said: I wish to move this amendment and speak to Amendments Nos. 145YWB, 148A and 148B. They deal with the equalisation of pension rights and the objective is to ensure that the company's consent is sought before trustees or managers make alterations to the scheme. Where the company refuses to give such consent to any recommendations or decisions made by the trustees or managers, then the scheme must refer the matter to OPRA to be resolved.
There are two reasons for asking for Amendment No. 145YWA to be considered by the Minister and the Committee. The first is that there is more than one way to equalise pension ages in pension schemes. Thus, some schemes are more costly than others and the employer will clearly wish to have control over costs.
The second reason is that, while the equalisation of pension ages has arisen from European Court judgments, it is nevertheless a benefit improvement over which the employing companies would wish to have control. I realise that the issue can cause difficulties between trustees, managers and the employing company. Because of that, I have suggested that OPRA should have the power to intervene in those situations. I beg to move.
Lord Mackay of Ardbrecknish: The European Court of Justice has ruled that both employers and trustees of a scheme are bound by Article 119 of the

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Treaty of Rome and they must both ensure that pension schemes treat men and women equally within the limits of their respective powers. Clause 58 will give trustees the power to make alterations to a scheme to comply with the equal treatment rule where they do not otherwise have these powers, a duty which will be incumbent upon employers by virtue of Section 1 of the Equal Pay Act 1970 as modified by Clause 55 of the Bill.
The effect of my noble friend's Amendments Nos. 148B, 148A, 145YWB and 142YWA would be to ensure that the trustees or managers of a pensions scheme seek the employer's consent in writing to any changes to scheme rules which they wish to make under Clause 58. In cases where the employer did not give that consent the occupational pensions regulatory authority (OPRA) would have the power to intervene.
I can certainly understand that employers might be hesitant about giving trustees the power to make changes to schemes without first consulting them. However, we have given some thought to this point and concluded that this is unlikely to happen in practice. Employers are already bound by European law to provide equal treatment and scheme rules normally require trustees to obtain the consent of the employer before a change is made. It is difficult to imagine a situation where trustees would not consult the employer and reach agreement as to how equalisation should be provided for any future service. Clause 55 of the Bill will also provide for schemes without an equal treatment rule to be treated as if they had one and for the more favourable treatment to apply.
Turning to the question of what should happen where there is a dispute between the parties, since the Barber ruling it has been clear that pension schemes must provide equal treatment. Individual scheme members can rely directly on Article 119 as interpreted by the European Court's ruling before our own courts and industrial tribunals. What is more, Clause 58 of the Bill already provides a mechanism for allowing schemes to be equalised for the future without the involvement of OPRA. We intend that OPRA should enforce statutory obligations designed to snake sure that schemes are secure and appropriately funded so that they are in a position to pay the promised benefits. The equal treatment provisions do not fall into that category and other remedies are available for handling disputes between employers and trustees—for example, the pensions ombudsman and the courts.
I can understand that employers in particular might like to see an overriding requirement in the Bill that any changes to scheme rules should be expressly consented to by the employer. I am not able to accept this amendment today, but would be willing to give the matter some further consideration, though I cannot promise more than that at this stage.
The Earl of Buckinghamshire: I am grateful for the Minister's reply, which I shall read carefully and I shall return to the matter at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 145YWB and 145YX not moved.]
Clause 58 agreed to.
Clause 59 agreed to.
Clause 60 [Restriction on powers to alter schemes]:
The Earl of Buckinghamshire The Earl of Buckinghamshire moved Amendment No. 145YY:
Page 34, line 2, after ("might") insert ("adversely").
The noble Earl said: This is quite a curious amendment. The clause currently states that scheme rules cannot be changed to the benefit of their members without their consent. I seek to be able to have a scheme improved without having to obtain the consent of all its members at the same time. It is entirely correct—and happens in any case in all the trustee rules—that you cannot make changes which are adverse to the accrued rights of members. But I am curious to know whether consents are needed if improvements are envisaged.
Fortunately, the only time when agreements to improvements would be required—it is an argument which perhaps tells slightly against the amendment—is if employers were selectively to start improving one section of a scheme or provision for one group of members of a scheme which would be contrary to the interests of the other members of it. That would be quite a difficult situation.
In a sense this is a probing amendment. I should like to hear what my noble friend the Minister feels about it. I beg to move.
Lord Mackay of Ardbrecknish: The purpose of Clause 60 is to prevent amendments which have a detrimental effect on members' accrued rights. The only exception to the rule is where individual members have given their consent to such an amendment.
The circumstances which determine whether an amendment could possibly have an adverse effect on any category of scheme members will usually be unique to the scheme. The interaction of different rules and entitlements can frequently mean that what appears to be a beneficial amendment can adversely affect the rights of a small minority of members. Making a decision on whether an amendment is adverse to any individual scheme member or group of members is often not straightforward. Whoever is vested with the power to make amendments—the employer or the trustee, depending on the terms of the scheme rules—will need in virtually all cases to seek the advice of an actuary.
This amendment would give whoever has the power to make modifications the authority to determine whether a modification has an adverse effect, without first being required to seek the advice of an actuary and certification from him. Given the complexities of occupational pension schemes, we do not believe that that is safe. Having listened to my explanation, and on the basis that we are both aiming in the same direction, I hope that my noble friend will be able to withdraw his amendment.
The Earl of Buckinghamshire: I am very grateful for my noble friend's reply. As I worked through the

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amendment I think I probably understood that he would give me that answer. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 60 agreed to.
Clause 61 [Power of trustees to modify schemes by resolution]:
Lord Lucas Lord Lucas moved Amendment No. 146:
Page 34, line 40, after ("section") insert (" 76 or").
The noble Lord said: In moving this amendment I shall speak at the same time to Amendments Nos. 147 and 148. Perhaps I may say how pleasant it is to be able to deal with numbers only.
These amendments will clarify Clause 61. The clause enables trustees to modify schemes to comply with certain requirements of the Bill. Amendment No. 146 will enable trustees to modify their scheme to comply with such terms and conditions as may be imposed by the compensation board under Clause 76 as well as Clause 77. Amendment No. 147 adds clarity to subsection (2) (d) by making it refer to specific subsections of Clauses 33 and 69. Also, by replacing "or" with "and" at the end of line 41, it also makes clear that trustees may amend their scheme for any other purposes under subsections (2) (a) to (2) (d) as well as for any additional purposes which may be prescribed under paragraph (e). Amendment No. 148 applies the clause to Northern Ireland. I beg to move.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendments Nos. 147 and 148:
Page 34, line 41, leave out from ("section") to end of line and insert ("33(2), 69(2) or (3), 83 or 84, and").
Page 35, line 6, after ("(2) (d)") insert ("or any corresponding provisions in force in Northern Ireland").
The noble Lord said: I have already spoken to these amendments. With the leave of the Committee I shall move them en bloc. I beg to move.
On Question, amendments agreed to.
Clause 61, as amended, agreed to.
Clause 62 [Grounds for applying for modifications]:
[Amendments Nos. 148A and 148B not moved.]
Clause 62 agreed to.
Clauses 63 and 64 agreed to.
Clause 65 [Modification of public service pension schemes]:
Baroness Seear Baroness Seear moved Amendment No. 149:
Page 37, line 12, at end insert:
( "( ) Notwithstanding the provisions of section 148 below, any order made by the appropriate authority under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.").
The noble Baroness said: Even in the absence of the noble and learned Lord, Lord Simon of Glaisdale, we return to the question of regulations. Under this clause considerable powers are given to the Secretary of State, as indeed they are throughout the Bill, to make regulations. While we accept that it is a Bill which will
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require regulations to be made, and we do not deny that that is the case, we also want to ensure that adequate parliamentary control is maintained.
In Clause 65 it is an "appropriate authority" that can make the regulations. According to the scrutiny committee on procedures, where a Secretary of State makes a regulation it is subject to parliamentary control—only through the negative procedure, but at least it is some element of control. But that is only if the Secretary of State makes regulations; if it is an "appropriate authority"—by which I take it to mean a Minister other than a Secretary of State—then not even the negative procedure applies to ensure that there is a modicum of parliamentary control. That is the reason for tabling the amendment. I beg to move.
Baroness Hollis of Heigham: I rise simply to show solidarity on this matter. We believe it to be a good amendment.
Lord Mackay of Ardbrecknish: It might be helpful if I explained a little more about what Clause 65 provides. This clause allows an "appropriate authority" to modify a public service scheme for the same, limited, purposes that the new regulatory authority is able to modify private sector schemes under Clause 62. Those purposes are: to allow such a scheme to comply with the contracting out requirements; and, to allow a payment to be made to the employer from surplus in such a scheme, but only where it is trust based.
This clause brings forward powers currently contained in Section 141 of the Pension Schemes Act 1993. We examined the purposes for which schemes may be modified under that Act and concluded that many of the modification powers are no longer needed. Consequently, this clause provides more restricted powers to modify schemes than currently exist under the Pension Schemes Act.
The powers to modify for contracting-out purposes could, in theory, be applied to all public service schemes. However, almost all public service schemes are presently contracted out of SERPS. We anticipate that those schemes will wish to remain contracted out when the new contracting-out regime comes into effect, and would expect them to have no difficulty in meeting the new requirements without amendment. Consequently, the power to modify for contracting-out purposes would only be used very rarely, if at all.
The powers to modify a scheme to allow payments from surpluses to the employer can only affect a limited number of public service schemes, because the powers can only be used to modify a trust-based scheme. The main public service schemes are not trust based and so cannot be affected by this power. There are some trust-based public service schemes, but those are mainly small schemes set up for the staff of non-departmental public bodies. In general, the intention throughout the Bill is that trust-based public service schemes should be treated in a similar way to private sector schemes. In respect of payments from surpluses to the employer they will need to meet the same requirements as private sector schemes (set out in Clauses 33 and 69).

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I recognise that powers to modify schemes, particularly in relation to surpluses, can give concern and the noble Baroness has tabled an amendment with which I have some sympathy. I have also noted that the Scrutiny Committee has drawn attention to this clause. However, this is a matter in which the departments that are responsible for public service schemes have the main interest. I would need to take their views on the best way forward. For that reason, perhaps I may ask the noble Baroness to withdraw her amendment and allow me to take it away for further consideration.
9.30 p.m.
Baroness Seear: We can never resist such blandishments as an offer from the noble Lord to take the amendment away and think about it, especially at this time of night. However, I should like to say—I seem to have said the same thing several hours ago —that the Minister's reference to the fact that only a small number of schemes are left out and that most people would be covered is not satisfactory. A great deal of law has to be passed for exactly that reason. A small number of people fall through the net and those are the people who attract abuses. I hope that we shall not hear any more of the argument that it does not really matter because nearly everyone is all right: and that for the rest it is just too bad. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 65 agreed to.
Clause 66 [Preferential liabilities on winding up]:
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 150:
Page 37, line 40, at end insert ("including any liability, calculated and verified in the prescribed manner, for increases to pensions").
The noble Baroness said: In moving this amendment, I should like to speak also to Amendment No. 151. It has been grouped with Amendment No. 150A but that deals with a different point. My two amendments are concerned essentially with the rights of pensioners. Clause 66 relates to priority liabilities on wind up. It sets out the order in which the various claims are to be dealt with should a scheme be wound up. What bothers me about the present order is that it is to some extent reversing the order which currently exists in a number of schemes and, since it is legislative, it will override whatever is in those rules.
My amendment relates to increases in pensions paid in line with whatever is the prescribed arrangement. As the Bill is drafted, existing pensioners come at the bottom of the league, yet 11 believe that they do have a claim to be considered higher up the rank, so to speak. The reason is very simple. Once a pensioner, for most people that is all there is. He or she can look to no more improvement, because working life is at an end, except by way of increases to the pension in payment, which are usually paid in accordance with a formula contained within the scheme. However, an active member who is still in employment has the opportunity to improve his or her position either through promotion or by job change or simply by securing increased earnings or paying more into the scheme by way of additional voluntary contributions or whatever. It has been pointed
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out to me that if the Bill is not amended the position of existing pensioners in the event of wind up could have been worsened.
In the briefing I have received from trade unions they acknowledge that this is the case but their remedy for overcoming it is by ensuring that there are pensioners among the trustees and that they should be there by statutory requirement. However, as we know, the Committee rejected the proposition which we made that there should be pensioner members among the trustees as a matter of law, so we are left with what could be a worsening position with no right of representation. I therefore hope that the Minister will agree with me that something ought to be done in these circumstances. I beg to move.
The Earl of Clanwilliam: I support the noble Baroness very sincerely in her amendment. Pensioner trustees should be represented at some stage, especially where there are more pensioners than there are active members.
Baroness Seear: We also strongly support this amendment from these Benches.
The Earl of Lindsey and Abingdon: It is my intention to speak only to Amendment No. 150A. The purpose of the amendment, which refers to preferential liabilities on winding up, is to try to obtain a more balanced equation between those who are just below or just over retirement age. As worded at present, in Clause 66 there is a distinct advantage for those referred to in subsection (3) (b) over those in subsection (3) (c). In other words, I am looking for a more level playing field. Bearing that in mind, I should like to give an example of, say, a 56 year-old person having paid into a scheme an aggregate contribution identical to that of an older member. That person should not get significantly worse returns on his own investment after a period of 20 years' service.
Lord Mackay of Ardbrecknish: This is an important issue. I shall take a few minutes to explain what exactly we intend by this clause, and why, and also to answer the points made by the noble Baroness and my noble friends.
This clause would ensure that the liabilities covered by the minimum solvency requirement are, so far as possible, secured; and that the purpose of the minimum solvency requirement is not frustrated by scheme priority rules which would apply scheme assets on wind up on a different basis. Thus, the requirement on schemes to cover the "preferential liabilities" in the clause will ensure that a scheme which is 100 per cent. solvent on the statutory minimum solvency requirement basis will in fact, on wind up, attribute to each member the actuarial value of their accrued rights, including their rights to indexation.
However, this clause also contemplates the situation that schemes may wind up less than 100 per cent. solvent on the statutory minimum solvency basis, or otherwise be unable to meet their liabilities in full. Obviously, we hope that schemes will not wind up in a position where they are unable to secure the benefits promised. We believe that the minimum solvency

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requirement and the wide range of other measures for enhancing scheme security which we have discussed will minimise the chances of schemes winding up in this position. But we live in the real world. Things could go badly wrong and we must address the question of how we should deal with that situation.
Where a scheme does not meet the statutory minimum solvency requirement it is inevitable that some of the preferential liabilities will not be met. The proposed priority order will ensure that there is an equitable distribution of assets. It is only right that pensioners should receive some priority over active members and that they should, if possible, suffer no reduction in their income. That is reflected in the priority order.
Additionally, the position of pensioners will be further protected as a consequence of the actuarial valuation basis to be used for the purpose of calculating liabilities under the clause. This will need to be consistent with the valuation basis used for calculating a scheme's minimum solvency requirement. As such, pensioner liabilities will need to be valued by reference to the returns on gilts. This means—in simple terms—that, on wind up, the scheme will need to attribute more cash to them than would be the case if the assets were simply distributed pro rata to all members (pensioner and non-pensioner) in proportion to their accrued rights. This will be the case even where, on a scheme basis, the minimum solvency requirement calculation would allow a proportion of the pensioner liabilities of a very large scheme to be valued by reference to equities.
We have given long and careful thought as to whether pensioners should be given any further protection under the preferential liabilities and whether indexation should be given the same priority as the pension in payment to existing pensioners. However, indexation can be very costly and will mean that more of the available assets will be used to fund escalating payments to existing pensioners.
As I have already said, this should not cause problems in a scheme which meets the minimum solvency requirement. If more of the assets are used to provide for the future increases of existing pensions there will be fewer assets available to secure the accrued rights of the other members. Some members—and my noble friend Lord Lindsey made this very point—who may be close to pensionable status may be left with insufficient funds to deliver their accrued pension rights and without the ability to repair damage to any large extent. In these circumstances, someone has to lose out. We believe that it is more equitable, so far as possible, to protect the basic pension entitlement of all scheme members and share out whatever residual assets may be available to provide pension increases. This seems better than offering total protection to one class of member and prejudicing the rights of other members who may well be in a no better position than a pensioner to make the loss good.
Those arguments are applicable to Amendment No. 150A. I appreciate that the purpose of this amendment is to protect the position of an older, but not yet retired, scheme member. It would tend to ameliorate the present
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situation in which pensioners' rights can be fully secured while the rights of someone just short of retirement can be significantly reduced.
I think my noble friend's heart is in the right place. The clause as drafted achieves a similar effect in a different way. It gives a reasonable degree of priority to the basic accrued rights of all scheme members. I hope that my noble friend will therefore agree that his amendment is unnecessary. With that explanation of what is a complicated, but could in certain rare circumstances be an extremely important, issue, I hope that the noble Baroness will feel able to withdraw her amendment.
Baroness Turner of Camden: I am not really surprised by the Minister's response, although I am a little disappointed. I ask him to accept that indexation is a very important issue for many pensioners, particularly those who have been on a pension for some years because the value of their pension in relation to earnings has fallen as the years have gone by.
I am not very happy with the Minister's response, but I shall take further advice before Report. A number of representations have been made to me on this issue. It has been pointed out to me that there are already pension schemes and pension scheme rules whereby pensioners and indexation for pensioners have the priority which I am seeking to give in my amendment. As I understand it, that will be overruled by this legislation once it is on the statute book. Therefore, although I feel unhappy about this, I am not willing at this time to press the amendment to a Division, so I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Lindsey and Abingdon The Earl of Lindsey and Abingdon moved Amendment No. 150A:
Page 37, line 43, after ("accrued") insert ("save that any member of a scheme to which this section applies who has accrued 20 years service and attained the age of 50 shall be entitled to a pension actuarially reduced or otherwise as if entitled under subsection (3) (b) above.").
The noble Earl said: I thank my noble friend the Minister for his comprehensive reply, which was more encouraging than I had expected. However, I still feel that the older pensioner of, say, 65 who, in addition to his company pension, is already drawing a state pension has a substantial advantage over an early leaver. I believe that that still applies because of the actuarial reduction in his benefits. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 151 not moved.]
Clause 66 agreed to.
Clause 67 [Discharge of liabilities by insurance, etc.]:
Lord Haskel Lord Haskel moved Amendment No. 151A:
Page 38, line 22, after ("requirements") insert ("being a scheme acceptable to the member").
The noble Lord said: In moving Amendment No. 151A, I should like to speak also to Amendments Nos. 151B and 163B. I am not sure why Amendment No. 163B has been grouped with this amendment, but I shall attempt to speak to it.
Clause 67(3) lists four ways of winding up a scheme. Paragraphs (a) and (b) allow members' rights to be transferred to other occupational or personal pension schemes. Paragraph (c) allows a scheme to be wound up by purchasing annuities from insurance companies chosen by the members. However, paragraphs (a) and (b), under which members' rights can be transferred, do not require that members should agree. They require only that the new scheme should satisfy the "prescribed requirements". Winding up a scheme is obviously a major decision and I believe that members should be consulted about it, whatever the way in which it is wound up. The amendment therefore seeks to iron out the differences in treatment and requires the members' agreement irrespective of the destination of the members' rights.
Amendment No. 163B deals with payments made in anticipation. It is a probing amendment and is intended to provide an opportunity to make it clear that, when the board makes a payment in anticipation of compensation, the trustees will not become liable personally for repayment. The legislation as it stands says merely that the board can recover part or all of such payments to trustees where it subsequently decides that the necessary criteria have not been met or that the payments were excessive. Without a guarantee that they will not become liable personally, there is a risk that trustees will not apply for such payments and scheme members will lose out. I beg to move.
9.45 p.m.
Lord Mackay of Ardbrecknish: At present most occupational schemes require the trustees to discharge the member's liabilities by purchasing an annuity when the scheme winds up. That is not always the best method of securing a member's pension rights and in the cases of large schemes the costs and volume required may make that avenue impractical.
The Government believe that the trustees should have a number of options for discharging their liabilities. That will provide them with the flexibility to follow the most favourable avenue for members.
Clause 67 will enable trustees to discharge their liabilities by purchasing annuities; by paying the actuarial value of their accrued rights; by enabling members to take transfer credits in another scheme; or by enabling the member to take a personal pension. Secondary legislation will provide that individual members will have a period of six months in which to consider the trustees' proposals, take advice and, if they wish, to put forward an alternative option.
The noble Lord will appreciate that, as a transfer to another occupational pension scheme and a personal pension are individual arrangements, they are dependent on the member's consent. Without that consent, the trustees could not discharge pensions liability through either of the routes to which I have specifically referred. I hope on that basis the noble Lord is prepared to withdraw the amendment.
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I am not entirely sure whether the noble Lord spoke to Amendment No. 163B which relates to the Compensation Board. I do not want to answer an amendment that has not been spoken to, especially at this time of night.
Lord Haskel: Yes, I did speak to it.
Lord Mackay of Ardbrecknish: I thank the noble Lord. One becomes so immersed that one begins to wonder whether one has heard the argument or just read it. Amendment No. 163B concerns the operation of the Compensation Board. The board will be able to make interim payments to schemes to ensure that scheme members, particularly pensioners, do not suffer undue financial hardship. The board will be able to make those payments when it has reasonable grounds for believing that compensation is appropriate. That is essential. It allows the Compensation Board to act quickly and effectively. But the board may decide after further investigation that compensation is not, after all, appropriate or that too much has been paid. There is therefore provision for the board to recover any payments made if that happens. It must be right for the board to be able to do so, because all compensation payments are funded ultimately through the levy paid by other schemes.
I understand the noble Lord's concern that those recoveries should not penalise scheme members. Of course, the intention of the Compensation Board is to assist, not penalise, scheme members; and we do not envisage that the board would press for recovery if it would be detrimental to scheme members. But we believe that that is a matter for the board to determine. Each case will be different and the board will be in the best position to determine what impact any recoveries will have on scheme members. However, we recognise that an important issue has been raised. Indeed, the National Association of Pension Funds has already brought that to our attention and we have undertaken to think about it further. We shall certainly do so after having this short debate.
Lord Haskel: I thank the Minister for his explanation about Amendments Nos. 151A and 151B. That clears up the matter very well. On Amendment No. 163B, I am pleased that the Minister will look into the matter further. The point I wanted to make was merely that it should not be trustees who are liable personally for any repayment. I hope that when the Minister is looking into the matter that point will be taken into consideration. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 151B not moved.]
Clause 67 agreed to.
Clause 68 [Deficiencies in the assets]:
Lord Lucas Lord Lucas moved Amendment No. 151BA:
Page 39, line 30, after ("verified") insert ("by a prescribed person and").
The noble Lord said: I shall speak also to Amendments Nos. 151CA, 170A, 170B and 170C. The effect of Amendment No. 151BA is to insert a power into Clause 68 which allows regulations to make it clear

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that the calculation of a debt on the employer is to be undertaken by a suitably qualified actuary. This is an existing provision of the Pension Schemes Act 1993, Section 183(3). The amendment simply ensures that the provision will continue.
Amendment No. 151CA will allow for certain schemes to be exempt from the deficiency on wind-up provisions. This means that schemes which are exempt from the minimum solvency requirement under Clause 49(2) can also be excluded from these provisions. It is important that Clause 68 can be made to dovetail with the minimum solvency requirement. This amendment, therefore, also introduces a general power to modify the provisions as they apply in certain circumstances.
Although there is an existing power to modify Clause 68 included in Clause 108, this is limited to particular sets of circumstances. The power to modify minimum solvency is not limited in this way and it is desirable that the same wider power is introduced into Clause 68. The other amendments are consequential. I beg to move.
On Question, amendment agreed to.
Lord Haskel Lord Haskel moved Amendment No. 151C:
Page 39, line 37, leave out ("not").
The noble Lord said: The amendment makes any debt due from the employer when a scheme is wound up a priority under the terms of the Insolvency Act 1986 and the Bankruptcy (Scotland) Act 1985. The money in question is, in effect, the employees' past earnings over which they have had no control and hence should be regarded as a priority debt. The argument made against that previously was that it was impractical for other potential creditors to ascertain what were the employer's unmet pensions liabilities. This argument is no longer valid as they can now seek information on how far a potential debtor's pension scheme complies with the MSR and the contributions to its schedule. I beg to move.
Lord Mackay of Ardbrecknish: I hope that I can persuade the noble Lord to withdraw his amendment because I am afraid that I cannot accept it.
The objective of insolvency law is, so far as possible, the equal distribution of assets among unsecured creditors. As the law stands, the trustees of the pension scheme are ordinary creditors of the employer. The PLRC report identified a significant reason why a deficit should not become a priority debt.
Bearing in mind the value of many pension schemes relative to the value of the employer company, the creation of a contingent debt of a size potentiallygreater—sometimes several times greater—than that of the employer could deter potential creditors from investing in the company and, as the PLRC report states:
"be a major obstacle to the provision of credit".
Nevertheless, we are obviously anxious to ensure that pension schemes are properly funded. That is the basic rationale for the minimum solvency requirement under the requirements and schemes to establish a schedule of contribution consistent with meeting that requirement. Any contribution unpaid before the due date becomes a debt on the employer. This applies while the scheme is
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ongoing and offers the trustees a clear means of securing funds due from the employer to the scheme. It should reduce the risk of a deficiency arising in the event of an employer insolvency or of the scheme winding up.
Clause 68 provides a further layer of protection for scheme measures. It re-enacts existing employer debt provisions, which mean that any shortfall in the fund at the point of employer insolvency will also be a debt on the employer. With the MSR in place, there should be less need for schemes to resort to these provisions.
We believe that they should remain in place as a useful additional contribution to members' security. But we do not believe that it would be appropriate to go further and to make any such debt a priority debt to the disadvantage of other creditors mainly, as I have pointed out, because of the adverse effect that that might have on the availability of credit for employers sponsoring defined benefit schemes. In the light of what I have said, I hope that the noble Lord will withdraw the amendment.
Lord Haskel: I thank the noble Lord for that explanation. We are trying to look after members' interests. The money in question is employees' past earnings, and earnings have always been a priority debt whenever there has been a liquidation. However, I shall read what the Minister said and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Lucas Lord Lucas moved Amendment No. 151CA:
Page 39, line 40, at end insert:
("( ) This section does not apply to an occupational pension scheme falling within a prescribed class or description.
( ) Regulations may modify this section as it applies in prescribed circumstances.").
On Question, amendment agreed to.
Clause 68, as amended, agreed to.
Clause 69 [Surplus on winding up]:
Lord Lucas Lord Lucas moved Amendment No. 152:
Page 40, line 8, at end insert ("the requirements of subsection (3A) and (in prescribed circumstances) (3B), and any prescribed requirements, are satisfied.
(3A) The requirements of this subsection are that—").
The noble Lord said: In moving this amendment, I shall speak also to Amendments Nos. 153 and 154. The effect of these amendments is to provide that, in a scheme which is winding up and has excess funds remaining after all liabilities have been secured, including limited price indexation increases, the trustees must notify scheme members of their intention to make a payment to the employer. This will enable scheme members to make representations to the trustees. The amendment also provides that, where a member is concerned at a decision of the trustees to grant a payment to the employer in these circumstances, he will be able to ask the authority to check whether the trustees have complied with the statutory requirements.
On Question, amendment agreed to.
[Amendment No. 152A not moved.]
Lord Lucas Lord Lucas moved Amendment No. 153:
Page 40, leave out line 19 and insert:

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("(e) notice has been given in accordance with prescribed requirements to the members of the scheme of the proposal to exercise the power.
(3B) The requirements of this subsection are that the Authority are of the opinion that—

(a) any requirements prescribed by virtue of subsection (3) are satisfied, and

(b) the requirements of subsection (3A) are satisfied.").

On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 154:
Page 40, line 20, leave out ("(3)") and insert ("(3A)").
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 155:
Page 40, line 28, at end insert:
("( ) If, where this section applies to any trust scheme, the trustees purport to exercise the power referred to in subsection (1) (c), or give their consent under subsection (2), without complying with the requirements of this section, sections 3 and 9 apply to any of them who have failed to take all such steps as are reasonable to secure compliance.
( ) If, where this section applies to any trust scheme, any person other than the trustees purports to exercise the power referred to in subsection (1) (c) without complying with the requirements of this section, section 9 applies to him.").
The noble Lord said: This amendment was spoken to when I moved Amendment No. 136. I beg to move.
On Question, amendment agreed to.
Clause 69, as amended, agreed to.
Clause 70 [Assets remaining after winding up: power to distribute]:
[Amendment No. 155A not moved.]
Lord Lucas Lord Lucas moved Amendment No. 156:
Page 41, line 16, at end insert:
("( ) If, where this section applies to a trust scheme, the requirements of this section are not complied with, section 3 applies to any trustee who has failed to take all such steps as are reasonable to secure compliance.").
The noble Lord said: This amendment too was spoken to when I moved Amendment No. 136. I beg to move.
On Question, amendment agreed to.
Clause 70, as amended, agreed to.
Clause 71 [The Compensation Board]:
Lord Lucas Lord Lucas moved Amendment No. 156A:
Page 41, line 21, after ("be") insert ("so").
The noble Lord said: In moving this amendment, I shall speak also to Amendments Nos. 161B, 161D, 161E and 161F. Amendments Nos. 156A and 161B make it clear that the Secretary of State will appoint the chairman of the compensation board and ensure that the board will be able to make payments out of any funds it holds, not only those directly attributable to the levy. Amendment No. 161D deletes one of the definitions listed in Clause 74 as the expression is not used in Clauses 74 to 78, while Amendment No. 161F brings the wording of Clause 75 in with that in Clause 76. Amendment No. 161E concerns the recovery of lost assets where compensation is payable.
The amendment is necessary because under trust law trustees have a duty to recover any lost assets. The fact that compensation is payable does not remove that duty; nor do we think that it should do so. It is in the interests
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of scheme members that missing assets should be recovered so that pensions can be paid in full as far as possible. But there is a risk that some trustees will relax their efforts to recover assets in the knowledge that the compensation scheme will safeguard most of the pensions. That would increase the costs of the compensation scheme, and any increase in costs would be borne by other schemes paying the levy. We need to be sure that measures are in place to protect the interests of other pension schemes and ensure that there is no abuse of the compensation scheme. I beg to move.
On Question, amendment agreed to.
10 p.m.
Baroness Seear Baroness Seear moved Amendment No. 156B:
Page 41, leave out lines 23 and 24 and insert:
("(3) In addition to the chairman, the Board shall comprise—

(a) a member appointed after the Secretary of State has consulted—

(i) organisations appearing to him to be representative of employers, and

(ii) the chairman,

(b) a member appointed after the Secretary of State has consulted —

(i) organisations appearing to him to be representative of employees, and

(ii) the chairman,

and such other member or members as the Secretary of State may appoint after consultation with the chairman.").
The noble Baroness said: We are now considering the compensation board, which is obviously another very important institution being established under the legislation. The point of the amendment is that, as proposed, the selection of the people who will be on the compensation board seems to be a somewhat cosy arrangement between the Secretary of State and the members of the board. In other words, the Secretary of State appoints the chairman and then, in consultation with the chairman, he appoints two other people.
In these days when there is so much talk of how people get on to quangos—and I shall not go into that argument—I should have thought that it was most important to make it absolutely clear that the compensation board is not just a creature of the Secretary of State. As the industry will fund the compensation board, it must be appropriate after the chairman has been appointed for members of the board to be selected in consultation with representatives of employers and trade unions. If the funding of the board is to be met by the industry surely as a matter of sheer justice control of it should at least be influenced by selection from both sides of industry. I beg to move.
Baroness Turner of Camden: Amendment No. 157, which is tabled in my name, has been grouped with the amendment of the noble Baroness. However, having studied both amendments, I must say that I prefer the wording put forward by the noble Baroness. I support everything that she has said. As I am sure the Minister will agree, it is important that the new institutions which come into existence as a result of the legislation can command a significant measure of public support, especially among the sections of the public most nearly

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affected. In my opinion, representatives of employers and employees should be on the board. I support the amendment.
Lord Mackay of Ardbrecknish: We fully recognise that members of pension schemes and employers who stand behind such schemes have a paramount interest in the running of the compensation schemes. I have listened with care to the arguments put forward by both noble Baronesses and I have a great deal of sympathy with their views. Indeed, we have now reached the position where I shall go even further than expressing a great deal of sympathy and say that I am prepared to accept Amendment No. 156B as drafted.
Noble Baronesses: Oh!
Loard Mackay of Ardbrecknish: I thought that that might bring a certain amount of joy to the Benches opposite; and I was not wrong.
However, as the noble Baroness has allowed us to do, we reserve the right to make any further appointments after consultation only with the chairman. I should like to congratulate both noble Baronesses on raising the issue. I am sure that the noble Baroness, Lady Turner, will agree to withdraw her amendment in due course. I shall try to remember to say the right thing when we reach the next amendment of the noble Baroness, Lady Seear.
Baroness Seear: I believe that this is the first time in the 24 years that I have been in this Chamber that I have had an amendment accepted. Therefore, I am especially glad. I thank the Minister for his sympathetic response.
On Question, amendment agreed to.
[Amendment No. 157 not moved.]
Clause 71, as amended, agreed to.
[Amendments Nos. 158 and 158A had been withdrawn from the Marshalled List.]
[Amendment No. 158B not moved.]
Schedule 2 [The Pensions Compensation Board]:
Baroness Seear Baroness Seear moved Amendment No. 158C:
Page 98, line 33, at end insert:
(" . where—

(a) the Compensation Board give a decision on any matter dealt with by them by means of a formal hearing or review, and

(b) they are requested on or before the giving or notification of a decision, to state their reasons for the decision,

they shall furnish a written statement of those reasons.").
The noble Baroness said: This is a small amendment to ensure that if a matter is passed to the compensation board for a formal hearing or review written statements should be given if requested. I beg to move.
Lord Mackay of Ardbrecknish: I will not repeat the exercise of the previous clause. After all, I would obtain an extremely bad reputation if I did that too often. However, I can inform the noble Baroness, Lady Seear, that at paragraph 10 of Schedule 2 the details of the board's procedural arrangements are to be set out in regulations. There is a similar provision in Clause 73 concerning the procedures to be adopted on review. I am pleased to tell the noble Baroness that it is our
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intention that both of these sets of regulations should include a requirement for the board to provide written statements including reasons for its determinations in all cases. This would, in fact, go further than the noble Baroness's amendment, which would require written statements only on request. On the basis of this assurance, which seems to me every bit as good as the previous one, I hope the noble Baroness will withdraw the amendment.
Baroness Seear: I think on this occasion I do withdraw the amendment, do I not? If we are going on at this rate we had better complete the Bill and stay all night. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Lucas Lord Lucas moved Amendments Nos. 159 and 160:
Page 98, line 40, leave out ("in relation to") and insert ("to an application for compensation under section 75 in respect of").
Page 98, line 42, leave out paragraphs (b) and (c) and insert:
("(b) determine the amount of any payment under section 76,
(c) determine whether any payment should be made under section 77 or the amount of any such payment, or").
The noble Lord said: I beg to move Amendments Nos. 159 and 160 and speak at the same time to Amendment No. 163. These amendments ensure that a formal application for compensation must have been made before the Pensions Compensation Board can make decisions. They also allow the board to make payments in anticipation both when it is likely that the scheme will qualify for compensation, and where it is already clear that the scheme will qualify but the final amount cannot yet be determined. Amendment No. 160 adds decisions on the amount of any payments in anticipation to the functions which the compensation board cannot delegate. I beg to move.
On Question, amendments agreed to.
Schedule 2, as amended, agreed to.
Clause 72 agreed to.
Clause 73 [Review of decisions]:
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 160A:
Page 42, line 8, at end insert (" or independent recognised trade union").
The noble Baroness said: This clause provides for the compensation board to review its decisions in particular circumstances. It also sets out that it may do so on application to it of a person who appears to have an interest. That is all right but what we seek to do with this amendment is to write into the Bill the obligation of the board to review in the event of an application by an independent recognised trade union.
As I am sure everyone now knows, the unions have for a long time taken a strong interest in pension provision. They employ their own experts and they run their own training courses. My union, MSF, has its own training college and has been running courses for trustees and potential trustees for many years. It also publishes a great deal of material for scheme members and runs seminars so that members are kept up to date with developments in the pensions field. Individual

901
unions have been encouraged in this area by the Trades Union Congress, which has its own in-house experts and has been doing a great deal of briefing on the Bill.
The reason we think it would be a good idea to write this provision into the Bill is that unions stand behind their members when it comes to pension difficulties. When necessary they have been willing to fund court actions, which of course are very expensive. It therefore seems entirely appropriate to give them a role when it comes to review of compensation board decisions. They are likely to have the expertise available to help members, who on their own may not feel able to ask for a review even though they may feel one is justified. I hope that the Minister will see that that is sensible and will agree with the proposition. I beg to move.
Lord Mackay of Ardbrecknish: I understand the concern of the noble Baroness that trade unions should be able to apply for a review of a decision taken by the compensation board. I recognise that in representing its members' interests a trade union may wish to apply for a review, particularly if those members could face financial hardship.
Under the Bill as currently drafted the compensation board will be able to accept requests for reviews from any persons appearing to the board to have an interest. That will, rightly we believe, give the board a great deal of flexibility. The board will be able to accept review applications from employers and trustees, as well as scheme members. It will also be able to accept them from people acting on their behalf, including trade unions—in short, from anyone it considers has an interest. However, we would not consider it appropriate to identify any or all of those people in the Bill. Indeed, the way in which the amendment is drafted would effectively separate trade unions from those who have an interest. I presume that that is not what the noble Baroness intended.
I believe that the Bill gives the compensation board the flexibility to do what the noble Baroness wishes. Therefore, I do not believe that there is any need to include a specific reference to trade unions.
Baroness Turner of Camden: I thank the Minister for that response. I made a careful note of what he said and I shall read Hansard tomorrow.
I am glad to hear that the Minister believes that the board has the necessary flexibility to receive representations from trade unions representative of scheme members. I hope that we shall find that it works out like that so that unions are able adequately to represent their members with difficulties in pension provision.
In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 73 agreed to.
Clause 74 [Cases where compensation provisions apply]:
[Amendment No. 160B not moved.
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 161:
Page 42, line 38, leave out paragraph (b).
The noble Baroness said: The amendment proposes the deletion of Clause 74(1) (b). Among the list of entitlements to compensation there stands the requirement that the employer should be insolvent. If we take the Maxwell case as an example, the problem with that is that the Mirror Group was not and never has been insolvent. Had that condition existed at that time the Mirror Group pension scheme members would not have been eligible for compensation under the clause. I do not believe that that was originally the intention. I believe that that is perhaps an accidental effect of the Bill.
It may well be that the Government feel, perhaps with some justification, that if the employer has the funds available the employer should be made to refund whatever is missing or to pay the necessary compensation. However, the provision could have the effect of driving a firm into insolvency when it might not otherwise have been insolvent. That might not be to the advantage of either existing scheme members or the employees involved.
It seems to me that subsequent clauses in the Bill give the compensation board enough flexibility to take account of the employer's circumstances without having this very rigid provision that the employer must be insolvent before compensation can even be considered.
Perhaps the Minister will be good enough to respond to that point. I shall be interested to know why the Government felt that it was necessary to include this as an absolute requirement. I beg to move.
10.15 p.m.
Lord Mackay of Ardbrecknish: The overall effect of the qualifying conditions in Clause 74 is to restrict the scope of the compensation scheme. We believe that this is an important feature of the scheme. As the Pension Law Review Committee recognised, a wide compensation scheme, covering all risks, could encourage reckless behaviour in the knowledge that all losses would be covered in the event of scheme failure.
The compensation scheme applies only to trust based schemes where the employer is insolvent. There must also be reasonable grounds for believing that assets have been dishonestly removed and the compensation board must be satisfied that it is reasonable that compensation should be paid. In addition, where the scheme is salary related, it must have fallen below the minimum solvency requirement.
We believe that limiting compensation in this way concentrates the resources of the compensation scheme on those risks which are most likely to cause loss and least likely to be reduced by other measures to improve scheme security introduced in this Bill. The compensation scheme is intended to be a scheme of last resort, standing behind a strengthened legal and regulatory framework.
Employers usually have substantial and direct influence on the security of schemes, and for that reason there is risk that they may seek to use the existence of a compensation scheme as a means of avoiding their responsibilities. The prime responsibility to fund a

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scheme lies with the employer. It is only when the employer is unable to fulfil his obligations by reason of his insolvency that the question of external funding in the form of compensation should be considered. I hope that in the light of my explanation, and indeed the Pension Law Review Committee's specific recommendations that compensation should be payable only when the employer is insolvent—
Baroness Turner of Camden: Before the noble Lord sits down, will he be good enough to respond to my comment on the Maxwell affair? Under these provisions, the Mirror Group pensioners would not have been entitled to compensation because the Minor Group was never insolvent.
Lord Mackay of Ardbrecknish: If the noble Baroness will allow me to take the matter away, I shall write to her.
Baroness Seear: I was about to ask the same question. When the Minister replies to the noble Baroness regarding the Minor Group, will he consider whether there could be a role for the compensation board in bridging the gap—it has been a very big gap—between moneys being recovered from the Maxwell scheme and payments to the pensioners? The board could have a secondary function in tiding over in circumstances such as those which arose with the Maxwell scheme.
Lord Mackay of Ardbrecknish: Perhaps I may say this in general terms. An employer who is still solvent is obviously liable to meet the deficit under the various provisions. We have discussed some of them today on the employer-debt provision. Indeed, where there is a takeover the debt is on the old employer and not on the new one in the circumstances that we envisage.
Noble Lords will remember that some time ago we discussed whether the compensation board could take back money that it had given in the event of a situation not being as bad as had been considered. Another situation which may arise is that the pension fund may well be able over time to restore to itself the assets which had been illegally removed. In such circumstances the compensation board might help to keep the pensioners in payment. I think that that is right. However, on the specific question regarding Maxwell, I prefer to write to the noble Baroness.
Baroness Seear: Is there any provision in the Bill as it now stands which enables the compensation board to do what the Minister has just outlined and keep the pensioners paid during an interim, painful period before the money has been recovered? Is that within the power of the compensation board?
Lord Mackay of Ardbrecknish: I believe that we have probably passed that stage—although we are moving at such a rate that I find it as much as I can do to keep ahead of the amendments.
The circumstances the noble Baroness describes are those we envisaged when we discussed the pay-back to the compensation board; namely, that the board will be prepared to step in before it is absolutely certain that all
904
is lost. In the eventuality that all is not lost the board would be due some money back. Therefore I think that the answer to the question is yes.
Baroness Turner of Camden: I thank the Minister for that response, some of which was quite encouraging. Under subsection (1) (e) of Clause 74 fairly wide powers are given anyway to the compensation board to take account of all circumstances. The phrase is:
"reasonable in all the circumstances".
So there are wide powers. Even if we took out subsection (1) (b), "the employer is insolvent", there is still the ability to take account of the employer's position under paragraph (e). That is what I said in the beginning. However, I shall await with interest the Minister's response to the query I raised over the Minor Group pensioners. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 161A not moved.]
Lord Lucas Lord Lucas moved Amendment No. 161B:
Page 43, line 3, leave out from second ("of') to ("an") in line 4 and insert ("funds for the time being held by them,").
The noble Lord said: I have already spoken to this with Amendment No. 156A. I beg to move.
On Question, amendment agreed to.
[Amendment No. 161C not moved.]
Lord Lucas Lord Lucas moved Amendments Nos. 161D and 161E:
Page 43, line 26, leave out paragraph (f).
Page 43, line 40, at end insert:
("(4A) Where this section applies to an application for compensation under section 75, the trustees must obtain any recoveries of value, to the extent that they may do so without disproportionate cost and within a reasonable time.
(4B) If subsection (4A) is not complied with, section 3 applies to any trustee who has failed to take all such steps as are reasonable to secure compliance.").
The noble Lord said: I have already spoken to these amendments with Amendment No. 156A. I beg to move.
.On Question, amendments agreed to.
Clause 74, as amended, agreed to.
Clause 75 [Applications for payments]:
Lord Lucas Lord Lucas moved Amendment No. 161F:
Page 43, line 47, leave out ("Payments may be made") and insert ("Compensation may be paid").
The noble Lord said: I spoke to this with Amendment No. 156A. I beg to move.
On Question, amendment agreed to.
Clause 75, as amended, agreed to.
Clause 76 [Amount of compensation]:
Lord Lucas Lord Lucas moved Amendment No. 161G:
Page 44, line 17, after ("scheme") insert ("and the Board have determined the settlement date").
The noble Lord said: I beg to move Amendment No. 161G and speak at the same time to Amendment No. 163A. These amendments together will ensure that any payments made before the amount of compensation can

905
be finally calculated are interim payments and any payments after that are compensation proper. I beg to move.
On Question, amendment agreed to.
[Amendment No. 161H not moved.]
Lord Lucas Lord Lucas moved Amendment No. 162:
Page 44, line 33, leave out from ("if') to ("exceeds") in line 34 and insert ("the maximum amount mentioned in subsection (3) (a)").
The noble Lord said: I beg to move Amendment No. 162 and at the same time speak to Amendment No. 162AA. These amendments will ensure that the correct amount is taken into account in calculating compensation for salary-related schemes. I beg to move.
On Question, amendment agreed to.
[Amendment No. 162A not moved.]
Lord Lucas Lord Lucas moved Amendment No. 162AA:
Page 44, line 37, leave out ("amount or aggregate") and insert ("maximum amount").
On Question, amendment agreed to.
[Amendment No. 162B not moved.]
Clause 76, as amended, agreed to.
Clause 77 [Payments made in anticipation]:
Lord Lucas Lord Lucas moved Amendment No. 163:
Page 44, leave out lines 43 to 46 and insert:
("(1) The Compensation Board may, on an application for compensation under section 75, make a payment or payments to the trustees of a trust scheme where in their opinion
(a) section 74 applies, or may apply, to the application, and").
The noble Lord said: I spoke to this amendment with Amendment No. 159. I beg to move.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 163A:
Page 45, line 2, at end insert:
("but the Board have not determined the settlement date").
The noble Lord said: I spoke to this amendment with Amendment No. 161G. I beg to move.
On Question, amendment agreed to.
Baroness Seear Baroness Seear moved Amendment No. 163AA:
Page 45, line 9, leave out ("the payment") and insert ("so much of the payment as they consider appropriate").
The noble Baroness said: This amendment seeks to give discretion to the compensation board not to demand the total payment if there is reason to believe that its application will be very draconian. It makes it possible for the compensation board to make adjustments for so much payment as it considers appropriate. Amendment No. 163AB seeks to insert:
"but nothing in this subsection authorises the recovery from any person of a sum if in all the circumstances and in particular having regard to an action taken by that person in consequence of a payment, it would be unreasonable to recover that sum".
The idea is that the compensation board does not have to go the whole way but can use its judgment in modifying the amount that it demands. I beg to move.
Baroness Turner of Camden: This amendment seems very reasonable to us and we support it.
Lord Mackay of Ardbrecknish: This amendment comes fairly close to the discussion that we had a few
906
minutes ago. The compensation board will be able to make payments in anticipation to schemes. This is an essential measure to ensure, as I said in my intervention, that scheme members, particularly pensioners, do not suffer undue financial hardship. To ensure that the board can act quickly, it will be able to make these payments when it has reasonable grounds for believing that compensation is appropriate but before a final decision has been made. After further investigation, however, the board may decide that compensation is not, after all, appropriate. Therefore, there is provision for the board to recover any payments made. All payments of compensation are funded through a levy paid for by other schemes. I believe therefore that it is right that the board should have the power to make those recoveries.
The board has discretion over the recoveries that it makes and we do not envisage that it would press for recovery if the scheme has little or no assets. The clause as drafted would not prevent it making partial recovery if the scheme has insufficient assets to repay in full. It is the intention of the compensation board to assist members and not to penalise them.
We recognise that there is an important, more general issue, regarding recoveries made by the compensation board. I understand that there are concerns that the recovery of such payments may adversely affect members, as both the noble Baronesses indicated perhaps. The National Association of Pension Funds has already brought this matter to our attention and we have undertaken to consider the issues further. On that basis, I hope that the noble Baroness will agree to withdraw her amendments.
Baroness Seear: We are again grateful to the noble Lord for saying that he is prepared to consider these amendments. We are doing rather well tonight. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 163AB and 163B not moved.]
Clause 77, as amended, agreed to.
Clauses 78 and 79 agreed to.
Clause 80 [Schedules of payments to money purchase schemes]:
[Amendment No. 163BA not moved.]
Clause 80 agreed to.
[Amendment No. 163BB not moved.]
Clause 81 [Schedules of payments to money purchase schemes: supplementary]:
[Amendment No. 163C not moved.]
Clause 81 agreed to.
Clause 82 agreed to.
Lord Mackay of Ardbrecknish: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at twenty-nine minutes past ten o'clock.

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