Sitting of 13 March 1995

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

    Roads
    Sir David Knox: To ask the Secretary of State for Wales what has been the total spending by central Government on roads in Wales since 1979; and how many miles of motorway and trunk roads have been laid since that year.
    The Secretary of State for Wales (Mr. John Redwood): Since 1979, total spending by central Government on the roads programme in Wales has been over £2.6 billion, including £468 million in transport grant. Twenty-eight miles of motorway and 162 miles of trunk road have been completed or improved. Seven major improvement schemes totalling over 27 miles are under construction.
    Sir David Knox: Does my right hon. Friend agree that considerable progress has been made in improving the motorway and trunk road network in Wales since 1979? Will he further agree that this has been of considerable help in attracting inward investment to Wales?
    Mr. Redwood: My hon. Friend is right. The M4 and the A54 corridors have been most successful in attracting businesses. I should draw attention also to excellent train links. We are keen to encourage more freight by rail as well as by road. There are several policies that we are following with that in mind.
    Mr. Barry Jones: Does the Secretary of State agree that the £60 million River Dee crossing scheme will hugely improve the attractions of Deeside industrial park? Is that why it is said that a United States pharmaceutical company will be coming to my constituency? Will he give some details about the project?
    Mr. Redwood: The hon. Gentleman is right. The Dee crossing will be most important. Like the hon. Gentleman, I welcome the announcement by the Welsh Development Agency today that there will be about 200 more jobs in Clwyd as a result of a United States pharmaceutical company establishing its European base in a WDA factory at Deeside industrial park. It is most welcome news. I am sure that improved transport links were some of the factors that led to the announcement.
    Mr. Sweeney: Can my right hon. Friend give any update on progress towards achieving a link road between
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    Culverhouse Cross and Cardiff-Wales airport? Will he confirm that he will resist any attempts to produce such a link via a green-field site?
    Mr. Redwood: My hon. Friend is right. We need to be careful about any such route. There are environmental and transport issues, which will be part of the judgment that will have to be made. I have asked that the county highway authority again examine its current proposals. I thought that they were too expensive. We need a scheme, however, and I hope that the authority will return soon with a sensible and realistically priced one.

    Training for Work
    Mr. Rowlands: To ask the Secretary of State for Wales if he will make a statement on the future funding and arrangements for training for work in 1995–96.
    The Parliamentary Under-Secretary of State for Wales (Mr. Rod Richards): Training for work will be funded from 1 April on the basis of results, instead of training weeks completed.
    Training and enterprise councils have welcomed this change. They will, as a result, have a strong incentive to ensure that training for work is geared to qualifications and jobs; and the resources available for adult training will therefore be used more efficiently and effectively.
    Mr. Rowlands: Is the Minister aware that the training element has been reduced to a mere two weeks? Companies that employ for temporary or seasonal work can clean up on grants while offering minimum training. I believe that it is possible for a department store to train its Father Christmas for a couple of weeks, hire him for a couple of weeks and then sack him, and thereafter claim £1,000 in grant under the new scheme. Other organisations that have been trying to undertake longer-term training are shutting down or contracting. If my worries, concerns and fears are true, will the Minister review the scheme?
    Mr. Richards: As far as I am aware, there are no current training schemes for Father Christmases. The hon. Gentleman has raised a serious point and it would be helpful if he were to write to my right hon. Friend the Secretary of State outlining precisely what he has in mind. If he wants to put the boot into Father Christmas, he should write to my right hon. Friend, who will consider what he has to say.
    Sir Wyn Roberts: Is my hon. Friend satisfied that the training and enterprise councils can, and do, combine the roles of training and enterprise? Is he satisfied that a sufficiently high proportion of the TEC budget is finding its way to the sharp end?
    Mr. Richards: My right hon. Friend makes a valid point, as, indeed, is his wont. Clearly, the purpose of funding is that it goes to the sharp end, to get people back to work and to ensure that they are qualified. Training is necessary to ensure that enterprise is allowed to flourish.
    Mr. Win Griffiths: What was the outcome of the scheme in England which the Secretary of State said was successful? Is it not true that it was more difficult for women returning to work, and low achievers, to get on training courses because of the huge over-emphasis on

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    training success and job outcomes? Is there a case for rebalancing that, so that we can drive the cowboys out, still keep quality and go for the best in Wales?
    Mr. Richards: The pilot schemes in England to which the hon. Gentleman referred took place over some two years. It is because of their success that we are now embarking on the schemes in Wales. Of course we are concerned with quality, and the National Council for Vocational Qualifications is charged with ensuring that awarding bodies assess properly and that quality assurances exist.

    Education, Dyfed
    Mr. Dafis: To ask the Secretary of State for Wales what representations he has received concerning funding for education in Dyfed.
    Mr. Richards: My right hon. Friend and I have received many representations on the issue of education funding in Dyfed. It is, however, for individual local authorities to determine how much of their available resources to direct towards each service, including education, in the light of their statutory duties and their perception of local needs and priorities.
    Mr. Dafis: This year in Dyfed, all services have to be cut. When will the Welsh Office stop undermining the school system in Wales in pursuit of its aim of making all schools in Wales grant maintained? I want the Welsh Office to understand that its twin strategy of encouraging that through cuts for local education authorities and inducements for grant-maintained schools is well understood in Wales and is opposed. It is irresponsible at this time, as we approach local government reorganisation. Will the Minister agree to meet a deputation from governing bodies in Dyfed and elsewhere in Wales and listen to what they have to say, and to their discussion of solidarity with local authorities? Will the Welsh Office please desist from its current irresponsible strategy?
    Mr. Richards: My right hon. Friend is not trying to force schools in Wales to become grant maintained. What he and I want to ensure is that parents in Wales have a choice. The hon. Gentleman talks about cuts in education, but perhaps he would do well to remember the following statistics. Between 1979–80 and 1992–93, the net funding per pupil in primary schools in his county of Dyfed increased by some 63.8 per cent. The corresponding figure for secondary schools was 53.7 per cent. Indeed, over the same period, spending per pupil on books and equipment in Dyfed increased by 36.8 per cent. in primary schools and by 66.1 per cent. in secondary schools. Those are the figures after allowing for inflation.
    Lady Olga Maitland: Will my hon. Friend confirm that there is a surplus in the reserves of both local authorities and schools' own funds and that they are quite capable of paying for teachers' pay increases?
    Madam Speaker: Order. The question concerns a particular area—Dyfed. Is the hon. Lady relating her question to that?
    Lady Olga Maitland: Madam Speaker, I am relating it—
    Madam Speaker: If it is a specific question, it should relate to what is on the Order Paper.
    Lady Olga Maitland: I stand corrected. I am relating the question to Dyfed.
    Mr. Richards: The hon. Lady is absolutely correct. In fact, in the 1993–94 fiscal year, primary school balances in Dyfed were some £2.3 million; the figure for secondary schools was some £1.6 million; and the education authority had a balance of £7.4 million, which aggregates to £11.3 million. On top of that, the figure for education and other administrations amounted to some £3.5 million. On top of all that, the Audit Commission report in January this year, "Paying the Piper, Calling the Tune", said that, throughout England and Wales, efficiency savings of some £500 million could have been made. In Wales, the figure is £30 million—all to be saved if education authorities and county councils go for efficiency cuts.
    Mr. Ron Davies: For the record, Dyfed has raided its balances and now has one of the lowest in Wales. On top of that, it is faced with £4.5 million-worth of education cuts. I am not surprised that there is widespread concern: the public now see a Government making money available to suit their own political needs through the popular schools initiative, while denying the remaining schools funds that they need to meet the educational needs of their own programmes.
    Is this not just another case of privilege for the few, at the expense of the choice and opportunity of everyone else? Does the Minister not realise that, just as he had to make a public apology recently for his ill-considered statements, he will shortly have to make a public apology for these ill-considered policies?
    Mr. Richards: It is interesting that the hon. Gentleman should make such remarks about education spending in Dyfed. As I recall, the leader of the Labour group on Dyfed county council opposed the education authority's proposal for cuts. Perhaps the hon. Gentleman should build up links outside the valleys of south Wales, in the rural parts that he never seems to visit.
    As for the popular schools initiative, my right hon. Friend the Secretary of State has set aside an additional £20 million to be spent on schools that are popular and therefore oversubscribed for the next four years. He wants to ensure that parents can choose to send their children to the good schools—the oversubscribed schools, the popular schools. That is why this is called the popular schools initiative.

    Railways
    Mr. Llwyd: To ask the Secretary of State for Wales what evaluation his Department has undertaken of the likely impact on the Welsh economy of downgrading of railway service provisions in Wales; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Wales (Mr. Gwilym Jones): I reject the malicious presumption in the hon. Gentleman's question. There are no plans to downgrade the railway service in Wales.
    Mr. Llwyd: The Minister used the word "malicious", but I have not even started yet. There may be no such

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    intention, but I recently met the Secretary of State for Wales, who knows that in north Wales, for example, the Conwy valley line will shortly lose £900,000 in charges paid to it by the Trawsfynydd power plant. That obviously poses a threat.
    The Cambrian line is also under threat, among others. Is any appraisal currently being undertaken, or is the Secretary of State as useless as he was said to be by Leslie Morgan the other day on the programme "On the Record"? That Conservative described the right hon. Gentleman as useless to mid-Wales, and said that the sooner he went the better.
    Mr. Jones: I think that the "threats" are in the imagination of the hon. Gentleman, who rushes to scare his constituents and everyone else in Wales. The Franchising Director is conducting a review; he has already published his draft proposals for the Great Western service, and his proposals for the rest of Wales will follow in due course. The hon. Gentleman should approach the matter positively. The combination of privatisation and the channel tunnel represents a tremendous opportunity for the railways of Wales.
    Mr. Ron Davies: That is precisely the point. The Under-Secretary must explain why we should not expect the worst, given that the Great Western is the only service for which minimum requirements have been published. We see that there will be a 20 per cent. reduction on the Paddington to south Wales service, which will, in effect, end at Swansea.
    There is massive public opposition to this madcap scheme, which will fragment the national service. It will waste £1 billion of taxpayers' money and cost thousands of jobs. Do the Government not realise that, if Wales is to have a successful and dynamic economy, we must have a properly planned, integrated and accountable transport system? No reputable Government would abdicate from that responsibility.
    Mr. Jones: If the hon. Gentleman had done his research a little better, he would have known that this is the first passenger service requirement that has been published. The Franchising Director is now working on others for the rest of Wales. This is the first time that a minimum provision has been laid down, and I stress that it is a minimum provision. Great Western has already stated that its new timetable, which is to be introduced in May, will maintain the current service.

    Business Rates
    Mr. Ieuan Wyn Jones: To ask the Secretary of State for Wales what representations he has received regarding the level of business rates imposed on small businesses in Wales.
    Mr. Gwilym Jones: Several.
    Mr. Ieuan Wyn Jones: Is the Minister aware that, as a result of the revaluation of business premises for the purposes of the unified business rate, holiday centres, caravan parks and retail premises in my constituency are suffering massive increases and will have serious problems meeting their new bills? Does he realise that, for example, up to 20 per cent. of retail premises in my constituency have closed over the past four years? Even allowing for transitional relief, those businesses will pay twice the rate of inflation on their new bills from 1995
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    onwards. Will the Minister intervene directly and ask the district valuer to be more realistic in terms of rental values in rural areas?
    Mr. Gwilym Jones: I hope that the hon. Gentleman realises that, as well as the change in the rateable value, there has been a consequential reduction in the rate in the pound, which goes down from 44.8p to 39p. The examples that the hon. Gentleman cites and all other small businesses in Wales have transitional relief and opportunities to appeal to the district valuer against the assessment after 1 April. I firmly believe that the system of uniform non-domestic rates is a far better system for businesses throughout Wales. It gives them the certainty, except in years of review, that they will face an increase of no more than the rate of inflation. As we can see from the emerging pattern of council tax increases in Wales, business would have suffered far worse if the uniform business rate had been determined by local councils.
    Mr. Alex Carlile: Does the Minister agree that small caravan parks are a useful form of diversification for many farmers and that they provide substitute employment? Does he recognise that there will be a huge increase, particularly in the business rate paid by small caravan parks with fewer than 50 pitches, and that the appeals system will simply clog to a halt because of so many appeals? Will he institute an immediate inquiry into the effect of these changes on the caravan and holiday industry in Wales, which is in despair at the changes?
    Mr. Jones: I readily acknowledge what the hon. and learned Gentleman says about the worth to agriculture and tourism generally of caravan parks. However, he should remember that they have not only the opportunity of transitional relief but the right of appeal. The appeals system, which I fully support, wishes to deal with appeals as expeditiously as possible.
    Dr. Spink: Does my hon. Friend accept that small businesses in Wales would benefit from more prudent budget setting and more prudent policies by local councils? Does he also accept that small businesses in Wales benefit greatly from inward investment, which generates much business and many jobs in the small business community?
    Mr. Jones: I certainly accept the thrust of my hon. Friend's point that businesses would suffer far worse if their rate burden were determined by councils in Wales. We know that this year small businesses will face, at worst, a 7.5 per cent. increase. The trend has not been finalised, but if they were to suffer the increase that is being imposed by councils in Wales, it would be more like 12 per cent.

    Hospital Waiting Times
    Mr. Ainger: To ask the Secretary of State for Wales how many consultants in Wales had published waiting times for first out-patient appointments in excess of 104 weeks on 30 September 1994 or in any subsequent set of statistics published since then.
    Mr. Redwood: Comprehensive information on waiting times for first out-patient appointments is not collected centrally for each hospital consultant but is available for health authorities and hospitals in general. However, the latest issue of the "Waiting Times Information Bulletin"

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    provides information on seven common surgical procedures. It shows that 15 of the 187 consultants included in the bulletin had a maximum waiting time of more than 104 weeks. That shows that the bulletin is doing exactly what it is intended to do. It lets people see where they have to wait a long time and where they can be seen more quickly, thereby enabling them to choose on an informed basis. I hope that the hon. Gentleman and his party welcome that.
    Mr. Ainger: Bearing in mind what the Secretary of State has just said, I challenge his figure of only 15. On my reading of that information booklet, there are 19 consultants with a waiting time of over two years. There are also in total 66 consultants with waiting times of more than one year, and those figures do not take into account urology, dermatology, trauma or general orthopaedics. How on earth is the Secretary of State going to put in place, between now and 1 April—two weeks away—the resources to ensure that patients get their first out-patient appointment within six months?
    Mr. Redwood: That is exactly what I intend to do. My current advice is that the health service can meet the new standards as from the beginning of the next financial year and will deal with the backlog shortly thereafter. I hope that Opposition Members will welcome the information that patients get. As the brochure makes clear, in practically every case there is a surgeon available with a short waiting time, just as in some cases there are surgeons who are very busy.
    Is the Labour party saying that I should issue instructions to say that no patient should be allowed to join the waiting list of a surgeon who is popular, and that patients must go to another surgeon even if they do not choose that? That would seem to me wrong. What we want is proper information; people can then weigh the name and the reputation of the surgeon against the waiting time. At the moment, we are meeting all the patients charter guarantees—I am pleased about that—and I intend the service to meet the new tougher guarantees next year.
    Sir Wyn Roberts: Has my right hon. Friend seen the consultants' report featured on the front page of the Western Mail today, purporting to show that £1 in every £10 spent in the NHS is spent on running it? Is that proportion correct and is my right hon. Friend satisfied with it?
    Mr. Redwood: There are disputes about how to categorise administration and management costs, but I certainly think that we need to reduce some elements of the management costs. That is why I have imposed restrictions on new recruitment and have set out proposals to the House—along with my right hon. Friend the Secretary of State for Health in England—to make sure that we reduce the number of health authorities and the number of employees and managers that those health authorities enjoy. I believe that that is welcome in Wales.
    I think that it will mean tighter control over management costs at the centre and proper administration in hospitals. I have linked it to a big programme to strip out forms, administration and unnecessary paperwork—and I shall announce more proposals on that shortly.
    Mr. Morgan: Does the Secretary of State accept that there are many who are sceptical about the prospects of genuinely achieving the shorter waiting times by 1 April,
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    and that they include not only Opposition Members but health service statisticians? One of them wrote to Mrs. Menna Davies of the Vale of Glamorgan community health council a few weeks ago to say:
    "The hospitals generally supply us with the best estimates they can but even those may be poor estimates of long-term waiting times."
    Will the Minister therefore assure us that, in his attempt to achieve the figures that he has set out by 1 April, he will not once again be visiting the statistical massage parlour?
    Mr. Redwood: I think that the hon. Gentleman means that he welcomes our policy, which is to cut waiting times and to try to get all out-patients meeting the necessary person in the health service within six months. I have already said that the health service is pretty confident that it can do that for new patients after the beginning of April. Thereafter we want it to clear the backlog as quickly as possible. I have been discussing with the service ways in which that can be done.

    Business and Local Authority Links
    Mr. FlynnTo ask the Secretary of State for Wales what new proposals he has to improve relations between his Department and business and local authorities in Wales.
    Mr. Redwood: I am improving relationships by holding meetings to review future plans for each area, by local authority business partnerships and by encouraging eight business development consortiums in Wales.
    Mr. Flynn: Will not the Secretary of State's double standards wreck his relations with local authorities, given that he condemns them for their contacts with lobbyists but allows the Welsh Office an open door to its corridors, which are infested with lobbyists seeking to pervert public policy for their rich clients? Why does he allow that to happen; why does he not allow Parliament knowledge of how many lobbyists have contact with his Ministers and civil servants? Is this why prominent Welsh Conservative Leslie Morgan described the work of the Secretary of State this weekend as "really disastrous"?
    Mr. Redwood: I was objecting to some local authorities spending taxpayers' money on employing consultants or lobbyists to do work that those authorities are capable of doing themselves. I do not intend to encourage that in the Welsh Office. I have taken a knife to the budget for consultancies, which are not right when we have talented officials who can do the job. I hope that local government will take a leaf out of that book.

    Privatisation
    Mr. Booth: To ask the Secretary of State for Wales if he will make a statement on the progress in Wales of privatisation policy.
    Mr. Redwood: Privatisation has brought lower prices—telephone charges are down by one third in real terms, and gas prices are down by more than one fifth. It has brought better service, more choice of telephones and better standards for dealing with customers. It has created several important private sector companies in Wales. With their new freedoms, they can now make a bigger contribution to the Welsh economy. In relation to the water industry, privatisation has increased the number of

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    beaches up to decent standards from 48 per cent. in 1986 to 76 per cent. in 1994. I hope that more progress will soon be made on that figure.
    Mr. Booth: As, today, the right hon. Member for Chesterfield (Mr. Benn) and the hon. Member for Bolsover (Mr. Skinner) have restated their belief in more public ownership—whereas the people of Wales, whether taxpayers, customers or shareholders, know the benefits of privatisation—will my right hon. Friend restate and explain to the people of Wales the benefits of privatisation, and press on with more?
    Mr. Redwood: I and my right hon. Friends will do exactly what my hon. Friend suggests. One important consequence of that policy is that more Welsh and British companies are world players in the world marker. That can take place only if they are freed of public sector restrictions. It is then down to the talents of company employees and to the imagination of the management to win in the world market. That is exactly what the best privatised Welsh companies are doing.
    Mr. Donald Anderson: When the Secretary of State is tempted to embark on further privatisation proposals, will he consider with some humility what happened in relation to the cardiac unit at Morriston Hospital NHS trust? His unique decision to put that cardiac project out to tender delayed by one year the start of the project and caused immense anguish to many Welsh cardiac patients, who had to travel to London. In the event, the solution achieved—the victory of the in-house team—was what everyone wanted all along.
    Mr. Redwood: I am glad that Opposition Members are pleased with at least one part of the Government's health policy. I, too, welcome the victory of the in-house team. It put together a creditable bid. It showed that it would provide good value, which was the object of the exercise. This is not a specifically Welsh initiative. It is a common UK policy, where we decided that it was best to test the market to ensure that we got good value for big capital projects. It did not cause delay in the way that the hon. Gentleman suggests. The business case and other paperwork must be produced, whether a project is publicly or privately financed.

    Health Services, Gwent
    Mr. Touhig: To ask the Secretary of State for Wales when he last met the chairman of the Gwent health commission to discuss health service provision in Gwent.
    Mr. Richards: My right hon. Friend the Secretary of State for Wales met all the health authority chairmen last Wednesday to discuss their proposals for improving services in the coming financial year. I shall be meeting the chairman of the Gwent health commission tomorrow.
    Mr. Touhig: Is the Minister aware that, in 1993–94, my constituents made 33,000 visits to the out-patient department of Royal Gwent hospital at Newport, some 15 miles away from Blackwood in the centre of my constituency? Is he further aware that the public consultation in the recently published Islwyn health plan showed that the Islwyn community's primary priority was the need for a neighbourhood hospital that would offer an out-patient facility and a minor casualty department? Indeed, the Conservative party candidate pledged his
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    support for that in the recent Islwyn by-election. Will the Minister join me in pressing the Gwent health commission to honour a pledge given in 1988, when the "Gwent 2000" document was published, to provide that facility, a pledge that was reiterated in 1992 when the neighbourhood health plan was published? Will he join me in pressing Gwent health commission to provide that hospital facility for Islwyn?
    Mr. Richards: I welcome the hon. Gentleman to his first Welsh questions. I assure him that the easy ride that he had in his maiden speech will be a unique experience. I am delighted that 33,000 of his constituents were able to have first-class treatment at Royal Gwent hospital—long may it continue. I am sure, however, that the hon. Gentleman will be aware that the Glan Hafren NHS trust is developing a proposal with a view possibly to having a community hospital in Islwyn. My right hon. Friend and I look forward to seeing that proposal.

    Water Charges
    Mr. Wigley: To ask the Secretary of State for Wales if he will make a statement on the current method of charging for water.
    Mr. Gwilym Jones: The current method is a matter for the water companies in consultation with the Director General of Water Services.
    Mr. Wigley: Does the Minister accept that the charge for Welsh households this year is £260 compared with £160 in the Thames valley? That figure hits pensioners and other people on low incomes exceedingly hard. Next year, there will be yet another increase in real terms. Does the Minister not realise that the system cannot continue, with charges spiralling ever upward? Will he start to make a change by encouraging Welsh Water and other water companies to provide the automatic 25 per cent. reduction for single occupancy that is given in respect of council tax? Will he give an assurance that under no circumstances will metering be compulsorily imposed on Welsh households, because that would mean even higher charges?
    Mr. Jones: Increased charges should be put into perspective. Over the next 10 years, the increase will be limited to 0.5 per cent. in real terms, and Welsh Water will invest £1 billion in Wales over five years—£500,000 every day of every year during that time. That will pay for cleaner beaches and improvements to the environment generally—changes that those of us who are concerned about the environment much welcome.

    Public Appointments
    Mr. Hanson: To ask the Secretary of State for Wales how many individuals have been appointed to quangos in Wales from the Welsh Office register of candidates for public appointments since July 1993.
    Mr. Richards: Between 1 July 1993 and 1 March 1995, my right hon. Friend the Secretary of State made 260 appointments, excluding reappointments, to non-departmental public bodies and national health

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    service bodies. Candidates are largely drawn from the departmental register in addition to other sources, including advertisements.
    Mr. Hanson: Is the Minister aware that, following advertisements placed by the Welsh Office, thousands of people applied to serve on quangos but only a small proportion were appointed? At the same time, people such as Michael Griffiths, one of the Minister's close constituents, sits on six quangos and has the temerity to call his horse Quango King. Mr. Griffiths sits on many non-executive and executive bodies on behalf of Welsh people but is not in any way accountable to them. Should not the Minister open up quango selection systems to favour members of the public and to greater public scrutiny, and consider in due course proposals for a Welsh Assembly, to return accountability to the people of Wales?
    Mr. Richards: Appointments to non-departmental public bodies are open to all. I invite the hon. Gentleman to write to me if he knows of anyone talented enough to be a chairman or non-executive member of a non-departmental public body—such as the person whom the hon. Gentleman mentioned. I reiterate that, when my right hon. Friend and I consider applicants for non-departmental public bodies, our only concern is to appoint the best people for the job. We do not even know what are their politics.

    Environmental Agenda
    Mr. Llew Smith: To ask the Secretary of State for Wales to which individuals and organisations he distributed his paper "The Environmental Agenda for Wales".
    Mr. Redwood: "The Environmental Agenda for Wales" has been distributed to a wide range of interests in Wales, including all county and district councils, executive non-departmental public bodies, training and enterprise councils, district health authorities and national health service trusts, representatives of business and voluntary organisations and members of the public.
    Mr. Smith: How can the Secretary of State justify his claim in his environmental agenda that he wants to involve local authorities whenever possible in making decisions on behalf of local communities when so many local authority powers have been passed to quangos? What policies does the right hon. Gentleman have to reverse that process?
    Mr. Redwood: I am grateful to the hon. Gentleman because that is exactly the policy that I am trying to pursue, against members of Labour's Front Bench, who seem reluctant to see any powers transferred from, for example, the Countryside Council for Wales to local government. There is an opportunity, but I will not force it down the throats of local government. I set out ideas for consultation. If local authorities want more responsibility for some local environmental matters, the offer is there. I hope that the hon. Gentleman, unlike members of his Front Bench team, will encourage that process, and then we can do business.

    Green Belt
    Mr. Harry Greenway: To ask the Secretary of State for Wales how many acres of green belt exist in Wales at present; what was the figure in 1979; and if he will make a statement.
    Mr. Gwilym Jones: There are presently no green belts in Wales, nor were there in 1979.
    Mr. Greenway: As an Englishman, I express surprise at that reply. Can my hon. Friend drag Wales into the 20th and 21st centuries and designate some of those beautiful rolling acres as green belt, as they surely should be? Is he looking into this matter or, if not, could he?
    Mr. Jones: I can reassure my hon. Friend that the subject is being well considered. As the hon. Member for Cardiff, North, I am well aware of the problems and pressures of development, such as this. We already have green wedges in West Glamorgan and green barriers in Clwyd. South Glamorgan is bringing forward a proposal for a green belt around Cardiff. The work that my hon. Friend wants done is well in hand.

    Educational Provision
    Mr. Murphy: To ask the Secretary of State for Wales when he last met council leaders in Wales to discuss educational provision and resources.
    Mr. Richards: Discussions with the local authority associations about local government finance issues are undertaken in the forum of the Welsh Consultative Council on Local Government Finance. My right hon. Friend last chaired a meeting of the Welsh Consultative Council on Local Government Finance on 30 December. I also met council leaders from Clwyd on 21 February.
    Mr. Murphy: The Minister will have read his right hon. Friend's article in this morning's Western Mail in which he said that schools that were in trouble would have to be resourced by the local education authorities. As he has told the local authorities that they must use their balances to pay for the teachers' award, where will the money to help those schools come from?
    Mr. Richards: I believe that my right hon. Friend was referring to any school governing body that might try to have a budget deficit. In that case, my right hon. Friend would clearly look to the local education authority, with regard to its local management of schools scheme, to ensure that those schools were funded properly.

  CHURCH COMMISSIONERS

    Church Buildings (Public Toilets)
    Mr. Harry Greenway: To ask the right hon. Member for Selby, representing the Church Commissioners, what financial provision is being made in the current year to equip churches, abbeys and cathedrals with public toilets.
    Mr. Michael Alison: None. This is not the responsibility of the Church Commissioners. The parochial church councils of parish churches and the administrative bodies of cathedrals have sole executive and financial responsibility in these

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    matters, subject to any statutory consents that they may require to carry out work affecting the historic character of a building.
    Mr. Greenway: Will my right hon. Friend assist incumbents who are paid by the Church Commissioners with the placement of public toilets in churches, bringing them into line with cathedrals, as many people want and as should happen as we enter the 21st century? I know of one church which, for two years, has tried to get the faculty to use money left to it to put in the public loo that people want and need. It has not so far been able to achieve that. Will my right hon. Friend put a bomb under the archdeacons who are so slow in getting things going?
    Mr. Alison: My hon. Friend will agree that a bomb might be slightly counter-productive. He is concerned about public toilets in parish churches. He is probably aware that most parish churches have a toilet in the vestry for the use of the incumbent. It would have to be a parish in which relationships between the congregation and the incumbent had fallen to an exceptionally low level if members of the public were barred from using the facilities available in the vestry. I shall, however, draw my hon. Friend's anxieties to the attention of the relevant archdeacons.
    Mr. Simon Hughes: On a slightly broader point, which arises from the question, do the Church Commissioners have responsibility for ensuring that churches, abbeys and cathedrals are generally accessible to all members of the public, including those with disabilities? If not, could they see that as a generally useful responsibility?
    Mr. Alison: We have some onerous responsibilities, as the hon. Gentleman knows, especially in property and finance, but we do not have direct responsibility for the matter about which he is concerned. For cathedrals, it comes within the ambit of the administrative bodies and for parish churches, especially large and popular ones, within the scope of responsibilities of the parochial church councils.

    Investments
    Mr. Flynn: To ask the right hon. Member for Selby, representing the Church Commissioners, what new proposals he has to improve the ethical accountability of the investments made by the commissioners.
    Mr. Alison: The commissioners have always managed their investments within ethical guidelines. Specific rules were developed when equity investment was begun in 1948 and those rules continue to be monitored and reviewed. I am arranging for a leaflet setting out our ethical policy to be sent to the hon. Gentleman so that he may study it slightly more fully.
    Mr. Flynn: Why have the Church Commissioners invested £1.75 million in GEC, Britain's second-largest arms manufacturer, which exports weapons of war to many foreign dictators? Recalling the words that he who lives by the sword will die by the sword, will the
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    right hon. Gentleman explain to the House how profiteering from the sale of arms assists the work of the prince of peace?
    Mr. Alison: The hon. Gentleman will note, when he gets the little leaflet that I shall be sending to him, that we do not invest in companies whose principal business is armaments. I do not think that it could be alleged that GEC's principal business is that of armaments. As it is, investments relating to armaments, alcohol, gambling and tobacco, from which we are excluded on ethical grounds, already result in the disbarring of the Church Commissioners from about 12 per cent. of potential investments in the stock exchange, which has a serious effect on the potential flow of funds for clergy stipends and retirement pensioners.

  LORD CHANCELLOR'S DEPARTMENT

    Legal Aid
    Mr. Hawkins: To ask the Parliamentary Secretary, Lord Chancellor's Department what further reforms are planned for the administration of legal aid; and if he will make a statement.
    The Parliamentary Secretary, Lord Chancellor's Department (Mr. John M. Taylor): Proposals for a fundamental restructuring of the legal aid scheme in England and Wales will be the subject of a Green Paper later in the spring.
    Mr. Hawkins: I thank my hon. Friend for that answer. Will he confirm that the Lord Chancellor is proceeding with the consultation on "Legal Aid for the Apparently Wealthy" so that my constituents will not be outraged in future by very wealthy people benefiting from our legal aid system? Will he also confirm that, as part of the same review, he is looking very carefully at proposals for franchising, which will improve quality control of the legal aid system to benefit those who are using it properly?
    Mr. Taylor: Consultation on "Legal Aid for the Apparently Wealthy" has closed and we are assessing the results. I thank my hon. Friend for his forward-looking remarks about franchising and quality assurance. We are talking about quality assurance—ultimately—for the consumer and we are heartened by the number of solicitors applying.
    Mr. Boateng: Does the Minister agree with the National Consumer Council that fear of costs is one of the biggest barriers to justice? If he does, how does he justify the fact that, even as we speak, his officials are actively considering increases for county court and High Court costs per day, making them some £200 in the county court and £500 in the High Court? How does that assist the ordinary litigant, the person of modest or medium means, who wants to bring an action before those courts? Is it not another example of the Government's denial of justice to those who most need it?
    Mr. Taylor: I think that fear of costs is a deterrent to those who would go to law. That is not a novelty, but it may be as intense now as it ever has been. The county court fees to which the hon. Gentleman referred are visited rather irregularly for the purpose of review.

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    It is some time since some of those fees were looked at, but the broad objective is that, as far as possible, the operation of courts should be self-financing, lest otherwise the taxpayer pays for other people's cases.
    Mr. Simon Hughes: To ask the Parliamentary Secretary, Lord Chancellor's Department if he will review the law on legal aid contributions by plaintiffs where defendants cannot be found to be served with papers or orders in proceedings.
    Mr. John M. Taylor: I am not persuaded that there is any reason to change the regulations.
    Mr. Hughes: Before I respond to that, may I tell the Minister how grateful were all the people who went to see him and his colleague the Lord Chancellor on Wednesday evening to ask for legal aid for the relatives of the Marchioness—
    Madam Speaker: Order. The hon. Gentleman is out of order. I am sure that it is very apt that the Lord Chancellor's Department should be paid such compliments, but they must be paid in writing, and not at Question Time.
    Mr. Hughes: I apologise, Madam Speaker. I thought that it would be discourteous to proceed without—
    Madam Speaker: Not at all. It is discourteous not to deal with the question in hand.
    Mr. Hughes: On the question in hand, will the Minister look again at a policy which says that the plaintiff may be assisted to get an order—in this case, against a person who had been violent and who was obliged by the order to leave the former matrimonial home—and then, because the defendant cannot be found and the order cannot be served, be required to pay for a proceeding that becomes effectively null and void? That cannot be in the interests of justice and it must be something which the Minister accepts needs to be reviewed, not just in a single case but in the interests of prospectively hundreds or thousands of litigants who would otherwise be put off seeking action to protect themselves and their own security.
    Mr. Taylor: I may be aware of the individual case concerned. In a case where emergency legal aid is granted in the belief that the applicant qualifies, and the applicant subsequently proves not to, the applicant must pay. As for the hon. Gentleman's irregular remarks, I heard them and I took them kindly.

    Case Transcripts
    Mrs. Lait: To ask the Parliamentary Secretary, Lord Chancellor's Department what provision is made for people on low incomes to obtain transcripts of legal cases where they are victims.
    Mr. John M. Taylor: All victims who request a copy of an existing transcript will be provided with one free of charge.
    Mrs. Lait: I thank my hon. Friend for that information. However, does he acknowledge that victims often find it helpful to be able to read a transcript and that they may need to read one in order to bring a civil case in respect of which, as my hon.
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    Friend is aware, original transcripts are not provided through legal aid? How can we ensure that those victims have access to justice?
    Mr. Taylor: If it were not such a serious subject, I would have to say that there is no such thing as a free transcript. Where no existing transcript is available, a legally aided person may receive assistance in meeting the cost of transcription. That is the best that I can do at the moment. If my hon. Friend would like to return to the charge, I want to be as helpful in that part of victim support as I possibly can be.
    Mr. Gerrard: Does the Minister accept that there is a problem in that transcripts often do not exist and will be made only when one of the barristers concerned in a case requests one? Therefore, the costs could be substantial. Does the Minister also accept that a victim, and particularly the relative of a murdered victim, may have a legitimate reason for wishing to have access to a transcript, but at the moment would find that transcript prohibitively expensive?
    Mr. Taylor: I am not going to say that it is not quite expensive to have transcripts. It is very labour intensive to produce all the words spoken in a court. The best advice that I can give to the hon. Gentleman this afternoon is to say that people do not need to acquire whole transcripts. They can concentrate on that part of the evidence that is material to their complaint.

    Magistrates Courts
    Mr. Ainger: To ask the Parliamentary Secretary, Lord Chancellor's Department how many magistrates courts have been closed in the past 10 years.
    Mr. John M. Taylor: Magistrates courts are provided by local authorities for the use of the Magistrates Courts Committee. Closure decisions are for the MCC, although the paying authority may appeal to the Lord Chancellor against a proposed closure. That is the only situation in which we are informed of a closure or involved in any way.
    Mr. Ainger: The Lord Chancellor's Department will be well aware that, over the past 10 years, there has been a significant number of magistrates courts closures, particularly in rural areas. That has coincided with significant reductions in public transport. Does the Minister share my concern that people living in rural areas, particularly in rural Wales, are now finding it extremely difficult to meet court times of 10 am using public transport? That is causing serious problems. Those people who have to pay fines at magistrates courts are also experiencing serious problems. Does the Minister accept that it is now time to start a moratorium on magistrates court closures in rural areas?
    Mr. Taylor: I have to tell the hon. Gentleman that he must advance and develop those arguments in his own local area where there are, in fact, no proposed closures. The only body competent to propose a closure is the magistrates themselves through their committee. The only body competent to oppose a closure is the county council. Only if they are at odds does the Lord

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    Chancellor have any role. The hon. Gentleman should be lobbying his local magistrates and local county councillors.
    Mr. McLoughlin: Can my hon. Friend assure me that the Lord Chancellor and his Department will consider carefully the question of rural services and the availability of courts when such proposals come before them? May I say that I am not too worried about people who must pay fines in magistrates courts, as the simple answer is that they should not get convicted in the first place?
    Mr. Taylor: I take very much to heart what my hon. Friend says. The issues are weighed carefully, and I shall make sure that that continues. I might say also that we do open new courts as well as attend occasionally upon the closures of old ones.

    Limitation Legislation
    Mr. Hinchliffe: To ask the Parliamentary Secretary, Lord Chancellor's Department when he expects to complete his review of limitation legislation.
    Mr. John M. Taylor: I informed the hon. Member in January that we were considering whether a comprehensive review of the law of limitation should be undertaken. The Lord Chancellor has now decided to invite the Law Commission to undertake such a review.
    Mr. Hinchliffe: Does the Minister understand the concerns of a significant number of people whose lives have been ruined by childhood abuse—often sexual—over their inability to take action through the courts because of the existing limitation legislation? Does he realise that, by tomorrow, it will be exactly one year since he gave me an assurance in the House during Question Time that the review would be completed by the end of last year? Does he realise why it is that a number of people who have been directly affected feel that the Government are conspiring to prevent them from getting to court with their cases?
    Mr. Taylor: I understand those concerns. Piecemeal reform in that part of the law has had its day, arid we need a comprehensive review. The Lord Chancellor has called for such a review to take place as soon as possible.

    Public Defender Service
    Mr. Austin Mitchell: To ask the Parliamentary Secretary, Lord Chancellor's Department if he will make it his policy to establish a public defender service.
    Mr. John M. Taylor: No. That is not intended.
    Mr. Mitchell: Given that the vicious curtailment in the coverage of legal aid and the inherent problems in dealing with that were pointed out last week by the National Audit Office and by the Public Accounts Committee, whose Chairman said that solicitors tend to
    "regard the citizen's right to legal aid as their own right to a blank cheque",
    would it not be sensible, save more money and bring justice to the great majority of our people if we established a public defender service to deal with criminal cases and if we financed a proper network of
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    law centres to deal with civil cases? Would that not bring the power of the courts of justice to the great mass of people in a way that we are not doing now?
    Mr. Taylor: I am very much in favour—as, I think, is the hon. Member for Brent, South (Mr. Boateng)— of involving within the legal aid system citizens advice bureaux and law centres. That is a very good idea. I am no more sanguine than the hon. Member for Great Grimsby (Mr. Mitchell) about abuse of the green form scheme. We need the tightest possible controls to ensure that the system, which is intended to help people have access to justice, is used properly.
    With regard to a public defender system, it is my experience that one of the best operations in the legal aid system is the courts' duty solicitor scheme, which seems to work well in practice. The idea of a public defender service has been canvassed from time to time, and the hon. Gentleman may be interested to know that the idea was canvassed in New Zealand, but rejected.
    Mr. Alex Carlile: Does the hon. Gentleman agree that the interests of justice—with particular regard to defendants—would be best served by having independent solicitors and independent barristers as defenders, as they would be practitioners serving no interest other than those of their client and the courts?
    Mr. Taylor: The policy of the Government is that publicly funded legal services should be provided—in the main—through the independent private professions.
    Mr. Jessel: In considering the future funding of legal aid, will my hon. Friend make certain that the Government do not attach excessive weight to the views of the two legal professions?
    Mr. Taylor: I feel sure that we shall get to know those views, but the Lord Chancellor has a wider duty than to the legal professions. We shall look with the greatest possible care at the way in which legal aid is funded, and we shall ensure that the interests of the litigant and the defendant are foremost.

  WALES

    David Lloyd George
    Mr. Simon Hughes: To ask the Secretary of State for Wales if he will consider an official commemoration of the 50th anniversary of David Lloyd George's death on 26 March 1995.
    Mr. Gwilym Jones: No.
    Mr. Hughes: That is a disgrace. May I ask the Minister in all seriousness, to think again? It is unacceptable, not just to people in Wales but to those throughout the UK, that probably the greatest Welsh parliamentarian this century is not being officially recognised 50 years after his death. I ask the Minister not to give such a short and ill-considered response, but to take the idea away, think about it and consider whether it might not bring even his side some benefit.
    Mr. Jones: I can assure the hon. Gentleman that it was not an ill-considered response. I acknowledge that Lloyd George was a great parliamentarian, albeit only a Liberal, but many others have an equal or greater

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    claim. The Government have no plans to introduce additional permanent bank holidays in any part of the United Kingdom because of the cost and disruption to business.

    Unemployment
    Mr. Barry Jones: To ask the Secretary of State for Wales how many people in Wales who are unemployed (i) have been unemployed for a year or more and (ii) are aged 25 years and under.
    Mr. Gwilym Jones: In January 1995, 39,700 persons in Wales had been on the claimant unemployment count for over one year. The number aged under 25 on the claimant count was 35,500.
    Mr. Barry Jones: What a great disgrace. Ministers should tackle the problem urgently. Is the Minister aware that, in my constituency, 1,500 unemployed people are either under the age of 25 or have been out of work for more than one year? What policy changes will he introduce? What hope will he give to those of our people who are unemployed?
    Mr. Gwilym Jones: I do not need to introduce any new policies because we already have the right policies, as has been shown as recently as in the Cambridge Econometric Theory survey of last week, which predicted that Wales would be the fastest-growing part of the United Kingdom economy during 1995. The hon. Gentleman ought to wake up to the real world.

EU-Canada Fishing Dispute
3.30 pm
Mr. Peter Shoreasked the Minister of State, Ministry of Agriculture, Fisheries and Food for a statement on Her Majesty's Government's policy on the dispute over fishing rights between the European Union and Canada.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Michael Jack): At the heart of this dispute is a disagreement between Canada and the European Union over the division of an agreed catch quota of 27,000 tonnes of Greenland halibut in the waters regulated by the North-west Atlantic Fisheries Organisation outside the Canadian 200-mile limit. That quota was set for the first time for this fishery in NAFO last September. The European Union expected a share of the total allowable catch proportionate to its track record which, in the most recent three-year period, represented 75 per cent. of the catch, while Canadian vessels took less than 14 per cent. At a NAFO meeting in February this year, Canada did not agree and advanced an alternative distribution which would have given it 60 per cent. of the TAC and the EU 12 per cent. The EU felt that this was neither fair nor just and decided unanimously to invoke the objection procedure which is provided for in NAFO rules.
Having invoked the procedure, the EU was entitled to take its preferred share of the 27,000 tonne TAC. Canada disputed the EU's use of the objection procedure, took national powers to act against EU vessels fishing outside its 200-mile limit and warned the EU that it would use those powers if the EU vessels did not leave the fishery. On Thursday last, Canada used its legislation to arrest a Spanish vessel on the high seas.
The United Kingdom has no fishing vessels in the disputed fishery and is not directly involved. However, we are actively encouraging the intense diplomatic efforts which are now taking place with a view to reducing the tension and getting negotiations restarted.
Mr. Shore: I am grateful to the Minister for that statement. He is, of course, aware that only five years ago the European Union catch was about 2,000 tonnes in the North-west Atlantic Fisheries Organisation area and that that has now increased to more than 82,000 tonnes. I do not think that the Minister will dispute the fact that when it comes to reputation for overfishing, few countries have a worse record than Spain.
Having said that, may I draw the Minister's attention to the most shocking part of the whole episode? I refer to the hostile, bellicose language used by the spokesmen of the European Union, in particular Commissioner Bonino, who described the Canadian action as an act of organised piracy, other Commission spokesmen who have talked about a range of sanctions being considered against Canada, and, worst of all, the agreement of the ambassadors to the European Union to a statement that includes these words:
"The European Union and its member states are forced to reassess their relationship with Canada in the light of this deplorable situation and reserve their rights to take any action which they deem appropriate."
Let us be quite clear about the British Government's attitude to the European Union taking any action which it deems expedient, in the knowledge that the Spanish
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Government have already sent a gunboat to the area. Are we going to find the British Navy lined up with the Spanish navy to drive out the Canadians?
Is the Minister aware how deeply offensive this whole procedure is, especially aimed against Canada, a country that has an unrivalled record in international good behaviour in so many areas, which is a fellow member of NATO, a senior member of the Commonwealth and happens to share the same sovereign as this country?
Mr. Jack: The right hon. Gentleman speaks, rightly, with passion about a very serious matter that has occurred on the high seas. As someone who has had to deal from the Dispatch Box on many occasions with strongly and deeply felt views in the House about the actions of Spanish fishing vessels, I think that we would all have some sympathy with the emotions that stir in the breasts of those Canadians who wish to defend what they deem to be their legitimate fishing interests. As we saw to the cost of our fishermen only last summer, when member states within the European Union, or anyone else, take precipitate action on the high seas to solve matters, it goes nowhere near the heart of the issue.
The right hon. Member mentioned NATO. With quiet respect, may I point out that Spain is also a member of NATO. This matter requires quiet diplomacy on our part. I became aware of the Canadian displeasure about the matter some time ago, and I and my right hon. and hon. Friends have done our best behind the scenes to urge on all parties concerned the need to negotiate a way round a problem that has occurred in a wholly legitimate international body, which Canada has been perfectly happy to operate within until now. When previous NAFO regulations were set, Canada respected them, just as, for example, the moratorium on the cod fishery off Newfoundland has always been respected by European Union countries fishing in that area.
On the right hon. Gentleman's point about conservation, the purpose of setting the total allowable catch at 27,000 tonnes was to reduce very substantially the amount of fish being taken in that fishery. Again, there was no dispute between Canada and the European Union on the need for that action.
Sir Teddy Taylor: As Canada is a friendly Commonwealth country, which has never let us down when we have been in trouble, and as the fishermen of Canada feel absolutely sickened that their fish stocks have been destroyed year after year by Spanish vessels using the vacuum refrigerator system, which destroys all stocks, will the Minister give the House one simple assurance—that the Government will do nothing about trade sanctions or anything else until they have come back to the House and asked for our permission? Does he accept the simple point that the figure that he quoted is basically a distortion, bearing in mind the fact that the Spanish catch has increased enormously in recent years?
Mr. Jack: What is not at issue, in terms of a distortion, is the fact that Canada and the European Union had agreed a much lower total allowable catch for that fishery to try to reduce the total amount of fishing. My hon. Friend is pressing me on statements made by Commissioners, as did the right hon. Member for Bethnal Green and Stepney (Mr. Shore). I assure him that, in my view and that of my right hon. Friend the Minister, the best way to serve the interests of Canada and the European Union is to press

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for the matter to be settled by negotiation. Gunboat diplomacy on the high seas— whoever undertakes it—does not remove the underlying problems of the worldwide difficulties of shortages and pressure on fish stocks.
Mr. Paul Tyler: Has the Minister made it clear to his Spanish opposite numbers that, in the House and the country, we would have more sympathy with the Spanish position if their Government had taken immediate action following the Bay of Biscay incidents last summer in which Cornish fishermen were subjected to Spanish acts of piracy? Do the Spanish Government now accept that all negotiations must take place within the European Union and that they must take no unilateral action? If not, quiet diplomacy will go out of the window and we shall have a major conflagration off the coast of Newfoundland in the next few weeks.
Mr. Jack: The hon. Gentleman and other hon. Members should know that we have expressed our great concern over the practices of Spain at the Fisheries Council, and I did so again when I met the new Fisheries Commissioner, Mrs. Bonino, last week. I impressed upon her the need for mechanisms to be put in place well before the summer tuna fishery commences, to ensure that we talk through any remaining points of difference and that people do not try to settle fisheries disputes by means of precipitate action on the high seas. I agree with the hon. Gentleman that Spain's past activities may have influenced Canada's view today, and it is hardly surprising that Canada is taking such a robust stance.
Mr. David Harris: As someone who has fought the Spanish over their fishing methods, particularly off the south-west coast of England, for 15 years, may I assure my hon. Friend that the sympathies of every fisherman in the south-west are with the Canadians? But does he agree that those disputes must be settled in accordance with international law? Are not we in great danger, because if, for some reason, Canada pursues its action in breach of international law, it will play into the hands of Spain, which might say next summer, when our fishermen are down there fishing for tuna, "Ah, we have the right, according to Canadian precedent, to arrest Cornish fishing boats off our tuna fishery". The issue is not as black and white as some hon. Members try to make out.
Mr. Jack: My hon. Friend speaks with a great deal of knowledge and wisdom. He has fought tirelessly for the interests of his fishermen under the threat of, and sometimes proven, breaking of rules by Spanish fishermen. He is absolutely right to point again at the parallel between this matter and the tuna fishery. He will recall that the disputes last summer took place in international waters. Against the background of pressure on the world's fish stocks, it is vital that disputes should be resolved not on the high seas but around the conference table.
Mr. Austin Mitchell: Why did we concur in the statement about sanctions? Is any EC finance or British contribution involved in sending a Spanish navy vessel into that area? What conceivable interest to do we have in defending the depredation of
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those Spanish pirates of the fishing grounds? Is it correct that that vessel dropped its gear overboard, which is a sure sign that the mesh used was illegal and that it was catching too small fish before the arrest? Finally, why do not we give Spain the same sterling support as Spain, the European Union and individual European countries gave us in our dispute with Iceland in the 1970s?
Mr. Jack: Far be it from me to say that the hon. Gentleman is involved in an exercise of "All our Yesterdays". I know that this is a serious issue for Humberside fishermen and the hon. Gentleman and I are in regular correspondence about aspects of that matter. He asked me a number of questions. On statements being made by European Commissioners, given Canada's robust stance, I counsel the hon. Gentleman, for his own interest, to read the statements of Minister Tobin on that and he will see that they are in robust terms. It is hardly surprising that an Italian Commissioner supporting a Spanish stance speaks in fairly inflammatory language. That is how those things occur.
I assure the hon. Gentleman that we are not funding the Spanish navy in that exercise. The hon. Gentleman mentioned the attempts, according to newspaper reports—those matters are as yet unproven—that the vessel concerned, the Estai, ditched its gear. The hon. Gentleman and I have exchanged concerns about undersize fishing by Spanish vessels in our waters, and the elements involved in this matter will strike a chord with our fishermen. But just as I chose last week to make it robustly clear to the new Fisheries Commissioner that, unless people are prepared to play by the rules, there will be no credibility in matters such as the common fisheries policy, it is equally important that rules that require negotiation around the table are adhered to.
Mr. Michael Colvin: Does my hon. Friend acknowledge that the problem goes beyond the plundering of fish stocks by Spain? Does he agree that climate change, the reduction of plankton and the move of the capelin to the south mean that fish stocks have moved south, too, and that the activities of the so-called animal rights lobby have stopped the seal cull? When we talk about Canada, which we should support robustly, we should not forget Newfoundland, a large part of whose economy is dependent on fishing.
To take up the question of the hon. Member for Great Grimsby (Mr. Mitchell), what about fish net sizes? We have heard on several occasions that the Spanish are using a mesh that is smaller than that which they are entitled to use under international law.
Mr. Jack: My hon. Friend is right to underline the worldwide problems of pressure on fishing stocks. He will be aware of the recent report by the UN Food and Agriculture Organisation. He will be aware also of Sir Crispin Tickell's report on sustainable development. Both he and the UN point to the tremendous pressure on fish stocks. Part of the reason for that is that modern technology has given man, the catcher, a significant advantage over the hunted, the fish. Everyone who is responsible for fishing policy has some difficult issues to take up on behalf of his or her fishing industry in the context of long-term conservation of fishing stocks.
Fishermen are proud people with a long tradition. They want the freedom to fish, and politicians with fishing responsibility have long-term conservation in mind. It was

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profoundly worrying to witness what happened to the Newfoundland stock. Canada and other nations fishing in the area ignored the signs and continued fishing. In the end the fishery was closed.
I spoke to the Commissioner last week about net sizes in the context of the accession arrangements for Spain and Portugal which deal with the development of technical conservation measures. I assure my hon. Friend that discussions are in progress.
Mrs. Gwyneth Dunwoody: Is the Minister aware that it was a great pleasure for some of us to hear Ministers speaking up in defence of their fishing fleets in robust terms? Is it not a disgrace that, on Commonwealth day, the House is not prepared to say openly that we are sick of the way in which the Spanish have consistently broken the rules? We should make it clear at all suitable forums that we intend to support the Canadians.
Mr. Jack: The hon. Lady may have forgotten a point of recent history, when the United Kingdom went out of its way to be as supportive to Canada as possible in Canada's wish to have a European Union-Canada fishing agreement. We have done as much as any member of the EU, and probably more, to support our Canadian friends in these important matters. Canada, however, would respect in every way the upholding of the principles of law. As my hon. Friend the Member for St. Ives (Mr. Harris) said—he speaks with telling experience, having had to deal with these matters on behalf of the fishermen in his constituency—we must uphold the rule of law and settle these matters not by precipitate action on the high seas but by discussion. The House should respect what my hon. Friend says.
Mr. William Cash: To take up the point of my hon. Friend the Member for Southend, East (Sir. T. Taylor), will my hon. Friend make absolutely certain that the British Government will give no comfort to the European Union in respect of the matters that are being discussed and the allegations that are being made? At the end of the day, the Newfoundlanders depend so much on fishing for their livelihoods, jobs and futures. We must take a stand to look after those who looked after us in the past.
Mr. Jack: I can understand why the hon. Gentleman speaks strongly about defending the interests of Newfoundland and its fishermen. He may have missed my answer in which I observed that, within NAFO, for the first time Canada and the other participating countries agreed to the 27,000-tonne total allowable catch for the species, in order substantially to reduce—by over 50 per cent.—the amount of fish being taken in the long-term interests of all concerned. That is an important point if we are looking at preserving the interests of Canada and its fishing agreement. As for the European Union, it is important that members who are the contracting parties, and the fishermen concerned, stick to the rules of that fishery and reduce the amount of fishing, in accordance with the total allowable catch that has been declared.
Mrs. Margaret Ewing: As a representative of a fishing community, I must advise the Minister that the charge laid by Commissioner Bonino of organised piracy against the Canadians is seen by fishermen as being much more applicable to the Spaniards themselves, because we
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know that they break the rules and that they fly close to the wind on many occasions. They have ruined the west African fisheries and now seem prepared to ruin the Canadian fisheries. Indeed, they are poised to do exactly the same here at home.
I ask the Minister simply which European Union states have fished the quota of 3,500 tonnes that was allocated to the European Union? Has the quota been broken? Will he now stop talking about playing by the rules, and guarantee our fishermen a surveillance and policing policy, which will mean that the industry of our fishermen, who are fighting for their lives, will be protected rather than sold out to the Spaniards?
Mr. Jack: I am happy to debate with the hon. Lady—either formally across the Dispatch Box, or informally—what we are going to do about enforcement under the new arrangement for Spain and Portugal. I agree entirely that it is central to those rules being seen to work. There are policing arrangements and the activities of Spain and Portugal were subjected to a ruthless inquisition at the end of last year, which resulted in a number of Spanish vessels being prosecuted for breaking some of the rules of that fishery. So the question of playing by the rules has been dealt with.
The hon. Lady touched on the central issue: the maintenance of the law and the agreements that surround that particular fishery. It is no use trying to settle the matter by other methods. She asked which member countries had been fishing. Spain and Portugal are the two principal interests in the matter, but countries such as Japan, Russia, Canada— obviously—Poland and others are also involved in that fishery. I point out to the hon. Lady that, in the totality of the fishery, which includes the waters within Canada's 200-mile economic zone, the European Union is the only contracting party to the North-west Atlantic Fisheries Organisation to be expressly forbidden from going into Canadian waters.
Mr. Andrew Rowe: Is not the problem substantially one of our own making? If only all the various nations concerned were to repatriate the part of their sovereignty that they have surrendered to international organisations, and if only they allowed the untrammelled free market to operate, within a year there would be no fish stocks and therefore no problem.
Mr. Jack: My hon. Friend has just initiated his own doomsday scenario on the fishing industry. Governments have a responsibility to work to help to conserve fish stocks for, effectively, the world's long-term interests. I must point out quietly to my hon. Friend that the dispute is about international waters, so there could be no question of repatriating international waters.
Mr. Tony Benn: If the Minister is unable to support Canada, which is taking the boat to court, will he at least make a clear statement opposing the decision by the Spanish Government to send two warships to the site? If there was a common defence policy in Europe, would Britain be required to contribute warships to deal with incidents of that sort against Canada in future?
Mr. Jack: The Spanish Government have, on a matter that they see as a threat to Spanish vessels in international waters, taken action to defend the interests of their fishermen. As I said to the right hon. Member for Bethnal

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Green and Stepney, we do not have any fishing vessels in that fishery and it is not directly a matter of concern to United Kingdom fishing interests. I have given a view—very clearly, I hope—that the idea of using any kind of naval presence to solve the problem is not the way forward, and I return to what I said in response to my hon. Friend the Member for St. Ives (Mr. Harris), who gave us an extremely good set of reasons why talk rather than precipitate action on the high seas is the right way forward.
Sir Richard Body: Will my hon. Friend confirm that the Government are willing to support the majority decisions of the 15 members of the North-west Atlantic Fisheries Organisation? If that is the case, will he undertake to tell the EC Fisheries Commissioner as much?
Mr. Jack: There has not been a decision of quite the kind suggested by my hon. Friend. I think that Commissioner Bonino is entirely aware of the position surrounding the arrangement of the quota.
Let us look at the history. Last September, Canada, the European Union and all other contracting parties agreed on the much lower quota of 27,000 tonnes. There was no disagreement. The disagreement concerns how that quota—which was set for the very first time—should be allocated to those who have traditionally fished the waters involved.
In normal circumstances, the track record of those fishing in the area would be expected to be the determinant. Canada, however, did not like the outcome of that exercise, and sought to disagree with it. Rather than having about three quarters of the fishery, the European Union was offered 12 per cent.; Canada then turned the numbers around, giving herself and others a substantial increase. Within that argument, however, the 27,000-tonne figure has not changed.
Mr. D. N. Campbell-Savours: Will the Minister answer the question asked earlier by the hon. Member for Southend, East (Sir T. Taylor), which he studiously avoided answering then? Will he state clearly that Britain will not support sanctions against Canada, or any attempts within the Community to bring about Community sanctions against it?
Mr. Jack: The European Union, which is currently engaged in discussions with Canada to try to resolve the problems, is clearly working hard in an attempt to secure round-table discussions about the point at issue, which is the allocation of stock. It is hardly surprising that, at a time when strong statements are being made, a range of options should be outlined; but our advice to all concerned is to get round the table and hold a proper discussion about the legitimate way in which the stock should be allocated.
Mr. Graham Riddick: Would I be right in interpreting my hon. Friend's comments to mean that the British Government are at arm's length from what the European Community has been saying and doing? I am sure that the British people will have little sympathy
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with the predatory fishing practices of Spanish fishermen, and a great deal of sympathy with the conservation policies of the Canadian Government.
Mr. Jack: I entirely understand my hon. Friend's latter point. Only last week, I robustly made it clear to the Commissioner that unless our industry could be convinced that Spain would stick to the rules, the credibility of the arrangements for Spain and Portugal's full accession to the common fisheries policy would be at risk. I told the Commissioner that I could see our fishermen turning against the arrangements, and stressed that there was strong public opinion about the matter.
Let me leave my hon. Friend in no doubt: the Commissioner knows how strongly we feel. The dispute, however, is between the European Union and Canada. The European Union, on behalf of its membership, entered into an agreement with Canada about the total allowable halibut catch; the share-out is a matter of dispute. We have been working almost tirelessly behind the scenes, trying to get people to stop making inflammatory statements and get round the table again to negotiate on the hard facts relating to the fishery. I assure my hon. Friend that we shall draw the strong views expressed this afternoon to the attention of the negotiators.
Mr. Allan Rogers: Does the Minister accept that a little partiality towards our Commonwealth friends would not go amiss? Many of us were very unhappy about our entry into the European Community because we felt that we were betraying the Commonwealth, our history and, in many cases, family and friends. When we hear a European Commissioner use thuggish language and extrapolate far beyond the present position, many of us feel that we do not want the European Community to take further action or to impose sanctions on Canada. We want a clear statement from the Minister that the Government will not support such action either.
Mr. Jack: As I told the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), we have in the past given every support to our Canadian friends and we certainly do so at present. We meet them regularly. We were one of the main advocates in the European Union of a European Union-Canada fishing agreement. We have certainly tried behind the scenes, as part of the general briefing for European negotiators, to make it clear that talk rather than precipitate action on the high seas is the right way forward. However, at the end of the day, the European Union has the responsibility to settle the dispute because it is between Canada and the European Union.
Mr. Roger Knapman: My hon. Friend chose to make his statement while the Commonwealth day festival is proceeding. Surely the Canadians are dealing with the Spanish fleet by using the best time-honoured and traditional practices. [HoN. MEMBERS: "Not in international waters."] If we are given the choice between supporting our kith and kin in Canada or our so-called fellow Euro-citizens, should not we choose the former every time?
Mr. Jack: We all have a great deal of sympathy for our many friends in Canada. That is why we have gone out of our way to be helpful to Canada in her relations with the European Union. This matter is about the actions of one country in terms of a fisheries dispute on the high

571
seas. There must be respect by all contracting parties for the law that is involved in this action. To pick and choose who to support in any one dispute would simply encourage other people, as my hon. Friend the Member for St. Ives said, to take the law into their own hands. When the world's fish stocks are under pressure, that is no way to try to resolve these difficult matters.
Mr. Nigel Spearing: Irrespective of any individual or corporate sympathies in the House, does the Minister agree that so far this matter has been dealt with by a Commissioner who is accountable only for her interpretation of treaties and agreements? It has not been a matter for the President or members of the Fisheries Council. The Minister says that this is a European Union dispute with Canada. That illustrates the fact that, in this matter, the Union is acting more like a unitary state than any federation or association of states.
Mr. Jack: In his usual way the hon. Gentleman points at me and seeks to build an edifice where there is no need for one. At this stage it is a matter of trying to reconvene negotiations within agreed mechanisms. There will be an opportunity in April, if the matter is still current, for the Fisheries Council to debate it and question the Commissioner, if necessary, on the action.
Mr. Spearing: Big deal.
Mr. Jack: The hon. Gentleman says, "Big deal". That is typical. When the mechanisms do not suit him he shoots them down and when they do suit him he takes them up. We are in discussions with our European Union partners through various committees under the standing procedures of the European Union to ensure that the EU maintains the stance of trying to recommence negotiations with Canada on this matter. If further action is needed there will be an opportunity at the April Fisheries Council meeting to discuss the issues.
Mr.Michael Lord: Does not this go to the heart of all the problems with Europe? The Minister said several times that we have to obey the rules and have law and order and so on. He even said that he had impressed on the new Commissioner that the credibility of the common fisheries policy was at issue. Does he honestly believe that these marauding Spanish trawlers are remotely interested in the credibility of that policy? They are not. They will go where they can and fish any stocks that they can, to the damage of those stocks and fishing industries all over the world. Against that background is it any wonder that a nation takes a robust stance?
My hon. Friend can gauge the feeling in the House. I put to him again the question that he has been asked several times. Will he give us his categorical assurance that this country will not put its hand to any measures against Canada on this issue until he comes back to the House?
Hon. Members: Answer.
Mr. Jack: I shall do my best to answer the hon. Member for Southend, East (Sir T. Taylor) and others. Let me deal first and with courtesy with my hon. Friend's questions. For the record I should point out to him that, at the Fisheries Council in December, Spain tried to increase the total allowable catch from 27,000 tonnes to 40,000 tonnes, praying in aid the argument that fisheries scientists say that the TAC for this species should not be
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set at an amount greater than 40,000 tonnes. No country in the Council, with the exception of Portugal, gave Spain any comfort on that matter. The Council respected the fact that the North-west Atlantic Fisheries Organisation had set a total allowable catch of 27,000 tonnes for good reasons that were in the long-term interests of all who fish the stock, including Canada's fishermen. The Council thus offered important recognition of the value of the scientific advice.
My hon. Friend went on to raise other issues. He may like to question these mechanisms, but what would happen if there were a free-for-all without them? People would quickly take all the fish; the stocks would be plundered and there would be none left for anyone.
My hon. Friend presses me, as other hon. Members have done, about future action in respect of the European Union. It is not for me, as Fisheries Minister, to deal with that aspect. I shall certainly draw to the attention of my right hon. Friend the Foreign Secretary the strength of feeling in the House on the matter. My task is to reach a position where we need not contemplate such action. The way to do that is to get round the table and talk about the issue.
Mr.Peter Hardy: Despite the existence of international law and the agreements that the Minister mentioned, will he comment on the fact that stocks of halibut and other fished species continue to decline dramatically, thus threatening the economic health of Newfoundland and eastern Canada? Will the hon. Gentleman also consider the fact that some of us may have real doubts about the legality of Spanish fishing methods and about the total catch that the Spanish take? I refer in particular to those of us with steel works in our constituencies who have seen Spain operate improperly in that industry.
Will the Minister also remind our people in Brussels that, at the time of the Gulf war, the Spanish contribution appears to have been a great deal smaller than has been their response to the Canadian action in this case?
Mr. Jack: The hon. Gentleman's question takes me somewhat wider than the fishing industry. The important point to bear in mind is that this is all about the conservation of fish stocks. Canada herself was a party to the ultimate fishing out of the stocks, which in turn led to the Newfoundland fishery being closed. That has worried fishing interests in Canada so much that they have urged their Government to take a very strong stand on this matter. It is not as if Canada's views were ignored when it came to taking a stand on it. I draw the hon. Gentleman's attention to the fact that the catch quota in that fishery had been substantially reduced to the lower figure of 27,000 tonnes in response to the very line of argument that the hon. Gentleman has advanced. The whole idea was to restrict the amount of fishing, in the long-term interests of preserving stocks of Greenland halibut, for the benefit of Canada's fishermen and of all other contracting parties to the North-west Atlantic Fisheries Organisation.
Mr.Hartley Booth: While all the sympathies of the House must be with our cousins in Canada, should not our sympathies also lie with upholding international law—since the Conservative party believes in upholding laws? In that regard, have not our cousins in Canada unfortunately broken international law by unilaterally claiming to have jurisdiction over the high

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seas? Is it not right, therefore, of the Minister to continue his negotiations to get Canada off the hook of having broken international law?
Mr. Jack: My hon. Friend, with his legal knowledge, presents a correct interpretation. It is important to remember that the negotiations are being conducted on behalf of the contracting parties in Europe by the European Union. Canada adapted her domestic law to legitimise, in her eyes, her action outside the 200-mile economic zone. That is the point at issue. She has now arrested a Spanish fishing vessel—but none of that goes to the heart of the matter. The total allowable catch was agreed by all parties. The way to resolve this matter is, as my hon. Friend says, to get back round the table and agree on a sensible distribution of the stock.
Mr.Toby Jessel: My hon. Friend said that the matter should be resolved around the table and diplomatically. If so, should not Spain instantly stop all fishing in this disputed part of the sea until those diplomatic processes have taken place?
Mr. Jack: My last reading of reports about what is happening in the fishery has shown that Spanish vessels have effectively ceased fishing and removed themselves to an area that is known as the Flemish cap, where they await developments.
Mr.Derek Enright: As someone who is not noted for his Euro-scepticism, may I ask the Minister to answer a question that he has dodged seven times? Will he urge on the Foreign Secretary that he abjure the use of sanctions against Canada?
Mr. Jack: I think I gave an answer to that question earlier when I said that I would alert my right hon. Friend the Foreign Secretary to the concerns that had been expressed about that aspect of the European Union's communications with Canada, but equally I said that, before we went down any of those precipitate roads, we wanted to see the European Union and Canada meeting round the table to discuss the matter. That is a far easier way of dealing with the matter than simply pushing parties apart. The solution lies in bringing parties together.
Dr. Gavin Strang: Does the Minister accept that the fundamental issue is the need to conserve fish stocks, bearing in mind the fact that total allowable catches and quotas are part of that, as are the fishing methods of vessels and fishermen? As Canada experienced the virtual wipeout of Canadian Atlantic cod stock, should we not approach the issue with some understanding of the considerations that have led the Canadian Government to take this action? Does the Minister appreciate that the breakdown of the talks within
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the framework of the North-west Atlantic Fisheries Organisation has been the immediate precursor to the problem and that the talks should not be left like that? Can those discussions be reopened with a view to reaching agreement on the European Union quota because, obviously, that is what is in dispute?
The incident in the Atlantic is an example of a wider problem: the inadequacy of the international arrangements, which are unable effectively to conserve stocks outwith national limits. Should we deal with that by extending national limits, or should the Minister consider securing, presumably through the framework of the United Nations, some arbitration procedure or method of help to achieve effective conservation and enforcement of actions outwith national limits?
Mr. Jack: I thought that I had answered most of those questions, but, at the risk of repeating myself, I shall try to do my best. The hon. Gentleman asked whether the fundamental issue was fish stocks and conservation. The short answer is, yes, that is the fundamental issue. That is why NAFO took the decision last September to introduce a total allowable catch of 27,000 tonnes on a fishery that, as he knows, has never been subject to any quota arrangements. It did that to conserve the stock for the long-term future. On fishing methods, he will know that rules exist on mesh size. As I said earlier in relation to the people who have broken those rules, after an exhaustive investigation by flag states and our European Union partners, action has already been taken to prosecute Spanish vessels for rule breaking.
The hon. Gentleman mentioned the Canadian cod stock. I quietly say to him that Canada was also involved in fishing that area and that all the people who fished in it contributed to the decline and eventual decimation of that stock. All parties, including the European Union fishing nations, respected the moratorium on the fishing of cod in that area. The hon. Gentleman asked whether talks can be resumed. That is exactly what people are trying hard to achieve at this moment, to ensure that the talks can be resurrected. I assure the hon. Gentleman that we are giving the European Union every encouragement that we can. The hon. Gentleman asked also whether international waters can be extended but did not hint at his own views.
Dr. Strang: I will be pleased to tell the Minister.
Mr. Jack: Perhaps the hon. Gentleman will allow me to answer him. Any fishing nation that sought to go beyond a 200-mile limit would simply find a worldwide tit-for-tat arrangement that would not serve any interests because ultimately there would have to be continuing agreement on areas not covered by exclusive economic zones. The United Nations standing conference on the law of the seas exists to deal with disputes, and organisations such as NAFO exist to reach sensible conclusions—and we are trying to encourage that in this dispute.

Points of Order
4.15 pm
Mrs. Alice Mahon: On a point of order, Madam Speaker. You will have read at the weekend of the decision by Cambridge health authority not to fund treatment of a seriously ill 10-year-old girl suffering from leukaemia. That case has caused great concern among my constituents and the general public. One reason given for refusing treatment was that the substantial expenditure combined with limited prospects for success would not be an effective use of resources. The Secretary of State for Health has been making pronouncements on radio. Has she said whether she will come to the House to address that worrying and serious matter?
Mrs. Anne Campbell rose—
Madam Speaker: I see the hon. Member for Cambridge (Mrs. Campbell) rising in her place. Does she wish to raise a point of order on the same matter"
Mrs. Campbell: No, Madam Speaker.
Madam Speaker: In that case, I will deal with the first point of order. I have not received any indication from a Minister that he or she will seek to make a statement on the matter raised by the hon. Member for Halifax (Mrs. Mahon) or any other matter today.
Mrs. Campbell: On a point of order, Madam Speaker. I seek your advice about an announcement that the Prime Minister recently made in the House. In response to a question from my right hon. Friend the Leader of the Opposition, the right hon. Gentleman assured the House that pay excesses among bosses of privatised utilities had gone too far and that he intended to deal with the matter by establishing the Greenbury committee, which would make recommendations to the Government on ways of preventing excessive pay. However, the front page of one newspaper today suggests that the Prime Minister has told a group of business men that the Greenbury committee will not make major recommendations and that the only recommendations expected are minor changes to company law. Do you, Madam Speaker, consider that the Prime Minister seriously misled the House about his true intentions?
Madam Speaker: No, I certainly do not. The hon. Lady knows that all Ministers are responsible for their comments. If the hon. Lady or any other hon. Member wants to pursue that matter further with Ministers, they can do so in Prime Minister's Questions and in other ways.

Orders of the Day

  Gas Bill
  Order for Second Reading read.
  [Relevant documents: The First Report from the Trade and Industry Committee of Session 1994–95 on The Domestic Gas Market (House of Commons Paper No. 23), the Second Special Report from the Trade and Industry Committee of Session 1994–95, containing the Government's Observations thereon (House of Commons Paper No. 291) and Minutes of Evidence taken before the Environment Committee on 15th and 21st February 1995 (House of Commons Paper No. 229-i and -ii of Session 1994–95).]
  Madam Speaker: I have selected the amendment in the name of the Leader of the Opposition.
  4.18 pm
  The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine): I beg to move, That the Bill be now read a Second time.
  The assumption that the supply of gas to the public can best be undertaken on a monopoly basis dates from 1847, when a committee of inquiry led to the passing of the first Gasworks Clauses Act. The conclusion that monopoly was the necessary form of organisation was based on the poor economics of laying competing pipelines and the associated disruption in terms of street works that that was found to entail.
  The idea of separating the trading functions from the operation of the distribution pipes has emerged progressively over the past few years. We have an active competitive market in the supply of gas to industrial and commercial customers. These customers have already seen savings of 10 per cent. to 15 per cent. or more as a result of that competition.
  The Bill provides a sound foundation for the phased introduction of the benefits of competition to the 18 million domestic gas customers in Great Britain. The Bill will empower customers to demand the levels of service that they want. It will provide a powerful incentive to innovation and efficiency, and it will provide a strong downward pressure on average prices. Already since privatisation, we have seen a fall in the price of gas before VAT of more than 20 per cent. in real terms and an even larger fall in the standing charge. Alongside that, British Gas has invested £9 billion in the United Kingdom since 1986, including a £2 billion programme of mains replacement to improve safety.
  Mr. D. N. Campbell-Savours: The President of the Board of Trade used the word "average". Can he illuminate that—[Interruption.] I do not think that the Minister for Energy and Industry needs to tell the right hon. Gentleman the answer. He does not need help in that way. Will the right hon. Gentleman tell us what will happen to low-use consumers of gas? Will their bills go up substantially, as is being argued?
  Mr. Heseltine: I can try to help the hon. Gentleman. "Average" is a complicated idea. One has to take the lowest prices and the highest prices, put them all together and divide them by the number of consumers. Out of that

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  calculation comes what we customarily called, when I was at school, an average. I hope that the hon. Gentleman has noticed that I did not need to refer to my right hon. Friend the Minister for Energy and Industry for that remarkable piece of memory of my childhood years.
  Mr.Dafydd Wigley: I do not want to challenge the right hon. Gentleman on the definition of "average". He will be aware of the danger that a person walking through a river with an average depth of 4 ft 6 in may drown in the middle. Is he not aware of the danger, within the average charges, to rural areas? If charges are required to reflect the costs of the supply of gas, the charges in rural areas may increase disproportionately, albeit within the average, which will hit some people hard.
  Mr.Heseltine: As the hon. Gentleman will know, it has been suggested that because of the transportation charge, there may be a differential of between plus and minus 2 per cent., depending on the area. That has to be set against the forecasts of the companies anxious to enter the market. They can see economies of up to 10 per cent. in overall prices. Those matters will be dealt with considerably in the licences that the regulator will issue. The details of the licences will appropriately be explored in Committee, if the Bill receives a Second Reading.
  Mr.Peter Bottomley: Is not the key point that over the past 20 or 30 years, gas has expanded from covering 7 per cent. of households to about 50 per cent.? Many people in rural areas wish that gas could reach them. If the transportation variation is so small compared with the rest—except when oil prices are very low—most people will be glad that gas has been extended to more people.
  Mr.Heseltine: That is absolutely right. That is why my hon. Friend will have welcomed the figure that I gave for investment by British Gas in widening and modernising its facilities; that investment amounts to £9 billion since 1986. That money has been obtained without recourse to the public purse because it has been raised in the private market.
  Mr.Richard Caborn: Can the right hon. Gentleman enlighten the House on how he believes that the Bill will proceed in terms of the transportation charge? First, there is the geographical point, which he explained to the House. Secondly, there is the variable and the fixed part of the gas charge which, as he probably realises, the Select Committee on Trade and Industry brought to the attention of the House. Can the right hon. Gentleman give the House any assurances that the average price for TransCo was at the lower end? Both the right hon. Gentleman and the regulator accept the figure of £15. Can he give assurances that the cross-subsidy, which is now built into the price, will continue and that it will not be removed in the near future?
  Mr. Heseltine: The hon. Gentleman puts the case very fairly, in asking about the £15 standard charge that is built into the proposals. That matter is subject in the end to the regulatory regime, but obviously there would be no point in changing the regime shortly after it had been introduced. I am sure that the hon. Gentleman will be reassured by the answer that I have given.
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  In formulating our proposals, we have been careful to ensure that safety will remain a top priority. We asked the Health and Safety Commission for a detailed report on our proposals. That report was published last week and we have accepted it.
  It is central to our proposals that every supplier will have an obligation to supply on request any domestic customer covered by its licence. It will charge for gas against publicly available price schedules. There will be a number of measures to discourage cherry picking of the more attractive customers and rules to deal with price discrimination by nationally or locally dominant suppliers. At the same time, market entrants will be allowed to choose pricing structures that meet consumers' needs. If some new suppliers wish to enter the market on the basis of a standing charge set at zero, as one has suggested that it may, we would not wish to stand in its way.
  We shall ensure that the requirement for special services to pensioners, the disabled or the blind and to those who have genuine difficulties paying for their gas should continue. That includes important services such as the free gas safety check for pensioners or disabled people who live alone and the provision of a range of special controls and adaptors to help with the use of gas appliances. The current requirements for service in those areas will be maintained and, in some cases, enhanced. All suppliers will have to bear their share of the social obligations to those customers, but there will be arrangements in the licences for a levy to share the costs of those services in certain circumstances if they fall disproportionately on a particular supplier.
  Mr.Peter Hardy: The Minister referred to social obligations. Does he feel that the Government have any social obligation to the many Sids and Mrs. Sids who were beguiled by Government legislation, persuaded to buy shares in British Gas and who had not expected that, in the short time to which he referred a moment ago, such a dramatic change in their circumstances would be effected?
  Mr. Heseltine: The hon. Gentleman has made an important contribution, but is he quite sure that he has the right industry? We are talking about the gas industry this afternoon, not the electricity industry.
  Mr.Hardy: Sid was gas.
  Mr.Heseltine: I understand that. The complaints of his right hon. Friend the Member for Copeland (Dr. Cunningham) are about the electricity industry, not the gas industry. If I may say so, it is a quite bizarre reversal of fortune for Labour Members to know that there are even things called shareholders, let alone to rise to their feet to defend them.
  Dr. John Cunningham rose—
  Mr. Heseltine: I thought that the Labour party was interested in customers, consumers and the public. Indeed, the object of this legislation is to reduce prices for the people who buy the gas.
  Dr. Cunningham: I am talking about this Bill. The Minister mentioned a levy on all providers. That is not in the Bill and the House has not yet had the advantage of seeing the licences, because they have not been published.

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  Is he telling the House, and is he giving a guarantee, that that matter is agreed between himself and the Director General of Gas Supply?
  Mr. Heseltine: When the right hon. Gentleman gets into the detail of the Bill, he will find that the powers to impose a levy are in the legislation.
  Dr. Cunningham: Who will decide?
  Mr. Heseltine: From the licences around, the regulator would decide whether that was a necessary development. The power to levy a charge to ensure that those services are protected is in the legislation.
  Dr. Cunningham: Yes, we understand that, but that was not really the point of question. The power is there, but is the right hon. Gentleman guaranteeing that it will be implemented, and is he guaranteeing that the director general will ensure that that power is used in the way that he suggests?
  Mr. Heseltine: The right hon. Gentleman can be absolutely sure that the Government's intention is to ensure that the services that we are talking about are protected for the benefit of those who depend on them. The power in the Bill therefore ensures that the opportunity to do that exists. If the regulator could find other ways of doing that through the licensing system, that would achieve the same ends. However, that is not in any way a substitute for our determination that those services should be maintained.
  Dr. Cunningham: It is the case, then, that it is quite possible that the director general could ensure that those services continue by making their costs fall on the consumers concerned.
  Mr.Heseltine: Not in a way that would act adversely against the Government's intentions in introducing this legislation. That is the point. The Government are determined to preserve the social implications of the legislation, and the powers to do that are there in the ability to levy in the way that I outlined. I do not in any way criticise the right hon. Member for Copeland for pressing me on the point, because it is important and it is one that the Standing Committee will want to consider when we get to the details. I wholly accept and welcome that as the point is very important.
  Dr. Keith Hampson: My right hon. Friend has just said that what we are seeing, or about to see, is a total revolution in the energy industry. Does he believe that one way to stop the scare stories that are being put about by Opposition Members to the effect that those on low income and the disabled will lose out, may be to guarantee to people—particularly during the transitional period—that the present British Gas standards are an absolute minimum and that that will be enshrined in a code of practice, which the regulator will have to follow in the legislation? Would not that shut up Opposition Members?
  Mr. Heseltine: My hon. Friend makes an interesting point. However, without committing ourselves to a code of practice, the Government's intention is to ensure the outcome that my hon. Friend has drawn to the attention of the House: in other words, the standards of British Gas today are the minimum standards. How we ensure that that happens is an issue that we shall have to resolve in
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  detail. However, it is irresponsible and unforgivable for the Opposition to suggest that somehow or other those minimum standards will not be maintained. They will be maintained.
  Sir Michael Grylls: Does my right hon. Friend agree that the scares being raised by the Labour party are very familiar to Conservative Members, because they were raised when we privatised British Telecom? At that time, Labour Members said in the House that all the telephone boxes would be closed after privatisation, but the outcome has been that there are 50 per cent. more telephone boxes and 96 per cent. of them are working.
  Mr.Heseltine: My hon. Friend reminds us, if we needed reminding, that every piece of competition-enhancing or privatising legislation put through the House by this Government has been subjected to total misrepresentation, deliberately and cynically, by the Opposition parties in order to try to persuade us not to proceed. When we have proceeded, their forecasts have turned out to be misleading and worrying for the particular groups of people on behalf of whom Opposition Members claim to speak.
  Dr. John Reid: What the Minister is saying about the maintenance of minimum standards and social responsibility is utter balderdash. Can he answer my question without reference to all the President's men beside him? If what he says is the case, why are there 60 fewer home service advisers to visit old people and disabled people, to advise them on the adaption of gas equipment? Without reference to all the President's men, can he tell me why those minimum standards are being reduced day by day?
  Mr. Heseltine: The hon. Gentleman is complaining about the existing situation. We are trying to introduce competition to improve the existing situation.
  I have never been ashamed to turn to my right hon. Friend the Minister for Energy and Industry, to seek his guidance on a matter in respect of which he is a well-known authority. Usually we manage to reach an agreed view, which I then present at the Dispatch Box. That is very different from what we see happening in the Labour party, where leading spokesmen fight each other to get to the Dispatch Box to give the different views of the Labour party's current policy.
  We have a bizarre situation in which the Labour party is largely absent from the debate this afternoon because it is now trying to agree its new policy on privatisation. We know perfectly well that when Labour Members have agreed, 53 per cent. will believe that they have won and 47 per cent. will believe that they have lost. If the Labour party ever came to power — which heaven forfend—half its members would sit on the Back Benches opposing the government in which they had been elected to serve. They would then talk to us about divisions in the Conservative party.
  Dr. Robert Spink: Can I bring my right hon. Friend back to the question of special interest groups? He will be aware of my special constituency

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  interest in blind people. Can he confirm that blind people will still be provided with Braille controls by all gas suppliers?
  Mr. Heseltine: I know of my hon. Friend's interest and I am pleased to be able to give him a simple answer, which is yes.
  Mr.Nigel Spearing: Will the right hon. Gentleman give way?
  Mr. Heseltine: I have given way enough. We must maintain the high standard of the debate and keep to the intellectually coherent case that I wish to deploy without that case being knocked about by the roughnecks on the Opposition Benches.
  Mr.Spearing rose—
  Mr. Heseltine: I know that the hon. Gentleman speaks for those roughnecks, but if he will forgive me, I shall try to make some progress.
  Mr.Ronnie Campbell: The President has the biggest neck.
  Mr.Heseltine: I may have the biggest neck, but there are parts of the hon. Gentleman with which I cannot compete.
  The Bill retains the duty to promote energy efficiency. It creates a new environmental duty, which would, for example, require the director general to take into account the environmental impact of losses in the gas transmission system. The licences will extend to all domestic supplies the current requirement on British Gas to produce energy efficiency services and advice.
  Perhaps most important, we are sweeping away the requirement that gas can only he sold as a fuel. The Bill will allow gas to be sold as part of an energy package, including a more efficient boiler as well as the gas itself. Suppliers will be able to compete in selling warm houses and not simply in selling gas, and they will have every incentive to compete by offering such added-value services as well as competing on price.
  Mr.Spearing: Will the right hon. Gentleman give way?
  Mr. Heseltine: The hon. Gentleman's neck is still as rough as it was a moment ago, and I will not give way to him.
  I believe that competition will provide a powerful dynamic for energy efficiency. I know that Labour Members have always taken a cynical view about that. They believe that the only way to promote energy efficiency is through public expenditure or levies on other consumers. But they have always scoffed at what a competitive market can achieve. They have always been proved wrong in the event.
  The principal concept underlying the Bill is the division of the various components of the gas industry. In particular, the public gas supplier envisaged by the Gas Act 1986 is to become three separate types of entity.
  The first is the public gas transporter, who operates the pipelines through which gas is delivered to premises. The Bill recognises that, at the level of local distribution, that
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  remains a monopoly function. Accordingly, British Gas's prices for transportation services will remain closely regulated.
  The second entity is the gas supplier, who will contract with the customer for a supply of gas and will be responsible for delivering the services that the customer requires.
  The third entity is the gas shipper, who performs the specialised function of arranging with public gas transporters for the right amounts of gas to be put into pipelines—normally at the beach—and conveyed to premises. In effect, that is a wholesaling function. The Bill requires that public gas transporters are separate legal persons from suppliers or shippers. However, the Bill allows the supplier and shipper functions to be handled either by the same entity or separately so that companies can organise themselves to fit their expertise.
  A memorandum giving details of the principal terms of the licences—to which Opposition Members have drawn the attention of the House—was placed in the Library last week. The legal drafts of the licences are being prepared and will be published as soon as they are ready. We will of course listen most carefully to the views of hon. Members, the industry and others with an interest as we move towards finalising those standard conditions.
  The Bill's detailed provisions largely consist of amendments to the Gas Act 1986 to give effect to the new structure and to provide an appropriate system of licensing. Clauses 1 and 2 adapt the duties of the Secretary of State and the director to the new regulatory framework. Clauses 3 to 8 introduce the new licensing framework for the industry, appropriate to the introduction of full competition. Clauses 3 and 4 and schedule 1 make it a criminal offence, subject to exemptions, to act as a supplier, shipper or transporter without the appropriate licence.
  Clause 5 sets out the licensing regime for public gas transporters. Clause 6 sets out the licensing regime for gas supply and gas shipping. Clause 7 provides for the scope of licence conditions and procedures for application. Clause 8 enables the Secretary of State to determine and publish standard licence conditions and provides for their incorporation in licences. The Bill includes a number of other clauses and schedules, which there will be an opportunity to consider in detail at a later stage.
  This Bill brings to an end a 150-year period of monopoly in the gas industry. It provides for the change to take place carefully and with fully adequate safeguards, yet it will allow people in the pilot areas to start benefiting from competition from next April. No stronger confirmation could be seen of the popularity of our proposals than the widespread interest that has been shown by people and their elected representatives in participating in the pilot phases. The Bill sets out proposals that have been welcomed by British Gas, by independent suppliers and by the Gas Consumers Council.
  Perhaps I can take the House just a little further back in history and deal with the views that the Labour party has expressed on the issue. As we listen to what the right hon. Member for Copeland says this afternoon, we ought to know the judgment, authority and quality of view that lie behind the Labour party's policies.

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  In 1985, the right hon. Member for Salford, East (Mr. Orme), who was then the Opposition spokesman, said:
  "There is no evidence that the Bill will improve efficiency, provide a better service, produce cheaper gas or, least of all, create greater competition."
  As the House knows, there have been significant reductions in the price of industrial and commercial gas. There has been a significant increase in competition. There is certainly improved efficiency and a wider service.
  The next forecast that we were to hear came from the Liberal spokesman, the hon. Member for Gordon (Mr. Bruce). He told us that
  "the 16 million British gas consumers can expect only one result—to pay increased gas prices, higher than the rate of inflation, for years to come."—[Official Report, 10 December 1985; Vol. 88, c. 780-93.]
  The whole House knows that there has been downward pressure on prices. The forecasts are that that will be intensified as a result of the Bill. The average annual gas bill for domestic consumers fell from £392 to £315 including VAT in 1994, in real terms. That is a fall of almost £77 per average domestic consumer.
  So what happens? The Opposition forecast inaccurately at every stage. The hon. Member for Clackmannan (Mr. O'Neill) said on 3 October 1994:
  "The Labour party has no interest or intention in seeking to return British Gas to the public sector."
  That is not altogether surprising, but it should be contrasted with a statement by the right hon. Member for Salford, East. He told us in 1985:
  "We shall reacquire the assets, based on the policy of the Labour party conference."
  The only conclusion is that Opposition Members got their judgments wrong and because their judgments were so wrong, they changed their policy. Now they know that they cannot possibly go back to the electorate with the policies that a few years ago they believed were absolutely essential. That is why the Labour party is in such turmoil on clause IV.
  If one thinks that the Labour party's policy is some sort of muddle based on misjudgments about the gas industry, perhaps I may trespass on the House's time a little longer.
  When the right hon. Member for Sedgefield (Mr. Blair) led for the Opposition in opposing the Electricity Bill in 1988, he said:
  "what is proposed today is not something radical, evolutionary and new, but something old-fashioned and failed."
  Yet now he is flogging around the country trying to persuade his party that the things that we did in 1988 are so central to the economic fabric of society that they cannot be changed.
  Just to illustrate the depth of knowledge that he brought to the subject, the right hon. Member for Sedgefield had to say:
  "the idea that we will have an influx of power stations, all competing on the grid, is nonsense."
  Yet I was at the Dispatch Box a year or so ago when the Labour party condemned us for the dash for gas, which produced precisely the range of power stations that the Leader of the Opposition forecast would not be produced.
  The last forecast stands in line. It is from the right hon. Gentleman in the same debate in December 1988:
  "In exchange for having no choice, we have the reality of higher prices."—[Official Report, 12 December 1988; Vol. 143, c. 680-84.]
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  Yet everyone knows that the downward pressure on prices has continued throughout that time.
  I took the liberty of looking once again at the amendment tabled by the right hon. Member for Copeland and his right hon. and hon. Friends. This is what Opposition Members will vote for tonight, if they get the chance. It says that the Bill
  "is damaging to the interests of many sections of the population, including elderly people, those with low incomes and those living in South West England, Wales and other parts of the United Kingdom distant from beaching points".
  That is clear. That is their opinion. I took the liberty of asking whether any representations had been made by local authorities to be the first experimental area to have the benefits of the competition that will do so much harm to the elderly, those on low incomes and those living in the south-west. After all, if this is so obvious, so important and so devastating for the people for whom hon. Members on both sides of the House have the utmost sympathy —this is going to be a good one—no authority would want to be an experimental area.
  The Tories do not come out of this story as well as I would like, if the standard is the imposition of hardship on all those hard-luck cases. Only two Tory-controlled local authorities applied to be part of the first experiment. The Liberal party did rather better. It did 100 per cent. better than the Tories in trying to impose, in the language of the Labour party, hardship on all the most pressurised classes in society. Four Liberal local authorities wanted to be part of the first experiment.
  I warned the right hon. Member for Copeland that there was trouble coming. What did we discover about the people who were going to damage the interests of many sections of the population, including elderly people and people on low incomes scattered all over the place? Who takes the prize for the number of local authorities that came to my Department and asked to help get the experiment in place? The right hon. Member for Copeland should stand up and be counted. Six Labour authorities, as opposed to four Liberal and two Tory authorities, applied to be part of the experiment. So which is the party that really cares? Which party is in the business of damaging the interests of elderly people and people on low incomes? It is the Labour party.
  I say to the right hon. Member for Copeland and to you, Mr. Deputy Speaker, for goodness sake, if you can get away from the Chamber, go back to where clause IV is being drafted and check it against the amendment on the Order Paper today. The Labour party will have to do some pretty fast talking if all the forecasts for which it will vote tonight come right. The Labour party has campaigned most arduously.
  We might ask a question or two about the Liberals. The Liberal party will undoubtedly vote for the Labour amendment, abstain or something—anything to keep out of the Government Lobby. That will be the Liberals' position, because they want to pretend that they are a distinctive party.
  On 13 October 1994, the hon. Member for Gordon, who was the Liberal Treasury spokesman, sent a letter to my right hon. Friend the Minister for Energy and Industry. The hon. Gentleman has moved on. The great thing about being a Liberal spokesman is that one never stays in the job for long. One can abandon the position that the party

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  has adopted one month, hand the job to someone else and disown it the next, in any part of the country. In that letter, he said:
  "I am concerned to read that the Government may be unable to find sufficient space in the Parliamentary timetable to legislate for competition in the gas industry.
  It is extremely important that the legislative framework for this is put in place as soon as possible".
  So that there should be no doubt—even for people like myself who perhaps do not pay as much attention to the Liberals as we should—the letter continued:
  "`i.e.' the next session in Parliament."
  Even I could work out on 13 October 1994 when the next Session of Parliament would be. I have good news for the hon. Gentleman—join us in the Lobby tonight, because this is the legislation that he regarded as so critical just a few months ago.
  Mr. Spearing: Will the right hon. Gentleman give way?
  Mr. Heseltine: No, he will not.
  Mr. Caborn: On a very important point of order, Mr. Deputy Speaker—the security of Government files. I have just been handed a file on the Second Reading of the Gas Bill—a file that obviously should be in the Minister's hands. All the points that he has mentioned are there—notes on intervention, regional pricing, winners and losers, small customers, cherry picking, direct debit, jobs, safety and the role of the regulator. They are all here in this file and as you will see, Mr. Deputy Speaker, they are marked, "Priority", "Immediate", and "Priority" again. I am sure—
  Mr. Deputy Speaker (Mr. Michael Morris): Order. The Chair is not responsible for any sources of reference that hon. Members may have. Clearly, the speech of the President of the Board of Trade has a little way to go yet.
  Mr. Caborn: Further to that point of order, Mr. Deputy Speaker.
  Mr. Deputy Speaker: Order. It is no good the hon. Gentleman standing there and waving papers at the Chair. With the greatest of respect, that was not a point of order for me.
  Mr. Heseltine: It is a huge hoot that the hon. Member for Sheffield, Central (Mr. Caborn) should be able to raise that matter today, but if he ever gets into government, he will discover that everything leaks. All that he has demonstrated is that that was a particularly proficient and professional example of the art. Had I organised it myself, I could not have done it faster, and I could not have chosen a nicer hon. Member to do it to.
  Another reason why the Opposition will try to persuade the House to vote for their amendment is that the Bill
  "omits any regulatory provision to enable price cuts to consumers where there are unjustified salary and share options awarded to senior employees."
  Dr. John Cunningham: Read that again.
  Mr. Heseltine: Yes, I will. If the right hon. Gentleman cannot understand that, I shall be happy to read it again. The words are in the Opposition amendment and I thought that Opposition Members could read their amendments. It
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  is clear that the right hon. Gentleman wants an opportunity to discuss recent pay awards and option schemes in British Gas. That is a legitimate thing for him to do and I am not complaining. He did not hear a word of protest from me. I am merely putting that subject on the agenda, so that when he gets up and does so, it will come as no surprise. Indeed, it might even encourage some of my hon. Friends to hang about to hear what the right hon. Gentleman has to say—not that he will not have said it all before.
  Nevertheless, I want to deal with that matter seriously. It is suggested that the regulator should be able to impose pressures on gas industry prices to deal with unjustified salary and share options awarded to senior employees. The House will want to know that the turnover for British Gas is £9.698 billion—nearly £10 billion. Total board pay and share options are under £10 million, which works out at 0.09695 per cent. of turnover—less than 1,000th of total turnover. Worked out in terms of the effect on the average domestic customer, it means that if there were no directors, stock options or bonuses, the price to that customer would be reduced by 50p a year. British Gas has succeeded in bringing down prices by 20 per cent., which is £77 for the average domestic customer. So, if one got rid of all the senior directors, bonuses and options and did not replace them, one would save 50p—for a board of directors who have saved customers £77 a year.
  I have this question for the right hon. Member for Copeland. Will he not replace that remuneration? Will there be no directors? Where would he recruit them, what would he pay them and how much would that take back from the 50p that he implies would be saved? Does he really think that he could run British Gas and all those other companies with no directors and no cosy soft jobs for pensioned-off trade unionists? He had better not tell them that this side of a general election campaign.
  The Opposition are trying desperately to confuse the public about the transformation that they are trying to bring about in Labour party policy on the issue. That policy lacks any credibility because they have had to abandon—or half of them have had to abandon —everything that they have ever believed in on the issue. That is a slight exaggeration, because some Labour Members have certainly not abandoned those beliefs.
  I have before me a reference to the hon. and learned Member for Leicester, West (Mr. Janner), who is rather keen on advising people about remuneration. I understand that he is making a killing out of advising directors in the private sector about stock options and remunerative packages—[Interruption.] I am not complaining, but observing that a member of the Labour party is making a killing out of all that. Having done so, in another capacity he is teaching them to present themselves as well as possible, in a friendly and smiling fashion on television, to rationalise and justify to the British people the remuneration packages that he has told them how to get—[Interruption.]
  Mr. Deputy Speaker: Order. I hope that the Secretary of State warned the hon. and learned Member for Leicester, West (Mr. Janner) that he intended to refer to him. There is a code in the Chamber, which Madam

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  Speaker has re-emphasised, that if hon. Members are to be referred to, they should be done the courtesy of being forewarned.
  Mr. Heseltine: I respect that judgment, Mr. Deputy Speaker. I shall convey to the hon. and learned Member for Leicester, West the fact that I did not give him warning and that I have referred to that matter. As it has been in national newspapers and as he has set himself up as an authority on the matter, he might have come to the House today to participate in the debate. He is an endangered species—he is hunting with the hounds and with the hares. He jolly nearly got himself outlawed in the House a week ago.
  The Opposition amendment reveals that the Labour party has been forced to abandon its opposition to privatisation. It has been forced to recognise that every Government of any significance in the world are moving in the direction that this Government pioneered. Labour Members know that that is in tune with the mood of the people and that is why they have abandoned their long-held views.
  Conservative Members have long-held views on the strength of the private competitive world, which offers better services, and is the most effective on quality and prices. We stick to our views and we will stick to this legislation.
  4.59 pm
  Dr. John Cunningham: I beg to move,
  That this House declines to give the Gas Bill a Second Reading because it believes that the Bill fails to provide effective safeguards for consumers against the deleterious consequences of deregulation of the domestic gas market; is damaging to the interests of many sections of the population, including elderly people, those with low incomes, and those living in South West England, Wales and other parts of the United Kingdom distant from beaching points; fails to provide adequate resources for health and safety monitoring of the implications of deregulation; does not require suppliers to provide the financial surety necessary to guarantee security of supply to consumers; does not address the question of regional electricity companies attempting to enter the gas market; fails effectively to emphasise the need for energy efficiency; and omits any regulatory provision to enable price cuts to consumers where there are unjustified salary and share options awarded to senior employees.
  We have just listened to a predictable rant by the
  President of the Board of Trade, which is now his everyday performance when he comes to the Chamber. On this occasion, as on previous occasions, we give him two out of 10 for content but slightly higher marks for artistic impression, except when he resorted to a squalid attack on my hon. and learned Friend the Member for Leicester, West (Mr. Janner) without doing him the courtesy of notifying him in advance. It is indicative of the depths to which the right hon. Gentleman has descended that he should do that despite the recent admonishment of Madam Speaker about such personal attacks in the Chamber.
  The President of the Board of Trade had a lot of say about many matters except the Bill. That is not surprising because, when he talked about the Bill, he demonstrated that he knows little about its implications. Even when the Minister for Energy and Industry whispered the answers in his ear, he confused some of his responses, as I shall demonstrate in a moment.
  The right hon. Gentleman talked about 1985 and 1988. We could all remind him where he was in 1988. He was writing a book called "Where There's a Will", which was
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  deeply critical of the Government's policies. It was all about intervention, doing more to support British industry and creating jobs. No one has done a bigger flip-flop than the right hon. Gentleman since coming back to office, except possibly his colleague who has just been appointed a Minister having travelled from the Labour party, through the SDP, to the Conservative Benches.
  Ms Angela Eagle: Does my right hon. Friend agree that, as the President of the Board of Trade had nothing to say about executive pay except to justify it, he seemed to be at odds with the Prime Minister?
  Dr. Cunningham: My hon. Friend is right. I do not know whether the President noticed, but, in the middle of his pathetic rant, even the chief executive of British Gas walked out. So I do not think that he has convinced many people in the Chamber or elsewhere by his performance today.
  Mr. Graham Riddick: They are all going now. [Interruption.]
  Mr. Deputy Speaker: Order. For the record, no one who should be here has walked out.
  Dr. Cunningham: It is a pity about the President's performance because this legislation is not only complex but important as it covers the safety and security of the supply of gas to many millions of people. The Bill comes at a time of huge public dissatisfaction with the Government's privatisation policies and the conduct of those in charge of privatised industries. It comes at a point when public and political mistrust of the powers, duties and performance of industry regulators is high and widespread.
  That the Bill is before the House at all owes more to the humiliating failure of the President of the Board of Trade to convince even his colleagues that the Post Office should be privatised than to any other reason. His isolation on that issue was further confirmed by the report of the Select Committee on Trade and Industry last week.
  The Bill's complexity, with 17 clauses, six schedules and some 68 pages of detailed proposals, is predictable enough, but much has been left out of the Bill and will be known and understood only when licences for gas suppliers are published. It is typical of this Government that they invite the House to accept the proposals in the absence of vital information in those licences. A second criticism is that the Bill leaves too much to the interpretation of the regulator. At a time when the regulatory regime has been found wanting, that is completely unacceptable to us.
  Dr. Hampson: Does the right hon. Gentleman accept that the Trade and Industry Select Committee, which has a Labour chairman and produced a unanimous report, said that British Gas should be deregulated as rapidly as possible for the sake of domestic customers, and that we were leading the world in terms of consumer choice at the meter? Does he also accept that the Committee agreed unanimously that there would be lower prices for customers, wherever they were in the United Kingdom and, in particular, that private competitors to British Gas

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  entering the market have even talked of abolishing standing charges? Does he, as Labour party spokesman, accept each of those points?
  Dr. Cunningham: No, I do not, and I shall come to the Select Committee's recommendations a little later.
  Mr. Spearing: Will my right hon. Friend give way?
  Dr. Cunningham: I shall give way to my hon. Friend in a moment.
  It is well established that there has been widespread disagreement between British Gas, Ofgas and the Department of Trade and Industry about the Bill. That no doubt accounts for the absence of information on the suppliers' licences today. In many respects, the proposals are simply a leap in the dark. Last December, the Trade and Industry Select Committee concluded —I shall quote rather than paraphrase, as the hon. Member for Leeds, North-West (Dr. Hampson) did, from the report:
  "We found no correlation between competition in the industrial market and what is envisaged for domestic supply, and could find no parallel examples abroad".
  The Committee went on to say:
  "We could find no hard evidence to suggest that competition as currently conceived would deliver substantial reductions in gas purchase prices".
  Those are two conclusions of the Trade and Industry Select Committee.
  Important questions have been raised about fundamental aspects of the Bill by all the leading consumer bodies, the Gas Consumers Council, the National Consumer Council—
  Dr. Hampson: On a point of order, Mr. Deputy Speaker. May I register the fact that the right hon. Gentleman has misinterpreted a Select Committee of the House by quoting passages entirely out of context—
  Mr. Deputy Speaker: Order. That has nothing to do with the Chair. Hon. Members' interpretation of other hon. Members' speeches is entirely up to them. There are plenty of opportunities in the House for hon. Members to make corrections.
  Dr. Hampson: Further to that point of order, Mr. Deputy Speaker.
  Mr. Deputy Speaker: Order. I have ruled on that matter.
  Dr. Cunningham: The hon. Gentleman seems to be about to take leave of whatever senses he has left.
  Mr. Spearing: A few moments ago, my right hon. Friend mentioned the Bill's unexpected consequences. Is he aware that, in Bromley by Bow in my constituency, we have a depot containing 20,000 spare units in multiple for gas consumers throughout south-east England? A year ago, the depot was to be expanded under an efficient British Gas; it is now to be closed consequent on the requirement of competition. Does not that show that
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  safety and consumer satisfaction will be reduced in south-east England, with redundancies and the closure of that depot?
  Dr. Cunningham: Yes, my hon. Friend is right. That closure was announced on 1 January this year.
  Mr. Robert Banks: The right hon. Gentleman has misled the House. May I quote from the conclusions of the Select Committee on Trade and Industry, which clearly say:
  "There will be benefits to consumers from the increased choice and lower costs flowing from the liberalisation"—
  Mr. Deputy Speaker: Order. If I heard the hon. Gentleman correctly, he said that the Opposition spokesman had misled the House. I must therefore ask him to withdraw that phrase.
  Mr. Banks: Perhaps I should have said "misquoted" the Select Committee report. May I point out that the conclusions clearly show that the Trade and Industry Select Committee recognises that there will be advantages to consumers from competition, and lower prices for consumers. It is as clear as a bell.
  Dr. Cunningham: I quoted the report of the Select Committee and I stand by that.
  Dr. Hampson: Misquoted. It was out of context.
  Dr. Cunningham: The retention of the Gas Consumers Council is to be welcomed. It is important that such a body, independent of the regulator, the industry and the Government, should speak out for gas consumers. The council will need to be especially vigilant in the proposed new competitive domestic market. It must be adequately funded.
  The Select Committee and unions working in the gas industry, including the GMB, which sponsors me, have raised important questions. These concerns are reflected in the amendment. Briefly, they are matters of consumer protection, consumer safety, energy efficiency, standards in the industry, regulatory weakness, openness and transparency of government and regulator alike.
  It is interesting to reflect on what British Gas thinks about these matters. I have a minute of a meeting called by Mr. Peter Sanguinetti—it is an internal memorandum—during December 1994. The minute reads:
  "There were many comments about the problems caused by the executive and the board making decisions without considering the impact of their actions internally as well as externally. The inevitable conclusion is that we have the potential for a crisis just about every week for the next two months at least."
  The memo with the minute refers to the withdrawal of services and shops, TransCo having problems with United, which is not paying its bills, the fact that almost 200 members of staff who now have no jobs will be encouraged to leave and TransCo no longer operating leakage survey teams. It appears that TransCo's staff will only go into homes and make the gas supply safe. They will not repair appliances. New debt and disconnection policies are foreshadowed for April. It is possible that disconnections will increase. Meter reading is to be contracted out. That is quite a contrast with what the President of the Board of Trade was saying about the

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  maintenance of current levels of service by British Gas. He is completely wrong about that, as he was about many other things.
  Mr. Heseltine: It seemed that the right hon. Gentleman was not happy about the contrast between what he said and what the Select Committee reported. Is he aware that the conclusion reads:
  "We believe that some further safeguards are required, but most of the fears now appear to have been unfounded or exaggerated, especially as regards the transitional period."
  Why does the right hon. Gentleman—
  Dr. Cunningham: Read on.
  Mr. Heseltine: Yes, I shall do so. The conclusion continues:
  "There will be benefits to consumers from the increased choice and lower costs flowing from the liberalisation of the domestic gas market, but the scale of the benefits and who would benefit is uncertain."
  The whole—
  Dr. Cunningham: Read on.
  Mr. Heseltine: Of course. The paragraph continues:
  "Since the Government had already encouraged new suppliers to prepare for entry to the market, we welcome the fact that legislation is to be introduced to comply with the intended timetable, and we emphasise the importance of proceeding in accordance with that timetable".
  How can the right hon. Gentleman continue producing canards when the Select Committee, which is chaired by the hon. Member for Sheffield, Central (Mr. Caborn), has patently stated that he is peddling "unfounded or exaggerated" half truths?
  Dr. Cunningham: The right hon. Gentleman had better say that to the National Consumer Council, the Gas Consumers Council and the Consumers Association, all of which have raised the same questions in their briefings, which I assume have been sent to every Member of this place. I am not inventing threats or fears. I am merely expressing the views that are held by all the principal consumer associations—
  Mr. Heseltine: Will the right hon. Gentleman give way?
  Dr. Cunningham: I shall give way in a moment when I have finished my sentence, if the right hon. Gentleman does not mind.
  Of course, there is a welcome for the proposals in principle, but questions have been raised about benefits to consumers and services to consumers, as I have been outlining.
  Mr. Heseltine: The Second Reading of a Bill is about the principles that lie behind the Bill. As the right hon. Gentleman has now conceded that the Select Committee wants us to go on, as do all the consumer bodies, will he join my right hon. and hon. Friends in the Government Lobby tonight?
  Dr. Cunningham: The right hon. Gentleman is strangely mistaken if he does not realise, after all his experience in the House, that we have tabled a reasoned amendment. He had a great deal to say about it but apparently he has not taken on board its implications. The
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  jobs of thousands of workers are in question. Many of these people are highly skilled and experienced in safety and maintenance work on behalf of consumers.
  Section 10 of the Gas Act 1986 contains an obligation to provide a gas supply. That obligation has been replaced in the Bill by a requirement merely to connect premises to the network. The omission of a statutory obligation to supply any consumer who requests that that be done seriously diminishes consumer protection. That, too, is the view of consumer organisations. People should have the right of supply regardless of who they are, what their income is, where they live or how they pay. The Bill gives no such guarantee. It is said that the obligation to supply will be included in licences, but they will be subject to change without the consent of Parliament. That is unacceptable to my right hon. and hon. Friends because we believe that consumers' interests and protection should be at the heart of the Bill. We know from recent events in the electricity industry that shareholders' interests have been paramount in the view of industry chiefs and of Ministers. That attitude should not be replicated in the gas industry.
  Consumers and regions throughout the country must be fully protected from discrimination by suppliers. There is the so-called cherry-picking threat. The problem is not comprehensively eliminated by the proposals that are set out in the Bill. Why is a legislative obligation not placed on suppliers completely to prevent discrimination against elderly people, people with low incomes and areas of the country that are deprived and contain many unemployed people?
  Consumer protection should be a primary duty of the Secretary of State and the director general, but as the Bill stands that is not so. It is vital that everyone has access to clear and concise comparable information on tariffs. Prices in terms of supply should be presented in a standard form by all companies so that consumers can make an informed decision, or they may well make the wrong decision. The dangers of misleading information and unfair terms are well documented in consumer affairs.
  Clause 2 appears to make public safety subject to section 4(1) of the 1986 Act. That should not be so. The duty to secure effective competition should not override safety for the public. There is worrying evidence about the rising number of accidents involving gas poisoning, which reached record levels in 1994, according to the Health and Safety Executive.
  British Gas apparently intends to withdraw from the installation and service market for all domestic appliances other than space and water heating. That contradicts what the President of the Board of Trade said. It intends to cease stocking parts for cookers, fires and other appliances, as my hon. Friend the Member for Newham, South (Mr. Spearing) said in his intervention. These are matters that cause us considerable concern, especially when the Gas Consumers Council, in its 1993 annual report, stated:
  "Proven incompetence does not yet appear to result in automatic removal of an installer from the Corgi register."
  Even when companies are shown to be incompetent in matters of maintenance and safety they are allowed to continue providing a service to consumers.
  Nor is there any statutory requirement for individual gas operatives to hold a certificate of competence. Of course, that would never be the case at British Gas with its service and maintenance arrangements. The reality, in

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  contradistinction to what the President of the Board of Trade argued, is that the whole culture of gas safety is being revised by the proposed legislation. In future, TransCo will simply make safe or turn off the supply rather than effect comprehensive repairs or replacement. Hitherto, British Gas set and policed the safety standards. That will end with the proposed legislation, if enacted.
  The social care obligation is also changed by the proposals. We discussed and exchanged views, during the President's speech, about free safety checks being retained. We shall certainly pursue that matter again in Committee. Labour Members were not convinced by what he said about free safety checks being retained and that an automatic three-year safety check would be retained for elderly and disabled people. Will home service advisers continue to give special help to consumers who are blind, elderly, frail or disabled? The right hon. Gentleman said that no change was envisaged. He seems blithely unaware that the number of home service advisers has already been cut by 60 in advance of the legislation. How can he tell the House that those services will be maintained when the number of home service advisers is being so dramatically reduced? He clearly does not know what he is talking about. Those are vital questions and we have just demonstrated that the right hon. Gentleman does not know the answer to them.
  I can go on. British Gas made clear, in a memorandum in December last year, its decision to review the current provision of adaptors for gas appliances and its intention to review the provision of Brailled controls for gas appliances and to withdraw its literature that is currently available in Braille. So much for the right hon. Gentleman's assurances to the House that no detrimental changes were envisaged.
  We have seen the problems that the President of the Board of Trade got himself into over the electricity industry, and the hostile bid for Northern Electric. On Monday 20 February, in this Chamber, he misled me and the House over his power to veto in relation to the actions of Office of Electricity Regulation. The right hon. Gentleman was good enough to write to me on 24 February to confirm that he had misled me in the House on that occasion. Since this is a complex matter, I was quite prepared to accept the apology that he gave in his letter. He placed on record in that letter what he should have told me about his duties and responsibilities in that letter. I have it here, but will not detain the House by reading it out.
  The right hon. Gentleman appears in the proposed legislation to be giving himself the same powers as the Director General of Gas Supply, who has the power to refer to the Monopolies and Mergers Commission, as he has already done with the Director General of Electricity Supply. Why does he want the power? Why does he believe it necessary? If he envisages using the power, will he announce to the House his reasons for it? We are entitled to some explanation on that issue, too.
  Mr. Alex Salmond: The right hon. Member for Copeland is correct. These are vital matters of principle. I know that the right hon. Gentleman has
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  tabled a reasoned amendment, which I shall be happy to support, but given the importance of these matters, will he be voting against the Bill itself?
  Dr. John Cunningham: No. We shall be voting on our reasoned amendment, for the reasons set out in it and in the context of reservations about the proposed legislation. That is our position.
  The Government are apparently so uncertain of the consequences of the proposals on consumer prices, safety and the industry that they have agreed to a trial. That decision is welcome, especially as so many organisations share our concerns about the Bill. It is clear that the Government dare not proceed with their original grandiose plans to introduce the proposals nationwide all in one go. But apparently, according to the proposed legislation and the associated literature, the trials are to be confined to operational efficiency. As the all-party Trade and Industry Select Committee said, in paragraph 60 of its first report:
  "It would be pointless to have a transitional period unless there is full assessment of its consequences and wide consultation, including parliamentary scrutiny, before further steps are taken."
  The Labour party strongly shares that view.
  Recent experiences of privatisation, competition and regulation have shown that regulation is weak and has been ineffective in protecting consumers. Privatised companies put shareholders first. They do not fully disclose all the details of their financial circumstances to regulators and, as we have seen in electricity supply, consumers have been overcharged for years.
  The Director General of Gas Supply will have many gas companies to regulate. We cannot be confident of success, especially as recent experience in the gas industry shows that, from December 1986—since privatisation—to January 1995, the price of gas, as measured by the retail prices index, has fallen by 16 per cent. But the price of gas, based on the producer price index, has fallen by 40 per cent.—more than twice as much. The consumer has not received commensurate benefits from that reduction. The consumer has not had the good deal that the right hon. Gentleman was trying to claim that he has had.
  These proposals come at a time when, in Britain, inequality is worse than at any time in the past 50 years. As the Rowntree report showed, in the past 15 years, inequality in the United Kingdom has grown faster than in any other industrialised country, with the exception of New Zealand. One in four people now lives in a household with an income below half the national average. The bottom tenth of the population is 17 per cent. worse off after housing costs than in 1979. The distribution of income is more unequal today than at any time since the war. In addition, as the British Medical Association reported last week, the widening health gap between rich and poor is a direct result of the Government's wrong priorities and unfair policies.
  In the monopoly market, the additional costs to British Gas of quasi-social obligations for all those on low incomes, elderly and disabled people, have been spread across the whole consumer base. Will those costs now be recovered from vulnerable consumers or will they continue effectively to be shared? I raised that issue when I intervened during the speech of the President of the Board of Trade. I was not convinced by his answers.

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  As the right hon. Gentleman said, the Bill does nothing to end excessive salary and share option abuses. I wonder whether the right hon. Gentleman agrees with the Prime Minister, who, in answer to my right hon. Friend the Leader of the Opposition, said:
  "Yes, I do find these payments as distasteful as the right hon. Gentleman—as do, I dare say, many other people as well … I believe that they bring the system into disrepute."—[Official Report, 28 February 1995; Vol. 255, c. 837.]
  Today the President seemed to be sweeping all that aside in his apparent acceptance of this. Here is the first opportunity for the right hon. Gentleman to act to end those abuses that the Prime Minister finds so distasteful, and he does nothing. There are no such proposals in the Bill. There are no powers for the regulator to cut prices where abuse occurs, to call directors and executives to account. Does the Prime Minister, sorry, the President—I beg his pardon, but we know that he would like to be Prime Minister—approve of Mr. Giordano receiving £450,000 for a two-day week as part-time chairman of British Gas? Does he approve of Mr. Cedric Brown's share options? Does the President realise that, if the recently announced British Gas incentive scheme had been in operation, Mr. Brown would not have qualified for a single share on his or his company's performance over the past three years?
  The total productivity of British Gas showed almost no improvement between 1989 and 1994; yet Mr. Brown, Mr. Giordano and their colleagues awarded themselves more than 1 million share options over that period. That was based neither on the company's performance nor on their own performance, and under the new incentive scheme that they have introduced not one of those shares would be available to them on merit. When the share options are set beside the company's performance, they are shown to be completely undeserved; yet the President of the Board of Trade remains silent.
  The right hon. Gentleman supported Mr. Brown when the news first broke a few weeks ago. Is that still his position? Would he like to tell us? Is this not all too typical of the present Government?
  Mr. Heseltine: What I supported—on a Monday morning edition of the "Today" programme, if I remember rightly—was the announcement by the new chairman of British Gas, Dick Giordano, that he did not want a hidden regime in British Gas. He did not 'want executives to receive bonuses and share options that added up, in large measure, to what looked like a salary. He therefore put together a remuneration package for Cedric Brown that enabled him, instead of receiving bonuses on top of his salary, to receive a salary that included those bonuses.
  That led to a second stage—the increase in salary, which I believe was £75,000. I am the first to recognise that that is a large sum, but the increase was portrayed as an increase in the basic salary to which the bonuses had been added—an increase of many hundred per cent. I said on "Today" that I thought that the chairman was right to create an open regime, enabling everyone to see what was happening; but I have also said many times, in the House and in public, that the Prime Minister is right to be concerned about such matters. I still believe that, which is why I welcome the establishment of a committee under Sir Richard Greenbury to examine the position.
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  I leave the right hon. Gentleman with a question that he will not want to answer. If he could fix the salaries of all directors of utilities, including British Gas—which he implies that he would like to do—how much difference does he think that that would make to the cost of gas to the customer? I calculate that, if no directors were paid, 50p a year would be saved. How much does the right hon. Gentleman think that he would save?
  Dr. Cunningham: The public want action, regardless of whether it makes any difference to their gas bills. The right hon. Gentleman does not seem to recognise that the public are fed up with seeing these people—I shall deal with the others for whom he is responsible in a moment—rip them off and make themselves rich in ways that are unconnected with their performance.
  The right hon. Gentleman seems not to have heard what I said. British Gas's total productivity showed almost no improvement; how could anyone qualify for a bonus when it had not been earned? How could those people justify giving themselves more than 1 million share options for which they would not qualify under the new regime that they themselves have introduced? How does the right hon. Gentleman defend that?
  Mr. Heseltine: I shall try to explain to the right hon. Gentleman. A few years ago, British Gas was a cosy monopoly, protected from any competition and with virtually no international ramifications. Today, it faces intense competition in the industrial and commercial markets. It has lost a significant part of its market, because the private sector has come in with lower prices. It has turned itself into a major investor in North sea oil and gas, and has become a world-class company trading in 45 countries. That represents a transformation in Britain's ability to fight in the international market place.
  The endless endeavours of the right hon. Gentleman and his party to pretend that British Gas today is what it was five years ago are a manipulation of the reality. British Gas is now a major British international company.
  Dr. Cunningham: The right hon. Gentleman seems to be saying that pay and share options can be taken regardless of company performance. Incidentally, he is wrong about something else as well: in no circumstances do my right hon. Friends and I want to make such decisions, but we want proper systems. We want remuneration committees that are not stuffed with the cronies of those whose salaries they are raising; and we want duties and obligations to be laid on people to behave with some decency when the stewardship is theirs.
  Mr. Heseltine: I wonder whether the right hon. Gentleman gave notice to his hon. and learned Friend the Member for Leicester, West of that personal attack on him.
  Dr. Cunningham: It is all too typical of the Government to refuse—as the President of the Board of Trade has done again today —to deal with abuses perpetrated by those on large incomes, while at the same time introducing legislation to weaken consumer protection and, perhaps, increase charges for pensioners, disabled people and families on low incomes. True to type, the right hon. Gentleman proposes again to risk the widening of inequalities in his legislation.
  We know that the Prime Minister is pressing the right hon. Gentleman on these matters, and that the public want action; we also know that the President of the Board of

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  Trade is loth to take such action. We know that because someone sent me a copy of a letter from the right hon. Gentleman's office to the Prime Minister's office—a letter from the right hon. Gentleman's private secretary, Ms Rachel Jenkinson, to Mrs. Mary Francis, the Prime Minister's private secretary at No. 10 Downing street.
  The letter says:
  "On this issue, obtaining information from Stock Exchange sources and direct approaches to the companies would run the risk of becoming a rather public exercise which the President is loth to undertake."
  I am not surprised that he is loth to undertake it. With the letter is a 20-page memorandum listing the bodies—British Gas, London Electricity, Eastern Electricity, Manweb, Northern Electric, Anglian Water, North West Water and so on—and the millions of share options that have been awarded regardless of performance. The right hon. Gentleman apparently intends to do nothing about that.
  The letter says:
  "The results suggest that there are potentially more causes célèbres to be found. In view of the figures shown in table 2 against the RECs in particular, this suggests that we should expect a good deal of publicity in June and July this year."
  That shows that self-awarded bonuses and share options, unattached to any performance criteria, are a matter of fact under the present Government. They are part of the system that the President of the Board of Trade and his right hon. and hon. Friends have established, and he intends to do nothing about it. So be it; the public will make their own judgment. The Bill raises that and many other issues of public concern. On this issue the President appears to be paralysed. He is more like Ulysses than Tarzan, sulking in his tent.
  The Bill raises a wide range of enormously important issues such as the right to supply, safety, pricing policy and consumer protection. It threatens the employment of thousands of people. The President and the Government have been widely condemned for issuing a false prospectus just a few days ago for the share sale in National Power and PowerGen. By pursuing these issues in Committee we intend to try to prevent them from doing that again. That is why I ask the House to vote for our amendment.
  5.40 pm
  Sir Michael Grylls: The right hon. Member for Copeland (Dr. Cunningham) has given the Labour party's response to the Bill. As his speech rolled on, I felt a bit sorry for him because, apart from picking out one or two important points which I agree should be considered in Committee, he could find nothing to say against the Bill's general principle. Therefore, he spent the greater part of his speech digging around in the same rather unpleasant way as the hon. Member for Dunfermline, East (Mr. Brown) and trying to mislead the public even further about the facts of some of the remuneration for people in the recently privatised industries. For example, he suggested that the share options and other packages are offered to a small number of people. I think that the hon. Member for Dunfermline, East spoke about a handful of directors, but, as is well
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  established throughout British industry, share options are generally given to many people in a business to motivate them.
  The right hon. Gentleman is the shadow President of the Board of Trade and, if there were an accident, he could be in office. I do not think that there will be an accident but there could be, and the right hon. Gentleman needs to understand these matters. I hope that I can take him with me on this issue. Does he agree that motivation for people doing any work in industry is important? The right hon. Gentleman nods assent. He and I, like most people, would agree that finding proper ways to motivate people to be successful is important. Therefore, we cannot begrudge the result of that motivation when people are successful. In a sense, that is what the share option argument is about.
  Share options are of no value whatever unless the recipients have performed so well that the shares have gone up in price. The right hon. Gentleman and I debated this a few days ago in the House. I hope he realises that profits from share options do not come from the company. They are an economical way to reward people or to motivate them towards success. The profit comes from the remaining shareholders and not from a company's coffers.
  Dr. John Cunningham: I am grateful to the hon. Gentleman for allowing me to intervene because I spoke for longer than I had intended. Let me be quite clear. I believe in high rewards for high performance. It is right for people to be highly rewarded for outstanding performance. If people create wealth and employment in the British economy and for their organisations they deserve high rewards, but such rewards must be merited and in the cases that I mentioned they cannot be justified. They were not merited by the performance of the individuals or the organisations, and that is especially true of British Gas. Shares were overvalued in the electricity supply industry, not on the basis of performance, but because consumers were being overcharged.
  Sir Michael Grylls: I note what the right hon. Gentleman says.
  Dr. Hampson: My hon. Friend will recall that Mr. Cedric Brown had his salary package changed because, as many of us agree, the existing share option was unsatisfactory. The new share option is performance related, which is what the right hon. Member for Copeland (Dr. Cunningham) was calling for. Ironically, in his speech he somehow condemned that because he said that if it had been in place, Mr. Cedric Brown would not have got his bonus increases. The scheme was changed to a performance-related system and the length of time that his contract had to run was reduced.
  Sir Michael Grylls: My hon. Friend is right, and he reinforces the remarks of my right hon. Friend the President, who dealt effectively with that matter.
  It is rather strange to hear the shadow President of the Board of Trade, in what we are led to believe is the new model Labour party, saying—I carefully wrote it down—that it is wrong for people "to make themselves rich". I thought that the Labour party had changed and wanted to see an improvement in the living standards of our people and to see people in industry doing well, being motivated and getting the rewards of that motivation.
  Mr. Derek Enright: The hon. Gentleman spoke about share options being well spread and giving

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  encouragement to people. How many share options did the manageress of the British Gas shop in Hemsworth receive to encourage her?
  Sir Michael Grylls: I cannot answer that precisely, but I can respond to the hon. Gentleman as I am about to move to that matter. I am grateful to the hon. Gentleman for reminding me. I shall correct some of the deliberately misleading statements by Labour in recent weeks about some of the share options. For example, some 200 staff and managers have share options in Seeboard, which is one of the smallest regional electricity companies. However, the hon. Member for Dunfermline, East spoke about only six of its directors. He has misled people over that. In Yorkshire Electricity, there were 54 such people, but the hon. Gentleman referred to only five and divided the sum of money between them. That is the sort of sleight of hand that would get an accountant behind bars very quickly. It is extraordinary how a Member of Parliament can get away with that.
  Dr. John Cunningham: Will the hon. Gentleman give way?
  Sir Michael Grylls: I shall give way in a moment.
  In East Midlands Electricity, 37 employees received the benefit of share options rather than the four directors mentioned by the hon. Member for Dunfermline, East in his news release. I could give further examples, but I suspect that I might be told that we are debating British Gas and not other companies.
  It is important to have truth and accuracy, and it is certainly important that, where possible, there should be agreement between the two sides. If we agree that people need to be motivated it is quite wrong and intellectually dishonest to attack those who are so motivated. That is my principal point on that issue.
  I warmly welcome the Bill. It could have been improved by being called the gas competition Bill, because that is what it is all about. My right hon. Friend the President of the Board of Trade rightly sketched the early history of gas supply. At one time it was generally accepted that it had to be a monopoly, but while Conservative Members realise that we have moved on from those days, apparently Labour Members do not. Nowadays, there can be safe and effective competition and it can operate in the interests of the consumer. That is what the Bill is about: it is not just about price.
  Price, of course, is affected by competition. All our experience of shopping in the high street leads us to believe that competition encourages prices to be kept down and, if possible, reduced, but competition also leads to improved service. This is what I find strange about the Opposition. They talk as if the introduction of competition will lead to the disappearance of services for the disabled, the blind and others who particularly need looking after. Experience shows the opposite.
  Most hon. Members will remember that, some years ago, when British Gas was a sleepy old state-owned company, a great deal of our constituency mail consisted of letters from desperate people who could not get the gas board to come round and put their appliances right, and so on. I can only speak for myself, although I suspect that most hon. Members share my experience: since privatisation, the complaints have all but disappeared. To be sure, mistakes still happen in any industry, but they have been greatly reduced in this one. I cannot remember
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  when I last had a letter from a constituent complaining about the service that he had received from a gas supplier. I accept, however, that the service can be improved—hence the argument behind this extension of competition, which is about improving the standard of service.
  In conversations with some of the gas suppliers, I have been told that they see improved standards as part of their role. I have, for instance, a circular from United Gas, one of the new private companies. The company says on the first page:
  "Gas is fundamental to quality of life and is not merely a commodity. Service to the customer is not only essential but is also one of the principal ways, along with price, that companies will gain market share."
  In other words, the company views it as important to its business to be able to say to the consumer, "Come to us for your supply, because we will offer you a better service than will any other supplier." That is competition, and it is just the same as a high street shop offering people a better service than the shop next door. Gas is no different.
  United Gas goes on to say:
  "We see opportunities to improve standards in areas such as (1) no disconnection in winter months for elderly customers with debt problems, (2) more frequent meter reading to avoid debt and disconnection problems, and (3) maintenance of an industry-wide Gas Care Register".
  Those ideas have been advanced by one of the new competing gas companies. They show that such companies want to enter the marketplace. Thanks to the Bill, they will be allowed to do so, so as to offer better services and, one hopes, lower prices.
  We saw the same thing when British Telecom was privatised. Waiting lists for telephones have evaporated. There used to be 250,000 people waiting for telephones, but there are no waiting lists now and people can get telephones installed quickly.
  When British Airways was the sole airline flying the London-Glasgow route—I remember this well, as I used to go to Glasgow quite often—the company used to tell passengers that the flight was so short that it did not have time to serve them breakfast. That was unfortunate, since I rather like breakfast early in the morning—as, I suspect, do many other people. Wonder of wonders: once British Midland was allowed on the route, it said, "Of course we can supply breakfast while flying between London and Glasgow", and it did. Business men benefited, and—lo and behold—British Airways found a way of supplying breakfast, too. That is what competition does. Strangely, the new model Labour party seems to have forgotten what competition is all about.
  Monopoly can do a great deal of damage to the public. It may be the dream of many business men; most business men would love to misbehave by rigging the market to create a monopoly. That is why we need competition authorities—to ensure that it does not happen and to protect the consumer. I believe that it is the duty of every Government to end monopolies wherever they find them—in the utilities or in the ordinary marketplace that we encounter every day.
  As for the opportunities offered by competition, there is always—understandably—a great deal of emphasis on the reduction in unemployment that follows the modernisation and privatisation of those industries, because they have to be run efficiently. British Gas had about three people for every two jobs. Clearly, that could not go on in a competitive marketplace. Quite reasonably,

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  the Opposition called the loss of jobs a bad thing. So it is when people lose their jobs in the first instance, but let us look at the positive side. New jobs are created in other companies entering the marketplace. That is exactly what happened in the telecommunications industry, and I believe that it will happen in the gas industry, too.
  For the employee, competition can also be beneficial. As long as there is only a monopoly, the employee is in a dicey position. If he falls out with his manager or director, he has nowhere else to go. There is only one gas company and if he leaves it, he has nowhere to work. If, however, there are a dozen competing companies and the employee does not like one of them, he goes to another. That is what happened with BT; there are now about 120 competing firms in the telecommunications market, where there used to be only one, and we know what good results that has had for the public.
  When the election comes, the electors will have an interesting choice. They can choose the new model Labour party which is apparently going to renationalise some of the utilities. We do not yet know which ones, but no doubt Labour will tell the country. It will make them into monopolies again and close independent gas companies, for instance. The outcome will be lower services at higher prices. Alternatively, the electors can chose to stick with the Conservative party which has brought about competition, with lower utilities prices, to the benefit of the consumer.
  That is a clear choice. I believe that people will chose the Government and the party who really believe in competition and in the free market; and in giving other companies a chance of coming into the market. What is proposed here for the gas industry is a massive step forward, for which the Government should be warmly applauded.
  5.57 pm
  Mr. Stephen Byers: I begin by declaring the fact that I am sponsored as a Member of Parliament by Unison, the trade union which represents many of the workers in the gas industry. I might explain for the record that that means that I receive no money personally, but my constituency party receives about £600 a year towards its running costs and, at the last election, received £2,200 towards election expenses.
  Reference was made earlier to a bundle of documents that had been mislaid. I have now had the benefit of reading the Minister of State's wind-up speech, which we shall not hear officially until later this evening. As usual, it is an excellent speech—written, I believe, on 8 March, when the Minister predicted the nature of the contributions that would be heard from Opposition Members:
  "What I have found particularly fascinating is the muddle, contradiction and hypocrisy emanating from the Benches opposite."
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  What marvellous foresight that shows on the part of the Minister of State. Perhaps he could also predict the winner of the gold cup at Cheltenham on Thursday—that would be of real benefit to hon. Members on both sides of the Chamber.
  The Minister for Energy and Industry (Mr. Tim Eggar): The hon. Gentleman obviously did not get to the fourth paragraph of my speech.
  Mr. Byers: The second paragraph was more than enough.
  In his Second Reading speech, the President of the Board of Trade referred at some length to the licensing regime and rightly stressed the importance of the licensing procedures. It was interesting and a matter of some concern that the documents contained a briefing note to the Minister stating clearly that the Minister should not
  "refer to licences being available at the beginning of the committee stage",
  which his civil servants say is unlikely. The note goes on to say that the Minister should always refer to licences being available in Committee but without specifying exactly when that important information will be made available. I urge the Minister to ensure that the licences are available at the beginning of the Committee stage.
  Mr. Eggar: As the old adage states, civil servants are there to advise, and Ministers are there to decide. Having received the advice that the hon. Gentleman has clearly read, I have given an undertaking to Opposition Front-Bench spokesmen that I shall do my utmost to make the suppliers licence available on the first morning of the Committee. I cannot give the assurance that I had hoped to give that the transportation and shippers licences will be available on the first morning of the Committee, but I am extremely hopeful that, if they are not available on that morning, they will be available later. I have always said that I will make the suppliers licence available as early as possible, and that it would available on the first day of the Committee.
  It is right that licences should be available to the House and to the Committee as early as possible. I have always been critical of situations in which hon. Members have been deprived of information that is essential if a Committee is properly to consider a proposal.
  Mr. Byers: I welcome the Minister's comments. Clearly, the licensing regime and the details contained in the licences will be of crucial importance for a proper consideration of the Bill. I welcome the assurance that he has given.
  Superficially, it is attractive to open up the domestic gas market for competition. I have always taken the view that competition is necessary if we are to have a strong, dynamic and vibrant private sector. That is good for the economy as a whole, with our industries competing, as they must, in the world market. Competition will often bring real benefits to the consumer in terms of wider choice, better quality and lower costs. It is important that Labour Members recognise the important role that competition can play in the private sector.
  I therefore start from a presumption in favour of competition in industry. Overriding reasons must exist as to why, in the public interest and for the common good, competition should not be imposed on the domestic gas market. On balance, I take the view that, for practical

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  reasons, the Bill's provisions do not benefit all our people. Therefore, the Bill is not in the public interest. Nevertheless, my party's Front-Bench team and I recognise the importance of competition. We have therefore tabled a reasoned amendment which seeks to deal with some of the genuine concerns of many hon. Members and of the public about the provisions of the Bill.
  The Monopolies and Mergers Commission recommended that British Gas's domestic monopoly should not be removed until some three to five years after the company had divested itself of its trading arms, but that recommendation has in effect been ignored by the Government. Unfortunately, they have allowed political dogma to triumph over reason in imposing competition on the domestic market at a rapid rate.
  In the relatively brief time available, I wish to deal with two issues to which the reasoned amendment refers: the pricing that is to be put into place, and hon. Members' real concerns about the Bill's safety provisions. Some 18 million domestic gas consumers use less than 2,500 therms per year. The President of the Board of Trade and my right hon. Friend the Member for Copeland (Dr. Cunningham) dealt earlier with cross-subsidy. Such a subsidy in the domestic gas market is highly significant. I think that all hon. Members recognise that the cross-subsidy is considerable and that domestic consumers who use a relatively high volume of gas—I think that the figure is more than 635 therms a year—are in effect subsidising the costs of consumers who use smaller amounts of gas.
  The effect of that is that people in larger properties, who will be consuming greater amounts of gas and who will often be among the wealthier members of the community, are subsidising pensioners, people on low incomes, and people with a disability, who will often be living in accommodation where a relatively low amount of gas is used each year. The bills of the low-volume users are being subsidised by the wealthy high-volume users. That has been described to me as socialism in action.
  Mr. Alan Duncan: Will the hon. Gentleman enlighten the House as to why the industrial user should be obliged to continue to subsidise the household user?
  Mr. Byers: The Bill deals specifically with the domestic gas consumer. The point that I am trying to make is that the high-volume domestic consumer is subsidising the low-volume domestic consumer through the cross-subsidy. Conservative Members have advanced the argument to me that competition will drive down costs for everyone. That is an important point that I feel obliged to deal with later.
  I was surprised at the extent of cross-subsidy. The House of Commons Library considered the effect of the subsidy in a purely statistical way. It showed that some 5 million gas domestic consumers who use 350 therms a year or less will pay 12.5 per cent. more for their gas if the cross-subsidy is removed while the cost for consumers using more than 2,000 therms will be cut by 10 per cent. if the subsidy is removed. An argument could be made that competition even protects people using low amounts of gas.
  Mr. Eggar: The hon. Gentleman obviously did not get to the part of my briefing which referred to that calculation. Had he read that far, he would have realised that the whole basis of that calculation—assuming the accuracy of the leak of his speech that I read in The Guardian this morning—is false. That calculation appears to be based on a British Gas figure given in August 1992 which was subsequently withdrawn in the evidence given by British Gas to the Select Committee on Trade and Industry in 1994. There is the old adage, "Garbage in, garbage out." The hon. Gentleman should not try to make that kind of capital.
  Mr. Byers: The Minister is probably more of an expert in garbage than I am. He will be aware that he cannot guarantee the level of charges or that there will be no losers under the Bill. If the Minister can give a guarantee, I will allow him to intervene again.
  Mr. Eggar: It is the view of independent competitors of British Gas that there should be no losers. In a free market, it is impossible to predict with certainty the effect on the individual consumer. As I am not sure that this assumption was in the hon. Gentleman's calculation either, I remind him that the regulator's decision to fix the transportation standing charge at £15 per individual consumer means that the interests of low-volume consumers will be more than protected.
  Mr. Byers: If the Minister could guarantee that the charge will remain at £15, I would welcome that enormously—as would low-volume users—but he knows that he will not take responsibility for maintaining the charge at £15. If he would, we should all breathe a sigh of relief. The Government have washed their hands of that responsibility and are prepared to leave the matter to the regulator. The Minister cannot guarantee that the £15 standing charge will remain.
  Mr. Nigel Griffiths: It is difficult for Opposition Members to accept that figures are independent. Giving evidence to the Monopolies and Mergers Commission on one occasion, British Gas implied that the majority of its domestic consumers were contributing not profits but losses, but when giving evidence to the Select Committee on Trade and Industry British Gas changed its position. It has the facts at its fingertips, but if it cannot interpret its own facts, it is difficult for the public and the House to do so. I commend my hon. Friend for endeavouring to enlighten the public and to express our fears—
  Madam Deputy Speaker: Order. That sounds remarkably like a speech, rather than an intervention.
  Mr. Byers: My hon. Friend made the point that there is clear evidence of the political view currently held within the Department of Trade and Industry. The DTI paper "The Prospects for Coal", published in 1993, is a clear example of Government thinking on energy:
  "The aim of Government policy is to ensure that service is provided to customers in a commercial environment in which customers pay the full cost of the energy resources they consume."

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  If that happens in the way that the Department proposed in 1993, the Minister must accept that a large number of consumers will be losers under the Bill.
  The argument is made that competition will drive prices down for all consumers, but in practice that will not be the case because new independent suppliers will be looking for the most profitable consumers. The suppliers will cherry pick. When profit is the motive, one can expect nothing else.
  Mr. Nigel Evans: The hon. Gentleman suggests that low-volume users will incur extra costs or higher prices as a consequence of the lack of cross-subsidisation. The same fears were expressed about British Telecom. but low users now enjoy a rebate rather than the opposite. How does the hon. Gentleman argue against that?
  Mr. Byers: If the Bill required such a rebate, I would accept the hon. Gentleman's point. Government advisers have warned about the implications of the Bill Mr. Dieter Helm of New college, Oxford is not just an academic—I would not rely on his words if he were—but a member of the Government's energy panel and an adviser to the Minister. He said:
  "There are almost certainly going to be winners and losers. Some people are paying too much for their gas at the moment and some people are paying too little. The new competitors coming into the market will want to pick the cherries … The losers are going to be those people who haven't really been paying the true cost of their gas supply in the past. Those are people who take relatively low amounts of gas, they're people who are, to put it bluntly, very difficult customers for British Gas or anyone else to service."
  That Government adviser was telling the public what can be expected from the Bill. Even more significant is the view of the independent suppliers who will move into the market. The managing director of Alliance Gas, Mr. Kristoffer Maroe, said one month ago that
  "it's impossible to stop cherry picking: that's what competition is all about."
  The Government's own energy advisers make the point that there will be losers under the Bill.
  Only clause 6(6) makes an effort to protect vulnerable groups in our communities. It states that the director shall not licence where it is proposed artificially to exclude
  "an undue proportion of premises likely to be owned or occupied by persons who are disabled or of pensionable age, or who are likely to default in the payment of charges."
  Such wording will bring a smile to the lips of every lawyer in the country, because it will be a nightmare to define. Cash registers will he ringing in courts throughout the land. That matter should not be left to the judicial process. In the supply of an essential commodity such as gas, the Government have a responsibility to provide a safety net to ensure that there will be no losers.
  The public generally would consider it wrong to exclude a poor area of a city such as Newcastle, but clause 6(6) would not stop an independent supplier applying for a licence to supply the whole of a desirable area such as East Anglia—as opposed to north-east England, where a larger proportion of the population will be of pensionable age, on low incomes or unemployed. Writing in The Times recently, Melvyn Marckus commented:
  "Eventually the penny will drop. Competition will herald cost-reflective prices, which in turn will mean winners and losers."
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  The other element in the reasoned amendment on which I wish to speak is safety, which must be paramount. The Minister has said that increased competition will not compromise safety, but I have bad news for him: it already has. He need only look at the way in which research and technology budgets, which are often devoted to improving safety, have been cut over the past few months because British Gas is cutting corners to prepare for competition.
  I have a real constituency interest in this as the energy research station at Killingworth in my constituency is threatened with closure and the loss of almost 500 jobs. It would be inappropriate in this narrow debate to talk about the devastating impact on the north-east of England of the loss of highly skilled and well-paid jobs, but there will certainly be an impact on the ability of the gas industry to meet safety needs.
  The gas business has been divided into five trading arms which last year spent £31.4 million on research and technology. This year the figure is down to £19.9 million and by 1999 it will be down to £14.2 million. Those budget reductions will have serious repercussions for the safety of the system. I am not talking about esoteric or academic research but about practical research which has real safety implications.
  To be more competitive, British Gas is not just cutting the amount it spends on research and technology; even more dangerously, there are reductions in safety margins elsewhere. Pipelines are having to take higher pressure to increase profits. The programme to replace the old iron gas mains has been slowed down. The research station at Killingworth has three areas of responsibility connected with safety.
  First, the Killingworth station contains the unit which monitors and identifies the risks involved in the non-renewal and maintenance of the old iron gas mains, some of which are now 100 years old. The real problem is the amount of disturbance to which those old mains are now subject. Cabling and the London docklands extension of the Jubilee line are creating great difficulties and problems for the old mains. All the work being done on that and on the safety risks is currently carried out at Killingworth.
  Secondly, the work being conducted on the safety and security of supply in high-pressure transmission lines bringing gas from the landing points to the pressure reduction stations, to try to ensure that there is no serious escape, is mainly carried out by a team based at Killingworth. Thirdly, Killingworth is the base of the incidents team, who go out to investigate any pipe explosion to identify the error and to try to ensure that such mistakes do not happen again.
  All that vital safety work is currently conducted at Killingworth, and it is being put at risk by the Government's proposals. The dedicated and highly motivated work force at Killingworth are to he the innocent victims of the Government's policies for the gas industry. The Bill is a triumph of political dogma over reason. It puts safety at risk and it will create many losers among gas consumers. For those reasons, the reasoned amendment is worthy of support today.
  6.23 pm
  Mr. Robert Banks: The hon. Member for Wallsend (Mr. Byers) referred to the speech to be made

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  later tonight by my right hon. Friend the Minister for Energy and Industry. I have no doubt that it was entirely right that my right hon. Friend should have composed his speech somewhat ahead of the debate. The speech by the hon. Member for Wallsend was entirely predictable. It was full of doom and gloom, and everything that he could dredge up was thrown against the Bill. If ever there was a Bill that deserved to command a consensus, to be approached from an intelligent point of view and to be discussed in Committee, this Bill is it.
  I suspect that few Opposition Members, including the right hon. Member for Copeland (Dr. Cunningham), actually read the report by the Select Committee on Trade and Industry. If they had read the evidence, they would have been convinced, as we on the Committee were, that it was right and proper for the Government to press ahead now with the deregulation of the gas industry. The evidence was overwhelming and the conclusion that we reached was that the Government should go ahead with the Bill. I am, therefore, delighted that we are debating the Bill today. I assure the House that I shall vote enthusiastically for the Bill, not for reasons of political dogma—I happen to believe in privatisation—but because of the evidence presented to the Select Committee, which pointed overwhelmingly to the Bill being necessary in the interests of the consumer.
  It will be interesting tonight to see where the Liberal Democrats stand on the issue. What are they going to do? Will they support the Labour party and go along with the old dogma of resisting and voting against any form of privatisation, irrespective of the proof of the pudding that has been eaten by the consumer, who has benefited so enormously from lower prices as a result of privatisation? The Liberal Democrats, just as much as the Labour party, are frightened of change. I suspect that if they do not vote with Labour, they will abstain as a means of keeping out of the decision-making process. It is all the more a pity for Parliament as a whole that we cannot join together and work in consensus, based on the hard evidence presented to the Select Committee.
  Some 18 million consumers out there will benefit from lower prices. Some great words have been said about standing charges, a point that concerned the Committee. There is no doubt that standing charges will be reduced; Competition will have a major part to play because, as the licences are taken up, companies will be hungry to expand their territory for the provision of gas and to bring on board the smaller users. They will do so in a way that will encourage people to go for gas and to use gas. The companies will reduce standing charges as part of that promotion.
  While the Select Committee took evidence, the subject of cherry-picking was exhaustively discussed. I am especially pleased that the Bill will ensure that suppliers are obliged to supply any customer in their licensed area. Surely that covers the point about some parts of the area not having large consumers and, therefore, being excluded. There is, however, a point about the geography of the licensed areas that will have to be addressed in Committee. The licensed areas must be comprehensive as opposed to just covering the areas where the better customers are and excluding those on the periphery.
  Mr. Eggar indicated assent.
  Mr. Banks: I am delighted to see my right hon. Friend nodding his head in agreement.
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  Safety is a very important factor. I have no doubt that it is sensible that safety throughout the United Kingdom should be in the hands of British Gas TransCo. It would be wrong to expect individual suppliers to set up their own teams and to make them available to rush out to deal with any emergency. There must be a comprehensive system to ensure that if a person suspects a leak in his gas supply, he can call a service which will be available immediately, irrespective of which supplier covers the territory. That has been agreed and accepted.
  It is important, however, that we deal with electricity emergencies and water emergencies in the same way. We should have a single telephone number so that a consumer may ring 888, for example, and be able to get through to gas, electricity or water emergency services. I see no reason why we should not arrange such a service. It would be a simple process and invaluable if time were of the essence—as it often is with gas leaks—and one needed to get hold of the person at the other end of the line so that a team could quickly check the possible out-flow of gas. There is no reason why we should not be able to set up such an arrangement. The Select Committee on Trade and Industry certainly recommends the provision of one telephone number and it would be convenient to use that same number for calling out emergency services to deal with electricity and water as well.
  Another matter is pipe installation work. Inevitably, certain pipes will have to be replaced and serviced from time to time and there may be a programme for replacement of gas pipelines in certain parts of the United Kingdom. I am concerned about whether the costs of pipeline work in specific areas will fall on the licence holder for that area, which could affect the prices charged for gas, or whether those costs would be subsumed in the whole programme of servicing pipes in the United Kingdom. It would be fair to assure consumers on that matter at this stage, rather than to leave them to discover subsequently that they happen to be in an area where much replacement pipe work is needed, which would increase the licence fee and mean that their gas prices would not equate with those of somebody in a neighbouring town. I hope that that question may be answered.
  My right hon. Friend the President of the Board of Trade has referred to the cost of licences and I know that that matter will be addressed later in Committee. Some costs, however, as is explained in the memorandum, will be incurred by shippers of gas in meeting the obligations of their licences as well as in paying licence fees. The memorandum states:
  "It has not yet been possible to determine these costs as the precise terms of the licences and the commercial background to the obligations are not settled. However, the Government will be publishing the draft shipper's licence shortly and will consider the views of business before finalising the proposals."
  I welcome very much the consultation between my right hon. Friend and representatives of the various companies which are potential suppliers. Indeed, British Fuels in my constituency has consulted members of my right hon. Friend's Department and I am grateful for the arrangements that have been made.
  However, I am somewhat concerned that the small supplier may often be left out and that the draft proposals in the Bill, which were sent out to a number of gas producers, were not sent out to some of the smaller potential suppliers. It is important that we consult as

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  widely as possible so that we do not at any point exclude the small supplier from the chance of entering the market and from securing a fair deal on power along with the large suppliers.
  The network code under consideration is relevant because it is feared in some sectors of the industry that British Gas, which will, after all, be in control of pipelining, will hold things up to the detriment of some of the smaller users. We have been assured that, by October 1995, British Gas will be in a position to deliver the systems required for the whole system to function. I should like to be further reassured that British Gas will be able to deal with pricing and with all the various balances that have to be facilitated to make the system work effectively, and that it will not militate against the smaller supplier wishing to enter the market.
  Rates of daily input, for instance, will be part of the system which will have to be put in place. Billing for gas is another factor to consider, especially its time scale, which could have quite an effect on the smaller supplier which relies on 28 days or less—perhaps more if it can get it—to balance its books. We must ensure that the smaller supplier is not at a disadvantage in comparison to the very large supplier which can carry the weight of being billed for the necessary gas on a day-to-day basis. There needs to be a check so that the finances of the small supplier will not over-balance.
  It is reasonable to assume that competition in the gas supply market will inevitably encourage—indeed, we want to encourage—people to consume more gas, but that militates against energy efficiency. That matter was raised in the Select Committee and one of the statements that emerged from the evidence given touched on a pertinent point and has always rested in my mind. I shall quote two sentences of the evidence given by the representative of Amerada Hess, Mr. Laidlaw. In reply to a question on energy efficiency, he said:
  "What we are actually trying to do is secure the maximum number of customers. The way we can do that is actually to offer energy efficiency packages and we have already had, even though our plans are obviously just shaping up, a number of energy efficiency companies contact us with a view to preparing and offering a full energy efficiency package to the residential market."
  That is a positive point and it is one of the exciting factors. The argument that energy efficiency will be sacrificed in the rush of people for cheaper gas has been overtaken by the fact that more people will be offered incentives to conserve their gas and to use more efficient appliances.
  It is important that the published prices and tariffs are fully available from all the suppliers. In all fairness, the system must be transparent, so that people who have a grudge against it because they see the large users getting lower prices can see also the price tariffs that are open to everyone within the scope of the suppliers.
  Having listened to the hon. Member for Wallsend, I wonder whether I am in the right country. The way in which he referred to the elderly and the disabled as being priced out and receiving rough treatment made me wonder what kind of people we are in this country. It is almost as though we have lost our ordinary basic common sense by believing that the world out there is a nation of people who want to do down the disadvantaged.
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  We do not have ruthless, heartless and unscrupulous business people in our nation. There are people out there who care about the disabled, the blind and the pensioners. They do not need to be told, or regulated, to care. They are perfectly capable of being perfectly reasonable in looking after those sectors of our society and our communities. It is an extraordinary fact of political life today that everyone believes that everything must be regulated because, if it is not, society will do down the weaker people. It is extraordinary that we cannot rely more on people's good nature and common sense to deal with those issues.
  Mr. Martin O'Neill: Is not the hon. Gentleman aware that, last week, share prices in the regional electricity companies collapsed because the regulator discovered that he had not been told that one of the electricity companies had something like £500 million tucked away in its books, which it could use as a defence mechanism, not to protect consumers, but to protect the directors of the board of the company concerned? That is going on all the time.
  The regulator did not know the information because he had not been told. When he discovered it by chance, he took the opportunity to do something about it. Those are the kind of people who are making money out of the energy business. That is why so many of us are so suspicious of the people who want to get into the industry and why we believe that those people must be regulated far more severely than they are regulated at the moment.
  Mr. Banks: We have one of the greatest energy businesses in the world. Our offshore exploration and drilling is second to none. British Gas has expanded abroad since privatisation and become one of the nation's great industries. I am sick and tired of hearing people trying to do down the managements which have gone out there and done something for this country. If we had not put the prospectors into the North sea, we would not be deriving the oil revenues that we enjoy and that help us to improve our standard of living. That has been achieved only by hiring the very best people and paying proper salaries so that they can get on and do the job effectively.
  Having dealt with that point, I want to consider the question of consumers being able to link up to gas. I understand that there is an obligation in the legislation governing the fact that if a consumer wants to become part of the gas supply network, provided that gas can be made available, it will be possible for that consumer to do that. British Gas TransCo will be responsible for linking people into the system. In a sense, that provision seems to be unnecessary because it is in everyone's interest, obviously not least that of the gas companies, to get more users into the network.
  Mr. Salmond: The hon. Gentleman says that it is in everyone's interest. The village of Rosehearty in my constituency is less than 10 miles from the St. Fergus gas terminal, one of the largest gas terminals in Europe. The people of Rosehearty are being offered a connection to the British Gas pipeline service at the cost of £1,000 per household. Under those terms, is that not a rather theoretical right? Is the hon. Gentleman aware that one of the reasons why connection costs have risen so much is that British Gas argues that it now cannot use the previous

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  connection formula because someone else could take over those connections after they have been connected at a high cost?
  Mr. Banks: I am not aware of the specific circumstances to which the hon. Gentleman refers. However, he may be referring to the development of a housing estate where it is necessary to bring gas from quite a distance to service not just one consumer, but a clutch of consumers. I suspect that the £1,000 that the hon. Gentleman quoted may well relate to supplying a small or even medium-sized housing estate. That sum of money, spread among the different consumers, would be a perfectly reasonable price. Competition will certainly bring the price down.
  Mr. Salmond: I was talking about a price per household. A few years ago, when British Gas could look over a much longer period in terms of connection prices, St. Fergus, a village similar to Rosehearty, was offered connections at £40 per household. Why, in the competitive world about which the hon. Gentleman is so enthusiastic, has the price risen from £40 to £1,000 per household?
  Mr. Banks: I am always suspicious of figures like that. When we look into them, we find that they are not quite as they have been set out. The Bill introduces competition and it has been proved that competition forces prices down. The hon. Gentleman's case is the very case that we are making. We want to get prices down. The hon. Gentleman should vote for the Bill and ensure that there is a better deal for consumers and the new suppliers.
  With regard to shippers, it is important that gas suppliers have equal treatment in respect of bringing gas into the system. I urge my right hon. Friend the Minister for Energy and Industry to press for United Kingdom suppliers to have access to European markets for gas supplies. That will be the start of a process which will develop in the countries of our European partners, for example, in France and Germany, and it is important for us, as a supplying nation, to have access and to put our gas into those systems.
  Recommendation 12 of the Trade and Industry Select Committee states that:
  "The UK Government should continue to press for unimpeded rights for UK gas suppliers in foreign (especially EU) energy markets."
  It is in Britain's interests to promote that.
  I am grateful for the opportunity to make a speech in this debate. I most heartily welcome the measures incorporated in the Bill. I hope that it passes through Standing Committee quickly and that we get on with the job, and with the test that will take place.
  6.47 pm
  Mr. Nick Harvey: Any attempt to transform a monopolistic gas market into a competitive one, in which customers can choose for themselves from whom they wish to buy their gas, is a step in the right direction. For that reason, the Bill receives the broad support of the Liberal Democrats.
  The Bill is based on the sound principle that competition gives consumers greater choice and, as such, should bring them benefits that a monopoly market will not deliver. However, what is less certain is whether the legislation is capable of transforming that sound principle
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  into sound practice. To that end, we must consider two broad areas of concern to see whether there is adequate provision in the Bill to bring real, tangible benefits to consumers. The acid tests in that context are: will customers receive better service and will they be required to pay less? I shall look briefly at each of those matters.
  First, will people receive a better service? Since privatisation, British Gas has had a fairly good record in customer services relative to other utilities. Recently, however, we have seen some worrying developments, such as leaked internal memos threatening to charge extra for services for the blind and the elderly, a sharp increase in the number of customer complaints and the beginning of preferential treatment not for prompt payers, but for prompt payers by direct debit. Some have suggested that the reason for those developments is the desire within British Gas to lower its costs to protect its interests in the run-up to competition.
  Those are examples of the sort of problem which could arise within a more competitive market if suppliers were given the freedom to lower standards and to cherry-pick customers. Against that backdrop, the introductory list of duties for the Secretary of State on the one hand and the Director General on the other should include the protection of the interests of consumers as a primary duty, rather than—as is currently the case in the Bill—a subsidiary duty. Consumer benefit should not be seen as a fortunate consequence of competition, but rather the driving force behind it. Competition itself is the means, not the end.
  As regards the specific service standards which will be required of all suppliers, we welcome very much the proposals put forward by one of the proposing suppliers to improve and enforce the current 39 standard requirements to which British Gas works. Polling has shown that standards of service are of great importance to customers, and those must be safeguarded against becoming victims of any frantic price war.
  Service standards can be divided into two groups; those which are vital and others which are desirable. Vital services, such as safety provisions and services for the disabled and the elderly should be protected in law and applied fairly to all suppliers. Services which are desirable, but not in any sense life-threatening—answering the telephone promptly, for example—need not be enforced by law, but should be monitored by consumer groups whose findings should be published so that customers can have the information they need to make an informed choice of who they will get their gas supply from.
  Balanced against the need for high levels of customer service is the need not to erect barriers to entry into the market which would inevitably lessen the scope of competition. So it is reasonable that only those requirements which are essential are backed up in legislation. However, there are some areas in which the Government's approach to liberalising the market—some of the more important provisos which are intended to be only in the licence rather than in the Bill—must be questioned. For some of the more central pillars of the market, legislation would be more appropriate than regulation. The duty to supply on request—as was mentioned by the right hon. Member for Copeland (Dr. Cunningham)—is an obligation in the Gas Act 1986 which is not to be found in the Bill.

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  Under the proposals, only the regulator will be able to ensure that disabled customers enjoy exactly the same protection as they have had in the past. By putting the provisions in the licence, the already pivotal role of the regulator is extended.
  If people are to benefit properly from competition, good service must go hand in hand with lower prices. It has been suggested that since the savings promised by the independent suppliers are to be made at the customer end of the supply chain, it would be impossible for prices to fall if standards are to be maintained or improved. That is, by and large, a false thesis. Customer services need not in many instances be expensive, and there is no reason why service standards cannot be improved at the same time as prices are lowered. It must be said, however, that some of the claims being made about the degree of savings to be achieved are probably fanciful at the higher end.
  As with service standards, the largest potential barrier to delivering financial benefits to customers is cherry-picking which, in this context, could take place on two levels—choice of area and choice of customers within an area. There must be safeguards against the possibility of competition flourishing only in areas near to gas sources, and also against competition reaching only the more cost-efficient customers within those areas.
  Licences will need to cover large enough areas to he comprehensive, but—as the hon. Member for Harrogate (Mr. Banks) said—those areas must not be so large as unreasonably to restrict access for suppliers into the market. As with service agreements, if safeguards against price discrimination are only written into licences, an important check against unfair charging is open to modification in the future without parliamentary scrutiny.
  On both counts—the quality of service and the level of pricing—it could be seen that customers who are the least cost-efficient from the suppliers' point of view risk missing the benefits of competition unless they are protected by the Bill as well as by the licences. If a pensioner in the west country has a significantly more restricted choice of supplier than an affluent family on the east coast, we could rightly say that the Bill had failed to establish the necessary structures to protect all consumers. Due to variations in transportation charges, benefits will vary from place to place, but we must ensure that all customers—no matter where they are from—get a gain of some sort.
  Mr. Sebastian Coe: The hon. Gentleman will, I presume, give unreserved support to the announcement last week that the south-west is to be the first of the pilot schemes, which will guarantee liberalisation and cost savings to that west country pensioner about whom he talks.
  Mr. Harvey: The hon. Gentleman anticipates my next point. For the very reasons which he has outlined, the choice of the south-west for the pilot scheme is a good one. There will not just be an opportunity to see whether the computer systems work, but to see whether customers really will be better off under the new system. Once the Bill has undergone parliamentary scrutiny, it will be
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  interesting to see whether the people of Devon, Cornwall and Somerset will enjoy the benefits for which everybody hopes.
  Mr. Duncan: I have not been able to discern from what the hon. Gentleman has said whether he and his party will support the Government and vote for Second Reading of the Bill. Will he confirm that that is his intention?
  Mr. Harvey: I assure the hon. Gentleman that I will not sit down and leave him disappointed. I shall come to that point presently.
  I shall finish the point that I was making about the experiment in the south-west. If the Government are as confident as they appear to be about the proposals, will they consider offering a guarantee to consumers in the south-west who are to be used as guinea pigs in the trial? The south-west has suffered disproportionately from utility costs during the past few years, and the Government should offer a guarantee that—should the system not work as they hope—they will offer compensation.
  Mr. Eggar: I am confused by what the hon. Gentleman says. When the pilot scheme goes ahead in the west country, there will be no obligation on the consumer to move from British Gas if he does not want to move. That fact underpins the whole pilot scheme.
  Mr. Harvey: I understand the Minister's point. For that reason, it must be seen that it is unlikely in most circumstances that anyone will lose in absolute terms. The acid test will be whether some consumers lose out in relative terms either within a region or, more probably, between different regions of the country.
  The Standing Committee will have an opportunity to look at the issues—including many of the points which the Opposition have made in their amendment—in great detail. But the principle of the Bill of extending competition is right and, for that reason, we will support its Second Reading.
  6.58 pm
  Mr. Piers Merchant: I was brought up in a world in which the basic household services—electricity, gas, telephones and water—were all provided by public service utilities. I was born after electricity and gas were originally nationalised so I knew nothing else.
  Mr. Nigel Evans: What, after electricity was invented?
  Mr. Merchant: I can assure my hon. Friend that I was also born after the original gas monopoly was set up, surprising though it may seem to him.
  While I have always been a believer in private enterprise and competition, I was not instinctively led in the direction of applying such an approach to the services. Certainly, any suggestion at the time that the Labour party might in some way support such an idea would have been stupendous. I suspect that some of the old Labour stalwarts of the era must be spinning rather swiftly in their graves at the idea that the Labour party should, as it appears to be doing, smile on the idea of competition in the provision of such services—in this case, gas.
  I listened carefully to the hon. Member for Wallsend (Mr. Byers). He told the House that competition was necessary and that there was always a presumption in favour of competition. They are welcome words indeed,

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  but not ones that would have chimed well with the old approach of the Labour party. It is good to welcome members of the Labour party into the real world and see them accept in the House the importance of competition and, indeed, the vital role that it plays in modern society.
  The hon. Member for Wallsend somewhat spoilt his speech by going on to advance a thesis that appeared to say that everything had to be regulated. I wonder exactly how competition can operate if regulation is so severe and all-encompassing that those who are in competition can hardly move or vary from a set pattern. The hon. Gentleman also said that, on balance, he had doubts about the Bill for practical reasons. He seemed to say that he went along with most of it but that there were practical problems in it and, for that reason, he would support the reasoned amendment. He finished by saying that he opposed the Bill because it was dogmatic in its base; yet he had accepted its basic principle. I found a considerable amount of contradiction in what he said.
  The other point that I picked up from the remarks of the hon. Member for Wallsend was his reference to cross-subsidy, which he described as socialism in action. That struck me as strange because cross-subsidy is an essential part of a competitive system. Anyone who goes to supermarkets—hardly part of the state sector—will see cross-subsidy in operation in the pricing structures of the goods within that market. It is an essential part of the system.
  The hon. Member for Wallsend advanced a thesis based on scare stories. That was sad because he had already conceded the importance of competition. I was sorry that he could not take himself a further step and accept the benefits of the Bill, even if he had doubts about one or two sections that could have been dealt with in Committee.
  I also listened with interest to the right hon. Member for Copeland (Dr. Cunningham), to whom I always listen with great pleasure. He is an eloquent espouser of his cause, but I felt that on this occasion he was more eloquent in making a case where in fact there was none. He seemed to have lost his basic fire. I suspect that he was caught in a position in which he had no principled base on which to oppose the Bill. So he scratched around trying to find justification for opposing it.
  The right hon. Gentleman conceded early in his speech any basic principle of objection. He constructed a case based purely on the weaknesses that he thought existed in parts of the structure, rather than the underlying concepts of the Bill, or on scare stories similar to those that we heard, as my hon. Friend the Member for Surrey, North-West (Sir M. Grylls) pointed out, about other privatisation measures that have come before the House in recent years.
  I said at the beginning of my speech that I had been brought up in a world in which there was only state provision of basic services. I had always supported denationalisation. It seemed sensible to denationalise the manufacturing industries such as steel, and services such as buses and road freight. Indeed, I witnessed when I was fairly young the creation of private broadcasting companies. I have to admit that in the early days I shared the doubts that are now being expressed by the Labour party about privatisation of some of the services. For me it was a journey into unknown territory. I was influenced by popular theories that were around at the time about a mixed economy and the prevalent economic theories that
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  natural monopolies had to be run by the state so that consumers were protected, which could not be provided by competition or the private sector.
  Indeed, I had some misgivings when British Telecom was first privatised. I wondered whether it would work. I wondered whether it was a suitable service to be privatised. I felt that, if it were privatised, it should at least be broken up. I reasoned that surely a private monopoly was even worse than a public one because it had no accountability. However, with hindsight I realised that the doubts that I had at the time were not justified. For that reason, I am utterly confident in the Bill. I base that view not on any dogmatic approach but on my belief that it represents practical reality—the same practical reality as made privatisation of BT and subsequent privatisations work.
  Privatisation has turned out, perhaps to the surprise of many people, to be one of the most brilliant, radical and successful developments in public policy in this half-century. British Telecom was the forerunner, but it is entirely right that gas should follow in its footsteps. As a service, British Telecom showed the way in the complex change of ownership and organisation of a whole industry. That process had to be taken in steps.
  My second original reservation about the privatisation of British Telecom was about the need to break it up. It was not broken up. I now realise that that would have been a mistake. It was correct to take the privatisation in stages because the operation was complex and it represented such a fundamental change.
  Mr. Salmond: I am interested in the hon. Gentleman's personal experiences. Has he spoken to any British Gas shareholders recently? If he has, will he estimate for the House whether they are enamoured with the activities of the company?
  Mr. Merchant: I expect that I have spoken to many British Gas shareholders because so many exist. As it happens, I have not discussed the matter to which I think the hon. Gentleman refers, of British Gas and its activities, but the hon. Gentleman is an intelligent enough person to realise that anyone who owns shares will change his views from one moment to the next about the efficiency and effectiveness with which the management of a company operates. I am sure that that is true of British Gas, as it is of any other company. That is an entirely good thing because it puts the company and its management under continual pressure. They have to be answerable to their shareholders. If the shareholders are unhappy with one particular aspect of the management's reign, the shareholders will take action.
  The three stages of this type of privatisation process are as follows. The first step is transforming a state-owned company to a private monopoly, which of course is regulated to ensure that it operates generally in the interests of its consumers. The second step is to introduce some competition. Both those stages have taken place with British Gas. The third step is to transfer as far as possible the operations into that of a fully competitive market. That is what the Bill is about. That is why I welcome it and support it in its entirety. I have no doubt that that is the right approach. It is the logical conclusion of what has already been done with the gas industry. Its timing is right. The timing set within its clauses for the move towards full competition is also right. It is a step at

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  a time, not a "leap in the dark", as the right hon. Member for Copeland called it earlier. It is a measured step at a time which will achieve its objective.
  If we think back to the old days of the state-run gas industry, we remember the gross inefficiency as well as the total lack of real accountability to the consumer and the "gas man cometh" stories. We remember the jokes about the gas board and its failure to respond to consumer inquiries and complaints. Indeed, speaking some weeks ago in a debate on the citizens charter, I alluded to my experience many years ago as a journalist, when the paper that I worked for had a department called Action Desk, which was designed to help members of the public with consumer problems. Within a few weeks of opening, Action Desk was completely flooded out by complaints about British Gas, to the exclusion of any other complaints.
  Such stories are well known in the public domain. Everyone remembers the poor standards and everyone can see the huge improvement in efficiency that has taken place since. Of course, the system is not perfect and there are still complaints and problems. What area of activity in the retail or service trades does not occasionally have problems?
  A simple look at the available statistics will demonstrate how dramatic the change has been. For example, supply restored has increased by leaps and bounds and is now up to 99.5 per cent. within 24 hours. There are special arrangements, such as Gas Care, which did not exist before, and arrangements for the elderly. People can now pay their bills at about 19,000 post offices, instead of only at the rather limited number of gas show rooms. Since privatisation in 1986, there has been a drop of about 20 per cent. in the real price. The drop has been about 35 per cent. for industry.
  Equally crucially, investment increased around threefold in that period. It varies between £1.3 billion and £2.2 billion a year, which is a huge amount and benefits not merely consumers, but the economy of the country as a whole. British Gas has been enabled to become a truly international player in energy, with activities in 45 different countries, exploration in 25 countries and supply in countries as wide apart as Argentina and India. That is a remarkable achievement and it shows the sort of business that can be built up, once the shackles of state control are lifted and the company is allowed to compete and to invest.
  Mr. Tim Smith: My hon. Friend has obviously been watching those rather strange television advertisements about the international achievements of British Gas. Is not the key point that, whereas it is sometimes suggested that there is a conflict between the interests of shareholders and customers, British Gas has been so successful in driving down its costs and increasing productivity in a relatively short time that both customers and shareholders have benefited from privatisation?
  Mr. Merchant: Absolutely. My hon. Friend is entirely correct. People who oppose the enterprise system or privatisation try to drive wedges between what they see as various competing interest groups in the industrial structure; but those groups are not competing. It is in all their interests to go in the same direction, just as discounts
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  for people who pay their bills by direct debit, which the hon. Member for North Devon (Mr. Harvey) mentioned, are in the interests of both sides. People ask why discounts are not extended to people who pay by cash and do not have bank accounts and British Gas has said that it will also extend them to those people, for a simple reason—it is in the interests of both sides for that to happen. It is in the interests of British Gas to encourage swift payment and a discount is in the interests of the payer. That is the beauty of the system; it works in the interests of all.
  I was discussing the benefits that have already flowed. Further benefits will flow if the argument is continued. If competition is brought fully into the provision of domestic gas, all of the price, quality and investment benefits that I have outlined will also improve and the customers will have choice—that essential weapon that enables them to change from one supplier to another if they are discontented, or to choose one supplier in preference to another if they feel that what they are offered is better. That also operates in the interests of both sides; the consumer gets a better deal, better quality and better prices and the supplier has continually to improve and review its operations to maintain its market share when in competition.
  It is also important to maintain some regulation, which is essentially what the Bill is about. The licences are about ensuring that the triple operations of supply, shipping and transport are carried out in a way that will ensure the success of the whole operation. I am glad about the split, which is a natural one. It too will ensure that the consumer is protected.
  Sufficient protections are built into the Bill to prevent cherry picking and to ensure safety and the provision of special services, such as those to the elderly. The detail must come in the licence, as it would not be appropriate for a Bill to include all the detail that must necessarily appear in a licence. The Bill rightly sets up the framework in which the licence is produced. The licence will contain the conditions, but the Bill clearly steers the structure of the licence in the right direction.
  Someone commented on tariffs—I think it was the right hon. Member for Copeland—but they will also be sorted out by the market, as long as sufficient regulation is present. I favour light regulation, but I clearly favour regulation and do not want a complete free for all, as we would then lose some safeguards, especially as competition develops. It is unnecessary to go into the detail of tariffs in a licence, let alone in a Bill, because that will be worked out with competition. That is also true of services, such as the repair of appliances, for which there is already a healthy private market.
  The principle of the Bill is excellent and the practice is thorough and realistic. It is thoughtfully worked through and takes care of the detail, yet maintains a tough regulatory environment. It introduces full competition in three phases, which is sensible timing. There is not a mad rush that might result in things becoming unhinged early on, but it is not put off to such an extent that all consumers will have to wait for an eternity to benefit.
  For all those reasons, the 18 million gas consumers will benefit considerably from the Bill. I support it strongly for that practical reason. I am very eager that my constituents should receive the benefits as soon as possible, so I wish it a hasty passage through the House.
  7.17 pm
  Ms Ann Coffey: The Gas Act 1986 created a private monopoly in the domestic sector, whose abuses were to be checked by a gas regulator. It has been a highly successful company, but the Bill is an admission by the regulator and the Government that it has not worked for customers. The new Bill is relying on competition to do what the 1986 Act failed to do, but the big question is, will it do it?
  There have been problems with the regulator and one of the disappointing aspects of the Bill is that it does not take the opportunity to rectify those problems. The Bill, as well as the 1986 Act, gives the regulator a duty to protect the interests of gas consumers, but that is subject to other duties, including that of securing effective competition. I suppose that one might ask which gas consumers she is there to protect. To assume that gas consumers are an entity is to misunderstand what people out there are about.
  The Bill gives no clearer definition of the regulator's duties, which is a serious problem. When the actions of the first regulator are compared with those of the second, one is hard pushed to accept that they have the same job description. Therein lies the problem, because part of the definition of their duties is a self-definition. The phrase, "public interest", is, in an independent, non-political arena, totally meaningless. Such a wide definition of duties inevitably means that the regulator is seen to operate within a political arena. How can she not, given that gas is a political issue and every action that she takes has political consequences? Lack of accountability—the gas regulator is accountable to no one—does not necessarily equal independence.
  Mr. Tim Smith: The hon. Lady said that the gas regulator is accountable to no one. The Gas Act 1986 provides that the Director General of Gas Supply is accountable directly to Parliament.
  Ms Coffey: I am grateful to the hon. Gentleman for his intervention, but I have yet to see how that takes place. The regulator comes to the Select Committee, as the hon. Gentleman says, but is not accountable to it. The Select Committee cannot direct the regulator what to do. In a previous debate on the regional electricity companies, the Minister took great pains to point out that the regulator was independent and had independent duties.
  The relationship between the Secretary of State and the regulator is also murky. The regulator advises the Secretary of State, and the Secretary of State may take that advice or not. The Bill gives the Secretary of State a veto concerning referral to the Monopolies and Mergers Commission. I presume that the Government's view is that they may as well give the Secretary of State that power because it will save them rejecting the MMC's findings once it has reported. However, it does not help the idea of a credible, independent regulator and it is a great pity that the Bill did not take the opportunity to begin the process of looking again at the duties and accountability of the regulator, who is very powerful and has great responsibilities and duties to perform.
  The gas, electricity and water regulators sometimes act inconsistently. Perhaps that is supposed to demonstrate some independence, but, like the MMC, which also shows such a tendency, it can lead to much confusion. Unless there is a stricter remit, we shall be faced with a myriad
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  of gas companies and a great deal of confusion. Last week, the electricity regulator, for example, suddenly discovered unknown cash reserves in regional electricity companies. Coincidentally, Norweb directors made £1 million by selling their share options a few days before the electricity regulator announced his decision to review prices. Perhaps they felt able to take their reward as they had performed so brilliantly in hiding from the regulator the extent of Norweb's cash reserves; or perhaps the matter throws a new light on performance-related pay or a corporate response to selling share options.
  If the Minister is seriously trying to set up a level playing field, why does he not set up TransCo as a legally separate company? If TransCo remains within British Gas, it will create difficulties in terms of transparency and ensuring that extra costs are not passed on to competing gas companies through standing charges. It will also be difficult to ensure that chief executives' high salaries are not passed on to competing gas companies. In essence, making the standing charge cost-reflective will depend on the regulator. As the regulator seems to have had some difficulty in lowering British Gas prices and ensuring better management in the company, there is not much cause for optimism.
  Another disappointing aspect of the Bill is its scant regard for energy conservation. At this point, I should say that I am co-chair of the British parliamentary lighting group. As the Minister is probably aware, the group is anxious to install low-energy light bulbs for obvious reasons, but those involve a capital cost. Although the Bill places a new duty on the Secretary of State and the regulator to take account of the effect on the physical environment, and licences will require all gas suppliers to provide energy efficiency advice to their domestic customers, it is not clear where the money will come from for energy conservation measures such as insulation, which is important because it allows people on low incomes to heat their houses for less money. It would have been helpful if the Bill had been clearer about how that would be managed.
  Low-income customers are the most expensive to supply in relation to their demand, particularly customers on pre-payment meters. I approve of pre-payment meters as an alternative to disconnection, but those who use them currently pay 12 per cent.—I hesitate to mention the figure—more than those on direct debit. So those who can afford to pay least for their gas pay more. How will competition help them? Much of what we have heard is simply speculation, as no one knows whether the standing charge will come down. What is not speculation is the fact that cross-subsidy by British Gas helps low-income customers to some extent. In the short term, therefore, cost-reflective pricing will raise the cost of gas to those customers.
  Not all customers are the same, nor are their interests, and British Gas has ably demonstrated that with its discount to direct debit customers. That discrimination can continue because it is a saving offered on an administrative cost, but pre-payment customers will not benefit from such a saving. British Gas made a pre-emptive strike at "cherry picking" because direct debit customers are attractive. Moreover, they are likely to be offered further administrative savings, so competition will without doubt benefit them. The bottom line is that they will get their gas more cheaply than those on pre-payment meters.

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  Irrespective of what the independent gas suppliers say, I do not believe that low-income pre-payment customers are an attractive proposition. They are likely to continue to pay higher prices while better-off customers benefit. The gas companies cannot refuse to supply them, but I doubt whether that group of customers will leaf through the "Yellow Pages" to find another gas supplier. People in that group probably have no telephone as they cannot afford the connection charge or have had their telephone disconnected. The independent companies probably know that those people will not ask them to supply them, and that they can afford to target better-off customers. So who will ensure that pre-payment customers benefit? The regulator obviously has some remit in the matter, but the interpretation of her duties is wide. The DTI said in its response to the report of the Select Committee on Trade and Industry:
  "We accept that by the very nature of competition there must be some uncertainty as to the scale and distribution of benefits".
  That is true. It is at present a matter of speculation.
  It is worth remembering that the supply of energy to the poor and needy is a social responsibility. It is ultimately a Government responsibility. It is not the responsibility of the market and delivery cannot be made by the market. In those terms, the Bill will not deliver. If the Bill will not deliver, what will? I have not heard what or who will deliver. Have we reached a state where gas has become just another commodity, a situation in which if someone has the money he will be supplied with gas, and if he has not, he will not? If that is the state to which we have come, it is not good enough.
  7.30 pm
  Mr. Sebastian Coe: I approach the debate with a feeling of deja vu, and I am interested in the division of attitude that has already been established across the Chamber towards the Bill. I am interested also in the revisionist historians who are packing the Opposition Benches. I accept that I must be careful because the Liberal Democrat spokesman this evening has shown some enlightened approaches to the Bill.
  As Opposition Members are busily rewriting the history of privatised industry in the 1980s, it is worth reminding the House that in 1979 publicly owned companies were costing the taxpayer about £50 million a week. The newly privatised companies, which were lauded as public sector operations by Opposition Members, are now contributing about £50 million a week in taxes. I suggest to Opposition Members that we should not be manning the barricades over the new-found profits of recently turned private companies. Instead, we should be saying that these companies are not contributing enough and that it is necessary to push for more. We should be seeking higher levels of profit, with which will go a considerable tax take. Last year, British Gas made a tax contribution of about £500 million. When the Government came to power, British Leyland and other clapped-out public sector industries were not making massive contributions to the welfare state through the tax take.
  I sense that Opposition Members are merely going through the motions. They. no longer believe in the nostrums that they were brought up to espouse. It is
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  interesting that weekend after weekend we witness one policy U-turn after another. A few weeks ago there was the acceptance of education league tables. Apparently the Labour party suddenly came to the conclusion that opted-out schools were not a disaster for the British people, or even for key members of the party. I read with great interest today that we are about to be confronted by a Labour U-turn on private health.
  I rather fancy that before the next general election, when the Labour party has sorted out the words that it hopes will get it through on clause IV, privatisation will be well and truly enshrined in its policy.
  I welcome the Bill for all the reasons that have been identified by my right hon. and hon. Friends. They go beyond the mechanistic reasons that centre on the opening up of the market, the sensible opening of North sea supplies and the availability of pipelines to companies other than British Gas. We know that as a result clear benefits will accrue to about 18 million consumers.
  The Bill is to be welcomed because it represents an extension of the Conservative party's belief that at the centre of policy must lie consumer choice and sovereignty. If we ever walk away from that as a concept or philosophy—I am sure that it is one in which Opposition Members believe, although they would implement it differently from us—we shall be selling consumers short. The Bill offers the freeing of a market. It continues the downward pressure on utility costs.
  The consumer does not regard price as the only touchstone of a service. He or she will have regard to a range of other factors. I am pleased that enshrined in the Bill are sensible provisions for disabled people. My right hon. Friend the President of the Board of Trade has given a commitment to take account of the interests of blind people. The Bill contains provisions for the elderly, for those about whom the hon. Member for North Devon (Mr. Harvey) talked. We know that there are pensioners who might find life difficult. The provisions to which I am referring are sensible, central and integral to the proposed legislation, as are those that relate to safety. Perhaps it is a liberty to speak on behalf of Opposition Members, but I think that there is broad agreement that such provisions are key tenets of the Bill.
  I have spoken in the House on many occasions about the importance of inward investment into Great Britain plc and into our peripheral regions. Inward investment is the lifeline of the economics of peripherality. If it is important as a general concept, it is a supply of oxygen in an area such a Cornwall.
  For some in my constituency, life is a hard-pressed existence. Average incomes are significantly lower in Cornwall than in other parts of the country for a myriad of reasons, including structural changes within the economy. If inward investment is to mean anything tangible in my constituency, we must have regard to the decision-making processes in boardrooms the length and breadth of the country, in Europe and even wider afield. Areas will be selected where there is seen to be a sensible business return.
  Cornwall has been successful in attracting inward investment. I can think of two or three notable examples over the past year or so. At Redruth, Contico plastics, an American-owned multinational company, decided to set up its European manufacturing base. It had trawled Europe before coming to that decision. It was not a happy accident. The company decided to establish its base at

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  Redruth because of a flexible, well-educated, committed and loyal work force. It did so also because of our belief that businesses should not be saddled with overly burdensome regulations.
  Central to any future investment decisions are the costs that are likely to be faced through utility charges. That is why I welcome unreservedly, as I did last week, the decision to use the south-west of England for the first pilot scheme. It will produce dramatic downward pressure on the cost of gas supplies to consumers. That is nothing new in commerce. There were reductions of between 10 and 15 per cent. in the cost of gas supplies to businesses. I am pleased that there are potential advantages for household consumers of anything between 10 and 15 per cent. I hope that the assessments are right. I would settle for even less than those percentages. It must be a move in the right direction. For the heart, the vibrancy and the economic base of Cornwall and the rest of the south-west of England it is vital that we maintain downward pressure on utility costs and charges, which, in my constituency, take up an inordinate amount of disposable income.
  The proposed legislation is sensible. I am sure that it will be treated sensibly in Committee. I have great pleasure in supporting it this evening and I will support it on Third Reading. I commend it to my constituents, whom I know will be looking to many of the pieces of the Bill tonight to produce real advantages for them in their businesses and their domestic households.
  7.39 pm
  Ms Judith Church: I am grateful for the opportunity to speak in this important debate. I addressed many of our prime concerns about the proposed legislation in November when I spoke during a debate on the Gracious Speech. Since then, few people in the country can be unaware of the bad smell surrounding British Gas: the stench of corporate greed with orbiting fat cat salaries for those at the top; share options showering like Smarties; and bonuses that beggar belief. The Government might like to pretend that it is nothing to do with them—the "It's not me, guv" simpleton expression that they assume when their chickens come home to roost. But the people of this country are not stupid. They know who was responsible for privatising British Gas. They know that their money is paying for these outrages. They know that the Bill will not lead to lower prices for most of them, just reductions for those who are most able to afford to pay and relatively more expensive gas for the least well off. It is called "cherry picking". It happened in health—[Interruption.] Conservative Members should listen, because they might learn something tonight. It happened in health, where general practitioners do not want the most expensive patients on their fundholding lists. It happened in education, where schools are selecting pupils who will be the least troublesome, and it has happened in gas supply already, where British Gas now has an extra 1 million customers paying by direct debit since it announced that there would be a 5 per cent. discount for "good" payers last November.
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  The Bill is seriously flawed—
  Mr. Eggar: Will the hon. Lady give way?
  Ms Church: I shall certainly give way to the Minister.
  Mr. Eggar: I am grateful to the hon. Lady. Will she tell us whether she opposes her constituents who are paying less for their gas, because they have voluntarily opted to pay by direct debit, thereby saving money, or is she in favour of them paying 5 per cent. more for their gas than they do at present.
  Ms Church: I very much welcome the fact that a number of my constituents in Dagenham are now able to pay by direct debit and get a saving on their gas [Interruption.] I must tell the Minister that, in my constituency, far fewer people than in his constituency or those of other Conservative Members are able on economic grounds to take advantage of paying by direct debit. It is our constituents who are suffering from the changes in the pricing structure of British Gas. It is our constituents who will suffer as a result of the Gas Bill. I welcome the Minister's intervention, because I welcome the opportunity to tell the people of this country just what the Bill will mean for them.
  The Bill is seriously flawed—[Interruption.] The Minister may laugh, but he will find out what the flaws are soon enough. That does not worry Conservative Members, a good many of whom—one can see it already in their faces—will not be here after the next general election, when these measures come into full force in 1998, when the so-called competition takes off. Others among them who may be here after 1998—I doubt whether there will be so many of them—know that they will be sitting on the Opposition side of the House. Labour Members know that we will be sitting over there, picking up the pieces if this flawed Bill becomes law. We know how difficult it will be to address the inequities that the Bill will introduce.
  The Financial Times leader of 3 March summarised the situation perfectly when it said that the
  "Bill leaves too much of importance to the suppliers' licence, and so to the interpretation of the Regulator. It has placed an extra burden on the utilities' regulatory regime, at a point when its achievements and powers are already under question … In particular, the implications for pricing remain obscure."
  It would be churlish not to welcome the Government's climbdown from their much-heralded free market dogma, when clause 6(6), to which my hon. Friend the Member for Wallsend (Mr. Byers) has already referred, states:
  "The area of the licence may not artificially exclude an undue proportion of premises likely to be owned or occupied by elderly persons or persons who are disabled or who are likely to default on the payment of charges."
  The key question, however, is what will be considered as artificial? Will it be considered as artificial if firms choose to supply only to the wealthier cities or boroughs, or if they choose to ignore regions of high unemployment or choose only the areas that give the highest returns? The fact is that the two objectives—protecting the poor and promoting competition—are absolutely irreconcilable. In a competitive environment, profits can be made only by attracting the custom of the wealthy while opting out of the more costly accounts of the less well-off. Wait and see. It is already happening.
  Mr. Nigel Evans: I am enjoying the hon. Lady's rant, but what would she say to the people who have heard all

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  this before? The Labour party came up with the same fears about British Telecom, saying that the poor who use public telephone boxes would not be able to use them because they would not be working, that no more would be installed and that the costs would go through the roof. The opposite has happened.
  Ms Church: And Conservative Members never listen, so we shall continue telling them. The hon. Gentleman does not know it, but my constituency has fewer people connected to the BT service than in almost the entire country. Why? Because they cannot afford the cost of connection to the service.
  Mr. Stuart Bell: And installation costs are the highest in Europe!
  Ms Church: I thank my hon. Friend for his assistance.
  For the Government to deny that simple market truth is either plain incompetence or, at worst, a calculated deception. Because the specific terms have been left to the suppliers' licences rather than being included in primary legislation, the role of the regulator is critical to the market. Yet I was shocked last week to hear the Director General of Gas Supply maintain that it was her premise that she should not be mixed up in politics. Unfortunately for Mrs. Spottiswoode, she is mixed up in politics—all consumers are not equal, but they all need gas. She should shut herself away with Orwell's "Animal Farm". Perhaps after that she might realise that some gas consumers are more equal than others—but not many of them in Dagenham, I fear.
  The regulator cannot escape the fact that her decisions, her actions or her failure to act will affect the lives of people throughout the country. A regulator is not some hidden hand in a virtual world of licences, technical jargon and "undue proportions". A regulator is affecting the real world, the real lives and the real hardship of the British people.
  Cross-subsidy is not some evil, unmentionable disease. It is about gas supply and fair gas pricing.
  Mr. Tim Smith: Has the hon. Lady noticed that, since the regulator was established some seven years ago, the effect of the regulator's activities on the people whom she has been describing has been to reduce gas prices by 20 per cent. in real terms? Is that not a benefit to consumers?
  Ms Church: Much of any gain that has been made has, of course, been made by the better off at the expense of the worse off. Relatively, the price of gas has fallen more for the better off than for poorer people. [HON. MEMBERS: "No."] Hon. Members must believe that. It is due to the price structure that British Gas has introduced, which the Bill will perpetuate. [Interruption.] I shall explain—very simply, because the hon. Member for Croydon, South (Mr. Ottaway) clearly still does not understand. If people are able to pay their bills by direct debit, because they are wealthy and have a lot of money in their bank accounts, they will pay less per therm than my constituents in Dagenham, who cannot pay by direct debit because they
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  have no money in their bank accounts. I am sorry that Conservative Members do not understand that, but it is a fact.
  Mr. Nigel Evans: As the hon. Lady knows, British Gas has already said that a discount will be available as soon as possible to those who pay in cash and on time.
  Ms Church: Many of my constituents in Dagenham cannot pay their bills on time, because they are trying to pay for school meals, electricity and food from the local supermarket. They are living on income support—living at subsistence level—and they cannot afford to pay their bills on time. Many, indeed, have prepayment meters and find it very difficult to make the payments. So what do they do? They turn their heating off. [Interruption.] I will continue, if the hon. Member for Ribble Valley (Mr. Evans) will let me. These are important points, and I am grateful to Conservative Members for giving me a chance to spell out the position because they do not understand.
  Cross-subsidy and the obligations that we owe our fellow citizens do not bring tears to the eyes of Conservative Members. We should not be surprised at that, because they have spent 16 years widening the gap between rich and poor—committing increasing numbers of our children to living in poverty, and in cold and damp houses where their young lives are blighted by illness. I know that, because I see them in my surgeries every week. Conservative Members do not understand that mutual obligation, and do not recognise the society in which I want my children to grow up.
  Undoubtedly, all this strikes Conservative Members as being a long way from the technicalities of the Gas Bill. That only demonstrates how little they understand or care about the consequences of their policies. Last week, the Director General of Gas Supply said of British Gas's gas care register, the free safety checks and British Gas's safety record:
  "Some of it is right and we don't want to put that at risk".
  But what will be put at risk by the Bill? I should like to look at the gas care register of elderly and disabled people. As British Gas puts it, there will be
  "extra help for those who need it".
  British Gas now has 160 home service advisers, one for each 150,000 customers. Their job includes making home visits to provide—free—adapter devices, advice on gas use and advice on cooking for some of the most vulnerable people in society. I gained first-hand experience of the value of such support services last Friday when I accompanied Erika Aldridge, a home service adviser, on a visit to an elderly disabled customer in Dagenham. She was offered a contour tap to enable her to ignite the sole means of heating in her small bungalow; for years she had not been able to turn it on properly, and lately she had not been able to click the switch into the ignition position.
  The tap was not simply handed to that woman with the words "Grandma, get on with it." Erika Alridge kindly helped and encouraged her to use it, and after three or four attempts she was able not only to turn on the gas for her fire but to click on the ignition. As she did that, on her own, her face lit up with joy: she would no longer have to depend on a 70-year-old neighbour to come in every morning and help her light the fire. On that

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  occasion, I also found out about "bumpons" and "knobbles". The Minister looks puzzled; I give way to him.
  Mr. Eggar: I am well aware of the various services that are provided. The hon. Lady, however, does not appear to be aware that the terms of the licence will place on independent gas suppliers a similar obligation to that currently placed on British Gas. What is she going on about?
  Ms Church: The Minister is making my point for me. If those obligations are so important to elderly and disabled British Gas customers—which they are—why is the provision not in the Bill? Why has it been stuck in the licence, with the result that adherence to the licence conditions will depend on the regulator?
  Mr. Eggar: I am sorry to keep interrupting the hon. Lady. The reason is simple: the obligations currently imposed on British Gas by the Gas Act 1986 are also imposed in the licence. We are simply following precedent.
  Ms Church: For decades, British Gas has carefully built up a professional service, but we know that the independent suppliers will not do that, because it would cost a lot of money. The idea of social responsibility in the provision of an essential service such as gas, the notion that there is a large social benefit to be gained from ensuring that our needy citizens are well looked after and the basic principle that we are one nation with mutual obligations and responsibilities are entirely alien to Conservative Members.
  The Minister needs to know that professionals like Erika do not come cheap. British Gas employs only people with degrees in home economics, and gives them substantial training. Not everyone has the right combination of personal qualities and technical competence to do such work. Given the cost—and there will be a huge on-cost—does anyone seriously think that the same standard of service will be provided by the independents? Where will be the incentive, in a competitive environment, to provide such service for the most costly and least sought-after customers? The Government have dramatically increased the number of elderly people living in the so-called "care in the community" system; they must understand that such policies elicit certain obligations.
  The flaws in the Bill are too numerous to mention, but some questions need answers from the President of the Board of Trade. [Interruption.] The energy consultants Gas Strategies reported last week—the hon. Member for Falmouth and Camborne (Mr. Coe) obviously has not read the report yet—that
  "Significant imbalances between supply and demand are likely to lead to price instability."
  What safeguards will there be for the consumer? The consultants also stated:
  "It is inevitable that some of the thirty or so companies will pull out or be forced out of the gas business as it evolves."
  What proof of the financial strength will the regulator require before granting a licence? Will the regulator act promptly to deal with suppliers who take a chance in an unstable market and end up with no gas to supply? Will the regulator ensure that the price is directly related to the cost of supply for all new entrants? At what point will
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  there be considered to be enough competition for the imposition of a levy to cross-subsidise and protect the more expensive customers?
  Why cannot the fundamental duty to supply be laid down in the Bill itself rather than in the licences? As my hon. Friend the Member for Stockport (Ms Coffey) pointed out, how can the regulator be considered to have adequate powers and independence when the Secretary of State can veto a reference to the Monopolies and Mergers Commission?
  The Bill is another measure that is entirely consistent with the Government's record: it will fatten up the rich at the expense of the poor. We all know, however, that it will be another nail in the coffin of this Tory Government—a coffin that is now well nailed down. The President of the Board of Trade thinks that he can get the Bill past the British people without a murmur of protest by promising lower gas prices, but he is wrong—and, at the next general election, he and his Government will find out just how wrong.
  7.59 pm
  Mr. Alan Duncan: The hon. Member for Dagenham (Ms Church) has given a lively and spirited performance which will earn rave reviews, at least from Conservative Members. We could not but perceive from her endearing little chuckles in the middle of her speech that part of it was a bit of an act. One does not have to go to a west end theatre for such an excellent performance but I fear that the theme of her speech and those of her hon. Friends cast them all as prophets of doom and gloom. Opposition Members were nit-picking rather than cherry-picking.
  Ms Church: The hon. Gentleman has no sense of humour.
  Mr. Duncan: The hon. Lady says that I have no sense of humour but I assure her that I enjoyed every moment of her speech and I congratulate her on it. I shall enjoy reading it.
  In debating the Bill, the hon. Member for Dagenham and her colleagues have not been able to tell the wood from the trees. There are great advantages in the continuing advance of competition, and challenging the whole principle will deny to her and to my constituents the benefits offered by the gas and other industries.
  The House will be aware of my interest in oil. Two years ago, that interest spread to an interest in gas. The Minister will remember the small private Member's Bill that I piloted, aimed at deregulating the supply of gas to caravans. The regulations so liked by the hon. Member for Dagenham were stopping the sensible supply through pipes of butane and propane gas. Thanks to the co-operation of the Minister and the procedures in the House that apply on Fridays, caravan owners can now benefit from the supply of gas piped from tanks. We are moving from basically the same principles to a larger operation.
  Mr. Peter Hain: The hon. Gentleman mentioned an interest in gas. Do he or any of his hon. Friends—perhaps I should more accurately say how many

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  of them—have an interest in the competitor companies that will be invited into the market on such favourable terms as those in the Bill?
  Mr. Duncan: I am not aware of any such details. I am here to debate the principles of the legislation, not to listen to the usual complaints by the hon. Gentleman.
  Some 30 years ago, Britain was principally fuelled by coal and oil and only partly by gas. It is now fuelled by oil, gas and coal, and the increase in production of North sea oil, much of which I say to the hon. Member for Banff and Buchan (Mr. Salmond) was not Scottish, coincided with the rise of Britain as a gas-producing country. In 1965, offshore gas had a mere 7 per cent. share of the market for energy. It is now 50 per cent.
  The discovery, production and supply of gas has been a great success story and as the industry expanded, the nationalised company of the time could not cope with it. The Gas Act 1986 started the process of denationalisation. Inevitably, when transferring a massive nationalised concern with millions of household consumers to ownership by shareholders, there is a period of transition during which the nature and identity of the business is essentially a half-way house between nationalisation and full privatisation. It was right that in managing that transition, the Government ensured a proper regulatory regime. That was primarily to protect the consumer, within certain bounds and that is exactly what has successfully been done.
  British Gas faced competition from the moment that the 1986 Act was enacted, initially for the supply from others to consumers of more than 25,000 therms a year and thereafter to consumers of more than 2,500 therms. For those who do not appreciate such volumes, that is equal to the annual consumption of about four households. The regulator has successfully imposed a price regime corresponding to the retail prices index minus 4 per cent.
  British Gas is not a monopoly. Since the 1986 Act broke up what was at that time a monopoly, about 60 per cent. of gas comes from other suppliers. There are 25 other companies supplying wholesale gas and among them are Alliance, Amerada Hess, Calor, Enron, South Wales Gas, Southern Gas, Sterling Gas and United Gas. All 25 companies are already competing with British Gas at a time when British Gas faces regulation and competition.
  Mr. Michael Clapham: The hon. Gentleman speaks about the introduction of competition to the domestic market and about the demand from companies which use gas to generate power. Is he aware that the supply-demand ratio may become insecure? The Bill contains no reference to who will be the supplier of last resort, and that could jeopardise the future.
  Mr. Duncan: The hon. Gentleman has a point and it will be addressed in Committee. However, I shall deal with it now by saying that it is already addressed by the geographical pattern of licences. Anyone who applies for a licence for a geographical area will have no way in which to distinguish in supplying gas through the existing pipelines whether he is supplying a house containing a disabled person or in which the main earner has a low income. The distinctions which the hon. Gentleman and
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  his colleagues have been trying to draw are entirely contrived and artificial. The guarantees for which he asks will be properly addressed in the detail of the licences in the same way as the licence held by British Gas properly addresses those matters. The hon. Gentleman should bear in mind that the benefits of privatisation are already massive.
  Mr. Clapham: What about VAT?
  Mr. Duncan: I shall come to that in a moment. Let us look first at the basic price. The price of gas to the domestic household has gone down by 20 per cent. not just in money terms but in real terms since privatisation in 1986. We have the lowest industrial gas prices in Europe. The network supplying gas used to consist of cast iron pipes, but that has been upgraded. Verges are being dug up for the laying of yellow polyethylene pipes. Between £1.3 billion and £2.2 billion a year is being invested in the pipeline network. That would have been unimaginable under the nationalised system.
  Much of the profit in British Gas is invested, much goes to shareholders and much goes to the Inland Revenue. Last year, £504 million was paid in tax and that pays for hospitals and schools and for other projects for which the hon. Member for Barnsley, West and Penistone (Mr. Clapham) often asks for more money. British Gas has an expanding and significant global presence which would have been unthinkable under the financial constraints of nationalisation.
  Despite all those benefits, which are evident even during the transitional phase, it is right to move on. That is what the Bill does. Having gone through the transition of the company being subject to regulation and competition, we should enhance the climate of competition so that the benefits to wholesale consumers can be transferred in equal measure to household consumers. The pessimism of the hon. Member for Dagenham and her hon. Friends is ill placed. Within a few years she will have to eat her words.
  Ms Church: Will the hon. Gentleman give way?
  Mr. Duncan: I look forward to the hon. Lady doing that now.
  Ms Church: Will the hon. Gentleman confirm that a greater proportion of his constituents pay by direct debit, that a greater proportion pay their bills promptly, and that fewer are on income support and less able to pay their gas bill than many of my constituents?
  Mr. Deputy Speaker (Mr. Michael Morris): Order. I think that three questions are enough.
  Mr. Duncan: The hon. Lady advances the typical socialist argument—just because some benefits cannot be spread to all they should be spread to none. It appears that she would deny to those of her constituents who benefit from competition and the direct debit system the benefits that they are already enjoying. The price of her recommendation is that she would confiscate from her constituents and from mine the benefits that they enjoy, just because those same benefits have not yet been extended, as they surely will be, to the rest of her constituents.
  Even now, cards are coming through our letter boxes asking domestic consumers to put their names on a register expressing an interest in receiving an alternative

  631
  supply of gas for their cookers and heaters. Even now, companies are preparing for the benefits of competition that will derive from the Bill, which I trust will be given a Second Reading tonight.
  I was pleased that the hon. Member for North Devon (Mr. Harvey), in what I thought was an initially ambivalent speech, came down in favour of voting for the Bill. I welcome that because this primary legislation is right. It provides for an equitable regime of duty and obligation on the part of licence holders. There will be a licensing system which will properly supply all parts of this country. The benefits of competition will spread, and—who knows?—some companies might even compete for business by deciding to abolish the standing charge. That is not unthinkable; it is perfectly possible. I look forward to the day when it becomes part of the marketing objectives of the companies that are going to queue up for licences to supply.
  There is not just competition within the gas industry; there is competition between gas and other sources of energy. That is the global picture which the hon. Member for Dagenham signally failed to assess.
  I should like to pick up a point about what should be in law and what should be in a licence. I can understand some people feeling that all the guarantees and standards that they wish to preserve should be enshrined in the letter of the law—but there is a problem with that. This is a rapidly developing market, taking on new technology, new structures and new competitive methods. If we put all the details in law, we should forever have to come back to the House to amend, update and change the law. It is right to put the parameters in law, and then to leave it to the Secretary of State and the licensing system to ensure that the guarantees which the hon. Lady rightly seeks are given legal effect.
  If a company wants to supply gas but does not meet the stipulations in the licence, it is a far more rapid remedy if the Secretary of State removes that licence than if the company goes through the courts for a number of years, supposedly for having failed to observe the terms of the law. So guarantees to the consumer are much better for being in licence form than if we included them in the more cumbersome structure of the Bill.
  Another important point concerns the question: why should a supplier of gas feel any less inclined to supply gas to someone who is disabled, just because that someone is disabled? We have heard the cry from the Opposition that the Bill will stop gas going to the disabled. I find that suggestion incomprehensible, and I call on the Opposition Front-Bench spokesman to explain what is meant by it—if he cares to repeat the allegation.
  I do not accept what has been said about safety either. There are fewer problems with safety, largely as a by-product of more modern equipment for the supply and use of gas. Because the lack of investment hanging over from nationalisation has been so rapidly solved, there are now fewer safety problems and risks associated with the supply of gas.
  As for complaints, I heard the hon. Member for Barnsley, West and Penistone mention VAT. Certainly, there were problems when it was announced that VAT would be charged on domestic fuel. A lot of people phoned up, not necessarily to complain but to inquire about how to pay their bills. As the measurement system does not distinguish between an inquiry and a complaint, the apparent number of complaints is a fallacious statistic.
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  All that happened was that a great many people—understandably, given that VAT was to go on their bills—phoned up to find out how it was going to work.
  Mr. Clapham: Is the hon. Gentleman suggesting that the great British public did not complain about VAT and just accepted that it should be added to fuel bills?
  Mr. Duncan: That is not the point that I am making, which is that the total number of complaints which the Labour Front-Bench spokesmen and their colleagues measured and then claimed were related to the performance of British Gas have nothing whatever to do with its performance. They were the fall-out from a political decision made in the Budget—nothing to do with safety, customer satisfaction or the performance of British Gas.
  Mr. O'Neill: The hon. Gentleman will probably be aware of, but has probably not yet read, the research paper produced by the Library which gives a breakdown of complaints and inquiries received by Ofgas. It shows that, in 1993, Ofgas received 1,658 complaints; in 1994 it received 2,203. In the same period, the number of inquiries fell from 184 to 115—so it would appear that the imposition of VAT does not support the hon. Gentleman's argument.
  Mr. Duncan: I suggest that the hon. Gentleman is being disingenuous. The figures put to us were not from Ofgas: they were from the Gas Consumers Council, based on a 20,000 sample—[Interruption.] I can wave my copy of the research document as easily as the hon. Gentleman can—I have seen the figures in it. The hon. Gentleman will appreciate that the numbers are very small indeed—250 out of 20 million customers ain't bad. I commend British Gas on its standards.
  There has been a great deal of complaint to the effect that those who work. for British Gas are dramatically overpaid. I do not agree. Had the hon. Member for Clackmannan (Mr. O'Neill) been present at the meeting of the Employment Select Committee last week, he would have seen the hon. Member for Wallasey (Ms Eagle) squirming at the answers that she got from Cedric Brown, chief executive of British Gas, and from Richard Giordano, chairman of British Gas to her accusation about how the share option scheme worked. It was shown to be completely wrong. The whole point of the share option scheme is that British Gas has to work steadily up the FTSE 100, not just in competition with its own past performance but in competition with all other FTSE 100 companies, before the company so much as earns a penny. Had those executives been paid according to what they have saved consumers since the privatisation of British Gas, they would now be worth billions, not millions.
  The consumer is protected by a regulatory regime which has meant prices falling. The shadow Chancellor implies that if the chief executive and his boardroom colleagues gave back their share options, customers would be much better off, but the director general of Ofgas, Clare Spottiswoode, has said:
  "British Gas could pay their directors 10 times the amount they currently are, and the consumer would not pay an additional penny."
  She said that on the "Today" programme on 9 March this year.

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  The implication put about by the hon. Member for Dunfermline, East (Mr. Brown)—that high salaries cost the consumer—is no more than a political point about something which, on the most generous calculation, would be worth 6p a month.
  Dame Elaine Kellett-Bowman: I understood our right hon. Friend the Secretary of State to say that if the executives were not paid a bean, it would save gas consumers a penny a week.
  Mr. Duncan: My hon. Friend is right. However many fingers we have, we know that only pennies are involved, whether it be one penny, fourpence or sixpence. The amount is small. The policy of criticising boardroom salaries in the pretence that they somehow cost the consumer money is a distasteful exercise in trying to buy votes. The hon. Member for Dunfermline, East has bought a sixpenny vote on the issue of Cedric Brown's income, yet, if he were ever to get into office, he would slap sixpence on income tax to grab the money off everyone else.
  The so-called reasoned amendment picks up on themes that are unfounded. It says that the Bill is
  "damaging to the interests of many sections of the population, including elderly people".
  It says that the Bill
  "fails to provide adequate resources for health and safety"
  but that is not so.
  The amendment talks about guarantees that will be in the licence, even though they were not in the Bill because circumstances will change. It once again talks about regulatory provision to enable price cuts to consumers where there are unjustified salaries and share options. If the Labour party fails to support the competition that will arise from the Bill, the real benefit of its promise is an enormously generous penny, twopence, threepence and fourpence a week—bully for that. If that is the price of its principles, I can understand why the hon. Gentleman has put such a low price tag on them.
  The Bill is the final step to privatisation. It is clear that the Labour party will attack it all the way, but will it reverse it? We do not know. It will not say whether the answer is yes or no. Even on the day that I am speaking, it appears that clause IV will be replaced by clause four and a half and that the rearrangement of the dinosaurs in the Labour party's constitutional museum will merely mean that the promise to nationalise will be replaced by a promise to own industries in public—a mere semantic change, but the same principle remains. It will not even tell us the words of the clause IV replacement.
  I predict that it will not be long before the Labour party has to eat its words in the amendment. All that the debate will have revealed is that the Labour party remains an anti-business party. It cares about votes. It does not care about consumers. It will stir up grievance and milk it for all it is worth. It will deploy every method of negative politics that it can. It will deny to its constituents what we will not: the inestimable advantage to consumers, to shareholders and to the economic improvement of the country that will arise from the passage of the Bill.
  8.22 pm
  Mr. Alex Salmond: I assure the hon. Member for Rutland and Melton (Mr. Duncan) that his speech, in its own way, was every bit as amusing as that which preceded it. When the hon. Member for Dagenham (Ms Church) was making her vigorous denunciation of the Bill and all its works, one of his hon. Friends shouted out, "Who wrote this stuff?" I assume that Tim Bell wrote the hon. Gentleman's speech as I have never heard such an extravagant defence of the extravagances of British Gas.
  Not all the oil and gas in the North sea would be in Scottish waters if Scotland were independent—just 90 per cent. or so—but I make no territorial demands nor have I any designs on Rutland, so perhaps the hon. Gentleman would abandon his territorial demands on Scottish resources.
  I declare an interest as a shareholder in British Gas, albeit a modest one. Perhaps more appropriately, I hold 2,000 shareholders' proxies, so I shall go to the annual general meeting of British Gas on 31 May with the intention of tackling some of the excesses that the hon. Gentleman finds so congenial. I assure him, however, that the vast majority of private shareholders in the company are in open revolt.
  I have heard it said that if the Select Committee on Trade and Industry says something, a consensus should exist in the House on the Select Committee's views. I even detected a nod from the Minister when one of his hon. Friends said that. I do not know whether some sort of contract has been offered or whether, from now on, any Select Committee recommendation will be immediately accepted by hon. Members on both sides of the House. It would be an interesting venture if the Government went down that road. However, they are unlikely to do so.
  I did not sit on that Select Committee, but I was a member of the Select Committee on Energy which preceded it. I remember that some of us were unenthusiastic, to say the least, about the process of privatisation in the electricity industry. Nevertheless, as privatisation was being proposed we agreed to try to make sensible recommendations in that context. It would have been unfair for people to say that that implied support for privatisation. It is legitimate for a Select Committee to make recommendation within a context set by the Government without conceding the point of principle.
  As for the claimed success of British Gas since privatisation, I remind the House that the company has been referred to the Monopolies and Mergers Commission twice since privatisation and to the Office of Fair Trading once. It was in constant battle with the previous regulator, Sir James McKinnon. At last year's general meeting of British Gas, which I also attended as a small shareholder in the company, I remember the valedictory series of insults that were levelled at Sir James by the company's board. One of the small shareholders got up and said that James McKinnon could not be too bad a lad as the person who appointed him was a member of the company board and sitting on the platform. He was referring, of course, to Lord Walker. Given the company's track record of constant battles due to the anti-competitive behaviour that Sir James detected, to claim that the privatised company has been an unqualified success is a remarkable argument.
  Mr. Tim Smith: I was surprised to hear what the hon. Gentleman said about the relationship between the

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  company and the regulator. Surely, by definition there is bound to be a certain degree, to put it mildly, of creative tension. It would be far worse if some kind of cosy relationship existed between the regulator and the company.
  Mr. Salmond: These things are a matter of degree. I suggest that two referrals to the Monopolies and Mergers Commission and one to the Office of Fair Trading tend to suggest that the Gas Act 1986 had certain flaws. Moreover, the fact that we are debating another Gas Bill to change the ground rules is an implicit admission that the Gas Act 1986 was a failure in terms of introducing proper and effective competition into the gas markets.
  I have tried to detect positions of principle in today's debate. With the greatest respect to hon. Members on both sides of the House, however, little of what I have heard today has been about the principle of the Bill. I have a fundamental disagreement in principle. It involves clause 5, which states that TransCo, the transportation company, should continue to be owned by British Gas, although its activities should separated. I object in principle to that arrangement and to clause 5.
  I will try to deal with both points of view and to explain to Labour and Conservative Members why they, too, should disagree with that policy in principle. I am attracted to the formulation that the previous Select Committee on Energy advanced for the electricity industry. It took the view that a strong argument existed for the distribution system to remain under public control and under common ownership. It said that that would ensure fair play in the overall market place. If it is no longer fashionable to have common ownership of the means of production and exchange, the Labour party may care to consider whether it might still be possible at least to support common ownership of the means of distribution. Serious ambiguities are left in the system. The company should have a social duty to provide gas supply to areas where it will be extremely costly to provide that supply. That is best catered for within a public sector arrangement.
  If the company's safety obligations are placed in the private sector and in a fully competitive environment, that will cause great difficulty. The Labour party might like to consider particularly whether the transportation system would not best be handled within some form of common ownership or public control. I suggest to the Conservatives, too, that the idea that that matter can be left in the hands of British Gas is a fundamental mistake in the privatised structure. One cannot have a truly competitive market in which just one player is left in control—albeit at arm's length—of the distribution system. To illustrate the substantial doubts of other players, I shall quote from an internal memorandum from a private oil company which hopes to move into UK gas supply in a big way. I shall not identify the company as I received the memorandum for other reasons.
  On the subject of introducing competition into the gas market, the company refers to the problems that it foresees in its internal planning:
  "British Gas TransCo, through its inability to deliver a competent service to shippers and hence our customers, is severely damaging the perception of gas competition among final consumers. Service standards have worsened since last autumn and British Gas TransCo seem to have taken no effective action to improve the situation. We have asked Ofgas to impose financial penalties for failures to meet set standards. However, penalties are not enough in themselves;
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  entering the domestic market with such poor standards of TransCo service would be highly damaging to customers and the reputation of independent suppliers in dealing with the general public."
  That is evidence of substantial doubts among companies wanting to move into the freed-up competitive gas market about the effectiveness of TransCo at present and the wisdom of TransCo being part of the overall British Gas network.
  British Gas must be one of two things—a company with a larger responsibility as a utility, or just another oil and gas company competing in the market. The ambiguity and personality split are already evident: Mr. Giordano clearly believes that salary levels should be set on the international oil and gas market, while many British Gas customers, staff and shareholders believe that the company has a special and particular obligation as the gas utility of final resort. Until the Government resolve that matter and identify the future for British Gas, the principles in the Bill will remain fundamentally flawed.
  As to the internal machinations of British Gas, I am indebted to Mr. Giordano, writing in tonight's Evening Standard, for crystallising some of my complaints about the company. Referring to the transformation of British Gas under his chairmanship, Giordano states—ironically, I believe—
  "British Gas? Isn't that the company which has all those over-stocked, rather unfriendly showrooms in Britain's high streets?"
  The reality is that British Gas has become an unfriendly company with hardly any showrooms because so many have been closed under Mr. Giordano's chairmanship. He also comments on the difficulties that British Gas has encountered with public resentment and shareholder outrage at pay settlements in the company. He writes of Mr. Cedric Brown:
  "Alas, the issue of his pay, which has been so unfairly dealt with, has consumed an inordinate amount of energy during the past few months. There has been a fog of confusion and misinformation."
  Indeed there has. That fog of confusion and misinformation was created by the board of directors, who refused to reveal to shareholders at the last annual general meeting the pay deals that had been made.
  Mr. Duncan: Showrooms are a hoary old chestnut. Does the hon. Gentleman believe that British Gas should be obliged to subsidise retail outlets when one can buy gas appliances from a wide range of retailers and pay one's gas bill free of charge at 19,000 or more post offices?
  Mr. Salmond: Scottish Power, a privatised utility, is expanding its showroom network throughout Scotland and moving south of the border. It is surprising that British Gas is retreating from Britain's high streets at precisely the time that other privatised utilities are expanding their showroom network and seem to regard that as a particular advantage in the competitive marketplace.
  As to salary levels in British Gas, I will quote from supporting comments for one of the resolutions that I sincerely hope will upset the apple cart at the company's annual general meeting and restore some sanity to its top leadership. The resolution was submitted not by me but by Pensions and Investment Research Consultants, and it details what has happened in terms of the pay deals negotiated behind the scenes. It states:
  "Companies have been asked by PIRC and by others to provide full disclosure on the issue of pay. PIRC welcomes British Gas commitment to the principle in future. PIRC notes that the review

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  of the remuneration for executives was not announced at the April 28 1994 AGM, yet the salary rises were backdated to that point and for the chief executive backdated to before the AGM, to January 1994. The Chairman"—
  Mr. Giordano—
  "was appointed an annual salary (for a two-day week) of £450,000 at the AGM, yet the terms were not disclosed at the AGM or indeed in any of the quarterly statements."
  That situation was defended by the hon. Member for Rutland and Melton. Details of salary settlements were kept not just from the general public but from shareholders at the AGM. If any Conservative Member, arguing for a competitive market, can defend senior executives who do not have the guts to go before their own shareholders to explain and to defend huge salary increases that the public find offensive, I shall be interested to hear that defence. Events in British Gas have provoked outrage among the public. It is interesting that Conservative Members do not realise that there is a shareholders' army set to march on the AGM to right the wrongs in the company.
  The House should examine not just what Mr. Giordano and Mr. Brown have done wrong but the structure that Parliament established in 1986, which allowed a company that the public once held in high esteem to become widely despised by the public and wholly hated by its shareholders.
  I explained earlier how moving to an open market can provoke problems as well as create opportunities. I gave the example of the people of Rosehearty and Sandhaven in my constituency. In Banff and Buchan terms, they are substantial villages of several hundred people. They live within a few miles of St. Fergus gas terminal, which is one of the largest in Europe. The flames from St. Fergus light up the evening sky. Those villages have wanted a gas supply for many years. One might criticise the structure of the nationalised British Gas which rationed gas supplies to consumers throughout the country, but my villagers' hopes were raised when they received a commitment from British Gas after privatisation that supply would be extended to their villages.
  At that time, British Gas in Scotland had the ability to operate a formula whereby the cost of connecting rural communities could be approached imaginatively. It assumed a number of connections over the years, which allowed the high initial cost to be offset on the assumption that more customers would be attracted in the longer term. By that means, villagers in St. Fergus, St. Combs, Inverallochy and Cairnbulg were connected to a gas supply at a cost of £40 per household in the early 1990s. Villagers in Sandhaven and Rosehearty are now being offered connection at more than £1,000.
  The explanation is that changes in British Gas have totally eliminated management autonomy in Scotland, so the previous formula has been vetoed by the London headquarters. Also—this is interesting in the context of competition—British Gas argues that it cannot afford the substantial outlay of connecting small villages if it cannot be protected from another company supplying those households in the future after British Gas has met the high initial cost. The move to competition is not helping people to obtain a gas supply but actively hindering the extension of the network. A once reasonable connection charge has
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  become highly inflated. The House must deal with that real situation, which is confronting rural households the length and breadth of the country.
  There are objections in principle to the Bill. The question of competition has not been fully thought through and cannot be dealt with while TransCo remains in the hands of British Gas. I see no reason why the Opposition should not vote against the Bill in principle, because it does not offer that protection, as well as making some factual points through the reasoned amendment. For that reason, if no one else divides the House on Second Reading, my party and Plaid Cymru will certainly do so.
  8.39 pm
  Mr. Tim Smith: The hon. Member for Banff and Buchan (Mr. Salmond) is very concerned about clause 5. I understand that, but I do not see it as a reason for him to vote against the Bill, which has considerable merit. In 1982–83, I served on the Standing Committee which considered the Telecommunications Bill, which led to the privatisation of British Telecom. Apart from a speech made by Mr. John Golding, who was sponsored by the Post Office Engineering Union, which now appears in the "Guinness Book of Records", I remember that Labour Members indulged in various scare stories about what would happen when British Telecom was privatised. They said that prices would rise, that the service would deteriorate and that the number of call boxes would be decimated. The exact opposite happened. In real terms, prices dropped dramatically. The service improved tremendously because BT started to employ salesmen rather than order takers and a telephone line could be connected within 24 hours. The number of call boxes that work is now much higher than it was when the business was nationalised.
  We have seen the same pattern with every privatisation measure brought before the House since 1982. We saw the same pattern with the Gas Bill in 1986. The same claims were made about what would happen when British Gas was privatised as a monopoly. Labour Members said—this is on the record—that prices would rise and that the service would deteriorate. In fact, as we have heard during the debate, the price of gas in real terms has fallen by 20 per cent. since the business was privatised. Every consumer of gas has benefited. Shareholders, including the hon. Member for Banff and Buchan, have also benefited because profits and dividends have risen. As I said in an intervention, it is possible in such circumstances that customers and shareholders can benefit.
  The hon. Member for Banff and Buchan suggested that the fact that we introduced the Bill meant that we had got the legislation wrong in 1986. He seemed to think that once one had legislated on something, it was never possible to amend the legislation in any way, or alternatively, that if one did amend it, it was an admission of guilt or fault. Clearly, we have moved on from 1986. An element of competition was built into the Gas Act 1986 so that, as we have heard during the debate, industrial customers have benefited significantly. My hon. Friend the Member for Rutland and Melton (Mr. Duncan) told the House that there are now 25 independent gas companies supplying industrial consumers and that the price to those consumers has fallen dramatically. I suggest

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  that it is sensible to move on from there to see whether it is possible to bring an element of competition into the supply of gas to domestic consumers.
  People sometimes suggest that the Government have run out of radical ideas. I suggest that the Bill is an extremely radical measure. There is no major capitalist country in which there is genuine competition in the supply of gas to domestic consumers. The idea that one can retain the pipes in one company and then generate competition by supplying gas from different suppliers down those pipes is relatively recent. The Bill represents a substantial step forward.
  It is not surprising that it is difficult to envisage precisely how the new system will work. That is why it is right that legislation should be relatively flexible and not too prescriptive. It is right that many of the terms and conditions under which the competitors of
  British Gas will operate should apply under licences granted by the Director General of Gas Supply because it will be easier for her to alter the terms than it will be for the House to amend primary legislation.
  Over the past few weeks, there has been a lot of debate about the role of the regulators. It is true that the regulators have considerable power; it is right that they should have considerable independence. The hon. Member for Stockport (Ms Coffey), or the hon. Member for Dagenham (Ms Church)—I cannot recall which—suggested that there was not sufficient accountability. Accountability does not mean that Select Committees should give directions to the regulator. It is right that the regulators should be accountable. It is reasonable that they are confined to a clear and relatively narrow objective, which is to ensure that the system operates in the interests of consumers.
  What concerns me about the way in which the Labour party is moving is that it wants to try to go back to the bad old days of the nationalised industries. The difficulty was that although the 1948 White Paper said that the nationalised industries would operate at arm's length and that Ministers would not interfere in their day-to-day affairs, the history of what happened over the next 30 years showed that no Minister of any political party could resist the temptation to interfere in their affairs.
  Mr. O'Neill: The hon. Gentleman is being rather narrow in his interpretation of the Bill's remit as regards the regulator. The Bill says that the regulator shall have a duty
  "to secure that, so far as it is economical to meet them, all reasonable demands in Great Britain…are met".
  The Bill says that the regulator shall have a duty
  "to secure that licence holders are able to finance the carrying on of the activities which they are authorised…to carry on"
  and a duty
  "to secure effective competition".
  There are three major and substantial responsibilities for the regulator which are embodied in clause 1. It seems likely that the hon. Gentleman has not read the Bill if he did not get as far as clause 1.
  Mr. Smith: I understand that point. However, all those objectives are included in the Bill because they are clearly in the interests of the consumer. That is exactly as it should be.
  The difficulty when these businesses were publicly owned, nationalised industries was that Ministers interfered in their day-to-day management for a raft of
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  different reasons. I remember when their prices were held down artificially to meet an objective of the income or prices policy of the Government of the day. That meant that those industries made losses and that the taxpayer had to subsidise them. No Governments were able to resist the temptation—
  Mr. O'Neill: That was done by the Heath Government.
  Mr. Smith: The Heath Government. I said that no Governments of whatever complexion were able to resist the temptation to interfere in the day-to-day affairs of those industries.
  It is not possible to establish a regime under which those companies remain in the public sector, but under which the Government set up a regulator who regulates their affairs. That is not an option. The only solution is to move those businesses into the private sector and then to establish a degree of independent regulation. The far better option is, as far as possible, to introduce competition into the affairs of a particular industry. That is what the Bill would do and for that reason, I very much welcome it.
  I do not believe that the powers of the regulator should go further than those set out in the Bill. What concerns me about what Labour Front-Bench Members are now saying about the system of regulation is that we would return effectively to the bad old days. They would give new powers to the regulators. They would give to the regulators, for example, the power to start interfering in the day-to-day affairs of the business. We already know that Labour plans to give the regulator power to fix the level of remuneration of board members. That is just for starters. I suspect that Labour will be unable to resist the temptation to suggest that the regulator should also be concerned about employment levels in the business. That was always a major consideration when these businesses were nationalised industries; they were effectively employment creation agencies. In other words, employment was held at artificially high levels to ensure that unemployment did not rise. I do not believe that that was a legitimate use of nationalised industries, yet that is precisely what happened.
  Mr. Salmond: I am not sure where the hon. Gentleman's argument is leading. Is he saying that the previous ideological battle between members of the two Front Benches about the ownership of any industry will be replaced by a debate about the extent of the powers of the regulator? If that is the sum total of the debate, I suggest that they all sit on the same Bench.
  Mr. Smith: The hon. Gentleman underestimates the importance of the issue which I am discussing. I am not suggesting that it is trivial, as he apparently believes. The power of the regulator is absolutely fundamental. It is terribly tempting to give the regulator this power or that power because we do not like this abuse or that abuse. None of us has liked what has been going on in the privatised utilities. Nobody looks on it with favour, but the answer to the problem is not to add to the powers of the regulator.
  There is no doubt that when these businesses were nationalised industries, employment was a very important factor. That is why even the Treasury underestimated the ability of businesses to reduce their costs and the speed at which they could do it once they were privatised. That is certainly what happened with the regional electricity

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  companies. They drove their costs down far more quickly than anybody anticipated. They did that, of course, by increasing productivity and reducing staffing levels. That has happened throughout the industries which have been transferred to the private sector. They are far more efficient and more cost-effective than they were.
  It would not be sensible to revert to the kind of system that we had before and that is why the Labour party's policies worry me. The proposals in the Bill are the best way forward. They will introduce a substantial element of competition in the supply of gas to the domestic customer and that is extremely welcome.
  8.51 pm
  Mr. Peter Hain: I challenge the whole philosophy behind the Bill because the proposition that competition can be left to its own devices and, thereby, automatically establish ideal equilibrium in the gas market is entirely without foundation. We are not dealing with a traditional, conventional area of supply and demand that can be rationed by price. We are not dealing with high-speed consumer gadgetry for which competition is ideal. We are dealing with a key, strategic and essential service. The Bill, in line with the Government's whole policy and their free market mania, is at the expense of public interests and in favour of private interests.
  The Bill will have three immediate consequences. It will increase cherry picking as the competition focuses and concentrates on the areas where most money can be made at the expense of the rest, which will result in social dumping. Secondly, it will undermine the strategic interests of the British economy by forcing our only national champion—British Gas—to concentrate on pygmy competition in its own back yard, instead of international competition that can advance the strategic interests of the British economy. The third major defect of the Bill is that it will operate under an inadequate system of regulation, which is not accountable to Parliament and is not seriously democratically accountable. The gas regulator and other regulators are virtually tin gods; a law unto themselves. They are pursuing competition blindly.
  One of the immediate consequences of such an approach is the lack of a sensible energy policy. In fact, we do not have one at all because each regulator and each competitive market is pursuing its narrow interests in a compartmentalised fashion and they cannot be aggregated to pursue an energy policy in the public interest.
  As a result of that free market mania, we are seeing the compartmentalisation of gas into shipping, transportation and supply, which means that the benefits of an integrated service, such as for repairs, are prevented. If one has a problem with one's gas system, wherever it may be situated, somebody from British Gas turns up at one's front door in a van. That van contains all sorts of things. It could contain a thermo-couple for a boiler, a small item for a cooker, something to do with the meter or some other part of the system that has gone wrong. With that one service man or woman and the equipment stored in the van, it is possible to rectify that problem. In future, if there is an emergency of some kind, TransCo will send
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  out an operative to deal with the problem and effect a repair. He or she will effect that repair if there is a problem with the meter. Beyond that—
  Mr. Nigel Evans rose—
  Mr. Hain: I am sorry that I cannot take interventions, much as I would like to, but many hon. Members want to speak.
  Beyond problems with the meter, other people will have to be called in. The list of various operatives in the Council for the Registration of Gas Installers will have to called on and those people will be invited to—perhaps—repair a cooker. That will result in an extra call-out charge being imposed on the householder, whereas at the moment there is simply one call-out charge and one person deals with the whole job.
  The ethos of an integrated service is being destroyed in front of our eyes. That may be of no interest to Conservative Members, but it certainly interests Labour Members, who have the interests of the people at heart, as opposed to those who wish to make profits out of the system. For example, as a matter of courtesy and good will, the gas man or woman may take a cooker out and replace it with a more modern model, and rather than throw the old cooker on the scrap heap, may install it free of charge in the home of—perhaps—an old woman whose cooker has broken down. That may not be competitive or go along with cost-related charging and all the jargon of the free market, but it reflects an integrated service.
  Indeed, it has even been the practice among British Gas workers to look at old, abandoned cookers, strip them down, put some of the parts in their vans and supply them to pensioners when they are in need of such equipment. Again, that service may be provided free of charge and may not conform to the dictates of the market, but it supplies a public service for people in need.
  Cross-subsidy will be impossible under the cost-related system of charging, which will be one of the guiding principles of the Bill when it becomes law. A uniform price, which has been one of the cardinal principles of the supply of gas in this country over many generations, will be impossible. We shall no longer have a uniform price. Safety will also be impaired and threatened by this regime. All those are consequences of the compartmentalisation of the industry; the destruction of an integrated service.
  I now refer to cherry picking and social dumping. Inevitably, the focus of competition will be in areas where the money can be made. Hon. Members need not accept that proposition from a left-wing Labour Member; they can accept it from the Monopolies and Mergers Commission, which predicted that social dumping and cherry picking would take place when such a regime, or something like it, was advocated.
  The competitors will not be interested in going up a remote Welsh mountainside to supply gas. They will not be interested in supplying gas at the top of a south Wales valley such as the Dulais valley in my constituency. Gas is supplied only half way up that valley. The competitors will be interested only in making money and in competing where the money can be made—among large users and rich households. Inevitably, there will be differential pricing. Indeed, the Government have conceded that. Rich customers and large users will pay relatively less; poor customers and low users will pay relatively more. That is a form of social dumping and it is already happening.

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  A dress rehearsal for that regime is already occurring in respect of the change introduced by British Gas whereby direct debit customers pay 5 per cent. less. That is a form of social dumping and it particularly hurts people on low incomes who cannot afford to have direct debits. I very much resent the arrogance of many Conservative Members who seem oblivious to the fact that many pensioners in my constituency, and I am sure in constituencies across the country, are frightened about direct debits. They are terrified at the prospect of a bank raiding their accounts, month by month, whether or not they have the money to pay those debits. Why should those people pay 5 per cent. more on their gas bills when they cannot afford those bills anyway? That is a form of direct social dumping.
  Other consequences of the Bill worry me a great deal. The obligation to supply is defined in statutory form in section 10(1) of the Gas Act 1986. However, that obligation has been weakened. It has been removed from the new Bill. TransCo simply has an obligation to connect a premises to the network. It no longer has an obligation to supply. It has been said—and I have no doubt about this—that the obligation to supply is in the licence. However, that weakens the obligation. The obligation should be in the legislation where it can be democratically accountable. It should not be in a licence or left to the regulator to police.
  Similarly, the obligation to publish prices has been weakened. That provision was contained in section 14(1) of the Gas Act 1986. The Bill deletes that requirement. Why does it do that? That obligation is weakened and it is transferred into the licence. I do not believe that that is an adequate safeguard.
  The obligation not to show undue preference or discrimination when setting prices has been weakened. That obligation was also contained in section 14 of the 1986 Act and it is another derogation to the licence and to the regulator. That undermines democratic accountability. Those are warning signals that social dumping will be institutionalised as part of the new competitive regime.
  Wales, in particular, will lose out. As it is far away from the points where gas is beached on the east coast, according to British Gas, charges could rise by up to 8 per cent. above those on the east coast. In addition, because Wales has many more low-income households than in the rest of the United Kingdom, social dumping will hit the people of Wales much harder.
  Proportionately, half the number of people in Wales are on direct debit in comparison with elsewhere in the United Kingdom. Many more cannot be on direct debit because Wales is the lowest income area of Britain. As a result of the 5 per cent. extra through not benefiting from direct debit; the 8 per cent. extra to pay for gas to be transported from the east coast; and differential pricing, which could be as high as 12 per cent., and which will open up between low users and rich users, people in Wales could pay 25 per cent. more than people elsewhere in Britain. Why should the people of Wales suffer simply because of their geography?
  I want to finish—[HON. MEMBERS: "Hear, hear."] I am grateful for the encouragement from the Opposition Front Bench. My major strategic criticism of the Bill is that it does not create a level playing field for competition. There is no reciprocity. British Gas has to compete with many foreign-owned suppliers and companies, when it cannot compete in Europe, where there is no reciprocal
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  opportunity to enter European markets. It is having to compete with European companies such as Shell, Elf, Total, Statoil and Norsk Hydro, which have access to our markets while there is no reciprocity for us to have access to their markets.
  British Gas is planning to invest up to £2 billion internationally over the next five or six years. It is in a very important market as one of the big international global players. If it is forced continually to fight off competition in its own back yard, it will be prevented from being a big player, and Britain will lose out strategically and economically to companies in Europe, America and elsewhere, which are coming in on much more favourable terms. For all those reasons, I believe that the Bill is the last spasm of a failed Thatcherism and I am totally opposed to it.
  9.3 pm
  Mr. Nigel Evans: I have enjoyed many of the speeches this evening, but I did not enjoy the speech by the hon. Member for Neath (Mr. Hain). The hon. Gentleman—a former leader of the Young Liberals—has changed his politics once by moving leftwards, and no doubt he can change them again. I enjoyed the speech of the hon. Member for Dagenham (Ms Church), but not as much as she appeared to enjoy it herself. The hon. Lady was extremely witty, but if she cannot take her speech seriously, I do not see how she can expect the rest of the House to do so.
  The message that we are getting loud and clear from the Labour party is that it is in favour of competition, but not the Government's sort of competition. As the Labour party experiences the death of clause IV and grieves over the sad departure of a loved one, it is finding that the vacuum created is rather difficult to fill. The Labour party cannot quite embrace privatisation and full competition because it has been weaned on state control, which is ingrained in its soul.
  There is no doubt that if Labour forms the next Government, there will be far more state control than there is at present. The golden share will be held on behalf of the Government and in the interests of the unions, and certainly not in the interests of the consumers. We are seeing the sequel to clause IV, but—as with many sequels—it does not stand up to what went before. The Labour party's message is that it has principles, but if one does not like them, it has other principles.
  The only thing worse than a monopoly is a state monopoly. The Government want to introduce competition because it is good for the consumer. The scheme has started with 500,000 consumers and will be extended to 2 million before all 18 million consumers benefit from the extension of competition in the delivery of gas to all consumers. Competition benefits many people in industry, and gas is currently being supplied to 60 per cent. of businesses by companies other than British Gas.
  As I said during an intervention on the hon. Member for Dagenham, we have heard the Labour party's fears on privatisation and competition before, and British Telecom was the prime example. BT now has competitors such as Mercury and many other cable operators. In my area in the north-west, Nynex is investing more than £1.8 billion to provide cable entertainment and telephony in direct competition with British Telecom.

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  Since privatisation, BT has invested some £22 billion in the telecommunications market, and that has come in the face of competition with cable operators, which are now putting 50,000 people a month on to their systems. That is the sort of competition we want. Thanks to that competition in the telecommunications market, prices have fallen and far more people are benefiting from that. The hon. Member for Dagenham talked about constituents who could not afford to get on to the telephone system.
  Ms Church: Do not laugh.
  Mr. Evans: I am not laughing. There have always been people who have not been on the telephone system for one reason or another, but—thanks to privatisation and competition within the telephone market—there are far more public telephone boxes that those people can use than was ever the case before, and far more of those telephones are working than ever before.
  We have also heard the argument that many people who are low users of telephones might find that their charges will go up. However, quite the opposite has occurred and low users are now getting rebates. That is not a result of Government legislation, but because it is in the interests of BT to do that.
  With regard to the payment of gas bills, I live in a rural area and there are many post offices in villages there. I am delighted that people will now have the opportunity to go to those post offices to pay their gas bills at no charge to them. That will be a shot in the arm for post offices across the country, including those in the constituency of the hon. Member for Banff and Buchan (Mr. Salmond).
  There has been tremendous downward pressure on prices within British Gas. Analysts have predicted that there will be a further fall of about 10 per cent. in addition to the 20 per cent. that we have already seen. Prices to industrial users have fallen by between 10 and 15 per cent. since competition was introduced. So I look forward to further falls in gas prices for my consumers.
  We have heard the old chestnut about a 5 per cent. discount being given to people who can afford to pay by direct debit. Opposition Members say how terrible that is because it is done at the expense of everyone else. Yet British Gas plans to introduce discounts for people who pay promptly in cash or by cheque. That has to be welcomed. Some people try to delay paying their gas bill, electricity bill or any other bill until the last possible moment. I believe that people who take the time and trouble to pay promptly ought to be given every incentive to do so and should benefit from doing so. I see nothing wrong with that whatever.
  We have heard a catalogue of scare stories from Opposition Members on various things including safety standards and essential safeguards. Yet those matters are covered in the Bill. We have heard again about cherry picking, but we know that the licence conditions will be sufficient to ensure that cherry picking does not take place. As someone who represents a rural area, I welcome that. I want to ensure that everyone benefits from competition. We shall see that in the pilot in the south-west.
  We have also heard that the disabled and the blind will lose out under the Bill, even though they have been told that that will not be the case. It was suggested that there
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  should be one number—perhaps 888—for people who have gas leaks or fears about electricity. It would be a good idea if they could dial one number from a telephone. I hope that that will be examined more carefully.
  The Labour party talked about cherry picking this evening. The cherry picking in which Labour Members have been involved is picking on Cedric Brown, share options and directors' pay. It is the worst case of the politics of envy that I have seen in a long time. Irrespective of the conclusions of the Greenbury committee, if a Labour Government were elected, they would no doubt act on share options and directors' pay. That can be seen clearly as a diversion from the other cherry picking that they would do. Not only the people at the top of the premier league, but people in division one, division two, division three and all the lower divisions would suffer. A Labour Government would pick on anyone and everyone because they would try to implement a massive programme and would need extra money to pay for it.
  We need profits in our companies in Britain because we need the investment that will be made with those profits. If the Labour party sees itself forming a future Labour Government and hitting companies that make profits, it must also accept that it will hit essential investments necessary for those companies to grow, flourish, go into the world market and compete.
  The Bill will benefit British companies. It will certainly benefit gas suppliers that wish to compete with British Gas. I fundamentally believe that it will benefit the consumers. We are here this evening to protect the consumers and promote their interests. I believe that the Bill will do exactly that.
  9.13 pm
  Mr. Andrew F. Bennett: I have been surprised by the debate. I was disappointed by Conservative Members, who spent more time in a debate on the Gas Bill speaking about telephones and what had happened in the telecommunications industry than they did on comparing what had happened in the gas industry before privatisation and since. Much of the success of British Gas since privatisation has been built on the skills that people learnt while the industry was still nationalised. The emphasis that the nationalised British Gas placed on training and skills for the work force has benefited the company a great deal.
  My main disappointment with the debate is that no reference has been made by Conservative Members and very little, I am afraid, by Opposition Members to the environmental consequences of the Bill. The Order Paper tags up the fact that the reports on energy conservation by the Select Committee on the Environment are relevant to this debate, and I had hoped that the Minister might mention that subject in his reply, but the leaked version that was circulating earlier did not seem to contain much concern for energy conservation.
  The Environment Select Committee, of which I was then a member, under the chairmanship of the hon. Member for Hertfordshire, West (Mr. Jones), carried out a very useful survey and report for the House. We followed it up with further inquiries into energy conservation. It is essential that the Government meet their Rio commitments, but, for all our constituents, it also makes good sense to save energy in the home, in industry and in offices.

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  The idea that the only thing that matters at the moment is the price of gas is a major failure. The issue has to be considered in a much wider context. It is much more important for the country and for many people that we consider the price of gas over a period of time. The dash for gas by the electricity generators has not been in the country's long-term interests. It may mean that electricity prices have come down, but it has done a great deal of damage to the coal industry and to people who make mining engineering equipment.
  If one brings the price down further and further, one certainly makes it harder to encourage alternative forms of energy production—certainly the renewable forms that might be far better for the long-term interests of the country. It also affects exploration.
  We should not forget the fundamental fact that natural gas is a finite resource. If we use it irresponsibly now, future generations will not be able to use it. I know all the arguments. For the past 20 years, it has been said that the supply will eventually run out, but as fast as people have been saying that, new discoveries have been made. Because it is a finite resource, it will run out in the end. The hope is that, by the time that it starts to run out, alternatives will have been found, but as there is no total logic that says that the two will coincide, it would merely be prudent for us to try to reduce the amount of energy that we waste. It would certainly be good for the environment if we were to do so.
  I remind the House that one of the most severe jolts to British industry occurred with the sudden hike in oil prices in the early 1970s. Although I cannot imagine circumstances in which there would be a sudden hike of the same dimensions in the price of natural gas, it is irresponsible to go on consuming natural gas so wastefully. It is important that we deal with the problem and, sadly, the Bill is not an attempt to do that.
  Rio required a major reduction in carbon dioxide emissions. Originally, the Government estimated that the Energy Saving Trust should reduce carbon dioxide emissions by 2.5 million tonnes. Last week, the Secretary of State for the Environment revised that figure downwards on the basis that, because of the way in which energy is being generated, it is not necessary to make quite such a big saving. He is still looking for a reduction in the region of 1.3 million tonnes by the year 2000, however, and if that is to be achieved, there must be some money for energy conservation. So far, the Government have not come up with a mechanism for paying for that. Originally, it was hoped that some of the money would come from the gas industry, but the new regulator stepped in and virtually vetoed that.
  The Government are now committed to competition. Whereas electricity consumers will pay about £6 a year towards energy conservation measures, gas consumers will pay virtually nothing. The Government should certainly have taken the opportunity provided by the Bill to propose some mechanism for making the Energy Saving Trust work.
  If the regulator must simply obey the law and the law is tightly defined, that is a useful role for a regulator but not very important. The Government say that they want to give the regulator a political role and it is clear that, over the past few years, the regulator has made political decisions. I simply argue that, if it is a political role, it should be exercised by a Minister accountable to this House, not by someone at second hand from the House.
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  Earlier in the debate, the President of the Board of Trade said that if we dealt with the benefits that were going to the top executives in British Gas, gas bills would be reduced by only 50p per consumer. If many of my constituents could have the 50p per consumer being squandered by those at the top of the gas industry—the same applies to the other privatised industries—it would make a considerable difference to their expenditure.
  Finally, I regret that the Bill makes no reference to the gas industry's environmental responsibilities. The only reference that it makes is to pipes. I gather that that puts the industry on the same footing as the electricity industry, which is responsible for pylons. The gas industry should have a far wider environmental responsibility and should certainly be responsible for conserving supplies of natural gas, which will ultimately run out.
  9.20 pm
  Mr. Martin O'Neill: The reasoned amendment in my name and that of my right hon. Friends is based on the assumption that we oppose a private monopoly. We are willing to have competition because the record of British Gas is not sound enough to merit our continued support.
  When this issue came before the Monopolies and Mergers Commission for consideration some time ago, we argued that British Gas should be allowed to operate in its present form because it was a world-class company, and that it was entitled to have in the United Kingdom a base of a size that enabled it to work extensively abroad. We still hold that view and, therefore, do not oppose clause 5, which the hon. Member for Banff and Buchan (Mr. Salmond) used as an excuse for opposing the Bill in principle. British Gas is a natural monopoly, but it is currently subject to close regulatory processes, Chinese walls and the threat of being split up if it does not operate as a single body.
  Mr. Salmond: I do not necessarily expect the hon. Gentleman to share my principles. He seems to have none of his own and seems to be about to recommend to his hon. Friends that they first vote to decline to give the Bill a Second Reading and then abstain on a subsequent vote when the question of Second Reading is put to the test.
  Mr. O'Neill: The hon. Gentleman clearly does not take too much time paying attention to the procedures of the House, as he spends most of his time outside the Chamber. The whole point of tabling a reasoned amendment is that we do not oppose the principle of the Bill. If the hon. Gentleman does not understand that fundamental procedural point, he has some learning still to do. We believe that British Gas's role in the domestic market should be opened up to a degree of competition.
  I have already referred to the MMC's 1993 report, in which it said:
  "We recognise that, while introduction of competition may well result in a reduction in the overall level of prices, some groups may be worse off'.
  Our amendment seeks to minimise that deleterious effect.
  Several groups are vulnerable. This has been an effective and wide-ranging debate. While we may not have agreed with everything said by Conservative Members, a number of their speeches were uncharacteristically thoughtful. On cherry picking and social dumping, my hon. Friend the Member for Neath

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  (Mr. Hain) said that, as the Institute for Fiscal Studies pointed out in its report of January last year, the average weekly wage in Wales is some £223, whereas in the south of England it is some £290. Even if we have uniform pricing, some areas will experience considerable disadvantage. We shall have to wait to see whether competition can bring down prices in areas such as south Wales to make the new entrants into the business that much more attractive to existing consumers. That is hard to envisage because of distances and consumption.
  Some of the evidence given by representatives of British Gas to the MMC has been undermined by the introduction of the direct debit discount. British Gas was able to introduce its own form of cherry-picking in advance of competition taking place. That was a crass public relations error.
  The discount was a gross insult to the poorer consumers, many of whom do not have bank accounts. Many of them do not have direct debit facilities. Over the past few months a sizeable television campaign has been waged by the banks and others in support of the direct debit system because many people are still sufficiently unsure of their relationships with banks not to enter into direct debit agreements. British Gas's opportunism undermines its claims about cherry-picking.
  Mr. Duncan: Does the hon. Gentleman accept that if a company such as British Gas improves the credit performance of its customers and attracts as many people who can give security of payment as possible, the ensuing benefits will bear on all consumers through the greater efficiency that will have been achieved?
  Mr. O'Neill: British Gas could similarly have benefited small consumers who pay regularly and on time. In fact, British Gas has been able to pull a stroke that may be difficult for its competitors to follow in securing access to 19,000 post offices. It remains to be seen whether there will be that number of post offices when the Bill is enacted and begins to be implemented. We shall worry about that when the time comes. If British Gas had really wanted to be of assistance, it would have introduced the discount at the earliest opportunity. That would have prevented yet another PR boob.
  Our concerns are not limited to payment. The starting point must be safety. Of all energy sources, gas is potentially the most dangerous. My hon. Friend the Member for Wallsend (Mr. Byers) talked about the work that is done at Killingworth and throughout the country by trained BG staff. Many of those who are now responsible for installation, maintenance and safety work are Corgi employees. They are not employed by British Gas. Under the Corgi scheme, contractors are registered. There is no requirement on the contractors to secure properly qualified staff.
  Many gas fitters who are unemployed as a result of redundancies are available to be recruited. It is to be hoped that the men will get jobs elsewhere. It must be understood, however, that many of the installation and maintenance contracts for gas consumers are being undertaken by Corgi contractors who do not adhere to proper safety standards. They are not capable of doing so because they do not have properly trained staff in the relevant disciplines.
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  As far as we are concerned, that is an anxiety, but we recognise that the Government have taken it into account in their requirement that the Health and Safety Executive makes proper provision for it. The only problem is that the Government have not provided the HSE with the resources to do so. Members of the HSE—the Trades Union Congress and the GMB—who are the people responsible for picking up the pieces when something goes wrong with the safety arrangements for British Gas, have expressed great disquiet about the funding and resourcing of the work for which the HSE will now be responsible, and I would hope—
  Mr. Duncan: Will the hon. Gentleman give way?
  Mr. O'Neill: No, I am sorry. The hon. Gentleman took up a considerable amount of the House's time—longer than I shall be able to speak this evening.
  Perhaps when he replies, the Minister will be able to tell us about the financial provisions that the Government will make available to the HSE to carry out its work, because one of the areas about which there is considerable disquiet is in the Bill's consideration of financial matters generally. It is not enough to say that provisions should be made to take out a financial bond or make other arrangements to the director general's satisfaction to cover the financial costs of suppliers—basically, having to cover the cost when a supplier goes bust. It is our view that leaving it to the discretion of the director general is not ideal, and we shall table amendments to secure that companies that wish to enter are required to take out bonds.
  We know that there is a certain shyness, or diffidence, on the part of the director general to require people to put down money. She does not like the idea of handling other people's money, as we found in the debate on the E-factor levy, but we believe that the provision of a commodity as substantial and potentially dangerous as gas should be undertaken only by people with the appropriate financial resources, sufficient concern for safety and a degree of security in their financial activities, which will enable some form of guarantee to be part and parcel of the package. Something along the lines of the air tour operator's licence, which is required by people involved in the travel business, would be of assistance.
  We want greater protection for the consumer. It was widely predicted that the director general wanted to remove the Gas Consumers Council. I am pleased that she was not successful. We believe that the role of the GCC as a separate body, apart from both the Government and the regulator, is important. We want it to continue in its present role. We want the statutory responsibility for consumer protection, which is contained in the Gas Act 1986, continued in the proposed legislation. We do not think that discretionary licence control is the best way of doing that, because at the moment, as I understand from the memorandum that has been made available by the Minister—we are grateful for it at this stage and look forward to receiving the licences at his earliest convenience—the discretionary provisions that are left in the hands of the director general are insufficient. The GCC has echoed that and says that the provisions that are made in the 1986 Act, as amended by the Competition and Service (Utilities) Act 1992, provide an obligation to supply, to publish prices, and not to show undue preference or discrimination between customers. Those principles should be enshrined in the proposed legislation.

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  Reference has been repeatedly made this evening to the standard of service, particularly to the old and disabled, and few people will forget the contribution of my hon. Friend the Member for Dagenham (Ms Church), who went out and saw the work of the properly qualified home service advisers. We can joke about the passion with which she made her point, but it was a vital point. She said that elderly people who were infirm and dependent on specialist advice and equipment were entitled to receive those services in perpetuity.
  As has been pointed out, British Gas—which some defend, describing it as the only provider of good services—has already sacked some 61 home service advisers this year. They were graduates with proper technical qualifications, capable of arguing their case with their superiors. Such services for the old and disabled must be central.
  Some organisations, including the Consumers Association, have expressed a degree of cynicism about United Gas's claim that the standard of service would be enhanced—"the thirty-nine steps", as United Gas described the process. It is suspected that United Gas said that in the certain knowledge that the consumers who would supposedly benefit from such protection would be discouraged from doing business with it, thus imposing an additional burden on British Gas. I do not know whether that will happen, but we shall examine the issue carefully in Committee.
  My hon. Friend the Member for Denton and Reddish (Mr. Bennett), who is a member of the Select Committee on the Environment, mentioned the absence of proper attention to the environment in the Bill. We want more than a token gesture in regard to pipelines; we want to consider the whole question of energy efficiency. It seems that what was crystal clear in the days of James McKinnon has become a grey area; certainly it is well known, and has been recorded in the minutes of several Select Committees, that Mrs. Spottiswoode is not enthusiastic about the E-factor. She does not want a levy to provide for effective energy-efficiency advice.
  Mrs. Spottiswoode has seen fit to approve only a handful of schemes suggested by the Energy Saving Trust, the body through which such advice would be channelled. However, Lord Moore—a former Secretary of State for Energy, now chair of the Energy Saving Trust—has said that the aims of the Rio summit should be incorporated in legislation, and that there should be a statutory requirement to provide for energy efficiency. We shall return to that in Committee.
  Investment in energy efficiency, however, is of secondary importance to investment in research and development. British Gas has invested in R and D for many years. One reason for our claim that we want British Gas to be a major player not only in the United Kingdom but throughout the world is that it would sustain its investment in the UK as well as abroad.
  Representations by British Gas to the Select Committee on Trade and Industry suggested that the company should not be subject to special restrictions on commercial freedom to restructure if that would not be in the interests of the shareholders. We believe that such restrictions should apply if they will require British Gas to invest in the most modern and efficient methods of gas provision—if for no other reason, because, as no one has disputed, British Gas will remain the major gas supplier for some time. As for the other suppliers, there are the regional
  652
  electricity companies, whose records leave something to be desired in some areas. Seven are linked to Utilicorp alone, and another group is linked to other major oil and gas companies. We should certainly like greater attention to be paid to the activities of those companies. There should be greater provision for the regulator or the legislation should enshrine provisions to ensure that the executive salaries of directors are given proper attention.
  Mr. Gary Streeter: Will the hon. Gentleman give way?
  Mr. O'Neill: I do not have time to give way. The hon. Gentleman has not been here for much of the debate.
  Last week Mr. Giordano told the Select Committee on Employment that he was happy to have full transparency either through a change in stock exchange rules or by the introduction of a new law. This is an opportunity for the House to introduce such legislation. Mr. Giordano is not against it, we want it, and we cannot understand why Conservative Members should turn their backs on it. If it is good enough for the chairman of British Gas it should be good enough for the Government. Such payments are certainly distasteful to the Prime Minister, but we are not sure about the attitude of the President of the Board of Trade.
  Before long pilot areas will be in operation. We are concerned that the trials will not just be about operational and technical efficiency but will be used to monitor the practices and policies and the advertising techniques of the companies that want to challenge British Gas. As the Select Committee said, during the transitional period we should be able to look at all aspects of the legislation. We welcome that period and hope that before long we shall be able to review what has taken place.
  The Bill marks a change in the British consumers' opportunity to buy gas. British Gas should not have a monopoly because that is not necessary. However, if that monopoly is broken due protection should be provided and it should be enshrined in the legislation and not in the licences. Protection should clearly be provided for the elderly and the infirm, it should relate to the duty to supply and it should require all the companies to publish their tariffs so as to make clear what is happening.
  We appreciate that the legislation could place a tremendous burden on the regulatory process, which has much to answer for. In the past 10 days we have seen its inadequacy when applied to electricity, and in the past few months there have been inconsistencies in application between one regulator and another in the same area. The Bill should correct many of the shortcomings. There will be opportunities to debate these matters in Committee, where our amendment will provide an opportunity to improve legislation that leaves a lot to be desired. We are not prepared to support it in its present form and shall look to see what we can achieve in Committee and on Third Reading.
  9.42 pm
  The Minister for Energy and Industry (Mr. Tim Eggar): This has been an interesting debate on what is essentially a technical Bill. Hon. Members who have been here for the debate will realise that it had a detail which is normally associated with Committee discussions. Many of the issues that have been raised can be debated in Committee.

  653
  I listened to the hon. Member for Clackmannan (Mr. O'Neill) with considerable interest because on 27 February I received a letter from Clydebank district council. It was in response to my letter asking local authorities whether they wanted their districts to be included in the pilot areas for competition. Clydebank council said:
  "(a) Clydebank should be included in the first or at worst second batch of premises relating to the extension of competition."
  In other words, Clydebank wanted the benefits of competition that flow from this Bill—a clear and, one would have thought, unequivocal contribution. But it goes on:
  "(b) Your Department be reminded of the policy of this district council in being against the privatisation of the gas industry."
  In other words, the council wanted the benefits of competition but not the implications of that competition—
  Sir Donald Thompson: Is it a Liberal council?
  Mr. Eggar: My hon. Friend has clearly not been here for this debate—
  Madam Speaker: Order.
  Mr. Eggar: I am sorry, Madam Speaker, I was responding to an intervention by my hon. Friend—
  Madam Speaker: Order. In any event, the Minister should be addressing the House.
  Mr. Eggar: I apologise. I was trying to respond to a sedentary intervention from behind.
  Madam Speaker: Order. Sedentary remarks are not interventions.
  Mr. Eggar: I heard something behind me, Madam Speaker. My hon. Friend said that Clydebank council sounded like a Liberal council. He was obviously not here to witness a great event: the hon. Member for North Devon (Mr. Harvey) came down on our side. The Liberals are going to join us in the Division to support the Bill. It was the hon. Member for Clackmannan who sat on the fence. He was in favour of this and against that. I have watched with considerable interest his struggle over this Bill inside the Labour party over the past few months. It has been a battle between neanderthal man, ably represented in this debate by the hon. Member for Dagenham (Ms Church), the old believer in clause IV, supported at one stage by the hon. Member for Neath (Mr. Hain), and modern Labour party man, as represented by the hon. Member for Clackmannan.
  In October the hon. Gentleman made a courageous speech asking the Government to legislate as quickly as possible to introduce competition to the gas market. It was an important and thoughtful speech, a brave attempt to get the Labour party to seize the high ground in favour of competition. It was especially brave because he knew perfectly well that his hon. Friend the Member for Livingston (Mr. Cook) was in the
  654
  neanderthal camp—against competition and the privatisation of British Gas. He represented the other view of Clydebank council.
  Of course this was before the hon. Member for Livingston sold his conscience for the shadow Foreign Secretaryship. Greater love hath no man than that he give up 75 years of Labour party history for promotion, which is what the hon. Gentleman did when he turned turtle and opposed his old position on the retention of clause IV.
  Dr. Reid rose—
  Mr. Eggar: I shall give way to the hon. Gentleman because I have a lot of sympathy with him; I know that he is engaged in a fierce battle with the Transport and General Workers Union, and he needs all the publicity he can get.
  Dr. Reid: Yes, I have the guts to make a decision. Let us see what the Minister's guts are like tonight. Will he make a courageous decision? Does he support the faction, led by the Prime Minister, in the Cabinet that finds excessive pay and share options distasteful and needing regulation; or the faction led by his immediate boss at the Board of Trade, who is loth even to investigate these obscene pay increases and who regards any such investigation as unwarranted interference in the market?
  Mr. Eggar: That intervention will not help the hon. Gentleman with his brothers in the Transport and General Workers Union one bit. He will have to fight that battle in his constituency. I should like to deal with the reasoned amendment that has been tabled by the Opposition. It also refers to top people's pay in the gas industry. I shall pick up the hon. Gentleman's points at that stage.
  The reasoned amendment states that the Bill
  "fails to provide effective safeguards for consumers".
  Mr. Enright rose—
  Mr. Eggar: Opposition Members, including the hon. Gentleman, should listen to what the Consumers Association says about the Bill. It states:
  "The Bill should lead to all consumers benefiting from lower prices, improved service standards and a wider variety of service packages within the gas market from which to choose."
  The Director General of the Gas Consumers Council, which is preserved in the Bill, said:
  "The Council welcomes the Gas Bill as an imaginative solution to the difficulties of fast but orderly transition from a monopoly to a competitive market."
  So the representatives of the consumer organisations support the Bill. We have dealt with every one of their concerns in the memorandum. If not, we will do so in the licence.
  The reasoned amendment goes on to state that the Bill is damaging to many sections of the population and that it singles out the elderly and people living in the south-west. It appears that Opposition spokesmen are not aware of those people's views. The hon. Member for North Devon, my hon. Friend the Member for Falmouth and Camborne (Mr. Coe) and GCC South-West have made clear that they welcome the fact that the south-west is the pilot area for the introduction.

  655
  So why does the reasoned amendment say that the Bill will harm the people of the south-west? That is not their view.
  The amendment draws attention to the position of pensioners, the disabled and the blind. The fact is that all those groups will have their present standards of service preserved, maintained and, if appropriate, improved. I say to the hon. Member for Dagenham that an obligation will be placed on alternative gas suppliers to provide fitments for gas appliances and cookers, and other such services to customers.
  Mr. Nigel Griffiths: I do not believe the Minister.
  Mr. Eggar: I do not know whether you heard that sedentary intervention, Madam Deputy Speaker. The hon. Gentleman said that he did not believe me. I made a clear statement of Government policy from the Dispatch Box. [Interruption.]
  Madam Speaker: Order. If the hon. Member for Edinburgh, South (Mr. Griffiths) has something to say, he should stand up and try to make an intervention. If not, it would be better if he kept quiet until he is allowed to intervene.
  Mr. Eggar: That was typical of the hon. Gentleman. He does not bother to check his facts. He mutters into his beer belly—[Interruption.] I am sorry. I have obviously maligned him. It was just the angle of the light. He has not got the guts to come to the Dispatch Box and to repeat his assertions because he knows that he has not done his research. [Interruption.] That would add to his beer belly.
  The hon. Gentleman for Clackmannan referred to health and safety. I would like to welcome the Health and Safety Commission's work. The hon. Gentleman, who sat with me on the Committee that considered the Coal Industry Act, knows that I regard safety matters as paramount. The commission has identified the need for additional resources to underpin the new regime. The hon. Gentleman asked me, not unreasonably, about funding. I am discussing that matter with my Government colleagues, but there is no need at present for specific provision in the Bill for additional funding. I assure the hon. Gentleman that adequate resources will be made available.
  Mr. O'Neill rose—
  Mr. Eggar: If the hon. Gentleman will forgive me, he slightly overran his time.
  The hon. Member for Clackmannan asked also about financial surety. We are determined to give consumers the assurance that they require, that the supply of gas to their homes will be maintained. Suppliers will have to satisfy the director general that they are financially sound. We intend also that suppliers will take out a bond—in effect, an insurance arrangement—to help maintain gas supply to consumers. In addition, the director general will have the ability to nominate a supplier to step in, as a last resort if another supplier fails and the market does not deal with the situation.
  Mr. Peter Thurnham: Will my hon. Friend bear in mind the concerns of small traders—such as my constituent, Mr. Eaton, whose
  656
  business suffered from street works outside his shop? He was able to obtain compensation from North West Water but not, surprisingly, from British Gas.
  Mr. Eggar: My hon. Friend has seen me about that complex case. I am studying and considering the various conflicting rights and obligations, and I assure my hon. Friend that I will give him another opportunity to discuss that matter with me.
  As to regional electricity companies, having listened to the right hon. Member for Copeland (Dr. Cunningham) and to the hon. Member for Clackmannan, I remain unsure of the Opposition's concern. If it is lack of competition between suppliers of electricity and of gas, that can be dealt with through the Monopolies and Mergers Commission and normal competition policy. Other aspects can no doubt be covered in Committee.
  The hon. Member for Denton and Reddish (Mr. Bennett) and my hon. Friend the Member for Harrogate (Mr. Banks) spoke of the need for energy efficiency. The Bill will increase the incentives for gas supply companies to offer consumers modern, energy-efficient gas installations—so in total, less gas will be consumed. I agree with my hon. Friend the Member for Harrogate that is likely to be an attractive selling point to many companies.
  The Opposition believe that the regulator should in some way set senior employees' salaries.
  Mr. Enright: Will the Minister give way now?
  Mr. Eggar: No. I am sorry.
  My right hon. Friend the Prime Minister said that legislation will be considered in the light of the Greenbury committee. The suggestion that consumer price cuts should depend on the regulator operating, in effect, a top peoples' pay policy, shows a naive misunderstanding of the regulatory system and of basic mathematics.
  If one takes the figures of the hon. Member for Dunfermline, East (Mr. Brown), even if the regulator returned to consumers all of Mr. Cedric Brown's 28 per cent. increase, that would amount to less than half of 1p per customer per year. The regulatory system sets prices—it does not attempt to control costs, which is for British Gas. If it can reduce its costs below those anticipated, it can increase profits and its competitiveness.
  In short, by their amendment Opposition Members are proposing a pay policy through the regulator—not because that policy makes sense but because Labour, as ever, revels in the politics of envy. That assertion is all the more real because of what the right hon. Member for Copeland said in response to an intervention—
  Mr. O'Neill rose—
  Question put, That the amendment be made:—
  The House divided: Ayes 244, Noes 318.

  Division No. 99]

  [9.59 pm

  AYES

  Abbott, Ms Diane

  Anderson, Ms Janet (Ros'dale)

  Adams, Mrs Irene

  Armstrong, Hilary

  Anger, Nick

  Ashton, Joe

  Allen, Graham

  Austin-Walker, John

  Anderson, Donald (Swansea E)

  Banks, Tony (Newham NW)

  657

  Barnes, Harry

  George, Bruce

  Barron, Kevin

  Gerrard, Neil

  Battle, John

  Godman, Dr Norman A

  Bayley, Hugh

  Godsiff, Roger

  Beckett, Rt Hon Margaret

  Golding, Mrs Llin

  Bell, Stuart

  Gordon, Mildred

  Benn, Rt Hon Tony

  Graham, Thomas

  Bennett, Andrew F

  Grant, Bernie (Tottenham)

  Bermingham, Gerald

  Griffiths, Nigel (Edinburgh S)

  Betts, Clive

  Griffiths, Win (Bridgend)

  Blunkett, David

  Grocott, Bruce

  Boateng, Paul

  Gunnell, John

  Bradley, Keith

  Hain, Peter

  Brown, Gordon (Dunfermline E)

  Hall, Mike

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

  Hanson, David

  Burden, Richard

  Hardy, Peter

  Byers, Stephen

  Harman, Ms Harriet

  Caborn, Richard

  Hattersley, Rt Hon Roy

  Callaghan, Jim

  Henderson, Doug

  Campbell, Mrs Anne (C'bridge)

  Heppell, John

  Campbell, Ronnie (Blyth V)

  Hill, Keith (Streatham)

  Campbell-Savours, D N

  Hinchliffe, David

  Canavan, Dennis

  Hodge, Margaret

  Cann, Jamie

  Hoey, Kate

  Chisholm, Malcolm

  Home Robertson, John

  Church, Judith

  Hoon, Geoffrey

  Clapham, Michael

  Howarth, George (Knowsley North)

  Clark, Dr David (South Shields)

  Hoyle, Doug

  Clarke, Eric (Midlothian)

  Hughes, Kevin (Doncaster N)

  Clarke, Tom (Monklands W)

  Hughes, Robert (Aberdeen N)

  Clelland, David

  Hutton, John

  Clwyd, Mrs Ann

  Illsley, Eric

  Coffey, Ann

  Ingram, Adam

  Cohen, Harry

  Jackson, Glenda (H'stead)

  Connarty, Michael

  Jackson, Helen (Shef'ld, H)

  Cook, Frank (Stockton N)

  Jamieson, David

  Cook, Robin (Livingston)

  Janner, Greville

  Corbett, Robin

  Jones, Barry (Alyn and D'side)

  Corbyn, Jeremy

  Jones, Ieuan Wyn (Ynys Mon)

  Corston, Jean

  Jones, Martyn (Clwyd, SW)

  Cox, Tom

  Jowell, Tessa

  Cummings, John

  Kaufman, Rt Hon Gerald

  Cunliffe, Lawrence

  Keen, Alan

  Cunningham, Jim (Covy SE)

  Kennedy, Jane (Lpool Brdgn)

  Cunningham, Rt Hon Dr John

  Khabra, Piara S

  Dafis, Cynog

  Kilfoyle, Peter

  Darling, Alistair

  Lestor, Joan (Eccles)

  Davidson, Ian

  Lewis, Terry

  Davies, Bryan (Oldham C'tral)

  Liddell, Mrs Helen

  Davies, Rt Hon Denzil (Llanelli)

  Litherland, Robert

  Davies, Ron (Caerphilly)

  Livingstone, Ken

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

  Lloyd, Tony (Stretford)

  Denham, John

  Llwyd, Elfyn

  Dewar, Donald

  McAllion, John

  Dixon, Don

  McAvoy, Thomas

  Dobson, Frank

  McCartney, Ian

  Donohoe, Brian H

  McCrea, The Reverend William

  Dowd, Jim

  Macdonald, Calum

  Dunnachie, Jimmy

  McFall, John

  Dunwoody, Mrs Gwyneth

  McKelvey, William

  Eagle, Ms Angela

  McLeish, Henry

  Eastham, Ken

  McMaster, Gordon

  Enright, Derek

  McNamara, Kevin

  Evans, John (St Helens N)

  MacShane, Denis

  Ewing, Mrs Margaret

  McWilliam, John

  Fatchett, Derek

  Madden, Max

  Field, Frank (Birkenhead)

  Mahon, Alice

  Fisher, Mark

  Mendelson, Peter

  Flynn, Paul

  Marshall, David (Shettleston)

  Foster, Rt Hon Derek

  Martin, Michael J (Springburn)

  Foulkes, George

  Martlew, Eric

  Fraser, John

  Maxton, John

  Fyfe, Maria

  Meacher, Michael

  Galloway, George

  Meale, Alan

  Gapes, Mike

  Michael, Alun

  Garrett, John

  Michie, Bill (Sheffield Heeley)

  658

  Milburn, Alan

  Salmond, Alex

  Miller, Andrew

  Sedgemore, Brian

  Mitchell, Austin (Gt Grimsby)

  Sheerman, Barry

  Moonie, Dr Lewis

  Shore, Rt Hon Peter

  Morgan, Rhodri

  Short, Clare

  Morley, Elliot

  Skinner, Dennis

  Morris, Rt Hon Alfred (Wy'nshawe)

  Smith, Andrew (Oxford E)

  Morris, Estelle (B'ham Yardley)

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

  Morris, Rt Hon John (Aberavon)

  Smith, Llew (Blaenau Gwent)

  Mudie, George

  Snape, Peter

  Mullin, Chris

  Soley, Clive

  Murphy, Paul

  Spearing, Nigel

  Oakes, Rt Hon Gordon

  Spellar, John

  O'Brien, Mike (N W'kshire)

  Squire, Rachel (Dunfermline W)

  O'Brien, William (Normanton)

  Steinberg, Gerry

  O'Hara, Edward

  Stevenson, George

  Olner, Bill

  Stott, Roger

  O'Neill, Martin

  Strang, Dr. Gavin

  Orme, Rt Hon Stanley

  Straw, Jack

  Patchett, Terry

  Sutcliffe, Gerry

  Pearson, Ian

  Taylor, Mrs Ann (Dewsbury)

  Pendry, Tom

  Thompson, Jack (Wansbeck)

  Pickthall, Colin

  Timms, Stephen

  Pike, Peter L

  Tipping, Paddy

  Pope, Greg

  Touhig, Don

  Powell, Ray (Ogmore)

  Turner, Dennis

  Prentice, Gordon (Pendle)

  Walker, Rt Hon Sir Harold

  Prescott, Rt Hon John

  Wardell, Gareth (Gower)

  Primarolo, Dawn

  Wareing, Robert N

  Purchase, Ken

  Watson, Mike

  Quin, Ms Joyce

  Wicks, Malcolm

  Radice, Giles

  Wigley, Dafydd

  Randall, Stuart

  Williams, Rt Hon Alan (Sw'n W)

  Raynsford, Nick

  Wilson, Brian

  Reid, Dr John

  Wise, Audrey

  Robertson, George (Hamilton)

  Worthington, Tony

  Robinson, Geoffrey (Co'try NW)

  Wray, Jimmy

  Roche, Mrs Barbara

  Wright, Dr Tony

  Rogers, Allan

  Young, David (Bolton SE)

  Rocker, Jeff

  Rooney, Terry

  Tellers for the Ayes:

  Rowlands, Ted

  Mr. Jon Owen Jones and

  Ruddock, Joan

  Mr. Joe Benton.

  NOES

  Ainsworth, Peter (East Surrey)

  Bottomley, Peter (Eltham)

  Aitken, Rt Hon Jonathan

  Bowden, Sir Andrew

  Alexander, Richard

  Bowis, John

  Alison, Rt Hon Michael (Selby)

  Boyson, Rt Hon Sir Rhodes

  Allason, Rupert (Torbay)

  Brandreth, Gyles

  Alton, David

  Brazier, Julian

  Amess, David

  Bright, Sir Graham

  Ancram, Michael

  Brooke, Rt Hon Peter

  Arbuthnot, James

  Brown, M (Brigg & Cl'thorpes)

  Arnold, Jacques (Gravesham)

  Browning, Mrs Angela

  Arnold, Sir Thomas (Hazel Grv)

  Bruce, Ian (Dorset)

  Ashby, David

  Budgen, Nicholas

  Ashdown, Rt Hon Paddy

  Burns, Simon

  Atkins, Robert

  Burt, Alistair

  Atkinson, David (Bour'mouth E)

  Butcher, John

  Atkinson, Peter (Hexham)

  Butler, Peter

  Baker, Rt Hon Kenneth (Mole V)

  Butterfill, John

  Baker, Nicholas (North Dorset)

  Campbell, Menzies (Fife NE)

  Baldry, Tony

  Carlile, Alexander (Montgomery)

  Banks, Matthew (Southport)

  Carlisle, John (Luton North)

  Banks, Robert (Harrogate)

  Carlisle, Sir Kenneth (Lincoln)

  Bates, Michael

  Carrington, Matthew

  Beith, Rt Hon A J

  Carttiss, Michael

  Bellingham, Henry

  Cash, William

  Bendall, Vivian

  Channon, Rt Hon Paul

  Beresford, Sir Paul

  Chidgey, David

  Biffen, Rt Hon John

  Clappison, James

  Body, Sir Richard

  Clark, Dr Michael (Rochford)

  Bonsor, Sir Nicholas

  Clarke, Rt Hon Kenneth (Ru'clif)

  Booth, Hartley

  Clifton-Brown, Geoffrey

  Boswell, Tim

  Coe, Sebastian

  659

  Colvin, Michael

  Heseltine, Rt Hon Michael

  Congdon, David

  Hicks, Robert

  Conway, Derek

  Higgins, Rt Hon Sir Terence

  Coombs, Anthony (Wyre For'st)

  Hill, James (Southampton Test)

  Coombs, Simon (Swindon)

  Hogg, Rt Hon Douglas (G'tham)

  Cope, Rt Hon Sir John

  Horam, John

  Cormack, Sir Patrick

  Hordern, Rt Hon Sir Peter

  Couchman, James

  Howard, Rt Hon Michael

  Cran, James

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

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

  Howell, Rt Hon David (G'dford)

  Curry, David (Skipton & Ripon)

  Howell, Sir Ralph (N Norfolk)

  Davies, Quentin (Stamford)

  Hughes, Robert G (Harrow W)

  Davis, David (Boothferry)

  Hughes, Simon (Southwark)

  Day, Stephen

  Hunt, Rt Hon David (Wirral W)

  Deva, Nirj Joseph

  Hunt, Sir John (Ravensbourne)

  Devlin, Tim

  Hunter, Andrew

  Dorrell, Rt Hon Stephen

  Jack, Michael

  Douglas-Hamilton, Lord James

  Jackson, Robert (Wantage)

  Dover, Den

  Jenkin, Bernard

  Duncan, Alan

  Jessel, Toby

  Dunn, Bob

  Johnson Smith, Sir Geoffrey

  Durant, Sir Anthony

  Johnston, Sir Russell

  Eggar, Rt Hon Tim

  Jones, Gwilym (Cardiff N)

  Elletson, Harold

  Jones, Nigel (Cheltenham)

  Emery, Rt Hon Sir Peter

  Jones, Robert B (W Hertfdshr)

  Evans, David (Welwyn Hatfield)

  Jopling, Rt Hon Michael

  Evans, Jonathan (Brecon)

  Kellett-Bowman, Dame Elaine

  Evans, Nigel (Ribble Valley)

  Kennedy, Charles (Ross,C&S)

  Evans, Roger (Monmouth)

  Key, Robert

  Evennett, David

  Kilfedder, Sir James

  Faber, David

  King, Rt Hon Tom

  Fenner, Dame Peggy

  Kirkhope, Timothy

  Field, Barry (Isle of Wight)

  Knapman, Roger

  Fishburn, Dudley

  Knight, Mrs Angela (Erewash)

  Forman, Nigel

  Knight, Greg (Derby N)

  Forsyth, Rt Hon Michael (Stirling)

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

  Forth, Eric

  Knox, Sir David

  Foster, Don (Bath)

  Kynoch, George (Kincardine)

  Fowler, Rt Hon Sir Norman

  Lait, Mrs Jacqui

  Fox, Dr Liam (Woodspring)

  Lang, Rt Hon Ian

  Fox, Sir Marcus (Shipley)

  Lawerence, Sir Ivan

  Freeman, Rt Hon Roger

  Legg, Barry

  French, Douglas

  Leigh, Edward

  Fry, Sir Peter

  Lennox-Boyd, Sir Mark

  Gale, Roger

  Lester, Jim (Broxtowe)

  Gallie, Phil

  Lidington, David

  Gardiner, Sir George

  Lilley, Rt Hon Peter

  Garel-Jones, Rt Hon Tristan

  Lloyd, Rt Hon Sir Peter (Fareham)

  Garnier, Edward

  Lord, Michael

  Gill, Christopher

  Lyell, Rt Hon Sir Nicholas

  Gillan, Cheryl

  Lynne, Ms Liz

  Goodson-Wickes, Dr Charles

  MacGregor, Rt Hon John

  Gorman, Mrs Teresa

  Mackay, Andrew

  Gorst, Sir John

  Maclean, David

  Grant, Sir A (SW Cambs)

  Maclennan, Robert

  Greenway, Harry (Ealing N)

  McLoughlin, Patrick

  Greenway, John (Ryedale)

  McNair-Wilson, Sir Patrick

  Griffiths, Peter (Portsmouth, N)

  Madel, Sir David

  Grylls, Sir Michael

  Maitland, Lady Olga

  Gummer, Rt Hon John Selwyn

  Malone, Gerald

  Hague, William

  Mans, Keith

  Hamilton, Neil (Tatton)

  Marshall, Sir Michael (Arundel)

  Hampson, Dr Keith

  Martin, David (Portsmouth S)

  Hanley, Rt Hon Jeremy

  Mates, Michael

  Hannam, Sir John

  Mayhew, Rt Hon Sir Patrick

  Hargreaves, Andrew

  Merchant, Piers

  Harris, David

  Mills, Iain

  Harvey, Nick

  Mitchell, Andrew (Gedling)

  Haselhurst, Alan

  Mitchell, Sir David (NW Hants)

  Hawkins, Nick

  Moate, Sir Roger

  Hawksley, Warren

  Monro, Sir Hector

  Hayes, Jerry

  Montgomery, Sir Fergus

  Heald, Oliver

  Moss, Malcolm

  Heath, Rt Hon Sir Edward

  Nelson, Anthony

  Heathcoat-Amory, David

  Neubert, Sir Michael

  Hendry, Charles

  Newton, Rt Hon Tony

  660

  Nicholls, Patrick

  Steen, Anthony

  Nicholson, David (Taunton)

  Stephen, Michael

  Nicholson, Emma (Devon West)

  Stem, Michael

  Norris, Steve

  Stewart, Allan

  Onslow, Rt Hon Sir Cranley

  Streeter, Gary

  Oppenheim, Phillip

  Sumberg, David

  Ottaway, Richard

  Sweeney, Walter

  Page, Richard

  Tapsell, Sir Peter

  paice, James

  Taylor, Ian (Esher)

  Patnick, Sir Irvine

  Taylor, John M (Solihull)

  Patten, Rt Hon John

  Taylor, Matthew (Truro)

  Pattie, Rt Hon Sir Geoffrey

  Taylor, Sir Teddy (Southend, E)

  Pawsey, James

  Temple-Morris, Peter

  Peacock, Mrs Elizabeth

  Thompson, Roy

  Pickles, Eric

  Thompson, Sir Donald (C'er V)

  Porter, Barry (Wirral S)

  Thompson, Patrick (Norwich N)

  Porter, David (Waveney)

  Thornton, Sir Malcolm

  Portillo, Rt Hon Michael

  Thurnham, Peter

  Rathbone, Tim

  Townend, John (Bridlington)

  Redwood, Rt Hon John

  Townsend, Cyril D (Bexl'yh'th)

  Rendel, David

  Tracey, Richard

  Renton, Rt Hon Tim

  Tredinnick, David

  Richards, Rod

  Trend, Michael

  Riddick, Graham

  Trotter, Neville

  Rifkind, Rt Hon Malcolm

  Twinn, Dr Ian

  Robathan, Andrew

  Tyler, Paul

  Roberts, Rt Hon Sir Wyn

  Vaughan, Sir Gerard

  Robertson, Raymond (Ab'd'n S)

  Viggers, Peter

  Robinson, Mark (Somerton)

  Waldegrave, Rt Hon William

  Roe, Mrs Marion (Broxbourne)

  Walden, George

  Rowe, Andrew (Mid Kent)

  Walker, Bill (North Tayside)

  Rumbold, Rt Hon Dame Angela

  Wallace, James

  Ryder, Rt Hon Richard

  Waller, Gary

  Sackville, Tom

  Wardle, Charles (Bexhill)

  Scott, Rt Hon Sir Nicholas

  Waterson, Nigel

  Shaw, David (Dover)

  Watts, John

  Shephard, Rt Hon Gillian

  Wells, Bowen

  Shepherd, Colin (Hereford)

  Wheeler, Rt Hon Sir John

  Shepherd, Richard (Aldridge)

  Whitney, Ray

  Shersby, Michael

  Whittingdale, John

  Sims, Roger

  Widdecombe, Ann

  Smith, Sir Dudley (Warwick)

  Wiggin, Sir Jerry

  Smith, Tim (Beaconsfield)

  Willets, David

  Soames, Nicholas

  Wilshire, David

  Speed, Sir Keith

  Winterton, Mrs Ann (Congleton)

  Spencer, Sir Derek

  Winterton, Nicholas (Macc'fld)

  Spicer, Sir James (W Dorset)

  Wolfson, Mark

  Spicer, Michael (S Worcs)

  Wood, Timothy

  Spink, Dr Robert

  Yeo, Tim

  Spring, Richard

  Young, Rt Hon Sir George

  Sproat, Iain

  Squire, Robin (Hornchurch)

  Teller for the Noes:

  Stanley, Rt Hon Sir John

  Mr. David Lightbown and

  Steel, Rt Hon Sir David

  Mr. Sydney Chapman.

  Question accordingly negatived.
  Main Question Put forthwith, Pursuant to Standing Order No. 60 (Amendment on Second or Third Reading):—
  The House divided: Ayes 312, Noes 22.

  Division No.100]

  [10.16 Pm

  AYES

  Ainsworth, Peter (East Surrey)

  Arnold, Jacques (Gravesham)

  Aitken, Rt Hon Jonathan

  Arnold, Sir Thomas (Hazel Grv)

  Alexander, Richard

  Ashby, David

  Alison, Rt Hon Michael (Selby)

  Ashdown, Rt Hon Paddy

  Allason, Rupert (Torbay)

  Atkins, Robert

  Alton, David

  Atkinson, David (Bour'mouth E)

  Amess, David

  Atkinson, Peter (Hexham)

  Ancram, Michael

  Baker, Rt Hon Kenneth (Mole V)

  Arbuthnot, James

  Baker, Nicholas (North Dorset)

  661

  Baldry, Tony

  Forman, Nigel

  Banks, Matthew (Southport)

  Forsyth, Rt Hon Michael (Stirling)

  Banks, Robert (Harrogate)

  Forth, Eric

  Bates, Michael

  Foster, Don (Bath)

  Beith, Rt Hon A J

  Fowler, Rt Hon Sir Norman

  Bellingham, Henry

  Fox, Dr Liam (Woodspring)

  Bendall, Vivian

  Freeman, Rt Hon Roger

  Beresford, Sir Paul

  French, Douglas

  Biffen, Rt Hon John

  Fry, Sir Peter

  Bonsor, Sir Nicholas

  Gale, Roger

  Booth, Hartley

  Gallie, Phil

  Boswell, Tim

  Gardiner, Sir George

  Bottomley, Peter (Eltham)

  Garel-Jones, Rt Hon Tristan

  Bowden, Sir Andrew

  Garnier, Edward

  Bowis, John

  Gill, Christopher

  Boyson, Rt Hon Sir Rhodes

  Gillan, Cheryl

  Brandreth, Gyles

  Goodson-Wickes, Dr Charles

  Brazier, Julian

  Gorman, Mrs Teresa

  Bright Sir Graham

  Gorst, Sir John

  Brooke, Rt Hon Peter

  Grant, Sir A (SW Cambs)

  Brown, M (Brigg & Cl'thorpes)

  Greenway, Harry (Ealing N)

  Browning, Mrs Angela

  Greenway, John (Ryedale)

  Bruce, Ian (Dorset)

  Griffiths, Peter (Portsmouth, N)

  Budgen, Nicholas

  Grylls, Sir Michael

  Burns, Simon

  Gummer, Rt Hon John Selwyn

  Burt, Alistair

  Hague, William

  Butcher, John

  Hamilton, Neil (Tatton)

  Butler, Peter

  Hampson, Dr Keith

  Butterfill, John

  Hanley, Rt Hon Jeremy

  Campbell, Menzies (Fife NE)

  Hannam, Sir John

  Carlile, Alexander (Montgomery)

  Hargreaves, Andrew

  Carlisle, John (Luton North)

  Harris, David

  Carlisle, Sir Kenneth (Lincoln)

  Harvey, Nick

  Carrington, Matthew

  Haselhurst, Alan

  Carttiss, Michael

  Hawkins, Nick

  Cash, William

  Hawksley, Warren

  Channon, Rt Hon Paul

  Hayes, Jerry

  Chidgey, David

  Heald, Oliver

  Clappison, James

  Heath, Rt Hon Sir Edward

  Clark, Dr Michael (Rochford)

  Heathcoat-Amory, David

  Clarke, Rt Hon Kenneth (Ru'clif)

  Hendry, Charles

  Clifton-Brown, Geoffrey

  Heseltine, Rt Hon Michael

  Coe, Sebastian

  Hicks, Robert

  Colvin, Michael

  Higgins, Rt Hon Sir Terence

  Congdon, David

  Hill, James (Southampton Test)

  Conway, Derek

  Hogg, Rt Hon Douglas (G'tham)

  Coombs, Anthony (Wyre For'st)

  Horam, John

  Coombs, Simon (Swindon)

  Hordern, Rt Hon Sir Peter

  Cope, Rt Hon Sir John

  Howard, Rt Hon Michael

  Couchman, James

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

  Cran, James

  Howell, Rt Hon David (G'dford)

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

  Howell, Sir Ralph (N Norfolk)

  Curry, David (Skipton & Ripon)

  Hughes, Robert G.(Harrow W)

  Davies, Quentin (Stamford)

  Hughes, Simon (Southwark)

  Davis, David (Boothferry)

  Hunt, Rt Hon David (Wirral W)

  Day, Stephen

  Hunt, Sir John (Ravensbourne)

  Deva, Nirj Joseph

  Hunter, Andrew

  Devlin, Tim

  Jack, Michael

  Dorrell, Rt Hon Stephen

  Jackson, Robert (Wantage)

  Douglas-Hamilton, Lord James

  Jenkin, Bernard

  Dover, Den

  Jessel, Toby

  Duncan, Alan

  Johnson Smith, Sir Geoffrey

  Dunn, Bob

  Johnston, Sir Russell

  Durant, Sir Anthony

  Jones, Gwilym (Cardiff N)

  Eggar, Rt Hon Tim

  Jones, Nigel (Cheltenham)

  Elletson, Harold

  Jones, Robert B (W Hertfdshr)

  Emery, Rt Hon Sir Peter

  Jopling, Rt Hon Michael

  Evans, David (Welwyn Hatfield)

  Kellett-Bowman, Dame Elaine

  Evans, Jonathan (Brecon)

  Kennedy, Charles (Ross,C&S)

  Evans, Nigel (Ribble Valley)

  Key, Robert

  Evans, Roger (Monmouth)

  Kilfedder, Sir James

  Evennett, David

  King, Rt Hon Tom

  Faber, David

  Knapman, Roger

  Fenner, Dame Peggy

  Knight, Mrs Angela (Erewash)

  Field, Barry (Isle of Wight)

  Knight, Greg (Derby N)

  Fishburn, Dudley

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

  662

  Knox, Sir David

  scott, Rt Hon Sir Nicholas

  Kynoch, George (Kincardine)

  Shaw, David (Dover)

  Lait, Mrs Jacqui

  Shephard, Rt Hon Gillian

  Lang, Rt Hon Ian

  Shepherd, Colin (Hereford)

  Lawrence, Sir Ivan

  Shepherd, Richard (Aldridge)

  Legg, Barry

  Shersby, Michael

  Leigh, Edward

  Sims, Roger

  Lennox-Boyd, Sir Mark

  Smith, Sir Dudley (Warwick)

  Lester, Jim (Broxtowe)

  Smith, Tim (Beaconsfield)

  Lidington, David

  Soames, Nicholas

  Lightbown, David

  Speed, Sir Keith

  Lilley, Rt Hon Peter

  Spencer, Sir Derek

  Lloyd, Rt Hon Sir Peter (Fareham)

  Spicer, Michael (S Worcs)

  Lord, Michael

  Spink, Dr Robert

  Lyell, Rt Hon Sir Nicholas

  Spring, Richard

  Lynne, Ms Liz

  Sproat, Iain

  MacGregor, Rt Hon John

  Squire, Robin (Hornchurch)

  Mackay, Andrew

  Stanley, Rt Hon Sir John

  Maclean, David

  Steel, Rt Hon Sir David

  McLoughlin, Patrick

  Steen, Anthony

  McNair-Wilson, Sir Patrick

  Stephen, Michael

  Madel, Sir David

  Stem, Michael

  Maitland, Lady Olga

  Stewart, Allan

  Malone, Gerald

  Streeter, Gary

  Mans, Keith

  Sumberg, David

  Marshall, Sir Michael (Arundel)

  Sweeney, Walter

  Martin, David (Portsmouth S)

  Tapsell, Sir Peter

  Mates, Michael

  Taylor, Ian (Esher)

  Mayhew, Rt Hon Sir Patrick

  Taylor, John M (Solihull)

  Merchant, Piers

  Taylor, Matthew (Truro)

  Mills, Iain

  Taylor, Sir Teddy (Southend, E)

  Mitchell, Andrew (Gedling)

  Temple-Morris, Peter

  Mitchell, Sir David (NW Hants)

  Thomason, Roy

  Moate, Sir Roger

  Thompson, Sir Donald (C'er V)

  Monro, sir Hector

  Thompson, Patrick (Norwich N)

  Montgomery, Sir Fergus

  Thornton, Sir Malcolm

  Moss, Malcolm

  Thurnham, Peter

  Nelson, Anthony

  Townend, John(Bridlington)

  Neubert, Sir Michael

  Townsend, Cyril D (Bexl'yh'th)

  Newton, Rt Hon Tony

  Tracey, Richard

  Nicholls, Patrick

  Tredinnick, David

  Nicholson, David (Taunton)

  Trend, Michael

  Nicholson, Emma (Devon West)

  Trotter, Nevile

  Norris, Steve

  Twinn, Dr Ian

  Oppenheim, Phillip

  Tyler, Paul

  Ottaway, Richard

  Vaughan, Sir Gerard

  Page, Richard

  Viggers, Peter

  Paice, James

  Waldegrave, Rt Hon William

  Patnick, Sir Irvine

  Walden, George

  Patten, Rt Hon John

  Walker, Bill (N Tayside)

  Pattie, Rt Hon Sir Geoffrey

  Wallence, James

  Pawsey, James

  Waller, Gary

  Peacock, Mrs Elizabeth

  Wardle, Charles (Bexhill)

  Pickles, Eric

  Waterson, Nigel

  Porter, Barry (Wirral S)

  Watts, John

  Porter, David (Waveney)

  Wells, Bowen

  Portillo, Rt Hon Michael

  Wheeler, Rt Hon Sir John

  Rathbone, Tim

  Whitney, Ray

  Redwood, Rt Hon John

  Whittingdale, John

  Rendel, David

  Widdecombe, Ann

  Renton, Rt Hon Tim

  Wiggin, Sir Jerry

  Richards, Rod

  Willetts, David

  Riddick, Graham

  Wilshire, David

  Rifkind, Rt Hon Malcolm

  Winterton, Mrs Ann (Congleton)

  Robathan, Andrew

  Winterton, Nicholas (Macc'fld)

  Roberts, Rt Hon Sir Wyn

  Wolfson, Mark

  Robertson, Raymond (Ab'd'n S)

  Wood, Timothy

  Robinson, Mark (Somerton)

  Yeo, Tim

  Roe, Mrs Marion (Broxbourne)

  Young, Rt Hon Sir George

  Rowe, Andrew (Mid Kent)

  Rumbold, Rt Hon Dame Angela

  Teller for the Ayes:

  Ryder, Rt Hon Richard

  Mr. Sydney Chapman and

  Sackville, Tom

  Mr. Timothy Kirkhope

  663

  NOES

  Austin-Walker, John

  Llwyd, Ellyn

  Barnes, Harry

  Madden, Max

  Benn, Rt Hon Tony

  Mahon, Alice

  Campbell, Ronnie (Blyrh V)

  Michie, Bill (Sheffield Heeley)

  Campbell-Savours, D N

  Patchett, Terry

  Canavan, Dennis

  Rooney, Terry

  Cohen, Herry

  Skinner, Dennis

  Corbyn, Jeremy

  Wigley, Dafydd

  Ewing, Mrs Margaret

  Wise, Audrey

  Godman, Dr Norman A

  Wray, Jimmy

  Gordon, Mildred

  Tellers for the Noes:

  Jones, leuan Wyn (Ynys Mon)

  Mr. Alex Salmond and

  Lewis, Terry

  Mr. Cynog Dafis.

  Question accordingly agreed to.
  Bill read a Second time, and committed to a Standing committee, pursuant to Standing Order No.61
  (Committal of Bills).
  Madam Speaker: With the leave of the House, I will put the money and the Ways and Means resolutions together.
  Mr. Bill Michie: No.
  Madam Speaker: Does the hon. Gentleman want me to put the questions separately?
  Mr. Michie: Yes.
  Madam Speaker: In that case, I shall put the question on the money resolution.

  GAS BILL [Money]
  Queen's recommendation having been signified—
  Motion made, and Question put forthwith, pursuant to Order [19 December],
  That, for the purposes of any Act resulting from the Gas Bill ("the Act"), it is expedient to authorise the payment out of money provided by Parliament of the following, namely—

  (a) the remuneration of, and any allowances or pensions payable to or in respect of, persons appointed—

  (i) to carry out tests of apparatus and equipment, and tests of gas for the purpose of ascertaining whether it is of or above a declared calorific value;

  (ii) to carry out tests of gas for the purpose of ascertaining whether it conforms with any prescribed standards; or

  (iii) to examine and stamp, or authorise the stamping of, meters used for ascertaining the quantity of gas supplied through pipes;

  (b) any increase attributable to the Act in the sums payable out of money so provided under any other Act. [Mr. Andrew Mitchell.]

  The House divided: Ayes 297, Noes 49.

  Division No. 101]

  [10.29 pm

  AYES

  Ainsworth, Peter (East Surrey)

  Atkins, Robert

  Aitken, Rt Hon Jonathan

  Atkinson, David (Bour'mouth E)

  Alexander, Richard

  Atkinson, Peter (Hexham)

  Alison, Rt Hon Michael (Selby)

  Baker, Nicholas (North Dorset)

  Allason, Rupert (Torbay)

  Baldry, Tony

  Alton, David

  Banks, Matthew (Southport)

  Amess, David

  Banks, Robert (Harrogate)

  Ancram, Michael

  Beith, Rt Hon A J

  Arbuthnot, James

  Bellingham, Henry

  Arnold, Jacques (Gravesham)

  Bendall, Vivian

  Arnold, Sir Thomas (Hazel Grv)

  Beresford, Sir Paul

  Ashby, David

  Bonsor, Sir Nicholas

  Ashdown, Rt Hon Paddy

  Booth, Hartley

  664

  Boswell, Tim

  Gill, Christopher

  Bottomley, Peter (Eltham)

  Gillan, Cheryl

  Bowden, Sir Andrew

  Goodson-Wickes, Dr Charles

  Bowis, John

  Gorman, Mrs Teressa

  Boyson, Rt Hon Sir Rhodes

  Gorst, Sir John

  Brandreth, Gyles

  Grant, Sir A (SW Cambs)

  Brazier, Julian

  Greenway, Harry (Ealing N)

  Bright, Sir Graham

  Greenway, John (Ryedale)

  Brooke, Rt Hon Peter

  Griffiths, Peter (Portsmouth, N)

  Brown, M (Brigg & Cl'thorpes)

  Grylls, Sir Michael

  Browning, Mrs Angela

  Gummer, Rt Hon John Selwyn

  Bruce, Ian (Dorset)

  Hague, William

  Budgen, Nicholas

  Hamilton, Neil (Tatton)

  Burns, Simon

  Hampson, Dr Keith

  Burt, Alistair

  Hanley, Rt Hon Jeremy

  Butler, Peter

  Hannam, Sir John

  Butterfill, John

  Hargreaves, Andrew

  Campbell, Menzies (Fife NE)

  Harris, David

  Carlile, Alexander (Montgomery)

  Harvey, Nick

  Carlisle, John (Luton North)

  Haselhurst, Alan

  Carlisle, Sir Kenneth (Lincoln)

  Hawkins, Nick

  Carrington, Matthew

  Hawksley, Warren

  Carttiss, Michael

  Hayes, Jerry

  Cash, William

  Heald, Oliver

  Channon, Rt Hon Paul

  Heath, Rt Hon Sir Edward

  Chapman, Sydney

  Heathcoat-Amory, David

  Chidgey, David

  Hendry, Charles

  Clappison, James

  Heseltine, Rt Hon Michael

  Clarke, Rt Hon Kenneth (Ru'clif)

  Hicks, Robert

  Clifton-Brown, Geoffrey

  Higgins, Rt Hon Sir Terence

  Coe, Sebastian

  Hill, James (Southampton Test)

  Colvin, Michael

  Hogg, Rt Hon Douglas (G'tham)

  Congdon, David

  Horam, John

  Conway, Derek

  Hordem, Rt Hon Sir Peter

  Coombs, Anthony (Wyre For'st)

  Howard, Rt Hon Michael

  Coombs, Simon (Swindon)

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

  Cope, Rt Hon Sir John

  Howell, Rt Hon David (G'dford)

  Couchman, James

  Howell, Sir Ralph (N Norfolk)

  Cran, James

  Hughes, Robert G (Harrow W)

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

  Hunt, Rt Hon David (Wirral W)

  Curry, David (Skipton & Ripon)

  Hunt, Sir John (Ravensbourne)

  Davies, Quentin (Stamford)

  Hunter, Andrew

  Davis, David (Boothferry)

  Jack, Michael

  Day, Stephen

  Jackson, Robert (Wantage)

  Deva, Nirj Joseph

  Jenkin, Bernard

  Devlin, Tim

  Jessel, Toby

  Dorrell, Rt Hon Stephen

  Johnson Smith, Sir Geoffrey

  Douglas-Hamilton, Lord James

  Jones, Gwilym (Cardiff N)

  Dover, Den

  Jones, Nigel (Cheltenham)

  Duncan, Alan

  Jones, Robert B (W Hertfdshr)

  Dunn, Bob

  Jopling, Rt Hon Michael

  Durant, Sir Anthony

  Kenndy, Charles (Ross, C&S)

  Eggar, Rt Hon Tim

  Key, Robert

  Elletson, Harold

  Kilfedder, Sir James

  Evans, David (Welwyn Hatfield)

  king, Rt Hon Tom

  Evans, Jonathan (Brecon)

  Knapman, Roger

  Evans, Nigel (Ribble Valley)

  Knight, Mrs Angela (Erewash)

  Evans, Roger (Monmouth)

  Knight, Greg (Derby N)

  Evennett, David

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

  Faber, David

  Knox, Sir David

  Fenner, Dame Peggy

  Kynoch, George (Kincardine)

  Field, Barry (Isle of Wight)

  Lait, Mrs Jacqui

  Fishburn, Dudley

  Lang, Rt Hon Ian

  Forman, Nigel

  Lawrence, Sir Ivan

  Forsyth, Rt Hon Michael (Stirling)

  Legg, Barry

  Forth, Eric

  Leigh, Edward

  Foster, Don (Bath)

  Lennox-Boyd, Sir Mark

  Fox, Dr Liam (Woodspring)

  Lester, Jim (Broxtowe)

  Freeman, Rt Hon Roger

  Lidington, David

  French, Douglas

  Lightbown, David

  Fry, Sir Peter

  Lilley, Rt Hon Peter

  Gale, Roger

  Lloyd, Rt Hon Sir Peter (Fareham)

  Gallie, Phil

  Lord, Michael

  Gardiner, Sir George

  Lyell, Rt Hon Sir Nicholas

  Garel-Jones, Rt Hon Tristan

  Lynne, Ms Liz

  Garnier, Edward

  MacGregor, Rt Hon John

  665

  MacKay, Andrew

  Smith, Sir Dudley (Warwick)

  Maclean, David

  Smith, Tim (Beaconsfield)

  McLoughlin, Patrick

  Speed, Sir Keith

  McNair-Wilson, Sir Patrick

  Spencer, Sir Derek

  Madel, Sir David

  Spicer, Michael (S Worcs)

  Maitland, Lady Olga

  Spink, Dr Robert

  Malone, Gerald

  Spring, Richard

  Mans, Keith

  Sproat, Iain

  Marshall, Sir Michael (Arundel)

  Squire, Robin (Hornchurch)

  Martin, David (Portsmouth S)

  Stanley, Rt Hon Sir John

  Mayhew, Rt Hon Sir Patrick

  Steen, Anthony

  Merchant, Piers

  Stephen, Michael

  Mitchell, Andrew (Gedling)

  Stern, Michael

  Mitchell, Sir David (NW Hants)

  Stewart, Allan

  Moate, Sir Roger

  Streeter, Gary

  Monro, Sir Hector

  Sumberg, David

  Montgomery, Sir Fergus

  Sweeney, Walter

  Moss, Malcolm

  Tapsell, Sir Peter

  Nelson, Anthony

  Taylor, Ian (Esher)

  Neubert, Sir Michael

  Taylor, John M (Solihull)

  Newton, Rt Hon Tony

  Taylor, Sir Teddy (Southend, E)

  Nicholls, Patrick

  Temple-morriss, Peter

  Nicholson, David (Taunton)

  Thomason, Roy

  Nicholson, Emma (Devon West)

  Thompson, Sir Donald (C'er V)

  Norris, Steve

  Thompson, Patrick (Norwich N)

  Oppenheim, Phillip

  Thornton, Sir Malcolm

  Ottaway, Richard

  Thurnham, Peter

  Page, Richard

  Townsend, Cyril D (Bexl'yh'th)

  Paice, James

  Tracey, Richard

  Patnick, Sir Irvine

  Tredinnick, David

  Patten, Rt Hon John

  Trend, Michael

  Pattie, Rt Hon Sir Geoffrey

  Trotter, Neville

  Pawsey, James

  Twinn, Dr Ian

  Peacock, Mrs Elizabeth

  Tyler, Paul

  Pickles, Eric

  Vaughan, Sir Gerard

  Porter, Barry (Wirral S)

  Viggers, Peter

  Porter, David (Waveney)

  Waldegrave, Rt Hon William

  Portillo, Rt Hon Michael

  Walden, George

  Rathbone, Tim

  Walker, Bill (N Tayside)

  Redwood, Rt Hon John

  Wallace, James

  Rendel, David

  Waller, Gary

  Renton, Rt Hon Tim

  Wardle, charles (Bexhill)

  Richards, Rod

  Waterson, Nigel

  Riddick, Graham

  Watts, John

  Rifkind, Rt Hon Malcolm

  Wells, Bowen

  Robathan, Andrew

  Wheeler, Rt Hon Sir John

  Roberts, Rt Hon Sir Wyn

  Whitney, Ray

  Robertson, Raymond (Ab'd'n S)

  Whittingdale, John

  Robinson, Mark (Somerton)

  Widdecombe, Ann

  Roe, Mrs Marion (Broxbourne)

  Wiggin, Sir Jerry

  Rowe, Andrew (Mid Kent)

  Willetts, David

  Rumbold, Rt Hon Dame Angela

  Wilshire, David

  Ryder, Rt Hon Richard

  Winterton, Mrs Ann (Congleton)

  Sackville, Tom

  Winterton, Nicholas (Macc'fld)

  Scott, Rt Hon Sir Nicholas

  Wolfson, Mark

  Shaw, David (Dover)

  Wood, Timothy

  Shephard, Rt Hon Gillian

  Yeo, Tim

  Shepherd, Colin (Hereford)

  Young, Rt Hon Sir George

  Shepherd, Richard (Aldridge)

  Shersby, Michael

  Tellers for the Ayes:

  Sims, Roger

  Mr. Timothy Kirkhope and

  Mr. Michael Bates.

  NOES

  Adams, Mrs Irene

  Cox, Tom

  Banks, Tony (Newham NW)

  Cunningham, Jim (Covy SE)

  Benn, Rt Hon Tony

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

  Bradley, Keith

  Dixon, Don

  Campbell, Ronnie (Blyth V)

  Donohoe, Brian H

  Campbell-Savours, D N

  Ewing, Mrs margaret

  Canavan, Dennis

  George, Bruce

  Church, Judith

  Gerrard, Neil

  Clarke, Eric (Midlothian)

  Godsiff, Roger

  Connarty, Michael

  Graham, Thomas

  Corbyn, Jeremy

  Grant, Bernic (Tottenham)

  Corston, Jean

  Gunnell, John

  666

  Hardy, Peter

  Roche, Mrs Barbara

  Hill, Keith (Streatham)

  Rooney, Terry

  Illsley, Eric

  Salmond, Alex

  Jones, Barry (Alyn and D'side)

  Skinner, Dennis

  Jowell, Tessa

  Snape, peter

  Lewis, Terry

  Spearing, Nigel

  McMaster, Gordon

  Spellar, John

  Mahon, Alice

  Weinberg, Gerry

  Marshall, David (Shettleston)

  Wise, Audrey

  Martlew, Eric

  Wray, Jimmy

  Meale, Alan

  Pike, Peter L

  Tellers for the Noes:

  Powell, Ray (Ogmore)

  Mr. Harry Barnes and

  Reid, Dr John

  Mr. Bill Michie.

  Question accordingly agreed to.

  GAS BILL [Ways and Means]
  Motion made, and Question put forthwith, pursuant to Order [19 December],
  That for the purposes of any Act resulting from the Gas Bill, it is expedient to authorise—

  (a) the inclusion in licences of conditions requiring the rendering of payments to the Director General of Gas Supply;

  (b) the making of provisions under which monetary penalties may be imposed on persons who contravene any conditions or requirements; and

  (c) the payment of any sums into the Consolidated Fund.— [Mr. Conway.]

  Question agreed to.

  Trafford Park Rail Terminal
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Conway.]
  10.41 pm
  Mr. Tony Lloyd: I thought that we were not going to reach this debate—[Interruption.]
  Madam Deputy Speaker (Dame Janet Fookes): Order. I am sorry to interrupt the hon. Gentleman, but clearly there is too much noise for him to be heard. Will hon. Members leaving the Chamber please do so quickly and quietly?
  Mr. Lloyd: This debate concerns the Euroterminal development at Trafford Park in my constituency. I know that the Minister for Railways and Roads is aware of its existence and I look forward to hearing his remarks in a few moments.
  I must say in clear terms how badly let down my constituents feel by British. Rail and, indeed, by central Government—and to a lesser extent by the Trafford park development corporation. Gorse Hill is a residential area, composed essentially of terraced housing. In recent years, it has become an area in which many people buy their first property. Indeed, some years ago, my first house was in that area, not far from the Euroterminal development. The residents feel let down because the area has suddenly been intruded on by the development of the Euroterminal. The development has a huge crane, which is having a severe impact on the local environment.
  The development was sanctioned originally by the Secretary of State in April 1992 and work began some two months later. Almost no consultation took place with the local community or, indeed, the local council about the likely impact. I draw the Minister's attention to the contrast with the channel tunnel rail link and I quote one of his predecessors, the right hon. Member for Kettering, (Mr. Freeman), then Minister for Public Transport, who said in relation to the channel tunnel rail link:
  "However, exacting design aims have been set for the rail link, not only for noise, but for all other areas of potential environmental impact, such as vibration. Our paper on property purchase and compensation policy explains that the thinking behind this is that it is better to limit the environmental intrusion at source … by putting the rail link in a cutting or providing mitigation in the form of noise barriers and landscaping, than to rely simply on compensation."—[Official Report, 31 March 1994; Vol.240, c. 1067.]
  I hope that the Minister will take that on board. When the matter came to the Trafford magistrates court recently, the magistrates drew attention to the fact that, before the construction of the Euroterminal, neither Railfreight nor the Trafford park development corporation consulted Trafford borough council regarding noise or other environmental problems. Nor did they seek to discuss the matter with me or with the local community. I consider that disgraceful.
  According to the stipendiary magistrate,
  "No advice was sought by Railfreight from their in-house advisers or from the manufacturers regarding possible noise problem."
  That is amazing, given that the development was so close to residences. The railway line is literally next to flats and houses. The magistrate also said:
  "We now know that silent cranes were a possibility although they were more expensive."
  668
  British Rail, subsequently Railfreight, opted for a plan that was much worse in noise terms in order to save money, at the expense—both environmental and financial—of my constituents. That is difficult to justify.
  I wrote to the then Parliamentary Under-Secretary of State for the Environment pointing out that the development required no planning permission: as a statutory undertaking, British Rail is outside the planning permission regime. The Minister replied on 28 March 1994, nearly a year ago, saying that the Government did not consider planning permission necessary for a statutory undertaking. He wrote:
  "We have issued guidance on the practice which statutory undertakings should follow in publicising development which they propose to carry out in exercise of their permitted development powers".
  Sadly, both British Rail and the development corporation chose to ignore that guidance. I consider that to be unforgivable and unacceptable. When I put the point to the corporation and to Sir Bob Reid, chairman of British Rail, each blamed the other in a game of "pass the buck". That, too, is unacceptable.
  The first problem experienced by my constituents may seem trivial, but it was the one that Sir Bob Reid seemed to latch on to when I met him. Their television reception was very poor, because the huge cranes act as an aerial, deflecting the signal. Just before Christmas 1993, Sir Bob told his assistant—whom I also met—"We must try to do something so that people do not lose their television reception over Christmas", but only in the early part of this year did British Rail and Railfreight finally get round to providing any kind of solution to the problem. I hope that the House agrees with my condemnation of BR's cavalier attitude to the interests of those whose lives were affected by its actions. Amazingly, even now only about 90 per cent. of those who experienced the problem have had their television reception restored, and I am told that the picture is not so good as it was originally; it is merely a good deal better than the terrible picture that they were obtaining. That may seem a small problem, but I do not think that it is so small nowadays, when we all take television for granted.
  Much the most important problem, however, has been noise. Noise levels are now unacceptable, and the matter was recently brought to court. Having sought to reach an amicable deal with BR and Railfreight over a long period, Trafford council eventually lost patience and issued a noise abatement notice; BR protested, and sought to fight it. Only after the court hearing had been adjourned a number of times did BR finally come to court and admit that it was causing a statutory nuisance. That in itself is incredible: the development had been in progress for a full year before BR accepted that the noise level was a pollutant and constituted a statutory nuisance.
  I hope that the Minister will join me in condemning BR and Railfreight for their casual attitude to those who have suffered. As I have said, BR could have opted for better technology which would have been much quieter, but considered its own costs more important than those of my constituents. As it has admitted its statutory duty, British Rail will now have to take some steps to ameliorate the problem because the court will make it do that. That compares with British Rail's lack of action to comply with rulings on other types of noise abatement.

  669
  I referred the Minister to the comments of his predecessor about the channel tunnel rail link, when it was said that prevention was better than cure. British Rail never tried to prevent these happenings. At a meeting in May 1994 it promised that an acoustic fence would be erected, but that promise did not materialise. British Rail simply lied, as it lied on a number of occasions about its actions.
  When I again took the issue up with Sir Bob Reid in one of the many letters that I wrote to various people about noise, he said:
  "We are talking about very large sums of money indeed in order to provide effective noise fencing."
  British Rail may have been talking about large sums, but it never spent them because nothing happened. Sir Bob Reid may have been gullible or deliberately misleading. He is now on his way out of British Rail and perhaps he is no great loss. I am sure that he will make a great deal of money in the private sector. I hope that every now and again he will think about the loss of money that my constituents are suffering because of his inability to make acceptable decisions.
  As I have said, the court has ordered British Rail to abate the noise. The problem is that under the legislation if British Rail can demonstrate to the court that it has taken all practical steps within acceptable financial limits, the court will override the original decision to tell British Rail to abate its noise nuisance and my constituents may face the prospect of having to put up with noise that is above the level set by the court.
  Even if British Rail reduces the noise to the level that the court has ordered, it will still be very noisy. One of the anomalies of noise legislation is that in a quiet rural area where background noise is low, the permitted ability to increase noise is far less than in an area on the boundary between a residential area and an industrial zone. That means that because my constituents are in an environment which is less good than another, they are likely to suffer more because of the nature of our planning laws. That makes little sense to me and it makes even less sense to my constituents.
  The nub of the debate is that, as a result of all this, my constituents have suffered real and material loss. For example, I have a letter from one of the local estate agents in Stretford. The company is called Trading Places and it wrote to the Gorse Hill residents committee. The letter is signed by J.B. Cox, a partner in Trading Places, and it states:
  Over the past three years the prices of terraced property in Stretford and Gorse Hill have fallen by an average of 8 to 10 per cent. because of general market conditions."
  We know that there has been a recession in property prices. The letter continues:
  "However, in my opinion, the property in the Gorse Hill area has fallen by nearer to 13 per cent., and has gone from being a popular area for first time buyers, to an area which the first time buyers wish to avoid if they can possibly do so. Such people call into our office asking for property within an affordable price range stressing 'not Gorse Hill'. When asked why they wish to avoid the area the majority have said that is because of the reported problems with the 'Terminal'. I can therefore only assume that the additional fall in property prices within the Gorse Hill area is attributable to the 'Terminal' and the problems which have arisen since the building of the cranes."
  670
  One of my constituents had his house valued and believes that he may have lost about £10,000 on a house that would have been worth £54,000 before the development. In anybody's terms, that is a significant and unacceptable loss.
  Another of my constituents wrote to say that she had contacted another estate agent, Maunders. She wrote:
  "Maunders have said they won't touch anything in Gorse Hill as a Part Exchange deal because of the publicity they've seen about the terminus."
  Therefore there is blight and a real loss in terms of property prices. I shall not mention his name, but I should like to draw the attention of the House to another constituent, an elderly man, whose wife is also elderly and sick. They lived in a block of flats which was right up against the operation of the crane. Because his wife was not well, my constituent decided to move. Perhaps unwisely, or because he was badly advised—who knows—he purchased another property some distance away. He then found himself, in his late 70s, unable to sell his flat, having already completed the purchase of the other property. He is now in considerable debt, desperately worried, and does not know what to do. He is certainly a victim, albeit badly advised, of the development of the Eurofreight terminal.
  The Minister will not be surprised to learn that I want to discuss compensation with him today. I draw his attention to parallels with the channel tunnel rail link. I know that he and his predecessors have had many exchanges with, among others, the right hon. Member for Tonbridge and Malling (Sir J. Stanley) about the operation of the Land Compensation Act 1973. I followed that debate with considerable interest. I would be grateful if the Minister told me tonight whether that Act applies—I believe that the parallels with the channel tunnel rail link are close. This case is actually even stronger, though.
  In a previous debate the then Minister, the right hon. Member for Kettering, said:
  "As hon. Members will know, it has been a long-standing policy of successive Governments to make a clear distinction in this respect between the construction or alteration of public works and the intensification of use of existing works."—[Official Report, 19 June 1991; Vol.193, c.345-6.]
  It is clear to me that this development is not an intensification of use; it is a fundamental change of use, from a rail track carrying goods trains to the presence of a huge crane intended to operate night and day. This is a clear case of construction and alteration of public works.
  I believe, therefore, that the Land Compensation Act applies. I hope that the Minister will confirm that and declare that the Government expect my constituents to have their financial losses—if no other—recompensed under the system. I also draw his attention to some remarks of his own about the channel tunnel rail link, when he mentioned the system operated by Union Railways: a voluntary purchase scheme, whereby owners of property eventually to be compulsorily purchased can request Union Railways to purchase now. He went on to say that Union Railways also operate a discretionary purchase scheme for properties outside the channel tunnel rail link safeguarded zone
  "on terms broadly comparable … to the scheme operated by the Highways Agency under the Planning and Compensation Act 1991."—[Official Report, 6 March 1995; Vol.256, c.124.]

  671
  Given the losses suffered by my constituents and the environmental pollution that they face every day and night, they are surely entitled to action on the part of the Government and of British Rail to undo the damage done.
  This whole exercise shows that British Rail and its successor companies have treated the community that I represent with contempt, which has emanated from Sir Bob Reid and run throughout the system. That is unacceptable. I hope that the Minister will at least make the effort to ensure, in what is still a publicly run industry, that these views are communicated to those involved.
  My constituents are entitled to some consideration for the losses that they have suffered. With the channel tunnel rail link—I do not wish to be divisive in such a packed House—in the leafier parts of southern England, it was accepted that it was necessary to come up with a prevention scheme to allay the fears of the right hon. Member for Tonbridge and Mailing. No such consideration or prevention scheme was provided for my constituents. I cannot accept that just because they live in the grimy north they should be treated worse.
  Because of British Rail's failure to consult, and because the planning powers did not exist to make the local authority and the development corporation consult the local people properly, all this is now water under the bridge. All that can be done now is to ensure that Railfreight gets down to abating the noise and other environmental inconveniences. And because even that abatement will not stop the slide in property prices, there must ultimately be a compensation scheme adequately to recompense people whose lives have been harmed and who have suffered financial loss.
  10.59 pm
  The Minister for Railways and Roads (Mr. John Watts): I congratulate the hon. Member for Stretford (Mr. Lloyd) on securing time to discuss the matter, and on explaining the concerns of his constituents so clearly. I should like briefly to sum up the wider background to the development of the terminal before I deal with his specific points.
  Intermodal transport is likely to provide a major opportunity for growth in the freight market for rail in Europe. In the past 15 years, the European railways' market share in the domestic freight market has decreased to about 7 per cent. Markets traditionally suited to rail have contracted because of wider structural changes in the economy, while the movement of finished goods has, so far, proved almost the exclusive province of road haulage.
  The United Kingdom, however, in common with other European Community countries, views the development of intermodal transport as a key factor in the development of freight business for the railway. Trafford Park Euroterminal has been developed in that context and as an important part of a new network of terminals to take advantage of channel tunnel opportunities. It is situated on an industrial estate close to a long-established terminal that has handled the domestic and the region's deep-sea intermodal business, known as freightliner, for many years. To make best use of resources, freightliner operations were moved to the new site on a temporary basis.
  The Euroterminal layout and cranage capacity were designed to cater for about 100,000 containers per annum. The initial channel tunnel service, together with the
  672
  freightliner business in the region, are now achieving those figures. Therefore, the old Trafford Park site is being recommissioned, used once again for freightliner traffic, and is to be offered in the freightliner package for sale.
  I am sorry that the hon. Gentleman has found the consultation by British Rail so inadequate. I shall reflect on the detailed criticisms that he made about the basis on which consultation has been pursued. In his view and that of his constituents, it has been pursued inadequately. British Rail has pursued a policy of co-operating with local authorities to accommodate the concerns of local communities. Wherever possible, practical measures have been introduced to try to eliminate the effects on the local environment. I agree with his point that it is far better to design out problems at the outset, where that is possible, than to undertake remedial action when a problem has arisen, which appears to be the case here.
  Following the start of operations at Trafford Park Euroterminal, British Rail received a number of complaints from residents. It has sought various practical measures to deal with those concerns. For example, I understand that there was a problem involving overspill from lighting and glare from the terminal lighting. I am told that that has been resolved.
  The hon. Gentleman mentioned interference to television reception and acknowledged that British Rail had taken some action in erecting a new transmitter and in undertaking the reorientation of aerials, but he explained that the implementation of that work took far too long. I am aware that, following landscaping work, residents experienced a temporary problem with rodent infestation, but I am advised that that has also been resolved.
  A council study has shown that pollution in the region did not differ from the prevailing level there. I am told that a council study into vibration from the site has proved inconclusive. The hon. Gentleman raised the matter of noise and the Land Compensation Act 1973. He explained that the development was undertaken under general development orders that did not require normal planning permission. The Act allows for compensation to be paid when property value is adversely affected by physical factors such as noise and vibration from new or altered public works, including railways. It does not specify precisely what is meant by altered works in the case of railways, although it does refer to work that is reconstructed, extended or otherwise altered. Interpretation of the law is not for Ministers but for the courts, but the hon. Gentleman and his constituents might conclude that there could be valid claims for compensation under the provisions of that legislation.
  As the hon. Gentleman explained, Trafford Park borough council brought an application for a noise abatement order before magistrates last autumn, following representations from local residents about noise nuisance at night from the terminal site. Initially, the court imposed a noise target of 41 decibels throughout the night hours and gave British Rail 90 days to introduce the necessary measures. In BR's view, those noise targets were technically infeasible. By way of comparison, a domestic refrigerator generates about 40 decibels.
  In response, the British Railways Board obtained independent advice about noise levels at the site, conducted further tests and put forward noise targets that would be technically feasible. Magistrates considered that

  673
  evidence and in the light of advice given in British Standard 4142 and limits recommended by the World Health Organisation for sleep disturbance, amended the noise target during night hours to 47 decibels.
  British Rail has started the works needed to bring about that noise reduction. The work includes cladding for the cranes and erection of an acoustic fence. Once the work is complete and noise level tests have been conducted, the terminal will reopen at night. Until then, channel tunnel trains have been rescheduled to avoid the night hours, and freightliner traffic is now using the adjacent terminal.
  The acoustic fence contract has been let, and work should be completed by the end of May. Mechanical modifications to the cranes should bring about a reduction in airborne noise by the end of this month. Further reductions are proposed for structure-borne noise.
  Staff training has also been reviewed to reduce unnecessary noise, and equipment has been fitted with reminder notices to prompt staff to use it considerately. British Rail has also requested double glazing quotations from three national suppliers to meet the problems specific to the top floor of maisonettes in Stanton street. It is clear that BR has made, and continues to make, strenuous efforts to operate the Euroterminal with regard for the local environment.
  Mr. Tony Lloyd: British Rail has at last made some effort, but it is more than a year since the terminal began to operate. My constituents have suffered a whole year because British Rail did not get it right in the first place.
  Mr. Watts: I have taken on board the hon. Gentleman's point that the efforts were made far too late for his constituents and to satisfy him. However unfortunate the history, and whatever the lessons for the future, it is only right to consider what has been done and is being done to overcome the problems inflicted on the hon. Gentleman's constituents. Strenuous efforts are being made, if not as early as they ought to have been, to operate the new terminal with regard for the local environment.
  As demand builds for BR's European services, more freightliner traffic will revert to the original Trafford Park terminal. Whatever the growth of European business for the north-west, capacity for container handling at the Euroterminal is limited to 100,000 containers per year, so
  674
  there should not be substantial further intensification of activity. Until the recent restriction on night use, those levels were already being reached.
  I hope that the hon. Gentleman and local residents will draw some comfort from the measures that have been completed or are under way.
  Mr. Lloyd: British Rail has been reluctant in the matter; it has been forced to act by the courts. Even the levels of noise about which we are talking are a significant increase. The decibel scale is not a linear scale, but a logarithmic scale. The extra 5 decibels makes an awful lot of difference. It means that there is an awful lot more noise than is made by the domestic refrigerator. If the Minister lived in such circumstances, would he, having seen his property devalued, want compensation?
  Mr. Watts: If I felt that my property had been devalued, I would make use of the provision that is available in the law to press a claim for compensation. I have tried to be as helpful as I can be in explaining what the provisions of the Land Compensation Act 1973 are, without venturing into territory that is not proper for me, which is to attempt to interpret what the law means. It would be foolish of a Minister, especially one who is a chartered accountant and not a lawyer by professional training, to try to give an interpretation of what the law means in its application to a particular case. The law is there and it can be used if individuals feel that they have a valid claim under it.
  I hope that the measures that are under way or completed and, perhaps, a rather more sensitive attitude to the management of the facility in the future will give some reassurance to the hon. Gentleman and to his constituents that attempts will he made to minimise the nuisance that arises from the operation of the terminal. It is, of course, a facility that is important to the development of freight business. It will be of benefit to the region in which the hon. Gentleman's constituency is situated. I know that he will recognise those benefits. Equally, it is important that we strike a balance and that the environmental costs to his constituents are not allowed to be too high in relation to the benefits that accrue. I hope that he will take some reassurance back to his constituents that measures to minimise nuisance will be continued into the future.
  Question put and agreed to.
  Adjourned accordingly at eleven minutes past Eleven o'clock.

DEFENCE

  Gulf War Veterans
  Mr. Llew Smith
  To ask the Secretary of State for Defence if the investigations his Department is conducting into Gulf war veterans suffering deleterious health effects following return from Operation Granby have examined the possibility of a relationship between the innoculations and NAPS tablets given to soldiers and health care personnel sent to the Gulf, and the development of motor neurone disease and leukaemia.

  Mr. Soames
  My Department considers all postulated causes of the alleged Gulf war syndrome. The possibility of a relationship between innoculations and NAPS tablets and the development of motor neurone disease and leukaemia has been examined. No evidence has been found within the body of medical knowledge to support such a connection.

  Training Flights
  Mr. Foulkes
  To ask the Secretary of State for Defence (1) how many overland training flights down to 100ft above ground level were conducted by the aircrew involved in the radar tracking trials using DA20 aircraft from West Freugh on 14 December 1994, prior to carrying out the trials flying; what was the location of the training flights; and what was the involvement of the Royal Air Force instructors in the training;

  (2) how many flights below 250ft above ground level were conducted by DA20 aircraft on radar trials from West Freugh during December; and what was the minimum authorised altitude for these flights.

  Mr. Soames
  Only one sortie below 250ft above ground level was flown by this aircraft, on 19 December; this involved a number of passes over the airfield at West Freugh. No sorties were flown below 250ft above ground level on other dates in December, nor were Royal Air Force instructors involved. The aircraft was operating under civil aviation regulations, and was authorised to fly down to a minimum authorised altitude of 100ft above ground level by the Civil Aviation Authority.

  Italian Tornados
  Mr. Redmond
  To ask the Secretary of State for Defence what was the purpose of the deployment of Italian Air Force Tornado aircraft to RAF Cottesmore in early December 1994; how many aircraft took part; which Royal Air Force unit hosted the visit; whether the visit was a NATO-sponsored unit exchange; how many low-level sorties were undertaken by the aircraft during the deployment, and at what minimum permitted altitudes; how many of these sorties included use of the Spadeadam range; and what breaches of flying regulations have been 354
  reported in respect of flying by the aircraft involved in the deployment.

  Mr. Soames
  Eight Italian Air Force Tornado aircraft were deployed to RAF Cottesmore, which hosted the visit, from 5 to 9 December; the purpose was to utilise the electronic warfare tactics range at RAF Spadeadam and carry out low-flying training within the United Kingdom low-flying system. The deployment was not part of a NATO squadron exchange. A total of 19 low-level sorties were flown, 11 of which involved the use of the Spadeadam range; the authorised minimum separation distance for each sortie was 500ft. There have been no reported breaches of flying regulations.

  Sea Service
  Mr. Peter Griffiths
  To ask the Secretary of State for Defence (1) if he will list the numbers of commissioned officers of each rank in the Royal Navy, differentiating between male and female officers of equivalent rank and indicating how many of the officers in each group have served at sea(a) at that rank or (b) at a lower rank.

  (2) if he will list the numbers of petty officers and ratings of each rank in the Royal Navy, differentiating between male and female personnel of equivalent rank and indicating how many in each group have served tours of duty at sea.

  Mr. Soames
  The information is not available in the precise form requested. A table showing the number of personnel serving on the trained strength of the Royal Navy—indicating chaplains and medical and dental officers—as at 1 January by rank and gender, together with the percentage of those personnel who have served at sea, is as follows. It should he noted that drafts and appointments to some ships—in refit or extended readiness, for example—do not count as sea service, and have been excluded. Additionally, some records which pre-date computerisation, particularly those of the more senior officers, may not be complete.

  Officers

  Male

  Female

  Rank

  Total

  Sea percent.

  Total

  Sea percent.

  Admiral

  4

  100

  0

  0

  Vice Admiral

  13

  85

  0

  0

  Rear Admiral

  27

  72

  0

  0

  Captain

  356

  93

  3

  0

  Commander

  1,125

  96

  12

  25

  Lieutenant Commander

  2,292

  95

  42

  45

  Lieutenant

  2,664

  88

  201

  48

  Sub Lieutenant/Midshipman

  230

  86

  24

  50

  Total

  6,711

  92

  282

  46

  Petty Officers and Ratings

  Male

  Female

  Rate

  Total

  Sea percent.

  Total

  Sea percent.

  Warrant Officer

  819

  97

  10

  20

  Chief Petty Officer

  6,973

  99

  102

  13

  Petty Officer

  5,848

  98

  329

  22

  Leading Rate

  6,732

  99

  732

  29

  355

  Petty Officers and Ratings

  Male

  Female

  Rate

  Total

  Sea percent.

  Total

  Sea percent.

  Able/Ordinary Rate

  11,271

  95

  1,655

  58

  Total

  31,643

  97

  2,838

  45

  Plutonium
  Ms Walley
  To ask the Secretary of State for Defence what complaints he has received about heavy goods vehicles carrying plutonium in police convoys travelling at over 70 mph on motorways.

  Mr. Soames
  I have received no such complaints.

  Employees, Hampshire
  Mr. Denham
  To ask the Secretary of State for Defence how many people were employed in the defence industry in Hampshire in each year since 1989.

  Mr. Freeman
  The numbers of United Kingdom regular service and Ministry of Defence civilian personnel working in Hampshire in 1 July in the years in question are set as follows. Figures for employment in defence-related industries are not available below the level of economic planning region.

  Service1

  Civilian2

  Total

  1989

  36,715

  20,397.5

  57,112.5

  1990

  34,254

  20,112.0

  54,366.0

  1991

  33,412

  20,111.0

  53,523.0

  1992

  31,742

  19,532.0

  51,274.0

  1993

  29,794

  18,168.5

  47,962.5

  1994

  29,092

  18,473.0

  47,565.0

  1 The 1994 figure for UK regular service personnel is provisional.

  2 Permanent staff counted as full time equivalents. The figure for 1992 is at 1 October.

  Defence Land Agency
  Mr. Jamieson
  To ask the Secretary of State for Defence if he will make a statement regarding the

  Illustration of costs for 350 resignations

  Year

  Gross costs to be met from CC income £

  Housing capital (funded by CC) £

  Net costs for Church £

  New housing capital (Funded by CC £

  1994

  2,452,000

  5,011,000

  747,000

  5,011,000

  1995

  3,439,000

  4,770,000

  1,872,000

  4,770,000

  1996

  3,216,000

  1,370,000

  1,899,000

  1,370,000

  1997

  2,434,000

  355,000

  1,226,000

  54,000

  1998

  1,731,000

  213,000

  706,000

  (100,000)

  1999

  1,250,000

  111,000

  433,000

  (215,000)

  2000

  890,000

  85,000

  272,000

  (254,000)

  2001

  851,000

  88,000

  412,000

  (264,000)

  2002

  707,000

  91,000

  413,000

  (274,000)

  2003

  625,000

  85,000

  437,000

  (285,000)

  2004

  415,000

  —

  321,000

  (396,000)

  2005

  289,000

  —

  244,000

  (411,000)

  2006

  216,000

  —

  197,000

  (428,000)

  2007

  211,000

  —

  204,000

  (445,000)

  2008

  211,000

  —

  209,000

  (463,000)

  2009

  217,000

  —

  216,000

  (361,000)

  2010

  221,000

  —

  221,000

  (375,000)

  356
  outcome of investigations by Ministry of Defence police into the activities of certain employees of the Defence Land Agency relating to the disposal of Ministry of Defence property in south-west England, described in Petty Officers and Ratings his answer of 12 April 1994, Official Report, column 148.

  Mr. Soames
  This matter is still under investigation and papers now rest with the Crown Prosecution Service.

CHURCH COMMISSIONERS

  Women Ministers
  Mr. Frank Field
  To ask the right hon. Member for Selby, as representing the Church Commissioners, pursuant to his answer of 23 February,Official Report, column 333, by how much the Commissioners' allocation to stipends has been reduced in the current year as a result of providing for resignations under the Ordination of Women (Financial Provisions) Measure 1993; what are the expected cuts in the allocation to stipends for this reason in each of the next three years; and if he will give his latest estimate of the cost of financial provision under the Measure on the same basis as the figures given to the Ecclesiastical Committee on 11 March 1993.

  Mr. Alison
  The commissioners are currently engaged, with dioceses, on a programme of cuts in diocesan support amounting to £32 million by 1997 to bring their expenditure and income back into balance. Those cuts are not directly related to the costs of financial provision arising from the ordination of women legislation, although those costs have had an impact—relatively modest—on the scale of cuts required. The commissioners' latest estimates of those costs to be met from their income average around £3 million per annum over the period 1995—97.

  Actual expenditure in 1994 and illustrative costings based on a possible total of 350 resignations are set out in the following table. These reflect the pattern of expenditure incurred to date.
  357

  Illustration of costs for 350 resignations

  Year

  Gross costs to be met from CC income £

  Housing capital (funded by CC) £

  Net costs for Church £

  New housing capital (Funded by CC £

  2011

  226,000

  —

  226,000

  (390,000)

  2012

  233,000

  —

  233,000

  (406,000)

  Total

  19,834,000

  12,189,000

  10,488,000

  6,138,000

  Notes:

  (a) The number of resignations shown (350)is a broad estimate, and the final costs may vary substantially.

  (b) Actual costs based on 232 resignations are shown in respect of 1994. A similar pattern of costs has been assumed for future years.

  (c) The figures make allowance for future increases in house prices and stipends.

  (d) It has been assumed that 50 per cent. of resigners will require housing assistance.

  (e) The net figures take account of such variables as stipends savings (assuming at least a temporary reduction in the payroll), allowance for retirement housing provision which would otherwise have arisen on retirement, and the possibility of some people redeeming loans or leaving rented accommodation once they have obtained alternative employment.

EMPLOYMENT

  Labour Statistics, Harrogate
  Mr. Robert Banks
  To ask the Secretary of State for Employment if he will set out the level of average rate of unemployment in the Harrogate travel-to-work area for the most convenient date in the year since 1979.

  Mr. Oppenhein
  The information requested is available monthly from June 1983 and can be obtained, on the unadjusted basis only, from the NOMIS database in the Library.

  Training
  Mr. Steinberg
  To ask the Secretary of State for Employment what is his estimate of the number of jobs that will be lost due to the re-defined criteria for payment to training providers of training for work programmes; and what provision will be made for trainees unable to complete their study.

  Mr. Paice
  I can make no estimate of the overall change in staffing amongst training providers. Individual training and enterprise councils determine both the training providers they fund and the nature of the payment arrangements to those providers. TECs have a contractual responsibility to ensure that trainees are given the opportunity to undertake suitable alternative training should a provider no longer be able to offer training for work.

  Mr. Steinberg
  To ask the Secretary of State for Employment how many participants are transferring annually from employment training or training for work schemes to supported self employment.

  Mr. Paice
  In 1993–94, 5 per cent. of all training for work trainees in Great Britain were self-employed six months after leaving. No information is held centrally about how many of these people or their businesses receive some form of support.

  Mr. Steinberg
  To ask the Secretary of State for Employment what mechanism there is to fund new training providers wishing to replace those training managers who can no longer justify their existence under existing rules.

  Mr. Paice
  Training and enterprise councils are free to fund new training providers who satisfy their requirements.

  Professional Executive Services
  Mr. Denham
  To ask the Secretary of State for Employment if he will publish a list of all Employment Service offices indicating those which(a) will be using the services of the professional executive services team in 1995–96 and (b) need its services in 1994–95 and, in the case of each office, the estimate made of the number of unemployed people for whom these services would be useful.

  Miss Widdecombe
  Responsibility for the subject of the question has been delegated to the Employment Service Agency under its chief executive. I have asked him to arrange for a reply to be given.

  Letter from R. M. Phillips to Mr. John Denham, dated 13 March 1995:
  The Secretary of State has asked me, in the absence of the Chief Executive, to reply to your question asking for a list of all Employment Service (ES) offices, together with information on the Professional Executive Services Team.The ES has over 1,350 offices throughout the country and to list them would not be practical. I have however provided details of the offices involved with the Professional and Executive Services Team which I trust you will find useful.The Professional and Executive Services Team offers specialist advice to executive level jobseekers on jobsearch activities. It was created at a time of rising unemployment to help unemployed executives in Hampshire and Isle of Wight. It was a local initiative in response to a rise in the number of unemployed executives in the area. Under this initiative executives were offered a half-day seminar on jobsearch techniques and an opportunity to include their pen picture in an occasional brochure which was distributed to local employers.With falling unemployment, the provision of this service has been reviewed and it will remain available during the coming operational year within the ES Portsmouth District. This District covers ES Jobcentres at Portsmouth, Newport, Ryde, Shanklin, Cosham, and Havant.During the current operational year these services have also been available within three other ES Districts; Southampton, Fareham, Winchester and Portsmouth. These Districts cover ES Jobcentres at Andover, Basingstoke, Petersfield, Winchester, Hythe, Lymington, Southampton, Woolston, Eastleigh, Fareham, Gosport.Specialist services to unemployed executives will continue throughout the ES with Executive Jobclubs and Executive Job Search Seminar programmes.While it is difficult to predict the future level of success of the scheme, I can advise that approximately 20 vacancies were taken by the Professional and Executive Service Team in Southampton between April 1994 and January.I hope this is helpful.

  Jobcentres
  Mr. Blunkett
  To ask the Secretary of State for Employment (1) if he will investigate the actions of the Employment Service in misascribing the constituency which the jobcentre in the Firth park area of Sheffield serves to the hon. Member for Sheffield, Attercliffe (Mr. Betts).

  (2) who is responsible for decisions in relation to the closure of the jobcentres; if it is his policy that the local Member of Parliament should be consulted or informed with regard to any changes to the availability of such a service; and if he will make a statement;

  (3) if he will investigate the proposal to close the Firth park jobcentre facility in Sheffield and the cost involved in clients having to travel to alternative facilities.

  Miss Widdecombe
  I regret the error which occurred and I have asked the chief executive of the Employment Service for a full explanation. I will write to the hon. Member in due course.

TREASURY

  Derivatives Dealing
  Mr. Campbell-Savours
  To ask the Chancellor of the Exchequer on what dates discussions took place between Treasury officials and Japanese officials on the incidence of off-exchange dealings in derivatives in Japan by non-Japanese nationals in the last two years.

  Mr. Nelson
  Japanese, United Kingdom and United States securities markets regulators met in Tokyo on 22 April 1994 in one of a series of trilateral meetings to discuss co-operation and regulatory issues in financial services. One of the issues discussed was the over-the-counter derivatives business. It was agreed to co-operate on a trilateral basis in further study.

  Mr. Nicholas Winterton
  To ask the Chancellor of the Exchequer what information he has about the value of pensions business currently handled by United Kingdom building societies; what information he has concerning the extent to which such societies are trading in derivatives; what steps he is taking in the light of the Baring affair to issue guidance to such derivative-trading building societies; and if he will make a statement.

  Mr. Nelson
  [holding answer 9 March 1995]: The volume of pensions business handled by building societies is very small both in relation to the size of their operations overall, and to the total volume of pensions in the United Kingdom. Under the Building Societies Act 1986, societies may use a limited range of derivatives, but only for the reduction of risk arising from changes in interest rates, currency rates or other prescribed factors. They do not have the power to trade or speculate in derivatives. The Building Societies Commission has issued prudential guidance on the use of derivatives. The commission keeps its prudential guidance under review. If further guidance is needed in the wake of recent events at Barings, the commission will provide it.
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  Mr. Nicholas Winterton
  To ask the Chancellor of the Exchequer what steps are being taken by the Building Societies Commission to ensure that building societies do not become involved in derivatives trading; and if he will make a statement.

  Mr. Nelson
  [holding answer 9 March 1995]: Building Societies may enter into only a restricted range of derivative contracts, solely for the purpose of reducing loss. They do not have the power to trade or speculate in derivatives.

  Manufactures
  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer when he expects United Kingdom relative export unit values for manufactures to fall to the fourth quarter 1986 level; and if he will list United Kingdom relative export unit values for manufactures for each quarter since the fourth quarter of 1986.

  Mr. Nelson
  The latest Treasury forecast for relative export unit values for manufactures is shown in chart 3.18 of the November 1994 "Financial Statement and Budget Report", together with historical data back to 1975.

  Quarterly data for relative export unit values for manufactures can be found in the "Monthly review of External Trade Statistics" published monthly by the Central Statistical Office.

  Civil Servants
  Mrs Maddock
  To ask the Chancellor of the Exchequer what proportion of those accepted for fast-stream entry for which his Department is responsible(a) in 1991, (b) 1992, (c) in 1993 and (d) in 1994 were women.

  Mr. Nelson
  Details for 1991 and 1992 are given in the civil service commissioners report for the relevant year. Copies of the reports are available in the Library. The information for 1993 and 1994 is as follows.

  Year

  Male

  Female

  Total

  1993

  13

  4

  17

  1994

  8

  5

  13

  Interest Rates
  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer if he will publish full details of the transmission mechanism through which increases in interest rates reduce the rate of inflation.

  Mr. Nelson
  A change in interest rates is likely to affect the pressure of demand in the economy and hence inflation, through several different channels. It affects investment, stockbuilding and consumption directly by changing the cost of capital and the cost of borrowing. It also affects these expenditures indirectly by changing the incomes of borrowers and creditors and the value of assets, such as housing. It may also affect the inflation rate by changing the exchange rate and hence sterling
  361
  import prices. Some of these effects can be quick acting; others occur over a longer period.

  Quantifying the aggregate effect is difficult. The estimates produced by the major United Kingdom macroeconomic models, including the published Treasury model, are regularly compared and published by the Economic and Social Research Council Macroeconomic Modelling Bureau at the University of Warwick. The latest comparison was published in the August 1993 "National Institute Economic Review," a copy of which is in the Library.

  Bank of England
  Mr. Vaz
  To ask the Chancellor of the Exchequer if he will list the names and tenures of the governors and deputy governors of the Bank of England over the last 30 years.

  Mr. Nelson
  The information requested is as follows.

  Tenure

  Governors

  Lord Cromer

  1 July 1961 – 30 June 1966

  Lord O'Brien

  1 July 1966 – 30 June 1973

  Lord Richardson

  1 July 1973 – 30 June 1983

  Lord Kingsdown

  1 July 1983 – 30 June 1993

  E A J George

  1 July 1993 –

  Deputy Governors

  Lord O'Brien

  1 March 1964 – 30 June 1966

  Sir Maurice Parsons

  1 July 1966 – 28 February 1970

  Sir Jasper Q Hollom

  1 March 1970 – 29 February 1980

  C W McMahon

  1 March 1980 – 31 December 1985

  Sir George Blunden

  1 January 1986 – 28 February 1990

  E A J George

  1 March 1990 – 30 June 1993

  R L Pennant-Rea

  1 July 1993 –

  Tourism
  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer if he will list the balance of payments on tourism for(a) 1976, (b) 1977, (c) 1993 and (d) 1994 to-date in 1994 prices.

  Mr. Nelson
  The travel account balances at 1990 prices are:

  Year

  Balance (million)

  1976

  +3,882

  1977

  +4,832

  1993

  -2,691

  Constant price estimates are routinely based on 1990 prices. Full data for 1994 are not available.

  EU Membership (Economic Benefits)
  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer if he will list and quantify the economic benefits which will flow to the United Kingdom from membership of the European Union, together with the beneficiaries.

  Mr. Nelson
  I have nothing to add to the replies I gave to the hon. Member on 17 March 1994,Official Report, column 822, on the 30 June 1994, Official Report, column 680, and on 19 September 1994, Official Report, column 941, and to the reply my right hon. Friend the Prime
  362
  Minister gave on 18 May 1994, Official Report, column 470, the reply my hon. Friend the Paymaster General gave on 25 November 1994, Official Report, column 468, and the reply my right hon. Friend the Member for Eddisbury (Mr. Goodlad), the Minister of State for Foreign and Commonwealth Affairs, gave on 29 November 1994, Official Report, column 583 in response to very similar questions from the hon. Member.

  Imported Goods
  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer if the Government are opposed to an increase in the price of imported relative to home-produced goods; and if he will make a statement.

  Mr. Nelson
  The Government are committed to permanently low inflation. We are not opposed to an increase in the price of imported goods relative to domestic goods unless this signals rising inflation.

  Return on Capital
  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer if he will give his assessment of(a) the rate of return on capital employed in manufacturing and non-manufacturing in 1993 and 1994 and (b) the connection between rate of return and investment in increased manufacturing capacity.

  Mr. Nelson
  The net real rate of return on capital employed by manufacturing companies in 1993 was 5.8 per cent. For all industrial and commercial companies—ICCs—it was 8.4 per cent. Data for 1994 are not yet available, but the forecast published last November in the "Financial Statement and Budget Report" showed the net real rate of return for all ICCs rising to 10 per cent. in 1994, with some further increase in 1995. Increases in rates of return contribute to an improved climate for investment. Evidence of this is beginning to emerge. For example, manufacturing investment in plant and machinery in the fourth quarter of 1994 was 5½ per cent. up on the previous quarter and 7¾ per cent. up on a year earlier.

  Tax Fraud
  Mr. Frank Cook
  To ask the Chancellor of the Exchequer how much the Government have spent on the detection of tax fraud for each year since 1979.

  Sir George Young
  The costs of investigating tax offences which actually amount to fraud are not separately identifiable. However, the costs of investigations carried out by the Inland Revenue into tax evasion, which includes fraud, during the last five years, were as follows:

  Year

  Spending £ million

  1989–90

  89

  1990–91

  103

  1991–92

  115

  1992–93

  124

  1993–94

  137

  Comparable figures for earlier years are not available.

  Valuation Office
  Mr. Matthew Banks
  To ask the Chancellor of the Exchequer whether he has reached a decision on the prior options in relation to the current three-year review of the Valuation Office as a next steps agency; and if he will make a statement.

  Mr. Nelson
  Treasury Ministers have now considered the options for the future of the Valuation Office agency, taking into account views expressed in response to the public consultation. We have concluded that the Valuation Office should continue as a next steps agency in the public sector and within the Inland Revenue.

  The next stage of the review, which it is hoped will be concluded by the end of April or very shortly thereafter, involves completing the evaluation of the agency's performance to date, reviewing the detailed framework within which the agency operates and considering the appropriate senior management structure for it.

  The next stage will in particular examine the potential for involving the private sector to a greater extent in the agency's non-core work; develop proposals for securing future improvements in efficiency, effectiveness and quality in the tasks it undertakes; and consider whether trading fund status would be appropriate for the agency.

  We expect to publish the results of the review in due course.

  Financial Institutions
  Mr. Malcolm Bruce
  To ask the Chancellor of the Exchequer what directions the Bank of England has given to United Kingdom financial institutions in relation to the separation of responsibilities between the front office and the settlements or back office areas of the trading units within such institutions.

  Mr. Nelson
  [holding answer 6 March 1995]: The Bank of England does not issue directions to banks on how they must conduct their internal trading and settlement operations but would generally expect the functions of authorisation, execution, valuation, reconciliation, custody and recording to be handled separately.

  Permanent Secretaries
  Mr. Milburn
  To ask the Chancellor of the Exchequer which permanent secretaries have left his Department's employment in the last five years; and which public positions they have been appointed to subsequently.

  Mr. Nelson
  [holding answer 8 March 1995]: Sir Peter Middleton and Sir John Anson have retired as permanent secretaries from the Treasury in the five years from 1 March 1990. They have not been appointed to any public positions.

  Cefn Lea Park Christian Centre
  Mr. Alex Carlile
  To ask the Chancellor of the Exchequer what was the rateable value of the Cefn Lea Park Christian holiday centre, Dolfar, Newton in 1994—95; what it will be in 1995—96; and if he will make a statement.
  364
  Mr. Nelson
  [holding answer 8 March 1995]: The rateable value for this centre is £9,400 in 1994–95 and will be £27,535 for 1995–96.

  The Government have introduced transitional arrangements to phase in assessments which have been increased. For properties with a new rateable value of £10,000 or more, increases in rate bills will be limited to 10 per cent. plus inflation. The same limits on increases will continue to apply for each year up to and including 1999–2000.

  Ratepayers who are dissatisfied with their new assessments may appeal after the new lists come into effect on 1 April 1995.

  Absenteeism
  Mr. Chidgey
  To ask the Chancellor of the Exchequer what measures he is taking to combat sickness absenteeism in(a) the Office of the Paymaster, (b) the Central Statistical Office, (c) the Royal Mint and (d) the Treasury.

  Mr. Nelson
  [holding answer 9 March 1995]: All four Departments are alert to the need to keep sickness absence to a minimum, and have introduced a range of initiatives to help improve the health of their staff and reduce sickness absence. They each have a separate dedicated welfare officer and a health and safety officer. All adopt widespread no-smoking policies, provide health screening, eye and eyesight tests for those who use display screen equipment and special leave for domestic emergencies.

  In addition (a) the Office of the Paymaster has introduced a "look after your heart scheme", cancer screening for women, a workplace nursery and holiday play scheme arrangements; (b) the Central Statistical Office held health screening programmes in both 1992 and 1993, makes health promotional videos available in its Library, has organised presentations from the national physiotherapy service and provides holiday play scheme arrangements; (c) the Royal Mint has an on-site occupational health service, a health screening programme and access to a fitness centre; (d) the Treasury also has a fitness centre, provides holiday play scheme arrangements, provides awareness seminars for new VDU users and carries out workstation risk assessments for all DSU users and regular risk assessment of the workplace. In addition, contractors are asked to provide a copy of their health and safety policy statement and are briefed on best safety practice in the workplace.

  All four departments have systems in place to record and monitor sickness absence; to manage staff with unacceptable levels of sickness absence; and to take appropriate action if it proves impossible to bring attendance back to acceptable levels. These systems are kept under review.

  Performance-related Pay
  Ms Coffey
  To ask the Chancellor of the Exchequer what was the annual cost to the Exchequer in foregone revenue of performance-related pay schemes for the latest year for which figures are available.

  Sir George Young
  [holding answer 27 February 1995]: There is no tax relief for performance-related pay.

PRIME MINISTER

  Executive Remuneration
  Mr. Burden
  To ask the Prime Minister what plans he has to ensure co-ordination between Ministers and regulatory bodies in monitoring levels of executive salaries and share options in privatised industries and services.

  The Prime Minister
  The role of regulators is to protect consumers. Regulators cannot be expected to judge the merits of individual board members, set their pay effectively and determine the appointment of boardroom executives. We await the conclusions of the Greenbury committee on the best practice for companies on executive remuneration.

  Water and Sewerage
  Mr. Nicholls
  To ask the Prime Minster what is the cost of his Department's expenditure on water and sewerage in(a) the current year and (b) each of the previous years.

  The Prime Minister
  For this purpose my office is part of the Cabinet Office. I refer the hon. Member to the answer given today by my hon. Friend the Parliamentary Secretary, Office of Public Service and Science.

  Ministerial Resignations
  Dr. Wright
  To ask the Prime Minister if he will provide a list of those ministers who have left his Government since 1992 and give in each case the reason for their departure.

  The Prime Minister
  The following Ministers have resigned from the Government since the end of 1992:

  The right hon. Norman Lamont MP

  The right hon. Tristan Garel-Jones MP

  The right hon. Sir Archie Hamilton MP

  Edward Leigh MP

  Sir Kenneth Carlisle MP

  Robert Jackson Esq. MP

  Michael Mates Esq. MP

  The right hon. the Lord Hesketh

  Tim Yeo MP

  The right hon. the Earl of Caithness

  Michael Brown MP

  The right hon. the Lord Wakeham

  The right hon. John MacGregor OBE, MP

  The right hon. Peter Brooke CH, MP

  The right hon. John Patten MP

  The right hon. Sir Timothy Sainsbury MP

  The right hon. Sir Wyn Roberts MP

  The right hon. Sir Peter Lloyd MP

  The right hon. Sir Nicholas Scott KBE MP

  The right hon. Sir John Cope MP

  The hon. Sir Mark Lennox-Boyd MP

  Patrick McLoughlin MP

  Robert Key MP

  Sir Irvine Patnick OBE, MP

  Earl of Strathmore and Kinghorne

  Viscount St. Davids

  Lord Annaly

  Tim Smith MP

  Neil Hamilton MP

  Earl of Arran

  366

  Allan Stewart MP

  Charles Wardle MP

  Robert G. Hughes MP

  There were a number of differnt reasons for these resignations.

  G7 Summit
  Mr. Dowd
  To ask the Prime Minister when he expects to respond to the letter to him of 3 March from the Secretary of the Japanese Labour Camp Survivors Association concerning its attendance at the G7 summit in July; and what his response will be.

  The Prime Minister
  A reply will be sent shortly. The arrangements for the G7 summit are in the hands of the Canadian authorities, who hold the chair at the moment, but there would normally be no objection to the presence in Halifax of non-governmental groups and organisations.

  Animal Protection, South Korea
  Mr. Matthew Taylor
  To ask the Prime Minister if he will raise the issue of the illegal cat and dog meat industry operating in South Korea when he meets the President of Korea later this month; if he will press the President of Korea to introduce stricter animal protection laws; and what action he has taken to stop the illegal cat and dog meat industry in South Korea.

  The Prime Minister
  I met the President of the Republic of Korea on Wednesday 8 March. We discussed bilateral trade and investment, science and technology, and other issues of mutual interest. We did not discuss the issue of animal protection but the South Korean Government are aware of the concerns of the British public on this issue.

OVERSEAS DEVELOPMENT ADMINISTRATION

  International Development Association
  Mr. Denham
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make it his policy, in relation to negotiations on the 11th replenishment of the International Development Association to propose that the accountability of IDA to both donor Governments and projected beneficiaries is improved, and that the 1993–94 reforms on information disclosure must be fully implemented.

  Mr. Baldry
  We will work with other donors during the negotiations on the 11th replenishment of IDA on the issues of strengthening IDA's accountability and implementation of its information disclosure policy.

  Mr. Denham
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make it his policy, in the negotiations on the 11th replenishment of IDA, to propose that(a) the objective of poverty reduction is fully incorporated into IDA loans, (b) social impact assessments are completed for all IDA projects, assessing social outcomes of loans as well as predicted adverse social impacts and (c) the proportion of IDA lending allocated to programmes of targeted intervention should be increased to at least 50 per cent.

  Mr. Baldry
  Poverty reduction is IDA's central objective, and we are ready to support measures which
  367
  will enhance IDA's effectiveness in helping borrowers to implement this objective, including expanded use of social impact assessments to improve the quality of IDA's lending. We are not persuaded, however, that global targets are an efficient way of achieving this. The composition of IDA's lending as made clear in the IDA-10 donors' report, should reflect the needs of individual countries.

  Mr. Denham
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make it his policy, in relation to negotiations on the 11th replenishment of IDA, to propose that(a) stringent procedures for evaluating the World bank's compliance with replenishment conditions should be agreed and (b) annual evaluations of IDA should be undertaken.

  Mr. Baldry
  Donors already require IDA management to report annually on progress made in implementing policy agreed under particular replenishments.

  Mr. Denham
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make it his policy to agree to the 11th replenishment of IDA only if he believes that the funds will be used in line with the objectives set out in his overseas development programme.

  Mr. Baldry
  IDA's priority objectives of poverty reduction, sound economic management and environmentally sustainable development closely match those of the UK aid programme.

  Mr. Denham
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make it his policy, in relation to the negotiations for the 11th IDA replenishment, that there should be no use of IDA funds to pay off the multilateral debt of recipient countries.

  Mr. Baldry
  We and other donors support continuation of IDA's fifth dimension facility, which is financed through reflows on past IDA loans and allocates additional resources to eligible IDA recipients which are on-track with their reform programmes, in proportion to interest payments due on their International Bank for Reconstruction and Development debt. We are also ready, in the context of the 11th replenishment negotiations, to consider whether there are other ways IDA might assist those few countries which have an unsustainable burden of multilateral debt, building on the suggestions made by my right hon. and learned Friend the Chancellor of the Exchequer at the annual meetings of the IMF and World bank in Madrid last October.

  Indonesian Police
  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer of 3 February,Official Report, column 883–84, what mechanisms he has put in place to ensure that no officers of the Indonesian police force who have been involved in activities relating to human rights abuses in Indonesia and East Timor receive scholarship awards in the United Kingdom or other training financed by his Department; and how many of those proposed as trainees by the Indonesian police force have been excluded from (a) scholarship awards in the United Kingdom and (b) other forms of training financed by his Department on these grounds in each year since 1990.

  Mr. Baldry
  [holding answer 8 March 1995]: All applicants for training under the Indonesia police project provide biographical details, have their work performance
  368
  assessed, and are interviewed before selection. No officers proposed for training have been rejected on grounds of involvement in human rights abuses.

HOME DEPARTMENT

  Rugby Offences
  Mr. Campbell-Savours
  To ask the Secretary of State for the Home Department what plans he has to seek a review of the law as it relates to offences on a rugby field.

  Mr. Maclean
  The Law Commission is currently considering the application of the criminal law to acts of violence committed in sport, as part of its inquiry into consent as a defence to offences against the person. The Government have no plans at present to review the law in this area.

  Passport Fraud
  Mr. Rooker
  To ask the Secretary of State for the Home Department in how many cases of false(a) full passports and (b) British visitor's passports in the past five years it has been discovered that a living person's identity has been duplicated

  Mr. Nicholas Baker
  The total number of fraudulent passport applications in each of the last five years was:

  Full passports

  British visitor's passports

  1990

  854

  210

  1991

  1,037

  151

  1992

  984

  126

  1993

  1,162

  159

  1994

  1,031

  116

  Separate figures are not available for the number of those applicants who used false identifies posing as a living person.

  Immigration Control
  Mr. David Shaw
  To ask the Secretary of State for the Home Department what steps he is taking to maintain immigration control-effectiveness at Dover.

  Mr. Nicholas Baker
  Immigration officers apply a document check to all passengers arriving at Dover, and examine non-EEA nationals to assess their admissibility under the immigration rules.

  In addition, immigration officers conduct surveillance on car and freight traffic to combat clandestine immigration by concealment in vehicles and containers. The number of clandestine entrants detected in the Dover area increased form 256 in 1993 to 379 in 1994.

  Al Fayed Brothers
  Mr. Alex Carlile
  To ask the Secretary of State for the Home Department if he will give the reasons for refusing British nationality to(a) Mr. Mohammed Al-Fayed and (b) Mr. Ali Al-Fayed; and if he will make a statement.
  369
  Mr. Nicholas Baker
  No. It is not our practice to comment on individual applications for naturalisation.

  Mr. Campbell-Savours
  To ask the Secretary of State for the Home Department if he will place in the Library copies of his correspondence with the hon. Member for Tatton (Mr. Hamilton) concerning the Al-Fayed's.

  Mr. Nicholas Baker
  I refer the hon. Member to the reply I gave to his question on 7 March 1995,Official Report, column 116.

  Asylum Seekers
  Mrs. Barbara Roche
  To ask the Secretary of State for the Home Department how many applications for asylum were determined in 1994; in how many cases(a) the applicant was granted asylum, (b) the applicant was refused and (c) the application was refused under paragraph 345 of the immigration rules.

  Mr. Nicholas Baker
  Information on decisions taken on applications for asylum in 1994, is in the table.

  Decisions1 2 on applications received for asylum in the United Kingdom, excluding dependants, by type, 1994

  Number of applicants

  31994

  Total Decisions

  20,990

  Recognised as a refugee and granted asylum4

  825

  Not recognised as a refugee but granted exceptional leave to remain

  3,660

  Total refused

  16,500

  Refused asylum and exceptional leave after full consideration

  12,655

  Refused on safe third country grounds5

  865

  Refused under paragraph 180F of Immigration Rules6

  2,985

  1 Decisions do not necessarily relate to applications made in the same period.

  2 Information is of initial determination decisions, excluding the out-come of appeals or other subsequent decisions.

  3 Provisional figures rounded to the nearest 5.

  4 Excluding South East Asian refugees.

  5 Refusals under para 345 of the Immigration Rules since 1 October 1994.

  6 Para 340 refusals since I October 1994. For failure to provide evidence to support the asylum claim within a reasonable period, including failure to respond to invitation to interview to establish identity.

  Mrs. Roche
  To ask the Secretary of State for the Home Department how many asylum seekers have been removed to France on safe third country grounds since 26 July 1993; and how many of those so removed have been returned to the United Kingdom by the French authorities.

  Mr. Nicholas Baker
  Available records show that 153 asylum seeker have been removed to France on safe third country grounds since 26 July 1993. Of these, 80 have been returned to the United Kingdom.

  Mr. Corbyn
  To ask the Secretary of State for the Home Department if he will give a breakdown by country of origin of current applicants for asylum, of the duration of their application, the time spent in detention and the proposed action, if any, by his Department.
  370
  Mr. Nicholas Baker
  The available information on the number of applications for asylum awaiting an initial decision as at 31 December 1994, by nationality, is given in the table. Information on the length of time these applicants have been waiting for an initial decision is not available.

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

  Mrs. Roche
  To ask the Secretary of State for the Home Department how many asylum seekers have been removed to France on safe third country grounds since 26 July 1993; and how many of those so removed have been returned to the United Kingdom by the French authorities.

  Mr. Nicholas Baker
  Available records show that 153 asylum seekers have been removed to France on safe third country grounds since 26 July 1993. Of these, 80 have been returned to the United Kingdom.

  Mr. Corbyn
  To ask the Secretary of State for the Home Department if he will give a breakdown by country of origin of current applicants for asylum, of the duration of their application, the time spent in detention and the proposed action, if any, by his Department.

  Mr. Nicholas Baker
  The available information on the number of applications for asylum awaiting an initial decision as at 31 December 1994, by nationality, is given in the table. Information on the length of time these applicants have been waiting for an initial decision is not available.

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

  The number of asylum applications outstanding, excluding dependants, as at 31 December 1994, by nationality

  Nationality

  Applications outstanding

  Europe including Americas

  Bulgaria

  550

  Colombia

  590

  Romania

  805

  Turkey

  3,545

  Former USSR

  1,155

  Former Yugoslavia

  5,990

  Others

  1,630

  Total

  14,265

  Africa

  Angola

  1,815

  Benin

  50

  Cameroon

  175

  Ethiopia

  1,345

  Ghana

  5,435

  Kenya

  2,090

  Nigeria

  5,100

  Somalia

  1,025

  Sudan

  510

  Togo/Ivory Coast

  1,300

  Uganda

  1,275

  Zaire

  3,570

  Others1

  3,570

  Total

  27,270

  Middle East

  Iran

  805

  Iraq

  575

  Lebanon

  475

  371

  The number of asylum applications outstanding, excluding dependants, as at 31 December 1994, by nationality

  Nationality

  Applications outstanding

  Others

  945

  Total

  2,805

  Asia

  China

  860

  India

  2,630

  Pakistan

  2,760

  Sri Lanka

  3,185

  Others

  1,405

  Total

  10,840

  Nationality Unknown

  80

  Grand Total

  55,255

  1 includes Sierra Leone

  Mrs. Roche
  To ask the Secretary of State for the Home Department if he will provide a breakdown by nationality of the number of asylum seekers removed from the United Kingdom on safe third country grounds in 1994.

  Mr. Nicholas Baker
  Information on the number of removals of asylum seekers whose applications were refused on safe third country grounds, by nationality, for 1994 is given in the table.

  Information on the destination of asylum applicants refused and removed on safe third country grounds, and the number of those who were returned by the country removed to, could be obtained only at disproportionate costs.

  Number1 of asylum seekers whose applications were refused on safe third country grounds and who were removed, excluding dependants, by nationality, 1994.

  Refusals

  Europe

  Albania

  3

  Bulgaria

  6

  Czechoslovakia

  11

  Poland

  6

  Romania

  11

  Turkey

  18

  Former USSR

  6

  Former Yugoslavia

  16

  Total

  77

  Americas

  Colombia

  1

  Other Americas

  2

  Total

  3

  Africa

  Algeria

  27

  Angola

  13

  Ethiopia

  9

  Ghana

  21

  Ivory Coast

  10

  Kenya

  2

  Liberia

  8

  Morocco

  1

  Niger

  1

  Nigeria

  15

  Sierra Leone

  12

  Somalia

  14

  372

  Number1 of asylum seekers whose applications were refused on safe third country grounds and who were removed, excluding dependants, by nationality, 1994.

  Refusals

  South Africa

  5

  Sudan

  4

  Tanzania

  2

  Uganda

  5

  Zaire

  4

  Other Africa

  2

  Total

  155

  Middle East

  Iran

  3

  Iraq

  7

  Lebanon

  6

  Total

  16

  Asia

  Afghanistan

  3

  Bangladesh

  3

  China

  6

  India

  6

  Pakistan

  7

  Sri Lanka

  24

  Total

  49

  Other and nationality not known

  6

  Grand Total

  306

  1 Provisional information pending the analysis of late data.

  Mr. Fisher
  To ask the Secretary of State for the Home Department if those seeking asylum in Britain are entitled to legal aid in order to apply for(a) a writ of habeas corpus and (b) a judicial review.

  Mr. John M. Taylor
  I have been asked to reply. Civil legal aid is available for both of these proceedings, subject to the statutory means and merits tests.

  Mr. Fisher
  To ask the Secretary of State for the Home Department how many people who are seeking asylum in the United Kingdom have been detained in the past 12 months, in(a) Campsfield, (b) Haslar holding centre, (c) Rochester and (d) Rickmansworth.

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

  Welsh Police
  Mr. Llwyd
  To ask the Secretary of State for the Home Department how many police officers were employed full-time by Welsh police forces in each year since 1990; and if he will make a statement.

  Mr. Maclean
  The total number of officers in Welsh forces is set out in the table. The available information does not distinguish officers employed on a full-time basis.

  Year As at 31 December

  Number of officers

  1990

  6,399

  1991

  6,424

  1992

  6,480

  1993

  6,438

  1994

  6,373

  Drugs (Deaths)
  Mrs. Helen Jackson
  To ask the Secretary of State for the Home Department if he will list the number of recorded deaths from(a) methadone and (b) heroin overdose for each coroner's area of the United Kingdom last year.

  Mr. Michael Forsyth
  This information is not collected centrally. In 1992, the latest year for which information is available, 76 notified drug addicts in the United Kingdom died because of an overdose of methadone, and 129 addicts died because of an overdose of heroin, morphine or other unspecified opiate drugs.

  Data Processing Contract
  Mr. Cohen
  To ask the Secretary of State for the Home Department (1) what were regarded as the relative(a) advantages and (b) disadvantages of (i) the ED5 in-house team bid and (ii) the Sema bid for the data processing contract in his Department; and on what basis he made his decision;

  (2) if he will list the senior managers within his Department who were responsible for data processing work prior to the recent privatisation; and if he will indicate what has happened to them, in career terms, since the award of the contract to Sema;

  (3) if his Department has paid towards the cost of redundancies of employees working on data processing at Corby who are likely to be re-employed in similar work at the site; and if he will make a statement;

  (4) if he will make a statement about how the bids from (a) the ED5 in-house team and (b) Sema for the data processing contract were evaluated; what assumptions were made about each bid including assumptions about aspects not directly contained in the bids; if the cost of the redundancies to he paid for by his Department was added to the Sema bid; and if he will make a statement;

  (5) if the evaluation process for the data processing contract covered all the services that were being undertaken on this work within his Department; and what adjustments were made in considering and comparing the bids for (a) the ED5 in-house team and (b) Sema to ensure an accurate comparison;

  (6) what was the period of time between the submission to this Department of best and final offers for the data processing contract and the announcement of the decision; and what factors underlay the length of time of this interval.

  Mr. Howard
  In the market test of the Home Office administrative information technology services division—ED5—the final competition was between Sema Group plc and an in-house team, in association with a private sector partner. Other bidders had been eliminated at earlier stages of the market test. Following detailed negotiations with Sema Group plc and the in-house team, both submitted "best and final offer" bids which were received on 9 June 1994. Both these bidders were considered technically capable of providing the required services and their bids were compared on the basis of a final evaluation which showed that the Sema bid represented better value for money offering estimated annual savings of about £4.8 million.

  The evaluation was undertaken on the basis of information put forward by the bidders in submitting their best and final offers. The evaluation covered all the
  374
  services in the contract; other information technology supplies and services provided to the Home Office which are outside the scope of the contract are purchased separately.

  In evaluating the offers, a number of adjustments were made to both bids to ensure that the total costs to the Home Office were being compared. The replies given to the hon. Member on 13 February, Official Report, columns 491–92, explained that details of bids and related evaluation arrangements are commercially confidential but the maximum potential costs to the Home Office of the transitional and restructuring costs in the Sema Group bid were used in the evaluation.

  It took 40 days to evaluate the bids, including consideration by Ministers and officials, and arrange the announcement which was made on 19 July 1994.

  The reply given to the hon. Member on 23 January at column 50 explained that with some limited exceptions staff in the undertaking were transferred to the Sema group. Subsequent redundancies are a matter for Sema plc who will meet the associated costs. Those staff in the undertaking who were redeployed before the transfer were found posts in the same grade elsewhere in the Department or in other Government Departments.

  Prisoners (Mental Illness)
  Mr. Allen
  To ask the Secretary of State for the Home Department what arrangements generally obtain in respect of prisoners for the treatment of a prisoner for mental illness who lived in one district health authority but is imprisoned in a prison covered by another district health authority; and if he will make a statement.

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

  Letter from Derek Lewis to Mr. Graham Allen, dated 13 March 1995.
  The Home Secretary has asked me to reply to your recent Question about arrangements for the treatment for mental illness of prisoners who are detained in establishments away from their usual districts of residence.The general rule under which the Prison Service has operated for many years is that it meets the costs of a prisoner's health care inside prison walls itself. That would include any treatment for mental illness. If a prisoner needs to be taken to an outside hospital for treatment for mental illness, the decision as to which hospital he/she is referred to is one for the clinicians involved in his/her care. The costs of treatment are a matter for his/her usual district of residence, except where the transfer to one of the special hospitals is concerned, as they are funded centrally by the Department of Health.Guidance issued by the NHS Management Executive states that the health authority responsible for funding the treatment of a prisoner/patient is determined by the address at which he or she was resident immediately before detention. Where that cannot be determined satisfactorily, responsibility falls on the district in which the offence, or alleged offence, in respect of which the prisoner is detained was committed.

  Crime Victims Hotline
  Mrs. Roche
  To ask the Secretary of State for the Home Department how many calls the telephone hotline for crime victims has received; how many of those calls have led to action being taken; and if he will specify the action.
  375
  Mr. Michael Forsyth
  [holding answer 10 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 13 March 1995:
  The Home Secretary has asked me to reply to your recent Question about the Victim Helpline.Up to 8 March this year, the Helpline had received 86 calls since its inception on 5 December 1994. The work of the Helpline is confidential and it is not possible to give details of individual calls. Of the 86 calls, sixty have been passed to prison governors for any necessary further action, such as the investigation of alleged unwanted contact from a prisoner. A further 26 calls were asking for advice on how the helpline operated.

  Parole
  Mrs. Roche
  To ask the Secretary of State for the Home Department (1) how many prisoners in the last year for which figures are available experienced a delay in their parole; what was(a) the average delay and, (b) the delay for each prisoner; and what has been (i) the total cost to public funds of these delays and, (ii) the cost for each prisoner;

  (2) how many prisoners are currently experiencing a delay in their parole; and what is the cost to public funds of keeping those people in prison.

  Mr. Michael Forsyth
  [holding answer 13 February 1995]: The Parole Board and parole unit are currently dealing with 569 cases involving prisoners where decisions on parole have been delayed beyond parole eligibility date or its anniversary. It is not possible to estimate the cost to public funds until these cases have been dealt with, and it is clear (a) in which cases parole will be granted, and (b) how long after the parole eligibility date a decision is notified to the prisoner.

  I regret that the information requested in relation to delays in parole during a complete year is not readily available and could be obtained only at disproportionate cost.

FOREIGN AND COMMONWEALTH AFFAIRS

  Chechnya
  Mr. Galbraith
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Russian Government concerning the war in Chechnya; and if he will make a statement.

  Mr. Douglas Hogg
  My right hon. Friend the Foreign Secretary raised our concerns with the Russian Prime Minister in London on 2 March.

  My right hon. Friend told him that Chechnya had been a setback to Russia's relations with the west, stressed the importance of ending the fighting and reaching a negotiated settlement and urged the Russians to guarantee free access for humanitarian aid.

  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what estimate he has made of the cost to the Russian Government of the campaign in Chechnya; what assessment he has made of the estimate of the economist Andrei Illarionov; and if he will make a statement.
  376
  Mr. Douglas Hogg
  It is very difficult to make an accurate estimate of the costs of the Chechnya campaign.

  We are aware of Illarionov's estimate of $5 billion. It is one of a number of widely varying estimates and is based on extrapolation from a limited amount of data.

  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the Russian Defence Minister General Pavel Grachev's call for a new offensive in Chechnya.

  Mr. Douglas Hogg
  We continue to urge the Russians to end the fighting in Chechnya and pursue a negotiated settlement. My right hon. Friend the Foreign Secretary made these points most recently when he saw the Russian Prime Minister on 2 March.

  St. Helena
  Mr. Mike O'Brien
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is his policy in respect of discrimination on wage rates for employment in Government services on St. Helena between ex-patriates from the United Kingdom and St. Helenians; in what instances in the last 10 years different wage rates were paid to each category of person for the same work; what were the wage rates; and if he will put in the Library documents which are used in the application of such a policy in St. Helena.

  Mr. David Davis
  There is no such policy. Pay scales offered by the Government of St. Helena to its employees do not discriminate between those recruited in the United Kingdom and St. Helenians recruited locally. An expatriate may be paid a supplement by us in addition to the local salary to bring him or her into line with UK salary levels if he or she is recruited as part of the UK's aid effort at the request of the St. Helena Government in order to fill a post for which no suitably qualified St. Helenian is available.
  Mr. Mike O'Brien: To ask the Secretary of State for Foreign and Commonwealth Affairs, how many St. Helenian males leave their families on St. Helena to work for over one year elsewhere.

  Mr. David Davis
  The total number of unaccompanied St. Helenian males working away from St. Helena on contracts of more than 12 months is 90, the vast majority being on Ascension island.

  Mr. Mike O'Brien
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is his policy in respect of censorship of radio stations in St. Helena; and if he will place the documentation which sets out that policy in the Library.

  Mr. David Davis
  There is no censorship of Radio St. Helena, which is the only radio station on the island.

  Mr. Mike O'Brien
  To ask the Secretary of State for Foreign and Commonwealth Affairs what Government censorship policy applies to St. Helena Television.

  Mr. David Davis
  There is no policy of censorship of television on St. Helena. A television station will soon start and will operate under licence by Cable and Wireless. The company is required under the terms of the licence to notify the Governor of details of the services to be offered. The licence controls the broadcast of obscene or seditious material or material that would endanger security or public morals.

  Mr. Mike O'Brien
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many St.
  377
  Helenian mothers leave their families on St. Helena to work for over one year elsewhere.

  Mr. David Davis
  The total number of unaccompanied St. Helenian mothers working away from St. Helena on contracts of more than 12 months is 22.

  Chelsea Fans, Bruges
  Mr. Pendry
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many British citizens were deported from Belgium as a result of the Bruges versus Chelsea football match; how many were arrested; how many have been charged; and how many have been or are likely to be prosecuted.

  Mr. David Davis
  Approximately 1,000 Chelsea fans, either without tickets or with forged tickets or with invalid tickets for the Bruges fans area of the stadium were deported from Belgium as a result of the Bruges v. Chelsea football match. Forty-two fans were detained for disorderly behaviour and one fan was arrested and charged with assault. None were prosecuted and all were released within 24 hours.

  Middle East
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with other permanent members of the UN Security Council on ways of resuscitating the middle east peace process; and what were the conclusions.

  Mr. Douglas Hogg
  During the debate in the UN Security Council on 28 February on Israeli settlement building in the occupied territories, we reiterated our continued support for the peace process and our condemnation of settlement building. Separately, on behalf of the EU, the French Foreign Minister wrote to the United States Secretary of State about the Troika's recent visit to theregion in support of the peace process.

  Iraq
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what support or co-operation the Iraqi-British interests group delegation to Iraq had from his Department.

  Mr. Douglas Hogg
  The Iraqi-British interest group neither requested nor received assistance from my Department for its visit to Iraq. However, at least one member of the group called, in a personal capacity, on our embassy in Jordan after the visit, and the normal courtesies were extended.

  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on levels of military activity in Iraq between Government forces and various rebel groups.

  Mr. Douglas Hogg
  We are aware of reports of clashes that have taken place between Iraqi Government forces and opposition groups over the past few days, mainly in the areas of Kirkuk and Irbil. It is difficult to assess the level of activity. Fighting appears to have broken out following the Iraqi opposition reports of Iraqi troop movements and shelling of Kurdish villages. We are continuing to monitor the situation closely.

  Burma
  Mr. Miller
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the countries which are known to him as supplying arms to Burma.

  Mr. Goodlad
  Together with our EU partners we imposed an arms embargo on Burma in July 1991. That remains in force.

  We have no reliable information about the sale of arms to Burma by other countries.

  Mr. Miller
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made regarding attacks by the Burmese forces on the Karen people.

  Mr. Goodlad
  Together with our EU partners we have expressed our concerns about recent developments directly to the ruling military regime in Burma, the State Law and Order Restoration Council—SLORC. We called in the Burmese ambassador on 17 February to reinforce the EU action and to urge the SLORC to call an immediate halt to the current offensive. On 10 March the EU issued a statement condemning the attacks and calling upon the SLORC to find a swift and peaceful solution to the ethnic minority problem in Burma.

  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received from other Governments critical of British attempts to stimulate trade links with the SLORC regime in Burma.

  Mr. Goodlad
  None.

  Angola
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what plans he has to send military and police observers to assist the UNAVEM III peacekeeping operation in Angola.

  Mr. Douglas Hogg
  We have no plans to contribute military or police observers to UNAVEM III. As my right hon. Friend the Minister of State for Defence Procurement told the House on 23 February, we have agreed in principle to a United Nations request to provide a logistics battalion to the peacekeeping operation in Angola.

  Sierra Leone
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what specific international initiatives are being taken to try to stabilise the internal security position in Sierra Leone.

  Mr. Baldry
  We are working to bring greater international attention to the conflict; in particular with the UN and Commonwealth. We are in close touch with EU and African partners. Last month the UN and commonwealth secretaries-general sent their special representatives to Sierra Leone to examine ways of bringing about a settlement.
  379
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what timetable has been drawn up by the Government of Sierra Leone for the return of the country to democratic rule.

  Mr. Baldry
  The existing timetable of the Government of Sierra Leone provides for parliamentary elections before the end of 1995. Although the internal security situation may lead to some delay, we expect the Government to press ahead with the transition to civilian rule as rapidly as practicable.
  380
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assistance the Government of Sierra Leone has sought from the international community to deal with its internal disorder.

  Mr. Baldry
  In response to requests from the Government of Sierra Leone, the UN and commonwealth secretaries-general have sent special representatives to Freetown to explore ways of bringing about a settlement. We have given our strong support to these initiatives.

HOUSE OF COMMONS

  Parliamentary Questions
  Mr. Haselhurst
  To ask the Chairman of the Administration Committee what improvements are planned to assist in the identification of parliamentary questions and answers.

  Mr. Michael J. Martin
  A new method of identifying written parliamentary questions by attaching a unique number to each question has been developed by the House authorities, in conjunction with Her Majesty's Stationery Office.

  With the wider use of questions in electronic form and the need to relate the electronic version to the printed page, the Committee has agreed that an identifying number should in future be shown beside each question when it appears on the Notice Paper and the Order Paper. As questions with an identifying number begin to be answered, the number will also start to appear in the Official Report.

  The number will not exceed five digits, and the sequence of numbers will begin afresh at the beginning

  Week ending

  Reduction in pool betting duty £

  Spot the Ball £

  Football Trust Income Total £

  7 January 1995

  393,654

  189,906

  583,560

  14 January 1995

  404,662

  205,343

  610,005

  21 January 1995

  408,250

  206,575

  614,825

  28 January 1995

  408,357

  197,103

  605,460

  4 February 1995

  401,609

  204,514

  606,123

  11 February 1995

  398,305

  200,988

  599,293

  18 February 1995

  398,545

  195,498

  594,043

  Performance Targets
  Mr. Mackinlay
  To ask the Secretary of State for National Heritage, pursuant to his oral answer of 27 February,Official Report, column 680, if he will publish the performance targets for the key areas in which services are delivered by his Department together with the results that have been achieved; and if he will make a statement.

  Mr. Sproat
  [holding answer 6 March 1995]: Details of the achievement of key performance targets by my Department appear in our annual report, which was published on 9 March, copies of which are available in the Library of the House. My Department's agencies and sponsored bodies produce their own reports.

DUCHY OF LANCASTER

  Water and Sewerage
  Mr. Nicholls
  To ask the Chancellor of the Duchy of Lancaster what is the cost of his Department's expenditure on water and sewerage in(a) the current year and (b) each of the three previous years.

  Mr. Horam
  The cost to my Departments of water and sewerage in the current year to date and in each of the three previous years is as follows:
  382
  of each parliamentary Session. The number will not be used to "count" individual Members' questions, but will simply reflect the current total of questions tabled in the House.

NATIONAL HERITAGE

  National Lottery
  Ms Lynne
  To ask the Secretary of State for National Heritage by how much the money disbursed by the Football Trust has been reduced since the introduction of the national lottery.

  Mr. Sproat
  [holding answer 7 March 1995]: Details of the weekly revenue made available to the Football Trust for distribution in the current financial year were given in response to a written question from the hon. Member for Stalybridge and Hyde (Mr. Pendry) on 2 February, Official Report column 778. The national lottery was introduced on 14 November 1994. A table detailing the trust's revenue since the start of 1995 is as follows.

  Cabinet Office £

  COI £

  HMSO £

  1991–92

  62,069

  52,623

  70,762

  1992–93

  73,952

  32,106

  111,602

  1993–94

  66,766

  3,1282

  98,266

  1994–951

  98,798

  n/a

  102,290

  1This is a part-year figure as not all invoices to the end of the year have yet been submitted.

  2The charging regime changed from rateable value to metered supply costs in 1993–94.

  Civil Service
  Mr. Trend
  To ask the Chancellor of the Duchy of Lancaster if he will make a statement about changes in the arrangements for recruitment to the civil service.

  Mr. Horam
  The Command Paper "The Civil Service: Taking Forward Continuity and Change (CM 2748)" indicated the Government's intention to reinforce the principle of selection on merit and to enhance the role of the independent civil service commissioners. The approval of the Privy Council is currently being sought to a revised civil service Order in Council to give effect to these new recruitment arrangements. Copies will be placed in the Library of the House.

  From 1 May 1995 the civil service commissioners will be responsible for interpreting the fundamental principle

  383
  of selection on merit on the basis of fair and open competition for all civil service recruitment, including the circumstances in which exceptions to the principle can be made within the parameters of the Order in Council; publishing a simple, but binding, recruitment code; auditing departments' and agencies' systems for compliance with their recruitment code and publishing on account of their audit in their annual report. They will continue to approve appointments from outside the civil service to the new senior civil service, but not to appointments immediately below that level and to the fast stream entries. Such appointments, like all other recruitment, will be subject to the commissioners' new recruitment code.

  Departments and agencies will be required to publish information about their recruitment systems and their use of the permitted exceptions to fair and open competition. This will make information available publicly about recruitment to the civil service and the extent to which exceptions to the recruitment principle are made, apart from very short-term appointments.

  Making these changes now does not, of course, prejudice the commitment in the Command Paper to consider legislation on the civil service to put the powers of the civil service commissioners and the Minister for the Civil Service on a statutory basis at a later date.

  Absenteeism
  Mr. Chidgey
  To ask the Chancellor of the Duchy of Lancaster what measures he is taking to combat sickness absenteeism in(a) the Recruitment and Assessment Services Agency, (b) the Civil Service Occupational Health Service, (c) Chessington Computer Centre and (d) the Central Office of Information

  Mr. David Hunt
  Management of sickness absence at next steps agencies is the responsibility of chief executives. I have therefore referred the hon. Member's question to the chief executives of the four agencies concerned, who will be writing to him separately.

  Letter from Thea Harvey to Mr. David Chidgey, dated 9 March 1995:
  Michael Geddes has asked me to reply to your PQ on sickness absence.The Recruitment and Assessment Services Agency formally monitors the sickness absence level of its staff on a monthly basis.However, the initial responsibility lies with line managers who are required to meet informally with staff when the attendance level is unsatisfactory.If there is no improvement, formal procedures begin which, ultimately, would end with dismissal as a result of irregular attendance.
  Letter from E. C. McCloy to Mr. David Chidgey, dated 8 March 1995:
  Your question to the Chancellor of the Duchy of Lancaster on measures taken to combat sickness absence in the Civil Service Occupational Health Service has been referred to me to reply directly.Hitherto, line managers initiated investigations on receipt of sickness absence records triggered from central records at Chessington at 14 days in 1 year for those under 45 years and 21 days in 1 year for those over 45 years.Over the last year a small number of staff developed serious medical conditions which resulted in unavoidable long periods of absence. In a small agency, 120 full time staff, the effect of a few
  384
  individuals with long term absence on the overall percentage sickness absence can be misleading. In 1993, 75 staff had no recorded sickness absence. The corresponding figure for 1994 was 92.The apparent rise in percentage absence has led us to review our management procedures. Line managers will, in future, initiate informal review of absence after 7 days of self certificated absence or 14 days of certificated or combined certificated/self certificated absence in any one year.Where such action fails to resolve the situation, discussion with senior managers will result, where appropriate, in a request for an assessment by an occupational physician independent of line managers. Where absence continues thereafter at and unacceptable rate formal procedures for inefficiency will be instigated in accordance with OHSA policy.
  Letter from R. N. Edwards to Mr. David Chidgey, dated 2 March 1995:
  I refer to your enquiry of 1 March to the Chancellor of the Duchy of Lancaster regarding the measures being taken to combat sickness absenteeism at Chessington Computer Centre.The Centre's procedures for the monitoring and control of sick absence were reviewed during 1994. As a result, new guidance notes for line managers were issued in September 1994 formally introducing new procedures. The changes in procedure introduced were intended to emphasise the line manager's role in the control of absence. Return to work interviews have been formally introduced, and warning letters to staff, whose absence levels exceed that normally expected, are to be issued by line managers rather than by personnel managers.These steps have been taken in addition to the measures already in place which include the provision of a welfare service for staff, and the use of the Occupational Health Service for advice on medical and health care issues.Absence levels across the centre are monitored on a monthly basis and measured against set targets. Over the last year there has been a downward trend in overall absence rates. Progress towards targets will continue to be observed closely and procedures reviewed and revised as necessary.
  Letter from Mike Devereau to Mr. David Chidgey, dated 6 March 1995:
  The Chancellor of the Duchy of Lancaster has asked me to respond to your PQ about managing sickness absenteeism.You are already aware, from my 26 January letter to you, of our figures over recent years. When compared against other organisations, our absence record might be regarded as not being a case of especially serious concern. However, I am by no means complacent and I do, of course, fully recognise that any reduction in sickness levels can contribute directly to our successful year-on-year achievement of efficiency gains.We have recently carried out an internal pilot study, which has been a valuable overall indicator, but now recognise that more analytical work needs to be carried out if we are to achieve meaningful benchmark comparisons. We believe that we need to build up a more complete picture of absences analysed by grade; by age range; by sex; staff with no absences; distribution of illness by length of absence; types of illness, and comparison across various work areas. This further analysis is in hand.We are also awaiting report of a Health Screening exercise, in which—on a voluntary basis—a high percentage of staff recently underwent physical and lifestyle checks. This screening was carried out for us by an independent external organisation, and we have asked that they report back to us on their overall findings—including details of health profiles, smoking and drinking patterns, and any observations they can provide on matters such as stress levels.Health screening is one of a number of initiatives taken by COI in recent years to improve health standards. Other initiatives have

  385
  been the introduction of 'no smoking' policies; provision of a small fitness centre; eyesight testing for VDU users; and training in safe manual handling procedures.Depending on the further analysis work referred to above, it is likely that our action plan will encompass:

  (i) setting up better monitoring systems;

  (ii) carrying out regular benchmarking against 'best practice' organisations;

  (iii) providing more detailed guidance to line managers, so as to encourage them to take even greater personal responsibility for controlling absences;

  (iv) if appropriate, provide training for line managers in the management of sickness absence;

  (v) providing more counselling to staff with comparatively poor sickness records, and developing our system so that—even after a single day's absence—staff are formally interviewed by the manager to welcome them back and discuss the nature of the illness.

LORD CHANCELLOR'S DEPARTMENT

  Register of County Court Judgments
  Mr. Campbell-Savours
  To ask the Parliamentary Secretary, Lord Chancellor's Department if he will amend the Register of County Court Judgments Regulations so as to exempt hon. Members carrying out their public duties from having to pay for searches of county court judgments.

  Mr. John M. Taylor
  There are no plans to change the requirement to pay a fee for searches of the register of county court judgments.

  Mr. Campbell-Savours
  To ask the Parliamentary Secretary, Lord Chancellor's Department on what date his Department transferred its responsibility for logging county court judgments to Registry Trust Ltd.

  Mr. John M. Taylor
  Although the Lord Chancellor retains statutory responsibility for the register of county court judgments, responsibility for the day-to-day operation of the register was passed to Registry Trust Ltd. on 30 December 1985.

  Mr. Campbell-Savours
  To ask the Parliamentary Secretary, Lord Chancellor's Department in what way payments for search requests on county court judgments by hon. Members carrying out their public duties have changed since the Lord Chancellor's departmental responsibility for these matters was transferred to Registry Trust Ltd.

  Mr. John M. Taylor
  No changes have been made to the requirement to pay a fee for searches of the register of county court judgments since Registry Trust Ltd. assumed responsibility for the operation of the register.

  Civil Enforcement
  Mr. Alex Carlile
  To ask the Parliamentary Secretary, Lord Chancellor's Department if he will make a statement on the report on the future of civil enforcement, which was lodged with him in early 1994.

  Mr. John M. Taylor
  The Lord Chancellor undertook a public consultation in 1992 on whether the law in this area should be changed. He is currently considering the outcome of that consultation.

  Court Summonses
  Mr. Alex Carlile
  To ask the Parliamentary Secretary, Lord Chancellor's Department if he will make it his policy to ensure that court summonses in the county court are served by first class post; and if he will make a statement.

  Mr. John M. Taylor
  The Lord Chancellor recently conducted a public consultation exercise on the policy of serving summonses by first class post. The responses to this consultation are currently being evaluated.

TRADE AND INDUSTRY

  Internet
  Mr. Allen
  To ask the President of the Board of Trade what consideration his Department is giving to the use of an encryption key which would allow the state access to all information on the Internet; and if he will make a statement.

  Mr. Ian Taylor
  The Internet is an open and unrestricted environment for information exchange, in which encryption is currently little used. The Government, along with other member states, are currently discussing the future use of encryption in such networks, taking account of both commercial needs and the interests of security and public order.

  Italian Car Taxation
  Mr. Robert Ainsworth
  To ask the President of the Board of Trade what representations he has made to the European Commission concerning the Italian Government's proposals to reintroduce the imposta straordinaria; and if he will make a statement.

  Mr. Ian Taylor
  The Government are very concerned about the difficulties which Italian car taxation has been causing exporters to Italy of luxury cars. This problem has been raised at regular meetings of the Internal Market Advisory Committee, which is chaired by the European Commission. In addition, I wrote to the Italian Finance Minister last month, urging the Italians not to reintroduce the imposta straordinaria, which we understood was then under consideration. We were pleased to learn that the Italian Government subsequently published their budget without including this tax.

  BSkyB
  Mr. Allen
  To ask the President of the Board of Trade if he will make a statement on the Office of Fair Trading's decisions on 7 March relating to the packaging and pricing of BSkyB programming to cable operators.

  Mr. Jonathon Evans
  I welcome the success of the Director General of Fair Trading in securing undertakings from BSkyB which meet his concerns.

  Exports to Gibraltar
  Mr. Bennett
  To ask the President of the Board of Trade if the export licence application refused for the export of goods to Gibraltar in 1993 was for equipment specified as ML3 in group 1 of part III of schedule 1 to SI 1992 No. 3092.
  387
  Mr. Ian Taylor
  No. The equipment in question was specified as ML15.

  It has not been the practice of successive Governments to reveal details of licences or applications unless the requirements of confidentiality are outweighed by the public interest.

  Petrol Pumps
  Mr. Alex Carlile
  To ask the President of the Board of Trade if he will make it his policy to continue the requirement for petrol pumps to be checked by trading standards officers; and if he will make a statement.

  Mr. Jonathan Evans
  Trading standards officers have the power to test petrol pumps, as items of weighing or measuring equipment in use for trade. TSOs test petrol pumps before first use and from time to time during use; the frequency of this subsequent testing will depend on the local situation.

  Plans have already been announced—in the booklet "Deregulation—Cutting Red Tape", January 1994—for a scheme to allow manufacturers to self-verify their own production if they so choose. This would not affect the in-use testing by TSOs.

  Plantsbrook Group plc
  Mr. David Evans
  To ask the President of the Board of Trade when the Monopolies and Mergers Commission report into the Service Corporation International plc Great Southern/Plantsbrook acquisition will be published.

  Mr. Jonathan Evans
  The Monopolies and Mergers Commission is due to report on the acquisition of Plantsbrook Group plc by Service Corporation International on 24 March. The Department aims to publish MMC merger reports within 20 working days of receipt.

  Voluntary Agreements
  Mr. David Evans
  To ask the President of the Board of Trade what powers he or the Director General of Fair Trading have to review voluntary agreements entered into to avoid references to the Monopolies and Mergers Commission.

  Mr. Jonathan Evans
  The Director General of Fair Trading has a continuing responsibility to keep commercial activity under review. That can extend to voluntary agreements or undertakings and the degree of compliance with them. Where he considers it appropriate, the director general can make a reference to the Monopolies and Mergers Commission.

  Gas Consumers Council
  Mr. Nigel Griffiths
  To ask the President of the Board of Trade what is the reduction in the Gas Consumers Council's budget for 1994–95; and what assessment he has made of the impact of these cuts on the staffing of the council.

  Mr. Eggar
  The Gas Consumers Council grant-in-aid for 1994–95 is £2,711,000, a reduction of £209,000 on the previous year. it is for the council to decide how best to use its resources, including staffing levels, to carry out its duties.

  Gas Bill
  Mr. Nigel Griffiths
  To ask the President of the Board of Trade if he will provide additional resources to(a) the Office of Fair Trading, (b) the Office of Gas Supply, and (c) the Gas Consumers Council to reflect their increased work load as a consequence of additional responsibilities contained in the Gas Bill.

  Mr. Eggar
  I do not believe that the Gas Bill will add materially to the responsibilities of the Office of Fair Trading and the Gas Consumers Council. The number of Ofgas staff will rise by about 50 when the Director General of Gas Supply takes over the DTI's functions for gas metering as envisaged under the Gas Bill. In addition, some 10 to 20 posts plus consultancy support may be needed at Ofgas to manage the transition to a competitive market, although this should fall once a fully competitive market is established.

  Newspapers
  Mr. Hardy
  To ask the President of the Board of Trade (1) if he will consider the increased carriage charges faced by retail newsagents from monopoly supplying wholesalers;

  (2) what representations he has received about the examination by the Monopolies and Mergers Commission of the newspaper industry in respect of carriage charges.

  Mr. Jonathan Evans
  [holding answers 9 March 1995]: The National Federation of Retail Newsagents has raised this matter in correspondence, as has Lekkerland UK.

  The MMC report on the supply of newspapers in England and Wales gave no adverse public interest finding in respect of carriage charges, and no power arose to act on them.

  However, a reference to carriage charges was included in the voluntary code of practice to govern the supply of national newspapers agreed with the industry following publication of the MMC report., This reference ensures that such charges are not used as a means of circumventing the prohibition on refusal to supply, by making supply economically unattractive to new applicants.

  If new retailers feel that their carriage charges are incorrect, they should take the matter up in the first instance with the wholesaler. If this does not resolve the dispute the retailer should make use of the arbitration procedure set out in the code of practice.

  Mr. Bill Michie
  To ask the President of the Board of Trade if he will reconsider the matter of carriage charges in the newspaper trade following the recent increases.

  Mr. Jonathan Evans
  The Monopolies and Mergers Commission's 1993 report on the supply of newspapers in England and Wales included no adverse public interest findings in respect of carriage charges, and therefore no power arose to act on them.

  However, a reference to carriage charges was included in the voluntary code of practice to govern the supply of national newspapers, agreed with the industry following publication of the MMC report. This ensures that such charges are not used as a means of circumventing the prohibition on refusal to supply by making supply economically unattractive to new applicants. If new retailers feel that their carriage charges are incorrect, they should take the matter up in the first instance with the

  389
  wholesaler. If this does not resolve the dispute, the retailer should make use of the arbitration process set out in the code of practice.

  Electricity Bills
  Mrs. Helen Jackson
  To ask the President of the Board of Trade what was the percentage of unpaid electricity bills last year overall and in each of the electricity company areas.

  Mr. Page
  This is a matter for the companies concerned.

  Gas Bills
  Mrs. Helen Jackson
  To ask the President of the Board of Trade what was the percentage of unpaid gas bills last year overall and in each of the gas company areas.

  Mr. Page
  This is a matter for the companies concerned.

  Rom-Data
  Mr. Jamieson
  To ask the President of the Board of Trade if he will make a statement about the circumstances that led to Rom-Data in Cornwall receiving a grant; and what steps he is taking to recover the money.

  Mr. Page
  [holding answer 9 March 1995]: My officials lodged an invoice with the liquidator of Rom-Data in January seeking recovery of the grant paid to the company. Otherwise, I have nothing to add at present to the answers given to earlier questions from the hon. Member.

  Companies House
  Mr. Jon Owen Jones
  To ask the President of the Board of Trade what was the full cost of the consultancy work carried out by SRU/MMD Ltd. on the privatisation review of Companies House since it was appointed in October 1992 until he made his announcement on the future of Companies House on 20 December 1994,Official Report, column 1046.

  Mr. Jonathan Evans
  The cost of the consultancy work was £283,000 excluding VAT. I have already written to the hon. Member correcting my earlier answer on this subject and a copy of that letter has been placed in the Library of the House.

  Northern Electric
  Mr. McWilliam
  To ask the President of the Board of Trade what contact Sir Charles Powell had between 1984 and 1991 with civil servants in connection with the Trafalgar House bid for Northern Electric; with whom he was in contact; and if he will make a statement.

  Mr. Jonathan Evans
  [holding answer 9 March 1995]: None.

  Mr. McWilliam
  To ask the President of the Board of Trade what contact or communication Ministers or officials in his Department had with Sir Charles Powell as non-executive director of Trafalgar House, in connection with(a) the Trafalgar House bid for Northern Electric and (b) the subsequent decision not to refer the hid to the Monopolies and Mergers Commission; and if he will make a statement.
  390
  Mr. Jonathan Evans
  [holding answer 9 March 1995]: At a meeting on 1 December 1994, Sir Charles Powell advised my right hon. Friend for Energy and Industry of the possibility of Trafalgar House making a bid for Northern Electric and asked whether the Government had any plans for early redemption of the special shares in regional electricity companies.

  On 15 December, my right hon. Friend confirmed that the Government would retain their special shares in the RECs until 31 March 1995 and that they would not be redeemed early. In his role as Minister with responsibility for the energy industry, my hon. Friend met Mr. David Morris, chairman of Northern Electric, on 19 January 1995 and Sir Charles Powell, on behalf of Trafalgar House, on 23 January.

  At both meetings, and in accordance with our usual procedures, my right hon. Friend made it clear that he could listen only to the companies' views about the bid and could not discuss the bid itself. In addition to these meetings, a number of letters were received from Sir Charles and others on behalf of Trafalgar House, and from Northern Electric and others on behalf of Northern Electric.

  Sir Charles also made a number of telephone calls to officials in the office of my right hon. Friend about procedural matters relating to the bid. The content of these calls was not referred to Ministers. My right hon. Friend the President of the Board of Trade was not involved in any of these contacts between Sir Charles and the Department.

  Mr. McWilliam
  To ask the President of the Board of Trade what discussions or communications Mrs. Annabel Keswick, political adviser to the Chancellor of the Exchequer, had with Ministers and civil servants in the Department of Trade and Industry in respect of the Trafalgar House bid for Northern Electric.

  Mr. Jonathan Evans
  [holding answer 9 March 1995]: None.

  Mr. McWilliam
  To ask the President of the Board of Trade (1) what account was taken of the recommendations of the Foreign Affairs Committee on its third Session report of Session 1993–94, HC 271, on the Pergau dam relating to Trafalgar House in evaluating that company's bid for Northern Electric;

  (2) what evaluation he made of the relationship between Trafalgar House and Jadine Matheson when deciding not to refer the Trafalgar House bid for Northern Electric to the Monopolies and Mergers Commission; and if he will make a statement.

  Mr. Jonathan Evans
  [holding answer 9 March 1995]: In making his decision not to refer the bid to the Monopolies and Mergers Commission, my right hon. Friend the President of the Board of Trade took account of all relevant factors. His decision was in accordance with the advice of the Director General of Fair Trading.

  Coach Companies
  Mr. Meacher
  To ask the President of the Board of Trade if he will refer the activities of(a) Stagecoach and (b) Badgerline to the Office of Fair Trading on the grounds of predatory pricing.

  Mr. Jonathan Evans
  The Director General of Fair Trading will consider any complaints of anti-competitive behaviour which the hon. Member puts to him.

  Arms Sales (Burma)
  Mr. Miller
  To ask the President of the Board of Trade what has been the value of British arms sold to Burma since 1990.

  Mr. Ian Taylor
  For reasons of commercial confidentiality, it has been the policy of successive United Kingdom Governments not to disclose details of defence trade with individual countries.

  "Energy Paper 65"
  Ms Ruddock
  To ask the President of the Board of Trade what assumptions he has made in "Energy Paper 65" concerning the amount of coal likely to be burnt in English and Welsh power stations in the year 2000; and what was provided by RJB Mining to prospective investors as likely to be sold to English and Welsh power stations in 2000.

  Mr. Eggar
  [holding answer 7 March 1995]: The amount of coal burnt in power stations is not an assumption, but rather a result of the modelling process described in "Energy Paper 65" paragraph 2.26. Estimates of the coal tonnage burnt in 2000 in English and Welsh coal power stations vary between 23 to 38 million tonnes. I understand RJB Mining plc prospectus contains its estimates.

  Ms Ruddock
  To ask the President of the Board of Trade what levels of gross domestic product growth are assumed in the central forecasts to 2000 in "Energy Paper 65"; and how this figure compares with current Treasury forecasts.

  Mr. Eggar
  [holding answer 7 March 1995]: In the central GDP growth scenarios in "Energy Paper 65", gross domestic product is assumed to grow by an average rate of approximately 3.1 per cent. per annum between 1994 and 2000. This compares with a current Treasury assumption of an average GDP growth rate of about 3.2 per cent. per annum over the same period.

  Ms Ruddock
  To ask the President of the Board of Trade what evaluation his Department has made of the discrepancies between the central forecasts for United Kingdom carbon emissions in 2000 made in "Energy Paper 65" and those published by DRI/McGraw Hill on 13 February.

  Mr. Eggar
  [holding answer 7 March 1995]: The detailed assumptions which underlie DRI's forecast for the UK have not been made public.

  Ms Ruddock
  To ask the President of the Board of Trade what independent peer review process he has undertaken before publishing "Energy Paper 65".

  Mr. Eggar
  [holding answer 7 March 1995]: In the course of developing the models used for the projections in "Energy Paper 65", discussions took place with various experts in the energy modelling field. In addition the following two papers have been published which discuss the research then in progress:
  Hodgson, Derek and Miller, Keith (1995) "Modelling UK energy demand", in Barker, T., Ekins, P. and Johnstone, N. (eds) "Global Warming and Energy Demand", London: Routledge.Miller, Keith (1993) "The DTI Energy Model", in Hawdon, D. (ed) "Recent Studies of the Demand for Energy in the UK", Guildford: Surrey Energy Economics discussion paper series.
  Ms Ruddock
  To ask the President of the Board of Trade what assumptions have been made regarding the contribution of combined cycle gas turbines to the 392
  generation mix in 2000 in "Energy Paper 65"; and what proportion is assumed to be operating at baseload.

  Mr. Eggar
  [holding answer 7 March 1995]: It is estimated that between 16 and 18 GW of CCGT capacity will be in place in 2000. In most of the scenarios all the CCGT capacity runs on baseload. The details of electricity supply industry capacity are given in annexe C.

  Ms Ruddock
  To ask the President of the Board of Trade if he has included within "Energy Paper 65" any carbon emissions from energy extraction processes within the North sea.

  Mr. Eggar
  [holding answer 7 March 1995]: The treatment of offshore emissions in "Energy Paper 65" is consistent with the national atmospheric emissions inventory and takes into account offshore carbon dioxide emissions from gas flaring and from fuel used for production.

  Ms Ruddock
  To ask the President of the Board of Trade what estimate he has made in "Energy Paper 65" of the likely carbon savings which the Energy Saving Trust will achieve in 2000.

  Mr. Eggar
  [holding answer 7 March 1995]: In "Energy Paper 65", 1.6 million tonnes of carbon are assumed to be saved by the Energy Saving Trust in 2000.

  Ms Ruddock
  To ask the President of the Board of Trade what estimate he has made in "Energy Paper 65" of the likely carbon savings which will occur by 2000 within industry; and if he will provide a breakdown of the contribution that will be made by each relevant Government initiative.

  Mr. Eggar
  [holding answer 7 March 1995]: By 2000, it is estimated that savings of between 2 million and 2.5 million tonnes of carbon will be made within the business sector, which comprises industry and commerce. "Energy Paper 65" estimates show that the energy saved is likely to be less carbon-intensive than was assumed in the original climate change programme. The carbon savings comprise emissions saved directly in the business sector through lower consumption of fossil fuels and indirectly in the electricity supply industry through lower electricity demand from businesses.

  "Energy Paper 65" does not separately distinguish all the individual Government initiatives in the business sector.

  Ms Ruddock
  To ask the President of the Board of Trade what independent research he has commissioned to assist him in the preparation of "Energy Paper 65".

  Mr. Eggar
  [holding answer 7 March 1995]: The development by the science policy research unit of a boiler and combined heat and power model was part funded with the private sector. This model has been run by DTI as part of the "Energy Paper 65" exercise. In addition, both DTI and DOE have various on-going research programmes with the Building Research Establishment and energy technology support unit.

  Ms Ruddock
  To ask the President of the Board of Trade what assumptions he has made in "Energy Paper 65" concerning the likely output of Magnox power stations in 2000.

  Mr. Eggar
  [holding answer 7 March 1995]: The Magnox stations owned by Nuclear Electric and British Nuclear Fuels Ltd. are assumed to be producing around 20 TWh in 2000.
  393
  Ms Ruddock
  To ask the President of the Board of Trade what implications for local environment air quality he envisages as a consequence of the increased diesel car usage in 2000 forecast in "Energy Paper 65".

  Mr. Eggar
  [holding answer 7 March 1995]: "Energy Paper 65" does not assess local air quality, but a recently published report by the energy technology support unit—"UK Petrol and Diesel Demand: Energy and Emissions Effects of a Switch to Diesel"—commissioned by the Departments of Transport and Trade and Industry, projected significant overall reductions in both national and urban emissions of carbon monoxide, hydrocarbons, oxides of nitrogen and particulates from vehicle exhausts by the year 2000, compared with 1990. These projections took into account the expected improvements from tighter emission standards already agreed, as well as projections of traffic growth and vehicle mix in line with those of "Energy Paper 65".

  Ms Ruddock
  To ask the President of the Board of Trade what assumptions are made in "Energy Paper 65" regarding the relationship between the growth in domestic product and the growth in energy demand; and how these differ from the assumptions made in "Energy Paper 58".

  Mr. Eggar
  [holding answer 7 March 1995]: The growth in gross domestic product is one of a number of factors influencing energy demand. Paragraphs 3.4 to 3.16 of "Energy Paper 65" provide details of the GDP growth rate assumptions used in both "Energy Paper 65" and "Energy Paper 58". The primary energy ratio gives an indication of the overall relationship between the GDP an energy demand. Paragraphs 6.8 to 6.9 describe the energy ratio in the new projections. This can be compared with "Energy Paper 58", where the primary energy ratio declined by 0.1 to 1 per cent. per annum between 1990 and 2005.

  Ms Ruddock
  To ask the President of the Board of Trade if the methodology employed in the collection of carbon emission figures in "Energy Paper 65" is identical to the methodology employed by the intergovernmental panel on climate change.

  Mr. Eggar
  [holding answer 7 March 1995]: The emissions projections in "Energy Paper 65" are based on the United Kingdom's national atmospheric emissions inventory and are consistent in almost all respects with the methodology recommended by the intergovernmental panel on climate change. The net effect on the projections of the differences in methodologies is broadly neutral.

  Ms Ruddock
  To ask the President of the Board of Trade what estimate he has made in "Energy Paper 65" of the likely carbon savings which the imposition of 8 per cent. value added tax on domestic fuel will achieve in 2000.

  Mr. Eggar
  [holding answer 7 March 1995]: The central estimate from the "Energy Paper 65" projections for the likely carbon saving brought about by the imposition of 8 per cent. VAT on domestic fuel is approximately 0.4 MtC in 2000.

  Post Offices
  Mr. Spearing
  To ask the President of the Board of Trade what guidelines he has approved between Post Office Counters and the Post Office Users National Council concerning the relocation of Crown post offices; and if he will list cases where such guidelines have not been followed.
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  Mr. Page
  This is a matter for the Post Office and the Post Office Users National Council.

  A. F. Budge Ltd.
  Mr. Tipping
  To ask the President of the Board of Trade when he(a) received the report from the receiver and (b) expects to make a decision in respect of A. F. Budge.

  Mr. Jonathan Evans
  A report under the provisions of the Company Directors Disqualification Act 1986 was received from the joint administrative receivers of A. F. Budge Ltd. on 28 September 1993.

  Proceedings for disqualification against three directors of A. F. Budge Ltd.—Anthony Frederick Budge, Mrs Janet Budge and Michael Austin Yates—were commenced on 8 December 1994.

  Regional Assistance
  Ms Walley
  To ask the President of the Board of Trade whom he consulted in respect of regional assistance given by his Department within the remit of the Industry Act 1972.

  Mr. Page
  Regional assistance is now given under the Industrial Development Act 1982. My officials consult as necessary to establish whether a project is eligible to be considered for assistance and whether the project meets the criteria of the regional selective assistance scheme.

  Construction Tile Industry
  Ms Walley
  To ask the President of the Board of Trade which consultants and at what cost advised his Department in respect of sector analysis of the construction tile industry in each of the last five years.

  Mr. Page
  My Department is not the sponsor Department for this sector. However, in maintaining a body of market analysis for a range of departmental work, my Department uses the published material of a number of market research consultancy firms.

  Interreg
  Mr. Wigley
  To ask the President of the Board of Trade how much money there has been allocated by way of the Interreg II fund from the EU for projects in(a) Wales, (b) England, (c) Northern Ireland and (d) the Republic of Ireland.

  Mr. Eggar
  The Commission divided Interreg's 2,900 mecu budget between 2,300 mecu for the objective 1 areas and 600 mecu for the rest. Within each of these totals, the poorer eligible areas have larger allocations per head. The figures are:

  Allocation £ million

  Population thousands

  Per capita £

  Objective 1

  All

  1811

  22,146

  82

  Northern Ireland

  52.7

  1,358

  36

  Republic of Ireland

  105.1

  1,735

  61

  Other

  All

  472.4

  46,859

  10

  Wales

  10.6

  595

  18

  England

  22.3

  2,238

  10

  Pensions (Derivatives)
  Mr. Nicholas Winterton
  To ask the President of the Board of Trade what information he has about the value of pensions business currently handled by United Kingdom insurance companies; what information he has concerning the extent to which such insurance companies are trading in derivatives; what steps he is taking in the light of the Baring affair to issue guidance to such derivative-trading insurance companies; and if he will make a statement.

  Mr. Jonathan Evans
  [holding answer 9 March 1995]: Premium income received by UK insurance companies during 1993 in respect of personal and occupational pensions business was estimated to be £14.6 billion.

  United Kingdom insurance companies may be end users of derivatives but should not be traders. Provided they have adequate controls over their use, insurance companies may prudently use derivatives for the purposes of reducing the investment risks inherent in their portfolio or for efficient portfolio management. My Department issued guidance to all UK insurers in December 1994 setting out the objectives which an adequate system of control over their investments, including derivatives, must be able to satisfy. At the same time, we asked companies for a state of play report on the extent to which their systems complied with the guidance and, where necessary, on what remedial action they had put into effect. We are currently reviewing the responses and will take such follow-up action as is necessary.

HEALTH

  Nebulisers
  Mr. Soley
  To ask the Secretary of State for Health if nebulisers are available on prescription in(a) England, (b) Scotland and (c) Wales.

  Mr. Sackville
  Hand-operated nebulisers are available on general practitioner prescription. It is for health authorities to make decisions about the best use of their resources on the basis of clinical priorities and local needs. Hospital consultants may prescribe equipment such as powered nebulisers as part of national health service treatment. Health authorities may provide equipment prescribed as part of NHS treatment either permanently or on loan and in these circumstances no charge may be made.

  Epilepsy
  Mr. Battle
  To ask the Secretary of State for Health if she will make a statement about research into sudden unexplained death in epilepsy.

  Mr. Bowis
  The Department is aware of issues and concerns surrounding sudden unexplained death in epilepsy. However, I am not aware of any current research on this subject. The main agency through which the Government support medical and related biological research in the United Kingdom is the Medical Research Council, which receives its grant-in-aid from the office of my right hon. Friend the Chancellor of the Duchy of Lancaster and is always willing to consider scientifically sound proposals. The council has considerable relevant work on neuroscience research and has identified 396
  neurological disabilities, including epilepsy, as an area in which it wishes to encourage applications.

  Mr. Battle
  To ask the Secretary of State for Health how many deaths were attributed to epilepsy in the United Kingdom for each year since 1990 in each health authority for which information is available.

  Mr. Bowis
  Information on the number of deaths, by health authority, will be placed in the Library.

  Mr. Battle
  To ask the Secretary of State for Health if she will make a statement on co-operation with the Department for Education in ensuring that all schools have an active epilepsy policy.

  Mr. Bowis
  My officials will be consulting Department for Education officials as part of my Department's initiative on epilepsy, which I announced in the House on 17 January.

  Mr. Battle
  To ask the Secretary of State for Health what plans her Department has to encourage an increase in the number of brain operations for intractable non-lesional epilepsy.

  Mr. Bowis
  Decisions on treatment are the responsibility of the doctors concerned, who are required to exercise their clinical judgment, informed by a patient's medical history. Health authorities and trusts are responsible for ensuring that the full range of services is available, taking account of their priorities and resources.

  Mr. Battle
  To ask the Secretary of State for Health (1) what training is given to medical practitioners and their staff to ensure that there is a minimum of risk to(a) expectant mothers with epilepsy, (b) mothers with epilepsy and (c) children of mothers with epilepsy.

  (2) what advice her Department gives to health authorities in respect of carers for children with epilepsy requiring the best possible training; and if she will make a statement.

  Mr. Bowis
  The education and training of health professionals is a matter for the relevant royal college. However, as part of the programme that I announced on 17 January, we shall be seeking to raise epilepsy awareness among general practitioners and primary care teams.

  Asbestos
  Mr. Cohen
  To ask the Secretary of State for Health what assessment the Chief Medical Officer of Health has made of health dangers associated with asbestos; what new steps her Department proposes to take; and if she will make a statement.

  Mr. Sackville
  The principal diseases caused by exposure to asbestos are asbestosis, a pneumoconiosis; primary carcinoma of the lung; malignant mesothelioma; and diffuse mesothelioma. Asbestos-related diseases take a long time to develop and are nearly always the result of occupational exposure to asbestos fibres.

  Asbestos-related diseases are prescribed as industrial diseases. Such diseases occurring now largely reflect past industrial exposure before the introduction of the controls, enforcement of which is the responsibility of my right hon. Friend the Secretary of State for Employment.

  Older People (Health Care Costs)
  Mr. Alton
  To ask the Secretary of State for Health how much of the NHS annual budget is spent on people over 65 years of age in the United Kingdom.
  397
  Mr. Bowis
  We estimate that around 42 per cent. of total hospital and community health service expenditure is on people aged 65 and over, who comprise about 16 per cent. of the population.

  Prescription Charges
  Mr. Llwyd
  To ask the Secretary of State for Health what was the total amount recouped by her Department through prescription charges in(a) 1992, (b) 1993 and (c) 1994; and if she will make a statement.

  Mr. Malone
  I refer the hon. Member to the reply that I gave to the right hon. Member for Derby, South (Mrs. Beckett) on 9 December 1994 at column 397. Prescription charges provide valuable additional income to the national health service at a time of competing demands for resources.

  Mr. Fabricant
  To ask the Secretary of State for Health in respect of what proportion of prescriptions the patient claims exemption from prescription charges, what checks are made to monitor the accuracy of such claims; and what proportion of such claims are found to be false.

  Mr. Malone
  In 1993, 82 per cent. of prescription items were dispensed free of charge by community pharmacists and appliance contractors to patients who declared that they were exempt or entitled to remission of charges under the national health service low income scheme. Regular checks of patients declarations carried out by family health services authorities indicate that about 1.5 per cent. are incorrect. I am determined to take action to stamp out this abuse and all other forms of fraud against the NHS.

  Sight Tests
  Mr. Llwyd
  To ask the Secretary of State for Health how many patients had their eyes tested in each year since 1991; and if she will make a statement.

  Mr. Malone
  The number of national health service sight tests paid for by family health services authorities in England is shown in the table:

  Year

  millions

  1990–91

  4.154

  1991–92

  4.979

  1992–93

  5.528

  1993–94

  5.935

  The number of private sight tests is not available.

  Measles Rubella Vaccine
  Mr. Alton
  To ask the Secretary of State for Health (1) how many yellow card reports of suspected adverse reactions linked to the autumn measles rubella vaccination campaign have been received by the Committee on the Safety of Medicines and Medicines Control Agency since 9 December 1994.

  (2) if she will list the complications notified by the yellow card reports linked to the autumn measles rubella vaccination campaign received since 9 December 1994 in respect of (a) the number of individuals affected, (b) the number of signs and symptoms, (c) the number of more serious reactions, (d) the number of allergic reactions, (e) the number of reported convulsions and (f) the number with late neurological damage.
  398
  Mr. Sackville
  Since 9 December 1994 the Medicines Control Agency has received a further 50 yellow card reports of suspected adverse reactions to measles rubella vaccine. A report for a suspected reaction does not necessarily mean that the vaccine caused the reaction. Signs and symptoms described in these reports have been classified as reactions. One hundred and fifty affected children were reported as having 281 reactions, of which 87–affecting 67 children–were considered to be serious. There were 15 allergic reactions, eight convulsions and seven late-onset neurological conditions, five of whom have recovered and two are recovering. Further information is being sought for some of the reactions to investigate their relationship with immunisation. It is estimated that eight million children have been immunised. Reporting of serious adverse reactions to date is therefore low.

  Generic Prescribing
  Mr. Elfyn Llwyd
  To ask the Secretary of State for Health what was the total expenditure on prescribed generic drugs in(a) 1993 and (b) 1994; and if she will make a statement.

  Mr. Malone
  The net ingredient cost—that is, the basic cost of drugs, less discount and excluding dispensing fees, container cost on cost allowance, oxygen payments and value added tax—of drugs prescribed and dispensed generically in England in 1993 was £341.6 million. For the first three quarters of 1994 the cost was £345.4 million.

  Asthma
  Mr. Matthew Taylor
  To ask the Secretary of State for Health if she will list the mortality rates for asthma for each of the last five years, broken down by ethnic origin.

  Mr. Sackville
  Data on asthma deaths by ethnic origin are not available centrally.

  The mortality rates for asthma for the last five years for which data are available are shown in the table:

  Mortality rates1 for asthma (1CD 2 code 493), England and Wales, 1988–92

  Year

  Rates

  1988

  4.0

  1989

  3.9

  1990

  3.6

  1991

  3.7

  1992

  3.5

  1 Deaths per 100,000 population.

  2 International Classification of Diseases, 9th Revision.

  Mr. Matthew Taylor
  To ask the Secretary of State for Health if she will list the number of cases of asthma reported in each family health service authority for each of the last five years, broken down by ethnic origin.

  Mr. Sackville
  Data on newly diagnosed episodes of asthma are not available by ethnic origin or family health services authority. Aggregated data from returns submitted to the Birmingham research unit of the Royal College of General Practitioners are available in the Office of Population Censuses and Surveys annual reference volume, "Communicable Diseases—Series MB2", copies of which are available in the Library. The latest data published are for the year 1992.

  Glaucoma
  Mr. Llwyd
  To ask the Secretary of State for Health how many cases of glaucoma were diagnosed in(a) 1990, (b) 1991, (c) 1992, (d) 1993 and (e) the last 12 months; and if she will make a statement.

  Mr. Sackville
  This information is not available in the precise form requested. It is estimated that in England 101,000 patients suffering from glaucoma were treated by general practitioners during 1991–92—source: "Morbidity Statistics from General Practice". Comparative figures are not available for the other years requested. For hospital in-patients, the numbers of finished consultant episodes, ordinary admissions and day cases, during the latest available period of five years, were as follows:

  Year

  Number

  1992–93

  22,802

  1991–92

  19,826

  1990–91

  17,534

  1989–90

  17,427

  1988–89

  15,373

  Source:

  Hospital Episode Statistics.

  Information on numbers of out-patient cases with glaucoma is not available centrally.

  Birth Certificates
  Mr. Rooker
  To ask the Secretary of State for Health how many full and short version birth certificates are issued each year by the Registrar General; and how many applications are made by a person who is not the individual on the certificate nor related to them.

  Mr. Sackville
  In 1994 the Registrar General issued 245,961 full birth certificates and 12,469 short birth certificates. The Registrar General does not distinguish between applicants who are the subject of the certificate or their relatives and other applicants.

  Arachnoiditis
  Mr. Barry Field
  To ask the Secretary of State for Health (1) what further representations she has received about arachnoiditis and the use of Depo-Medrone;

  (2) if she will make a statement on arachnoidits.

  Mr. Sackville
  We have received a number of representations about Depo-Medrone and arachnoiditis. Depo-Medrone is licensed for use by certain specified routes of administration only and is not recommended for epidural or spinal administration. If a doctor, however, believes that use of a licensed drug in an unlicensed manner is the only suitable treatment for a patient he or she may supply or administer the drug, having obtained informed consent from the patient.

  Dental Services
  Sir Peter Emery
  To ask the Secretary of State for Health what action she is taking to reverse the present shortages of NHS dentists in the south-west.

  Mr. Malone
  At 31 December 1994 the number of dentists under contract to family health services authorities in the south-west was 1,245, 32 more than at 30 June 1992.
  400
  Family health services authorities can apply for permission to appoint salaried dentists in areas where there are shortages. We have recently given approval for two salaried dentists to be appointed by Devon family health services authority and for one salaried dentist to be appointed by Gloucestershire family health services authority.

  The Green Paper, "Improving NHS Dentistry", proposes a wider role for the community dental service to treat those who cannot have ready access to general dental services.

  Mrs. Beckett
  To ask the Secretary of State for Health how many family health services authorities have appointed salaried dentists; how many salaried dentists have been appointed since July 1992; for what additional provision district health authorities have contracted; and if she will make a statement.

  Mr. Malone
  The number of family health services authorities that have employed salaried dentists and the number employed are shown in the table. In addition to those family health services authorities listed, Berkshire, Devon, Dorset, Hampshire, Hereford and Worcester, Kingston and Richmond, Northamptonshire, Gloucestershire and Solihull have also been granted permission to employ salaried dentists. At 30 September 1992 there were 2,191 whole-time equivalent hospital and community health service staff in England, excluding hospital practitioners and clinical assistants who also work as general and dental practitioners.

  Table 1 number of salaried dentists for whom a contract has opened since 31 July 1992 by family health service authority

  FHSA

  Salaried dentists

  Total

  137

  Cumbria

  1

  Derbyshire

  3

  Cambridgeshire

  7

  Norfolk

  3

  Kensington, Chelsea and Westminster

  14

  Essex

  2

  City and East London

  22

  Kent

  11

  Greenwich and Bexley

  6

  Bromley

  1

  Lambeth, Southwark and Lewisham

  22

  Surrey

  5

  Merton, Sutton and Wandsworth

  1

  Wiltshire

  2

  Isle of Wight

  2

  Buckinghamshire

  6

  Cornwall and Isles of Scilly

  5

  Gloucestershire

  4

  Somerset

  6

  Staffordshire

  2

  Cheshire

  8

  Lancashire

  2

  Manchester

  1

  Salford

  1

  This is the count of the number of salaried dentists who have contracts with FHSAs.

  This is not the number of salaried dentists employed at the requested dates.

  (Some salaried dentists have "open contracts" with FHSAs.

  This means they are ready to work when required but are not actually working).
  401
  Mrs. Beckett
  To ask the Secretary of State for Health how many letters concerning problems in gaining access to NHS dentistry have been received by her Department from individuals in the last five years; and if she will list those organisations that have written to her on the subject.

  Mr. Malone
  Since February 1990, the Department of Health has received approximately 350 letters from members of the public which were exclusively concerned with problems in gaining access to national health service general dental services.

  The Department has also received a similar number of letters from hon. and right hon. Members, community health councils, local authorities, professional organisations and patient groups.

  Family health service authorities continue to be the best source of information on the local availability of general dental services, and all authorities report that they are able to help patients to find NHS dentists.

  Mrs. Beckett
  To ask the Secretary of State for Health what was the total sum paid out to general dental practitioners working with the NHS in each month since April 1991.

  Mr. Malone
  The information is shown in the table.

  Payments to general dental practitioners working with the rational health service in England in each month since April 1991

  Month

  1991–92 £ million

  1992–93 £ million

  1993–94 £ million

  1994–95 £ million

  April

  92.3

  118.9

  101.1

  104.3

  May

  93.4

  118.8

  103.6

  105.2

  June

  95.8

  114.0

  103.0

  110.7

  July

  102.1

  117.0

  102.8

  109.9

  August

  106.8

  115.7

  103.9

  109.9

  September

  94.1

  103.2

  98.8

  104.0

  October

  101.4

  100.9

  100.9

  106.6

  November

  110.7

  104.3

  103.7

  111.10

  December

  113.3

  104.5

  98.5

  109.8

  January

  103.1

  108.6

  100.8

  106.6

  February

  117.3

  101.4

  104.2

  —

  March

  116.7

  97.7

  100.1

  —

  Notes:

  1. The data are for England only and are drawn from monthly cash-based financial information system reports submitted by family health services authorities and the Dental Practice Board. The January data are the latest available for 1994–95.

  2. Expenditure figures show the total of all general dental service payments in each month, including payments for salaried dentists and emergency dental service clinics. The figures also include the cost of employers' superannuation contributions.

  Mrs. Beckett
  To ask the Secretary of State for Health what is the average cost per course of(a) NHS dental treatment, (b) private dental treatment and (c) all dental treatments for an adult patient in 1993–94, 1992–93, and 1991–92.

  Mr. Malone
  The available information is shown in the table. Information on private treatment is not available centrally.
  402

  Average cost per adult course of treatment in the general dental service in England for the financial years 1991–92 to 1993–94

  year

  Average cost £

  1991–92

  39.80

  1992–93

  39.11

  1993–94

  36.18

  Source:

  Dental Practice Board.

  Note:

  1. The information refers to the general dental service only. The cost shown is the fee paid to the dentist.

  Mrs. Beckett
  To ask the Secretary of State for Health what is the average annual number of courses of dental treatment for an adult patient in England; and what is the average cost to(a) the NHS and (b) the patient.

  Mr. Malone
  The information requested is shown in the table.

  Information for courses of treatment completed in the year ending 31 March 1994

  £

  Average number of courses of treatment per adult patient

  1.62

  Average annual cost to the NHS of treatment per adult patient

  31.34

  Average annual cost to the adult patient

  £27.27

  Notes:

  1. The average number of courses of treatment per patient has been estimated from a sample of 70,000 courses of treatment.

  2. The costs shown are the costs of adult treatment. Regular continuing care payments are not included.

  3. The average to the patient represents the average for all adults, not the average to charge payers alone.

  Mrs. Beckett
  To ask the Secretary of State for Health what level of satisfaction was recorded by the British social attitudes survey about NHS dentistry in each year since 1993.

  Mr. Malone
  "British Social Attitudes: the 11th Report", 1994–95 edition, found that 58 per cent. of respondents surveyed in 1993 were satisfied or very satisfied with national health service dentists. A further 18.6 per cent. were neither satisfied nor dissatisfied. The comparable figures from the 9th report, 1992–93 edition, were 75.3 per cent. and 16.2 per cent.

  Family health services authorities report that they can help patients to find national health service dentists. The Government meet over two thirds of the cost of the general dental service. All those under 18 get free treatment and a quarter of treatments are provided free or at reduced cost.

  Mrs. Beckett
  To ask the Secretary of State for Health how many patients in each family health services authority, and in total, have requested help in finding a dentist since July 1992.

  Mr. Malone
  The information will be placed in the Library. Family health service authorities consistently report that they can help patients to find national health service dentists.

  Mrs. Beckett
  To ask the Secretary of State for Health by how much payments to dentists have exceeded Government estimates for each year since 1987; and how much was paid by Government and how much by patients.
  403
  Mr. Malone
  The information is shown in the tables.

  Overpayment of general dental practitioners fee income, 1987–88 to 1993–94, Great Britain

  Total payment (to all DRSG principals)

  "Gross" payments (£ million) (1)

  "Net" payment (£ million) (2)

  1987–88

  (5.003)

  22.722

  1988–89

  49.276

  74.494

  1989–90

  (13.645)

  12.256

  1990–91

  54.582

  17.921

  1991–92

  192.604

  128.140

  1992–93

  65.001

  62.920

  1993–94

  (49.354)

  4.143

  () Denotes a negative amount.

  Overpayment of general dental practitioners fee income, 1987–88 to 1993–94, Great Britain: payment by Government

  Total Payments (to all DRSG principals)

  "Gross" payment (£ millions)

  "Net" payment (£ millions)

  1987–88

  (3.544)

  16.095

  1988–89

  34.379

  51.974

  1989–90

  (8.511)

  7.645

  1990–91

  35.171

  11.548

  1991–92

  131.203

  87.290

  1992–93

  45.536

  44.078

  1993–94

  (34.609)

  2.905

  Overpayment of general dental practitioners fee income, 1987–88 to 1993–94, Great Britain: payment by patients

  Total payments (to all DRSG principals)

  "Gross" payment (£ millions)

  "Net" payment (£ millions)

  1987–88

  1.459

  6.627

  1988–89

  14.896

  22.520

  1989–90

  5.134

  4.611

  1990–91

  19.410

  6.373

  1991–92

  61.400

  40.850

  1992–93

  19.466

  18.843

  1993–94

  14.745

  1.238

  Notes:

  1. Column (1) shows the difference between actual gross fee payments made to dentists in the financial year and the estimates made of sums due to GDPs in the Dental Rates Study Group. The estimates include allowances for GDPs expenses. For 1993–94 an expenses allowance was not formally agreed but a notional amount decided upon for administrative and monitoring purposes.

  2. Column (2) shows the difference between target net income (after balancing) and the actual net income, allowing for the practice expenses incurred. This is calculated using information from a special exercise carried out by the Inland Revenue.

  3. DRSG principals are essentially general dental practitioners who have worked in the GDS for the whole of the financial year in question.

  4. The overpayment sums have been allocated to patient and Government by using total net and gross expenditure figures.

  5. Payments made under determinations 11-1X of the Statement of Dental Remuneration (eg maternity payments, seniority payments and direct reimbursement of expenses) are not included in the above.

  6. The net payment figures for 1987–88 excludes the balancing adjustment for associate dentists (£225 "underpayment" per principal; £3.37 million in total). Subsequent to 1987–88 this adjustment was not required.

  7. The figures in columns (2) and (4) for 1993–94 are provisional, and are subject to revision.

  Adoption
  Mr. Booth
  To ask the Secretary of State for Health if she will make a statement about the timetable for adoption law reform.

  Mr. Bowis
  The Government intend to introduce new adoption provisions along the lines of the White Paper,"Adoption: The Future", published in November 1993, as soon as parliamentary time permits.

  Smoking
  Mr. Alex Carlile
  To ask the Secretary of State for Health what measures have been undertaken by her Department to monitor the effects of the no-smoking campaign.

  Mr. Sackville
  The national three-year no-smoking campaign, which was launched in December 1994, is being undertaken by the Health Education Authority on behalf of the Department of Health. It is being evaluated in terms of its effectiveness in changing knowledge, attitudes and behaviour in the general population.

  Individual components of the campaign will also be monitored for impact among specific groups.

  Mr. Alex Carlile
  To ask the Secretary of State for Health what has been the reduction in treatment costs of smoking-related diseases since the beginning of the current no-smoking campaign; and if she will make a statement.

  Mr. Sackville
  It is not possible to relate recent reductions in smoking prevalence to current levels of smoking-related disease. Many smoking-related diseases have a lengthy development period and most of these manifesting themselves now are related to the smoking habits prevailing some 20 or 30 years ago.

  Intensive Care (Children)
  Mr. Alex Carlile
  To ask the Secretary of State for Health if she will make a statement on the review of intensive care for children undertaken by regional health authorities and regional branches of the NHS Executive.

  Mr. Sackville
  The reviews confirm that plans have been made to improve the provision of paediatric intensive care. The Department is consulting on the further work required to guide the implementation of these plans towards achieving an accessible and cost effective service nationally.

  Mr. Alex Carlile
  To ask the Secretary of State for Health what plans she has to identify children's intensive care as separately defined within purchaser-provider service arrangements.

  Mr. Sackville
  The specification of contracts agreed between purchasers and providers for supplying children's intensive care service is a matter for local determination.

  Heart Disease
  Mr. Alex Carlile
  To ask the Secretary of State for Health what plans she has to initiate research into hypertrophic cardiomyopathy; and if she will make a statement.

  Mr. Sackville
  The main agency through which the Government support biomedical and clinical research is the Medical Research Council which receives its grant-in-aid from the office of my right hon. Friend the Chancellor of the Duchy of Lancaster.
  405
  Mr. Alex Carlile
  To ask the Secretary of State for Health if she will list the cardiac diseases researched by her Department and the amount spent on each, for the last year for which figures are available.

  Mr. Sackville
  The list of research projects recently commissioned by the Department of Health on coronary heart disease—cardiac disease—and their cost is as follows:
  Recently completed research the effects of passive smoking: review and analysis of data on the contribution of passive smoking to coronary heart disease (1–11–93 to 30–4–94—£24,335);British Regional Heart Study: prediction and prevention of cardiovascular disease (1–10–85 to 31–12–95—4311,807);Lipids and coronary heart disease (1–1–87 to 31–3—92£25,000);Coronary heart disease: the role of the GP (1–10–90 to 30–9– 92—£181,232);Randomised controlled trial of coronary risk factor intervention (1–1–93 to 31–12–93—£299,192);National Study of Health and Growth: assessing coronary disease risk factors and bronchial reactivity in children (1–12–91 to 31–12–92—£30,123);(All the amounts quoted for research are for the entire duration of each project).Ongoing Research Nottingham Heart Attack Register (1–8–88 to 31–3—98£657,283);Whickham revisited: cardiovascular proposal (1–3–93 to 28–2–95—£83,000);Prospective markers of anti-oxidant status in relation to future cardiovascular disease, lung and stomach cancer (1–4–93 to 31–3–95—£183,972);CSAG: Waiting times for coronary revascularisation (1–10–94 to 31–1–95;£38,489);Development and validation of a weight-losing dietary intervention to reduce the risk of diabetes and CHD in South Asians (1–7–94 to 31–12–96—£176,987).
  Figures for on-going projects are estimates.

  Ambulance Response Times
  Mr. Alex Carlile
  To ask the Secretary of State for Health what were the numbers and percentage of emergency ambulance calls, in each ambulance service area, which took(a) up to 14 minutes, (b) each subsequent minute up to 60 minutes and (c) over 60 minutes, since April 1994.

  Mr. Sackville
  Information on calls up to 14 minutes in urban areas can be found in the patients charter, copies of which are available in the Library. The remaining information is not available centrally.

  Mrs. Beckett
  To ask the Secretary of State for Health what amount of compensation has been paid to members of the public by the London ambulance service due to delays in reaching patients calling the emergency service in each of the last five years.

  Mr. Sackville
  This information is not available centrally.

  Nutrition Task Force
  Mr. Alex Carlile
  To ask the Secretary of State for Health what measures she has taken to ensure that the targets of the Government's nutrition task force are met; and if she will make a statement.

  Mr. Sackville
  The nutrition task force was established to help meet "The Health of the Nation" diet and nutrition 406
  targets. The task force's "Eat Well!" programme comprises a number of projects for this purpose. The ministerial Cabinet committee, chaired by my right hon. Friend the Lord President of the Council, and the Chief Medical Officer's health of the nation working group, play a role in ensuring that progress towards targets is being made.

  Prescription Forms
  Mr. Madden
  To ask the Secretary of State for Health (1) what representations she has received about the information required to be obtained by those in pharmacies from those presenting prescription forms; what assessment she has made of the intrusiveness of the information required; and what arrangements are being made to print prescription forms in larger type and in ethnic minority languages;

  (2) which professional bodies were consulted about the design and content of the prescription forms to be issued shortly; on which dates such consultation took place; if consultation resulted in favourable reaction to the content; how many prescription forms have been printed to date; how many remain to be printed; what is the total cost of printing and distribution; and if she will make a statement.

  Mr. Malone
  From 1 April 1995 the already wide-ranging national health service prescription charge exemption and remission arrangements presently covering 81 per cent. of prescription items will be further extended to include all recipients of disabled working allowance who had less than £8,000 capital at the date of their claim. The prescription form FP10 must be amended to reflect that.

  I am also taking the opportunity to amend the declaration to make it applicable to all patients. In doing so the Government are responding to concerns of both the Health Select Committee and the Audit Commission, who have suggested that the laxity of the present patient declarations leave the way open for fraudulent claims. By asking all patients to sign the patient declaration we are taking an important first step in stamping out that abuse.

  We are currently discussing with the general medical services committee of the British Medical Association and the pharmaceutical services negotiating committee about incorporating these changes into their terms of service. I hope to lay amending regulations in the summer.

  There have been no additional printing and distribution costs. The changes were incorporated into the form during a regular print run. It has never been our practice to print prescription forms either in large print or in ethnic minority languages.

  Special Hospitals
  Mr. Hinchliffe
  To ask the Secretary of State for Health how many special hospital patients are currently awaiting discharge to medium-secure units.

  Mr. Bowis
  The Special Hospitals Service Authority is responsible for special hospitals services; the hon. Member may wish to contact the chairman of the authority.

  Autism
  Mr. Alex Carlile
  To ask the Secretary of State for Health how many cases of autism have been recorded for each year since 1990.
  407
  Mr. Bowis
  This information is not available centrally. It is estimated that the prevalence rate of classic autism is between 0.04 and 0.05 per cent. of the population and that about 0.21 per cent. may exhibit some features of autism.

  Mr. Alex Carlile
  To ask the Secretary of State for Health what was the cost of autism treatment in the NHS for each year since 1990; and what is the projected cost for 1995.

  Mr. Bowis
  This information is not available centrally. District health authorities are funded for purchasing health services for people with autism through their general allocations.

  The table shows expenditure on the purchase of health care for people with learning disabilities, which includes autism, by health authorities in England. Expenditure for 1990–91 is not available.

  Year

  £

  1991–92

  936,503,244

  1992–93

  1,068,035,565

  1993–94

  1,132,665,837

  Edgware General Hospital
  Sir John Gorst
  To ask the Secretary of State for Health what proportion of ambulances reach a patient in Barnet within the patients charter target of 14 minutes; and what proportion of emergencies were taken to(a) Edgware general hospital and (b) Barnet general hospital in each year since 1990.

  Mr. Sackville
  This information is not available centrally. My hon. Friend may wish to contact the chief executive of the London ambulance service, Mr. Martin Gorham.

  Sir John Gorst
  To ask the Secretary of State for Health (1) what are the estimated cost and future savings of closing the accident and emergency unit at Edgware general hospital;

  (2) what is the population currently served by (a) Edgware general hospital and (b) Barnet general hospital;

  (3) what plans there are to treat sufferers of dementia by the creation of a new unit at Edgware general hospital; and what representations she has received from the Barnet branch of the Alzheimer's Disease Council on the subject.

  Mr. Sackville
  This information is not available centrally. The hon. Member may wish to contact the chairman of Barnet health authority, Mr. Brian Salinger, for details. I have no record of a representation from the Barnet Alzheimer's Disease Council.

  Sir John Gorst
  To ask the Secretary of State for Health what representations she has received from the Wellhouse Trust concerning the level of resources at Barnet general hospital in the light of the increase in the number of in-patients from the Edgware area.

  Mr. Sackville
  None.

  Drug Overdoses
  Mrs. Helen Jackson
  To ask the Secretary of State for Health if she will list the number of recorded deaths from(a) methadone and (b) heroin overdoses in each of the past three years.
  408
  Mr. Sackville
  The data are published in table 10 of the publication, "Mortality statistics, injury and poisoning, England and Wales", series DH4, Nos. 16–18, copies of which are available in the Library.

  Minor Accident Treatment
  Sir John Gorst
  To ask the Secretary of State for Health what proportion of patients attending a minor accident treatment unit are subsequently referred to an accident and emergency department.

  Mr. Sackville
  The information is not available centrally.

  Eating Disorders
  Mr. Morgan
  To ask the Secretary of State for Health what guidelines she has issued to health authorities and trusts in relation to the employment of nurses or assistants who are or have suffered from anorexia nervosa, bulimia or other eating disorders.

  Mr. Malone
  Guidance on pre-employment assessment of prospective national health service employees is contained in HSG (94) 51, "Occupational Health Services for NHS staff", copies of which are available in the Library.

  Neuro-Surgery Units, London
  Mr. Austin-Walker
  To ask the Secretary of State for Health if she will list the neuro-surgery units situated in(a) Greater London, (b) South Thames region and (c) North Thames region; and what were their capacity and occupancy rates on the night of 6 March.

  Mr. Sackville
  The information is as follows:

  Neuro-surgery units situated in Greater London:
  Greenwich Healthcare NHS Trust, The Bethlem and Maudsley NHS Trust, St. George's NHS Trust, The Hammersmith Hospitals NHS Trust, The Hospitals for Sick Children, Havering Hospitals NHS Trust, The National Hospital for Neurology and Neurosurgery, The Royal Free Hampstead NHS Trust and The Royal Hospitals NHS Trust.

  Neuro-surgery units in South Thames:
  Greenwich Healthcare NHS Trust, The Bethlem and Maudsley NHS Trust, St. George's NHS Trust and Mid Sussex NHS Trust.

  Neuro-surgery units in North Thames:
  The Hammersmith Hospitals NHS Trust, The Royal Free Hospital Hampstead NHS Trust, The Hospitals for Sick Children, Havering Hospitals NHS Trust, The National Hospital for Neurology and Neurosurgery and The Royal Hospitals NHS Trust.

  Information on units' capacity and occupancy rates on the night of 6 March is not available centrally. South Thames regional office is conducting an urgent investigation into the circumstances surrounding the tragic death of Malcolm Murray, and capacity and occupancy levels is one of the areas being investigated.

  Mr. Austin-Walker
  To ask the Secretary of State for Health if she will list the neuro-surgery units which were contacted by Queen Mary's hospital, Sidcup, on the night of 6 March in relation to the case raised by the hon. Member for Woolwich in his letter dated 7 March; and if she will make a statement.

  Mr. Sackville
  The hon. Member may wish to contact Mr. William Wells, chairman of South Thames regional health authority.
  409
  South Thames regional office is conducting an urgent investigation into the circumstances surrounding the tragic death of Malcolm Murray.

ENVIRONMENT

  Waste, Drigg
  Mr. Robert Ainsworth
  To ask the Secretary of State for the Environment if he will list the dates of each seizure and checking of waste consignments to Drigg made by Her Majesty's inspectorate of pollution during the year 1990; which of these consignments breached the Drigg authorisation; and if he will give the nature of the breach.

  Mr. Atkins
  One seizure was made at the Drigg site on 31 August 1990. The consignment was found to include one aerosol can with free liquid, and a dry cell battery. This constituted a very minor breach of the Drigg disposal authorisation.

  Mr. Ainsworth
  To ask the Secretary of State for the Environment if the waste consignment for Drigg seized by Her Majesty's inspectorate of pollution in December 1994 conformed to all the conditions within the Drigg authorisation; and when Her Majesty's inspectorate of pollution report was completed and delivered to his Department.

  Mr. Atkins
  Results of the waste consignment for Drigg seized in December 1994 are not yet known.

  Countryside Commission
  Mr. Dunn
  To ask the Secretary of State for the Environment what is the annual emolument paid to members of the Countryside Commission; and what are the total emolument and expenses paid to each current serving member since his or her appointment.

  Mr. Atkins
  As chairman of the Countryside Commission, Sir John Johnson's remuneration is £37,065 for a three day week. The remaining commissioners each receive remuneration of £5,320 based on a minimum input of two days per month, although a number of commissioners regularly devote more time than this.

  Expenses are paid in line with standard civil service terms and conditions. Total expenses claimed by each commissioner from April 1993 to date are as follows. Earlier figures are not readily available.

  £

  Sir John Johnson KCMG

  10,779.07

  Rachel Thomas

  10,361.00

  David Fletcher MBE

  5,033.90

  Professor Allan Patmore CBE

  2,814.97

  Sir Richard Carew Pole

  2,194.86

  Lord Denham1

  1,593.46

  Sarah Ward

  1,345.55

  Rodney Swarbrick CBE1

  805.03

  1 Appointment from 1 August 1993.

  Exhaust Cleaning
  Mr. Robert Ainsworth
  To ask the Secretary of State for the Environment what representations he has received from local authorities requesting Government assistance 410
  to fund the fitting of test exhaust cleaning devices on (a) buses, (b) public sector vehicles, and (c) other vehicles; and if he will make a statement.

  Mr. Atkins
  My Department has had initial discussions with one local authority about the possibility of providing Government support for assessment and monitoring work associated with the experimental fitting of particulate trap assemblies to public sector vehicles. There are no plans, however, to provide funds for the fitting and operation of such devices.

  Information Technology
  Mr. Allen
  To ask the Secretary of State for the Environment what steps he has taken to encourage local councils to adopt a strategic approach to making the new information and communications technologies available to the local community.

  Mr. Robert B. Jones
  None. It is for individual councils to determine their own local priorities and strategies, including about such matters as the use of information and communications technologies.

  Rents
  Mr. Khabra
  To ask the Secretary of State for the Environment what is the average rent for new lettings by housing associations; and what was the equivalent figure for 1989.

  Mr. Robert B. Jones
  Information collected by the National Federation of Housing Associations shows that the average rent for housing association new lettings in the quarter ending 30 September 1994 was £45.63.

  The equivalent figure for 1989 was £23.64.

  Mr. Alfred Morris
  To ask the Secretary of State for the Environment what is the average rent paid by tenants of(a) private landlords and (b) local councils: and what were the equivalent figures in each category for 1978–79 in actual and real terms.

  Mr. Robert B. Jones
  Estimates of average rents paid before deduction of housing benefit or its earlier equivalent are as follows. The latest figures for private rents are for 1993–94 and so local authority rents are shown for the same year:

  Tenants of local authorities

  Tenants of private landlords £ per week

  1993–94 actual

  33.70

  60.00

  1978–79 actual

  5.90

  6.30

  1978–79 at 1993–94 prices

  16.90

  18 10

  Sources:

  Local authority rents: returns made by local authorities.

  Private rents: Private Renters Survey 1978–79, Survey of English Housing 1993–94.

  Notes:

  1. Rents are for England.

  2. Private rents are from household surveys and are subject to sampling error.

  Local Government Reorganisation
  Mrs. Maddock
  To ask the Secretary of State for the Environment how many responses have been received by his Department from residents of Dorset, excluding Bournemouth and Poole, since the Local Government
  411
  Commission published its preferred options for reorganisation; and how many (a) supported the proposed changes and (b) rejected them.

  Mr. Robert B. Jones
  As at 6 March, we had received 1,776 letters from members of the public residing in Dorset outside Bournemouth and Poole. Of these 69 support the Local Government Commission's final recommendations for Dorset and 1,707 are against the recommendations.

  Trust Councils Initiative
  Mr. Allen
  To ask the Secretary of State for the Environment what research his Department has undertaken into, and what assessment has been made of, the trust councils initiative; and if he will make a statement.

  Mr. Robert B. Jones
  We have no plans for a trust councils initiative.

  Packaging Waste
  Mr. Matthew Taylor
  To ask the Secretary of State for the Environment how his Department intends the producer responsibility industry group plan to be financed; and if he will make a statement.

  Mr. Atkins
  The Government have introduced enabling powers in the Environment Bill to place an obligation on businesses to recover and recycle packaging waste. Individual businesses may choose to discharge this obligation by acting alone or by collaborating with others in an "exemption scheme" which will deliver targets on their behalf. The internal financing of exemption schemes is a matter for business, subject only to satisfying the requirements of competition legislation and the registration requirements of the environment agencies.

  Mr. Matthew Taylor
  To ask the Secretary of State for the Environment (1) what progress has been made to produce a plan for recovering between 50 per cent. and 75 per cent. of all packaging waste by the year 2000;

  (2) what are the criteria by which his Department judged the plan for reducing waste produced by the producer responsibility industry group.

  Mr. Atkins
  The producer responsibility group was formed in 1993 to respond to the challenge to businesses concerned with packaging to develop an industry-led approach for delivering recovery and recycling targets for packaging waste. Among the objectives which Government set the PRG were the need for an effective organisation, spanning all the relevant business sectors, which can both draw up a plan and put it into action; and the need for a commitment by business that it will meet the costs necessary to fund new collection and processing capacity, together with a mechanism for raising the necessary finances.

  The PRG produced its final report in November last year and has now disbanded. Work on refining its approach and the ways in which industry might organise

  Estimated emissions of sulphur dioxides (S02) by source category for 1979–1992

  Thousand tonnes

  1979

  1980

  1981

  1982

  1983

  1984

  1985

  1986

  1987

  1988

  1989

  1990

  1991

  1992

  Power stations

  3,242

  3,007

  2,847

  2,748

  2,631

  2,589

  2,627

  2,722

  2,830

  2,728

  2,640

  2,722

  2,534

  2,427

  Domestic

  264

  226

  210

  202

  195

  158

  202

  197

  171

  155

  138

  118

  115

  103

  412
  itself to meet recycling targets has been taken forward by the VALPAK working representative advisory group—V-WRAG.

  Mr. Matthew Taylor
  To ask the Secretary of State for the Environment what legislation the Government have introduced to reduce packaging.

  Mr. Atkins
  Having considered the request from businesses in the packaging industry, we have included three clauses, numbers 76-78, in the Environment Bill which will, subject to parliamentary approval, establish enabling powers to promote or secure the re-use, recovery and recycling of products or materials when they become waste. We propose to apply these powers to packaging waste.

  Mr. Matthew Taylor
  To ask the Secretary of State for the Environment what estimates have been made of the rise in packaging over the last 10 years.

  Mr. Atkins
  No estimates exist as to variations in the amount of packaging as a whole over the last 10 years. The Department of the Environment "Digest of Environmental Protection and Water Statistics", however, does include statistics for consumption of some types of recyclable packaging. This publication is available in the Library.

  Sulphur Dioxide Emissions
  Mr. Matthew Taylor
  To ask the Secretary of State for the Environment (1) what measures have been introduced to ensure the United Kingdom meets the targets for the 70 per cent. reduction in sulphur dioxide emissions by 2005 and 80 per cent. by 2010, as agreed under the UN Economic Commission for Europe's second sulphur protocol;

  (2) what action his Department has taken to reduce sulphur dioxide emissions;

  (3) what measures he has introduced to ensure the United Kingdom meets its targets for the 40 per cent. reduction in 1980 level of sulphur dioxide emissions by 1998 as agreed under the Brussels directive of 1990.

  Mr. Atkins
  The Secretary of State published the United Kingdom national plan for the reduction of sulphur dioxide and nitrogen dioxide emissions in December 1990. The plan aims to deliver the UK commitment, under the 1988 large combustion plants directive, to a 40 per cent. reduction in 1980 levels of sulphur dioxide emissions from large combustion plants by 1998.

  My Department is preparing a national sulphur strategy to meet the targets for reduction in total sulphur dioxide emissions to which the UK is committed under the UN Economic Commission for Europe's second sulphur protocol and will be consulting on the strategy in due course.

  Mr. Matthew Taylor
  To ask the Secretary of State for the Environment if he will list the level of sulphur dioxide emissions in the United Kingdom in each year since 1979.

  Mr. Atkins
  The list following gives estimated emissions of sulphur dioxide, by source, for 1979–1992.
  413

  Estimated emissions of sulphur dioxides (SO2) by source category for 1979–1992

  Thousand tonnes

  1979

  1980

  1981

  1982

  1983

  1984

  1985

  1986

  1987

  1988

  1989

  1990

  1991

  1992

  Commercial/public service

  221

  197

  178

  170

  143

  148

  128

  135

  107

  101

  89

  90

  83

  84

  Refineries

  228

  237

  185

  165

  117

  115

  96

  108

  102

  97

  109

  109

  115

  131

  Iron and steel

  244

  128

  116

  101

  83

  75

  80

  80

  80

  85

  89

  88

  83

  83

  Other industrial combustion

  1,139

  930

  738

  667

  552

  491

  456

  517

  481

  509

  505

  497

  493

  518

  Non-combustion processes

  36

  35

  30

  26

  27

  27

  26

  24

  22

  23

  22

  19

  18

  14

  Extraction and dist. of fossil

  1

  1

  2

  2

  2

  2

  2

  2

  2

  2

  2

  2

  3

  3

  Road Transport

  55

  42

  53

  49

  42

  43

  45

  50

  46

  54

  61

  63

  58

  62

  Railways

  14

  11

  9

  8

  5

  6

  5

  5

  4

  4

  3

  3

  3

  3

  Civil aircraft

  2

  2

  2

  2

  2

  2

  2

  —

  2

  1

  —

  1

  2

  3

  Shipping

  67

  62

  53

  57

  52

  55

  50

  48

  45

  46

  57

  61

  61

  60

  Agriculture

  30

  21

  17

  15

  12

  10

  8

  9

  8

  7

  7

  8

  8

  8

  Total

  5,542

  4,899

  4,438

  4,213

  3,862

  3,721

  3,726

  3,897

  2,900

  3,813

  3,722

  3,782

  3,574

  3,500

  Source:

  Digest of Environmental Protection and Water Statistics No. 16 1994

  Mr. Matthew Taylor
  To ask the Secretary of State for the Environment what research has been carried out by his Department into the effects of sulphur dioxide emissions.

  Mr. Atkins
  The Department has undertaken a large programme of scientific research over several years into the effects on the environment of sulphur dioxide emissions. The scientific findings have been reviewed by several of the Department's expert advisory groups, including the review group on acid rain, the terrestrial effects review group and the critical loads advisory group. Copies of their reports are available in the Library of the House.

  Mrs. Anne Campbell
  To ask the Secretary of State for the Environment what assessment he has made of the differences in the sulphur dioxide emissions produced by hazardous waste incinerators and those produced by cement kilns.

  Mr. Atkins
  All operators of the hazardous waste incinerators and cement plants are required to monitor sulphur dioxide emissions. Cement plants produce higher amounts of sulphur dioxide. This is because hazardous waste incinerators dispose of wastes that mostly contain no sulphur, while cement plants use fossil fuels and raw materials that contain significant amounts of sulphur.

  Local Government Finance
  Mr. David Nicholson
  To ask the Secretary of State for the Environment, pursuant to his oral statement of 2 March on the explicit promises made by county and district councils about improved co-operation and delegation of functions, if he expects such promises to involved more or less local government expenditure; and what account he will take of such promises in future local government finance settlements.

  Mr. Robert B. Jones
  We would expect better co-operation and delegation to enable local services to be improved at no extra cost.

  Alkyl Phenol Ethoxylates
  Mr. Matthew Taylor
  To ask the Secretary of State for the Environment what research has been carried out 414
  by his Department on the effects of alkyl phenol ethoxylates on human health.

  Mr. Atkins
  We and the Department of Health have commissioned the Institute for Environment and Health to review current information on possible oestrogenic effects of chemicals, including alkyl phenol ethoxylates, entering the environment. It is expected to be completed by mid 1995.

  Mr. Matthew Taylor
  To ask the Secretary of State for the Environment what research has been carried out by his Department on the level of alkyl phenol ethoxylates in British rivers.

  Mr. Atkins
  The report from our current research on the effects of sewage effluent on fish, will include some data on levels of alkyl phenol ethoxylates in rivers. This report is expected to be completed by mid 1995.

  Mr. Matthew Taylor
  To ask the Secretary of State for the Environment what action his Department has taken to phase out the use of alkyl phenol ethoxylates.

  Mr. Atkins
  In accordance with a recommendation of the Paris Commission the United Kingdom is committed to phasing out by the year 2000, those uses of nonyl phenol ethoxylate which lead to discharge to water. This recommendation was agreed in 1992 and, in the UK, is pertinent for uses of nonyl phenol ethoxylate in industrial cleaning agents; it has not been used in domestic cleaning agents for the last 15 years. As part of the phase-out, the UK has surveyed all the main uses of ethoxylates. We are now considering the substitution of materials which are less damaging to the aquatic environment.

  European Regional Development Fund
  Mr. Matthew Taylor
  To ask the Secretary of State for the Environment what is the allocation of the European regional development fund to each of the objective 1, 2 and 5b regions in England for the current programming period.

  Mr. Curry
  The amount of European regional development fund grant available under each objective 1, 2 and 5b area in England for the current programming period is set out in the table. The programme documents for each objective area contain financial details in ecus. The table shows the sterling equivalent, at the current
  415
  exchange rate, for the European regional development fund.

  Objective area

  ERDF grant £ million (1994 prices)

  Objective 1 (1994–99)

  Merseyside

  380

  Objective 2 (1994–96)

  West Midlands

  222

  Yorkshire and Humberside

  187

  North East England

  185

  Greater Manchester/Lancashire/Cheshire

  184

  East Midlands

  47

  East London and Lee Valley

  44

  Plymouth

  18

  West Cumbria and Furness

  15

  Thanet

  10

  Objective 5(b) (1994–99)

  South West England

  116

  Northern Uplands

  52

  East Anglia

  32

  Lincolnshire

  30

  English Marches

  19

  Midlands Uplands

  7

  Percentage change in Dorset County Council's Standard Spending Assessment 1990–91 to 1995–96 by major service block

  Service Block

  Change in GDP 3deflator

  Year

  Education Per cent.

  PSS1 Per cent.

  Police Per cent.

  Fire Per cent.

  Highways per cent.

  OSB2 per cent.

  Capital Per cent.

  Total Per cent.

  Per cent.

  1990–91 to 1991–92

  17.1

  23.0

  10,0

  14.7

  13.4

  39.1

  12.9

  17.7

  6.3

  1991–92 to 1992–93

  8.5

  7.3

  18.0

  7.6

  –0.2

  36.2

  –11.2

  8.2

  4.0

  1992–93 to 1993–944

  4.4

  3.6

  3.9

  2.7

  5.5

  –2.8

  0.1

  3.4

  3.1

  1993–94 to 1994–954

  3.2

  –1.4

  4.2

  0.9

  0.1

  –0.5

  –8.5

  1.1

  52.0

  1994–95 to 1995–964

  1.1

  0.2

  6—

  2.2

  2.2

  5.4

  –6.2

  0.9

  53.3

  Notes:

  1 Personal Social Services.

  2 'Other Services' Block.

  3 The GDP deflator is a measure of domestically generated inflation in the economy.

  4 Adjusted for changes in function and responsibility.

  5 Projections published in the Financial Statement and Budget Report in 1994.

  6 Dorset Police Authority will be responsible for providing police services in the Dorset area from April 1995.

  Housing
  Mr. Jim Cunningham
  To ask the Secretary of State for the Environment what plans he has to develop an energy efficient growth in housing in the west midlands; and if he will make it his policy to take greater account of environmental factors in respect of housing developments.

  Mr. Robert B. Jones
  Measures to secure greater energy efficiency in housing and to take account of energy efficiency and other environmental factors when housing is being planned are part of the Government's strategy for sustainable development.

  Mr. Nicholas Winterton
  To ask the Secretary of State for the Environment what information he has on the number of new housing starts in January and February; and what was the figure for these months in 1994.

  Mr. Robert B. Jones
  It is estimated that in Great Britian there were 13,200 new dwellings started during January 1995 and 15,400 in January 1994, on a not

  New Households
  Mr. Jim Cunningham
  To ask the Secretary of State for the Environment how many new households are projected in the west midlands; and if this figure is in line with the regional guidance plan.

  Mr. Robert B. Jones
  The recently-published 1992-based household projections indicate 2,338 million households for the west midlands by 2011. This is an increase of 295,000 over the number in 1991. The draft regional planning guidance for the west midlands was based on earlier—1989-based—projections, which showed an increase of 244,000 households between 1991 and 2011. The Secretary of State is considering the need for any revision of the guidance in the light of the new figures.

  Standard Spending Assessments, Dorset
  Mr. David Atkinson
  To ask the Secretary of State for the Environment what have been the increases in the various categories of standard spending assessments for Dorset compared with inflation for each year since 1990.

  Mr. Robert B. Jones
  The information requested is as follows:

  seasonally adjusted basis. In February 1994 16,600 dwellings were started.

  These figures are as reported to the Department together with estimates for those local authorities which have not sent in statistical returns for their districts. They cover the total of housebuilding by private builders, housing associations and the public sector.

  Figures for February 1995 are not yet available.

  Nirex
  Mr. Llew Smith
  To ask the Secretary of State for the Environment if he will make a statement on the role of Her Majesty's inspectorate of pollution at the planning inquiry into the application by Nirex to build a rock characterisation facility at Longlands farm.

  Mr. Atkins
  Her Majesty's inspectorate of pollution has no formal role at the planning inquiry into the application by Nirex to build a rock characterisation facility at Longlands farm.

  Housing, Wandsworth
  Mr. Cox
  To ask the Secretary of State for the Environment what discussions he has had with the chief executive of Wandsworth council, Mr. Gerald Jones, on the report of Mr. Rowland Little, the appointed auditor for the council, on the council's housing, homeless, and temporary accommodation policies; and if he will make a statement.

  Mr. Robert B. Jones
  There have been no such discussions. This is a matter between the local authority and the district auditor.

  Mr. Cox
  To ask the Secretary of State for the Environment what is the present number of homeless families from the London borough of Wandsworth who have now been placed in bed-and-breakfast or temporary accommodation outside the borough.

  Mr. Robert B. Jones
  The information requested is not available in the Department.

  Mr. Cox
  To ask the Secretary of State for the Environment (1) how many council properties that have been sold in the London borough of Wandsworth in each year since 1980;

  (2) how many local authority properties in the London borough of Wandsworth have been sold under the priority sales scheme in each of the last 10 years.

  Mr. Robert B. Jones
  Tables presenting latest available information on total sales of council homes reported by each local authority from 1979–80 to March 1994 are in the Library. These also show the number of sales made under right-to-buy legislation, but information collected on other sales does not identify individual schemes within a local authority.

  Mr. Cox
  To ask the Secretary of State for the Environment how many local authority houses or flats were built in the London borough of Wandsworth in each year since 1980.

  Mr. Robert B. Jones
  The publications "Housebuilding in England by Local Authority Area: 1980 to 1989" and "Local Housing Statistics" show estimates of housebuilding completions in local authority areas of London. They show completions by sector, including activity by local authorities.

  "Housebuilding in England by Local Authority Area: 1980 to 1989" shows figures for the period 1980 to 1984. "Local Housing Statistics" shows figures for later years: Issue No. 103 covers the years 1985 to 1990; No. 105 covers 1991; No. 106 covers 1992; and No. 110 covers 1993. Copies of these publications are in the Library.

  Local authorities' primary housing tasks are now the efficient management of their own stock of housing and enabling other organisations to provide new housing, and Housing associations are the main providers of new social housing.

  Mr. Cox
  To ask the Secretary of State for the Environment what has been the number of registered homeless families in the London borough of Wandsworth in each year since 1980.

  Mr. Robert B. Jones
  The information requested is available in a table in the Library which summarises the reported data on homeless households accepted for permanent rehousing by each local authority in England for the years 1979 to 1993.

  Mr. Cox
  To ask the Secretary of State for the Environment how many people were on the housing 418
  waiting lists in the London borough of Wandsworth in each of the last five years.

  Mr. Robert B. Jones
  The annual housing investment programme—HIP—returns submitted by Wandsworth show the following numbers of households on their housing waiting lists on the 1 April in each of the last five years:

  1990: 7,292

  1991: 7,027

  1992: 7,384

  1993: 6,913

  1994: 6,561

  Mr. Cox
  To ask the Secretary of State for the Environment (1) what is the present number of empty council-owned properties in the London borough of Wandsworth;

  (2) how many local authority properties in the London borough of Wandsworth are for sale.

  Mr. Robert B. Jones
  The latest information held by my Department relates to dwellings vacant on 1 April 1994 when Wandsworth borough council reported a total of 615 vacant dwellings, of which 439 dwellings were to be sold. The data comes from its 1994 housing investment programme return, a copy of which is in the Library.

  Objective 1 Projects
  Mr. Alton
  To ask the Secretary of State for the Environment what evaluation he has made of the delivery and adequacy of support to small and medium-sized enterprises via objective 1; and whether the range of support on offer meets their needs.

  Mr. Curry
  I refer the hon. Member to my answer to him on Monday 20 February,Official Report, column 93.

  It is early days to make an evaluation of that support, since projects are only starting to get underway. We will be monitoring and evaluating objective 1 projects closely.

  Social Housing
  Mr. Timms
  To ask the Secretary of State for the Environment, pursuant to his answer of 1 February,Official Report, columns 685–86, on what date he expects the background information on the need for new social housing lettings to be published.

  Mr. Robert B. Jones
  We will make the information available as soon as it is possible.

  Housing Associations
  Mr. Fraser
  To ask the Secretary of State for the Environment if housing associations are regarded by his Department as subject to management supervision by his Department or by the Housing Corporation for the purpose of the EU public procurement directive.

  Mr. Robert B. Jones
  No, but the Government are considering the position of housing associations in the light of a recent ruling by the European court regarding similar bodies in another state, and legal opinions brought to my Department's attention. I will write to the hon. Member when we have completed this further consideration.

  Hampshire County Council
  Mr. Hunter
  To ask the Secretary of State for the Environment how many people have been employed by Hampshire county council each year since 1979.

  Mr. Robert B. Jones
  The information is as follows.

  Number of people employed by Hampshire County Council in General Services (excluding Law & Order services) at June of each year:

  Year

  Numbers employed

  1979

  51,748

  1980

  47,419

  1981

  48,669

  1982

  47,573

  1983

  48,366

  1984

  48,248

  1985

  48,141

  1986

  50,764

  1987

  51,698

  1988

  52,518

  1989

  51,152

  1990

  50,427

  1991

  49,746

  1992

  50,831

  1993

  43,451

  1994

  44,395

  Hampshire county council expenditure

  Cash £ million

  1994–95 prices £ million

  Real increase over 1982–83 figure Percentage

  Real increase over previous year Percentage

  Total expenditure (outturn)

  1982–83

  458.251

  825.546

  —

  —

  1983–84

  473.714

  815.577

  –1.2

  –1.2

  1984–85

  482.349

  791.427

  –4.1

  –3.0

  1985–86

  500.475

  777.786

  –5.8

  –1.7

  1986–87

  529.511

  798.813

  –3.2

  2.7

  1987–88

  578.833

  829.076

  0.4

  3.8

  1988–89

  628.143

  843.278

  2.1

  1.7

  1989–90

  658.829

  826.728

  0.1

  –2.0

  Net Revenue Expenditure to compare with SSA (outturn)

  1990–91

  724.996

  842.270

  2.0

  1.9

  1991–92

  809.140

  884.448

  7.1

  5.0

  1992–93

  888.472

  933.971

  13.1

  5.6

  1993–94

  840.713

  857.527

  3.9

  –8.2

  1994–951

  935.579

  935.579

  13.3

  9.1

  Note:

  1Budget estimate.

  County Council Reserves
  Mr. Gill
  To ask the Secretary of State for the Environment if he will list in rank order the amount of cash reserves held by each of the county councils.

  Mr. Robert B. Jones
  The latest available estimates of the level of reserves as at 1 April 1994 are as follows. The authorities are ranked by order of reserves excluding those held by schools, non-LMS; schools' reserves are shown separately, LMS. The first column, non-LMS reserves, includes funds, which may be substantial, held for specified purposes which may not be available to the council for general use, for example funds to finance capital projects to which the authority is committed; and insurance funds where the authority is bearing its own
  420
  Source:

  Joint Staffing watch for England

  Notes:

  (i) Polytechnics and higher education institutions were transferred from the local authority sector in April 1989.

  (ii) Further education institutions became the responsibility of the Further Education Funding Council in April 1993.

  Mr. Hunter
  To ask the Secretary of State for the Environment what has been the annual expenditure of Hampshire county council each year since 1979 expressed in cash terms, real terms and as a real term percentage increase or decrease on 1979 and on the previous year.

  Mr. Robert B. Jones
  The available information is as follows. There were two changes in the system of financing authorities in the period covered by the figures in the table, along with a number of changes in local authority responsibilities. In particular, in April 1989 responsibility for polytechnics was taken out of local authority control, and in April 1993 responsibility for further education was transferred to the Further Education Funding Council. Net revenue expenditure increased in 1994–95 through expenditure financed by the care in the community special grant. For these reasons it is not always valid to make comparisons either between financial systems, or between years within a financial system.

  insurance risks. These estimates are subject to amendment as authorities finalise their accounts. Compatible data on the use of balances in 1994–95 which would be needed to derive an estimate of the level of reserves at 1 April 1995 is not yet available.

  Estimated level of reserves at 1 April 1994

  County Councils

  Non-LMS £000

  LMS £000

  Nottingham

  –1,492

  14,965

  Shropshire

  –557

  7,789

  Isle of Wight

  2,258

  1,516

  Leicestershire

  2,540

  14,305

  Northamptonshire

  2,629

  10,191

  Dorset

  3,510

  6691

  421

  Estimated level of reserves at 1 April 1994

  County Councils

  Non-LMS£000

  LMS£000

  Derbyshire

  6,732

  13,078

  Bedfordshire

  7,114

  15,674

  Cumbria

  7,822

  3,514

  Warwickshire

  8,576

  7,015

  Hereford and Worcester

  10,305

  14,112

  West Sussex

  12,070

  4,748

  Gloucestershire

  12,252

  7,041

  Durham

  12,549

  7,810

  Oxfordshire

  13,162

  12,395

  Cleveland

  13,474

  9,239

  Northumberland

  14,573

  3,666

  Suffolk

  14,982

  13,120

  Avon

  16,205

  11,403

  Wiltshire

  17,260

  6.697

  Humberside

  23,735

  8.701

  Cornwall

  24,354

  7,371

  North Yorkshire

  24,776

  11,828

  Norfolk

  24,791

  9,059

  East Sussex

  29,181

  5,829

  Somerset

  30,901

  5,575

  Cheshire

  30,979

  17,584

  Lincolnshire

  32,774

  13,876

  Hertfordshire

  32,881

  23,522

  Kent

  35,234

  12,513

  Staffordshire

  38,073

  10,351

  Buckinghamshire

  38,981

  8,609

  Lancashire

  39,138

  32,976

  Berkshire

  39,574

  43,883

  Devon

  41,419

  10,439

  Cambridgeshire

  48,602

  7,930

  Essex

  49,465

  25,039

  Hampshire

  67,407

  25,310

  Surrey

  69,410

  5,545

  Source:

  Level of reserves (outturn) at 1/4/93 appropriations to/withdrawals from reserves 1993–94 (RS returns for 1993–94).

  Student Accommodation
  Mr. Alton
  To ask the Secretary of State for the Environment what plans he has to bring in a system of national licensing for those properties in multiple occupation which are inhabited by students.

  Mr. Robert B. Jones
  The period for responses to my Department's consultation paper on the case for licensing houses in multiple occupation closed on 18 February. Several of these responses drew attention to the particular problems associated with student accommodation. We are now considering what action to take in the light of these responses and an announcement will be made in due course.

  Local Government Conduct
  Mr. Robert Ainsworth
  To ask the Secretary of State for the Environment what guidelines he issues regarding the part councillors who declare an interest in a planning application can take in making decisions on that application.

  Sir Paul Beresford
  We have issued guidance on disclosure of members interests in DOE circular 8/90—"The National Code of Local Government Conduct", and in DOE circular 9/92–"Pecuniary Interests of Members of Local Authorities".

  Water Bills
  Mrs. Helen Jackson
  To ask the Secretary of State for the Environment what was the percentage of unpaid water bills last year overall and in each of the water company's areas.

  Mr. Atkins
  The information requested is not collected either by my Department or the Office of Water Services.

  Northumberland Coast
  Mr. Byers
  To ask the Secretary of State for the Environment what is the present position with regard to the proposed special protection area on the Northumberland coast; if he will make a statement; what plans he has to introduce restrictions on the collection of bait from the foreshore on the north-east coastline; and what powers he has to designate an area for protection when it is to the seaward side of the mean low water mark.

  Sir Paul Beresford
  My officials are consulting owners and occupiers. My right hon. Friend the Secretary of State has no plans to introduce any restrictions on bait digging above those currently in force at the Lindisfarne national nature reserve. The Conservation (Natural Habitats, &c.) Regulations 1994 provide for the designation of European marine sites.

  Sites of Special Scientific Interest
  Dr. Strang
  To ask the Secretary of State for the Environment how many sites of special scientific interest have been(a) damaged and (b) destroyed by (i) development and (ii) other means in England in each year since 1979.

  Sir Paul Beresford
  The information is not available in the form requested. Statistical information on damage to SSSIs in Great Britain between 1 April 1984 and 31 March 1991 is set out in the annual reports of the former Nature Conservancy Council. Since 1 April 1991, similar detail for England is contained in English Nature's annual reports. Copies of annual reports are in the Library.

  Hedgerows
  Dr. Strang
  To ask the Secretary of State for the Environment what length of hedgerow has been lost in England each year since 1979.

  Mr. Atkins
  Reliable figures are not available in the form requested. However, two surveys carried out for my Department covering the periods 1984–1990 and 1990–1993 indicated net losses of hedgerow in England of 85,000 km and 49,000 km respectively. These figures include losses caused by lack of management as well as by deliberate removal. The latest survey showed that the rate of removal of hedges during 1990–93 more than halved compared with 1984–90.

  Homelessness
  Dr. Strang
  To ask the Secretary of State for the Environment how many households have been accepted as homeless in each local authority in rural areas in England in each year since 1979.

  Mr. Robert B. Jones
  The data collected from local authorities on homeless households accepted for permanent re-housing does not differentiate between households from rural and non-rural areas. A summary print showing the reported acceptances in each local
  423
  authority area in England for the years 1979 to 1993 is in the Library.

  Eland House
  Mr. Barnes
  To ask the Secretary of State for the Environment if he will make a statement concerning facilities and arrangements for disabled people working in or visiting his Department's new building, Eland house.

  Sir Paul Beresford
  Eland house is currently under construction and will then be fitted out by my Department. It is my policy that we should follow best practice in providing facilities for disabled persons and we will ensure that the facilities and arrangements for disabled persons at the new building comply fully with code of practice, BS5810, and part M of the Building Regulations 1991.

  Enterprise Zone, Tyneside
  Mr. Byers
  To ask the Secretary of State for the Environment, when he expects to announce the location of the proposed enterprise zone on Tyneside following the closure of Swan Hunter's shipyard, following the oral statement of 12 May 1993,Official Report, columns 801–02.

  Sir Paul Beresford
  The three local authorities concerned, and the Tyne and Wear development corporation, have submitted a package of sites for consideration. This is currently being examined by Ministers and an announcement will be made as soon as possible.

  Sellafield
  Mr. Llew Smith
  To ask the Secretary of State for the Environment what assessment he has made of the implications for the protection of the environment which will result from the agreement reached between British Nuclear Fuels plc and Scottish Nuclear, for the long-term management and reprocessing of spent thermal oxide nuclear fuels at Sellafield.

  Mr. Atkins
  [holding answer 7 March 1995]: Any contract entered into by British Nuclear Fuels is a matter for that company, but any operations at Sellafield which result from such a contract will have to comply with the limits and conditions of the site discharge authorisations. Her Majesty's inspectorate of pollution is satisfied that compliance with these authorisations will fully protect the environment.

NORTHERN IRELAND

  Parliament Buildings, Stormont
  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland what plans he has to restore the Assembly chamber at Parliament buildings, Stormont, after the fire; and if the new chamber will be a replication of the previous design and decor.

  Mr. Moss
  Following the completion of the Royal Ulster Constabulary and forensic investigation, the process of salvaging material which might assist with restoration has begun, as has a detailed examination of the extent of the damage. When these exercises are 424
  completed, a decision will be taken on the restoration of the chamber.

  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland when he expects to receive the report from Sir Reginald Doyle on the fire and related matters at the Parliament buildings, Stormont.

  Mr. Moss
  My right hon. and learned Friend expects to receive the report from Sir Reginald Doyle before the end of March.

  Royal Ulster Constabulary
  Ms Mowlam
  To ask the Secretary of State for Northern Ireland if he will provide a breakdown by age of the members of the Royal Ulster Constabulary.

  Sir John Wheeler
  The age distribution of members of the Royal Ulster Constabulary as at 1 March 1995 is set out.

  RUC regular age band

  Number

  20 and under

  7

  21–25

  430

  26–30

  1,544

  31–35

  2,036

  36–40

  1,658

  41–45

  1,203

  46–50

  853

  51–55

  502

  56–60

  221

  61 and over

  14

  Total

  8,468

  RUC Reserve (Full-time)

  Age band

  Number

  20 and Under

  2

  21–25

  287

  26–30

  620

  31–35

  642

  36–40

  431

  41–45

  360

  46–50

  320

  51–55

  261

  56–60

  228

  61 and Over

  31

  Total

  3,182

  RUC reserve (part-time)

  Age band

  Number

  20 and Under

  9

  21–25

  149

  26–30

  221

  31–35

  233

  36–40

  205

  41–45

  209

  46–50

  173

  51–55

  168

  56–60

  114

  61 and Over

  20

  Total

  1,501

  Citizens Charters
  Ms Mowlam
  To ask the Secretary of State for Northern Ireland if he will list the costs of production and distribution of the Northern Ireland charter and where copies can be obtained by the public.
  425
  Sir John Wheeler
  The Northern Ireland citizens charter which was published on 5 February 1992 cost £30,000 to produce and £4,200 to distribute. It is sold through HMSO at a cost of £8.50 per copy. A free summary guide is available from the Northern Ireland citizens charter unit on a freephone number, 0800 243174, and by using a freepost address, Freepost BE111 Belfast BT4 3SX, and at libraries and citizen's advice bureaux offices.

  Copies of the main charter can be inspected at libraries and citizen's advice bureaux offices.

  Ms Mowlam
  To ask the Secretary of State for Northern Ireland if he will list the costs of production and distribution of, and the availability of the charters of the Government Departments in Northern Ireland, with special reference to(a) the patients and clients charter,

  Northern Ireland citizens charters and charter standard statements

  Charter/Charter Statement

  Cost of Publication £

  Cost of Distribution £

  Where available

  Patients and Clients

  67,218 (includes the summary guide)

  18,110(includes the summary guide)

  All health and personal social services bodies and related organisations. A summary guide was produced and distributed to every household in Northern Ireland

  Social Security Agency Customer Charter

  4,443

  60 approx

  Copies were issued to voluntary organisations, Chief Librarians and advice bodies. Copies available in all Social Security Agency Offices

  Training and Employment Agency Customers Charter

  11,000

  None

  All Agency local offices

  Parents Charter

  105,000

  9,000

  On request from the Department of Education. Copies were distributed, at the launch in September 1992, through schools, to all parents

  Northern Ireland Housing Executive Tenants Charter

  61,817

  38,532

  Initially copies were posted at the launch of the Charter in September 1992 to all tenants. New tenants get a copy on signing the tenancy agreement. All district offices of the NIHE have copies

  Northern Ireland Railways Passengers Charter

  30,000

  None

  Libraries, government outlets and all main NI Railways stations.

  Royal Ulster Constabulary Charter

  25,000 (includes cost publication and advertising

  —

  All RUC stations and RUC Headquarters

  Ulsterbus/Citybus Passengers Charter

  10,611

  Minimal as copies were placed in bus stations

  At bus stations

  Child Support Agency (NI) Charter

  66,175 (includes reprint costsincurred in November 1994)

  £60

  The Charter was widely distributed on the launch of the Agency in April 1993 and copies are available from the Agency's headquarters and each of its seven local offices.

  NI Court Services

  5,065

  Less than £500

  NI Court Service, Communications Unit, Court Offices. Citizen Advice Bureaux offices and public libraries throughout NI

  426
  (b) the Social Security Agency charter, (c) the Training and Employment Agency charter, (d) the Northern Ireland Housing Executive charter (e) the Northern Ireland railways charter, (f) the Royal Ulster Constabulary charter, (g) the Ulsterbus and Citybus charter, (h) the Child Support Agency charter, (i) the Driver and Vehicle Licensing (Northern Ireland) charter and (j) the Courts and Compensation Agency charter.

  Sir John Wheeler
  The table gives details of the cost of production and distribution and the availability of the charters of the Government Departments in Northern Ireland.

  Individual public service organisations are responsible for producing and distributing their own charters for those who use their services. The table shows costs and other details of production and distribution in so far as they are available centrally.
  427

  Northern Ireland citizens charters and charter standard statements

  Charter/Charter Statement

  Cost of Publication £

  Cost of Distribution £

  Where available

  Redundancy Service

  1,514

  None

  Redundancy Services Offices, Training and Employment Agency offices, Social Security Agency office and Citizen's Advice Bureaux offices.

  Driver and Vehicle Licensing (NI)

  878

  Minimal as copies were placed in local offices

  Copies are available in all DVLI local offices

  Compensation Agency

  Publication and distribution costs to total £500

  Agency offices, solicitors dealing with compensation claims, Citizen Advice Bureaux and Victims Support Groups

  Valuation and Lands Agency

  1,485

  None—distributed by Agency Staff as part of their duties

  Copies are available at Agency Headquarters, District Offices and Rate Collection Offices

  Belfast Action Teams

  8,245

  600

  Belfast Action Team offices, local libraries and on request. Copies were also circulated within NI Government Departments

  Government Purchasing Service

  850

  Minimal-distributed at seminars and on request by post

  From all Government purchasing Service Managers and Headquarters

  Our Service Standards (Department of Agriculture NI)

  12,800

  5,500

  Approximately 30,000 copies distributed to individual addresses. Copies are also available form Divisional Veterinary Offices, County Agricultural Development Offices, District Forest Offices and the Department's Communications Unit

  Forensic Science Laboratory
  Ms Mowlam
  To ask the Secretary of State for Northern Ireland how much of the £4 million planned for the Forensic Science Laboratory in Northern Ireland in 1994–95 was spent preparing to become an executive agency.

  Sir John Wheeler
  Approximately £180,000.

  Public Expenditure Plans
  Ms Mowlam
  To ask the Secretary of State for Northern Ireland for what reason there is a planned decrease in spending between 1994 and 1997 in(a) industry, energy, trade and employment, (b) transport and (c) environmental and miscellaneous services referred to in table 1.1 of "Northern Ireland Expenditure Plans and Priorities 1994–95 to 1996–97".

  Sir John Wheeler
  The planned decreases in Northern Ireland public expenditure cash plans in these areas is accounted for mainly by the completion of the privatisation payments to Harland and Wolff and Shorts—industry, energy, trade and employment; the completion of the Belfast cross-harbour bridge—transport; and a rephasing of capital expenditure on water and sewerage—environmental and miscellaneous services.

  Ms Mowlam
  To ask the Secretary of State for Northern Ireland what are the four construction projects 428
  on which £25 million will be spent on the police building programme, referred to in table 4.3 of "Northern Ireland Expenditure Plans and Priorities 1994–95 to 1996–97".

  Sir John Wheeler
  Table 4.3 of "Northern Ireland Expenditure Plans and Priorities 1994–95 to 1996–97" shows the Police Authority for Northern Ireland's plans, as at 31 March 1994, to take forward work, on construction projects valued at more than £50,000 each, costing a total of £25 million in the 1995–96 year.

  At that date, these plans included four new projects—three replacement police stations and a further phase of a regional support centre—costing a total of £6 million, in the 1995–96 year. The remainder of the planned expenditure for that year is in respect of on-going projects started in previous years.

  Ms Mowlam
  To ask the Secretary of State for Northern Ireland what is the meaning of the term DRC in section 1.5 of "Northern Ireland Expenditure Plans and Priorities 1994–95 to 1996–97"; and for what reasons it needed an increase of £13 million allocated to it in 1993–94.

  Sir John Wheeler
  The term DRC stands for departmental running costs and is explained in paragraph 11.2 of the plans. The £13 million increase, relating to capital and DRC end-year flexibility carryover, was required in 1993–94 due to slippage in planned expenditure in 1992–93.
  429
  Ms Mowlam
  To ask the Secretary of State for Northern Ireland if he will provide a breakdown of the £7 million allocated each year to community relations in the years 1994–95 to 1996–97, mentioned in section 1.4 of "Northern Ireland Expenditure Plans and Priorities 1994–95 to 1996–97".

  Sir John Wheeler
  The resources available for community relations are directed at consolidating a range of major initiatives which are designed to increase cross-community contact and encourage greater mutual understanding and respect of different cultures and traditions. Since publication of the current edition of "Northern Ireland Expenditure Plans and Priorities 1994–95 to 1996–97", I have announced on 6 December 1994, that the resources available will be increased.

  Over the period 1994–95 to 1996–97 these resources will be allocated as follows:

  1994–95£000

  1995–96£000

  1996–97£000

  Central Community Relations Unit1

  4,414

  5,307

  5,457

  Department of Education for Northern Ireland2

  2,638

  3,133

  3,333

  Department of Finance and Personnel (Policy, Planning and Research Unit3)

  250

  300

  305

  Total

  7,302

  8,740

  9,095

  Notes:

  1These resources will be directed to the Northern Ireland Community Relations Council, district council community relations programme, community reconciliation bodies, cultural traditions programme and capital programme.

  2The main elements of DENI's programme are the cross-community contact scheme, cultural traditions programme and voluntary reconciliation bodies.

  3This will support an information, evaluation and research programme.

  Ms Mowlam
  To ask the Secretary of State for Northern Ireland for what reasons table 4.18 of "Northern Ireland Expenditure Plans and Priorities 1994–95 to 1996–97" does not contain projected expenditure on(a) the electoral service and (b) the state pathology service; and what was the actual expenditure on these services in 1994–95 and the projected expenditure in 1995–96 and 1996–97.

  Sir John Wheeler
  The statistics relating to the electoral service and the state pathology service contained in "Northern Ireland Expenditure Plans and Priorities 1994–95 to 1996–97" have customarily, in common with a number of other statistical tables in the report, dealt only with historic information.

  The information requested is as follows:
  430

  £ thousands

  1994–-95 (Estimated outturn)

  1995–96 (Main estimates provision)

  1996–97 (Planned expenditure)

  Electoral service

  1,225

  1,254

  1,232

  State pathology service

  874

  910

  892

  Social Fund
  Mr. Matthew Taylor
  To ask the Secretary of State for Northern Ireland what is the allocation for the European social fund to Northern Ireland for the current programming period.

  Sir John Wheeler
  Under the single programming document 1994 to 1999, Northern Ireland will earn 354 mecu, approximately £274 million, from the European social fund. Around 24 mecu, approximately £18 million, will also be earned through the three Community initiatives which have now been agreed. Northern Ireland also expects to earn further ESF receipts from the remaining six Community initiatives and the peace initiative programme which have all still to be agreed with the European Commission.

  "Frameworks for the Future"
  Ms Mowlam
  To ask the Secretary of State for Northern Ireland if he will list the costs to the Government of the peace process including(a) cost of printing and distributing "Frameworks for the Future", (b) the estimated costs of the on-going talks (c) the estimated cost of referendums and (d) the estimated costs of creating and running a Northern Ireland Assembly.

  Mr. Ancram
  On the cost of printing and distribution of "Frameworks for the Future", I would refer the hon. Member to the answer I gave the Member for Derbyshire, North-East (Mr. Barnes) on 2 March,Official Report, column 683.

  The costs of on-going talks with Northern Ireland political representatives and the Irish Government have been met from existing departmental running costs and it is not possible to isolate the costs of this particular activity.

  It will only be possible to offer reliable estimates on the cost of a referendums and of creating and running an assembly when the details of the arrangements have been discussed and agreed with the relevant Northern Ireland parties.

  Civil Service Pensions
  Ms Mowlam
  To ask the Secretary of State for Northern Ireland what was the reasons for the reclassification of civil service pensions; and if the £17 million spent on doing this will be a one-off expense.

  Sir John Wheeler
  The reclassification of civil service pensions arose from the decision to allocate accruing superannuation liability charges to departments' budgets with effect from the 1994–95 financial year. This was designed to make the employment costs of staff more transparent. The reclassification was a technical adjustment which has been applied throughout the United Kingdom and which had no implications for the resources available to Northern Ireland.

  Environment Legislation
  Ms Mowlam
  To ask the Secretary of State for Northern Ireland on what grounds the Environment Protection Act 1990 was not extended to cover Northern Ireland; and when he intends to make a statutory provision for the protection of the environment here.

  Mr. Moss
  When this legislation was being considered, it was decided that, as with many such matters which could be expected to fall within the competence of a devolved legislature, it would be preferable to arrange separate provision by means of Orders in Council on the Northern Ireland statute book.

  Legislation broadly equivalent to the 1990 Act is currently being introduced into Northern Ireland on a phased basis. Two Orders in Council dealing with litter and genetically modified organisms are already in place and a further two relating to the major issues of waste and industrial air pollution are at an advanced stage of preparation. The provisions of the 1990 Act dealing with radioactive substances, which applied on a UK basis, have been superseded by the Radioactive Substances Act 1993.

  Private Finance Initiative
  Ms Mowlam
  To ask the Secretary of State for Northern Ireland how much Government money was spent(a) in total and (b) on each project on the private finance initiative in (i) 1990, (ii) 1991, (iii) 1992, (iv) 1993 and (v) 1994.

  Sir John Wheeler
  The private finance initiative was launched by the Chancellor of the Exchequer in November 1992. The Government contribution to projects and programmes deemed relevant to the initiative, for the financial years since launch, is as follows:

  £000

  Project

  1993–94

  1994–95 Estimated Outturn

  Urban Regeneration Grant

  13,290

  4,760

  Housing Associations

  30,800

  25,600

  Water Executive

  15

  122

  Hospital Equipment Leasing

  238

  n/a

  Total

  44,343

  —

  European Regional Development Fund
  Mr. Matthew Taylor
  To ask the Secretary of State for Northern Ireland what is the allocation of the European regional development fund to the objective 1 region of Northern Ireland for the current programming period.

  Sir John Wheeler
  Under the single programming document 1994 to 1999, Northern Ireland will earn 676.82 mecu, approximately £525 million, from the European regional development fund. Around 64 mecu, approximately £50 million, will also be earned through the three Community initiatives which have now been agreed. NI also expects to earn further ERDF receipts from the remaining six Community initiatives and the peace initiative programme which have all still to be agreed with the European Commission.

  Road Safety
  Ms Mowlam
  To ask the Secretary of State for Northern Ireland if he will make a statement about the Department of the Environment for Northern Ireland's programme aimed at reducing the number of fatal and serious road accident casualties.

  Mr. Moss
  The Department of Environment (NI) is carrying forward a programme of road safety measures aimed at reducing the number of fatal and serious road accident casualties by one third by the year 2000. The main elements of the programme are as follows:

  (a) Road Safety Plan The Department will be publishing its first plan later this year. It will set out how we will work together with other road safety bodies to achieve a one-third reduction in fatal and serious casualties by the year 2000.

  (b) Publicity Campaigns The Department, with assistance from the private sector intends to mount two major campaigns this year on speeding and drink/driving.

  (c) Road Safety Education in Schools The road safety education in schools will be continued although, due to resource constraints, the road safety education officer service is being reduced by approximately one third. Additional finance will be available for teaching materials. The cost of producing the annual road safety teaching aid calendar has been considerably reduced by competitive tendering, thereby improving value for money.

  (d) Road Traffic Legislation Northern Ireland's road traffic legislation will be updated to strengthen it and also bring it more closely into line with Great Britain. The Road Traffic (NI) Order 1995 was published in January 1995 and is on target to complete its parliamentary process by mid 1995.

  (e) Accident Remedial and Traffic Calming Measures In the last two years the Department has increased funding by 42 per cent. based on 1992–93 and 1994–95 (estimated figures). A further increase in funding of 16 per cent. is proposed for 1995–96.

  (f) Commercial Vehicle Checking Enforcement Additional resources are being deployed to enable the Department to further strengthen its efforts to target "on-road" checking of roadworthiness and loading standards for commercial vehicles.

  Sickness Absenteeism
  Mr. Chidgey
  To ask the Secretary of State for Northern Ireland what measures he is taking to combat sickness absenteeism in(a) the Social Security Agency, (b) the Training and Employment Agency, (c) the Driver and Vehicle Licensing Agency (NI), (d) the Rate Collection Agency, (e) Ordnance Survey of NI, (f) his Department, (g) the Compensation Agency, (h) the Valuation and Land Agency (NI), (i) the Driver and Vehicle Testing Agency and (j) the Child Support Agency Northern Ireland.

  Sir John Wheeler
  [holding answer 9 March 1995]: The Northern Ireland Office, Northern Ireland Departments and agencies monitor their absenteeism regularly.

  In 1994, the Northern Ireland civil service set up an inter-departmental working group to address the problem of absenteeism at a strategic/service-wide level. The group has developed

  (i) software to enable absenteeism statistics to be extracted from the main NICS non-industrial human resource database which allows all departments and agencies in NICS to produce statistics on a frequency and of a type to meet their business needs. In addition, I receive, as a standard feature, a quarterly absenteeism report on the non-industrial staff in all departments:

  433

  (ii) a policy statement on attendance, a copy of which has been issued to every member of staff. This statement not only provides the general policy on attendance but also explains the standards which are expected and the procedures to be followed when absence occurs. A copy has been placed in the Library;

  (iii) notes for guidance for line managers to assist them in the implementation of the policy; and,

  (iv) advice on absenteeism briefing sessions.

  Against this backdrop, individual departments and agencies are now able, where appropriate, to take their own local initiatives.

  The Northern Ireland Office—home civil service—also produces printouts which indicate where staff have reached set limits of sick absence. Further action includes staff counselling, the monitoring of further absences and the issue of warnings. These procedures are currently under review.

  Following a review of attendance levels in early 1993, the Social Security Agency introduced a "managing attendance" programme in November 1993 with the main objective of reducing absenteeism through sickness. One of its features requires line managers to monitor absences closely and to interview staff on their return to work. It also provides for the occupational health service to be brought in to help in appropriate cases and for disciplinary action to be taken where necessary.

  Alzheimer's Disease
  Mr. Barry Jones
  To ask the Secretary of State for Northern Ireland what estimate he has made of the number of people suffering from Alzheimer's disease aged(a) 65 years and over (b) under 65 years in Northern Ireland, and if he will make a statement.

  Mr. Moss
  [holding answer 9 March 1995]: Based on surveys of the prevalence of dementia elsewhere, it is estimated that in 1992 there were 11,500 people over 65 with dementia in Northern Ireland and some 750 people under 65 suffering from the disease. It is thought that about 70 per cent. of dementias are caused in whole or part by Alzheimer's disease.

  The Department of Health and Social Services has recently undertaken a comprehensive scrutiny of its policy on dementia. The report of the scrutiny is to be published in May and a copy will be placed in the Library.

SCOTLAND

  Tayside Flood
  Mr. McMaster
  To ask the Secretary of State for Scotland if he will detail as precisely as possible the assistance, both direct and indirect, given by central Government sources to the Tayside flood areas in terms of(a) immediate help, (b) assistance with temporary accommodation, (c) assistance with restoring permanent accommodation, (d) the application of the Bellwin scheme, (e) flood prevention measures and (f) other costs; and if he will make a statement.

  Mr. George Kynoch
  [holding answer 16 January 1995]: The Government's immediate response to the Tayside flooding in January 1993 was to trigger the Bellwin scheme of special financial assistance to local authorities. So far, nearly £1.679 million has been paid by
  434
  way of grant under the scheme to affected authorities. This is made up of £1 million to Tayside regional council, £673,229 to Perth and Kinross district council and £5,524 to Dundee district council. I expect a further payment to the regional council to be made shortly of about a further £800,000, but discussions with the regional council are still to be concluded.

  Perth and Kinross district council requested supplementary capital allocations of£1.11 million in 1992–93 and this was met in full. Within these resources £910,000 was made available specifically for temporary accommodation for people made homeless by the flooding. Further housing and non-housing allocations of £1.245 million and £200,000 respectively were made available 1993–94. The allocation for housing was in respect of repair of the flood damage to council stock.

  Tayside regional council was given supplementary capital allocations totalling £1.48 million in 1992–93 for expenditure on water, sewerage and other programmes, including roads and transport. This met in full the request made by the region. Further capital allocations in consequence of the flooding, totalling £700,000 were issued in 1993–94.

  As a further measure, the Scottish Office contributed £110,000 towards a comprehensive flood prevention study covering the River Tay catchment area, which the regional council is currently considering with a view to the implementation of flood prevention measures.

  In addition, a special scheme of grants was introduced to assist farmers with the cost of repairs to breached floodbanks. The special scheme increased the normal grant rate from 50 per cent. to 75 per cent. and was available for the period from 1 February 1993 to 30 September 1993.

  Mr. McMaster
  To ask the Secretary of State for Scotland if he will give the relevant data in relation to the Bellwin scheme as it applied to regional and district authorities in Tayside following the most recent floods in relation to(a) total amounts claimed, (b) total amounts paid, (c) per capita central government expenditure in relation to the (i) general population and (ii) flood victims, (d) budgetary heads of claims, (e) items claimed but refused, (f) items claimed by reduced and (g) items which could have been claimed but which were not; and if he will make a statement.

  Mr. Kynoch
  [holding answer 16 January 1995]: Following the severe flooding in Tayside in January 1993, claims under the Bellwin scheme were received from three councils. Tayside regional council and Perth and Kinross district council have received interim payments of grant. The relevant figures for all councils are shown in the table: the figures for grant claimed are net of the threshold for each authority and are based on the normal grant rate of 85 per cent.

  Authority

  Grant Claimed £

  Grant paid to date £

  Tayside regional council

  2,464,760

  1 ,000,000 (interim)

  Perth and Kinross district council

  791,451

  673,229 (interim)

  Dundee district council

  128,790

  5,524 (final)

  Total

  3,385,001

  1,678,753

  435
  Since the claim from Tayside region is yet to be finally settled, it is not possible to give per capita figures for expenditure, but it must be doubtful if such figures would be meaningful given the nature of the flooding.

  The claims have been assessed on the basis of the normal Bellwin scheme rules. These are set out in Scottish Office finance circular 6/1990, a copy of which is in the Library.

  I am not aware of there being any items of expenditure for which Bellwin grant could have been claimed but which the local authorities chose not to include in their claims. My officials have had lengthy discussions with the authorities concerned both before and after claims were submitted, and these discussions included guidance on what expenditure would and would not in principle be eligible for grant.

  Local Enterprise Companies
  Mr. McFall
  To ask the Secretary of State for Scotland (1) if he will place in the Library a copy of the advice provided to him by the Scottish Enterprise Board on his consultation paper regarding the review of local enterprise company boundaries;

  (2) when he will publish his views on the consultation paper regarding the review of local enterprise company boundaries.

  Mr. Kynoch
  My right hon. Friend will make known his decision on local enterprise company boundaries in due course, after he has received and considered the views of the Scottish Enterprise Board.

  Nursing Home Bids
  Ms Rachel Squire
  To ask the Secretary of State for Scotland how many private nursing home beds there were in each health board area in Scotland as a whole in(a) 1979 and (b) 1993–94.

  Lord James Douglas-Hamilton
  [holding answer 8 March 1995]: The information on private nursing home1 beds is as follows:

  Health Board

  21987

  1994

  Argyll and Clyde

  633

  1,150

  Ayrshire and Arran

  670

  2,064

  Borders

  180

  723

  Dumfries and Galloway

  52

  494

  Fife

  45

  795

  Forth Valley

  207

  860

  Grampian

  324

  1,761

  Greater Glasgow

  626

  2,299

  Highland

  292

  1,009

  Lanarkshire

  541

  2,181

  Lothian

  965

  2,242

  Orkney

  —

  —

  Shetland

  —

  —

  Tayside

  140

  1,609

  Western Isles

  —

  65

  Total

  4,675

  17,252

  Notes:1

  Private nursing homes and hospitals subject to the Nursing Homes Registration (Scotland) Act 1938, as amended.

  2 The first year in which comparable information was centrally available.

  Urban Programme
  Ms Rachel Squire
  To ask the Secretary of State for Scotland which geographic areas in Scotland are eligible to receive urban programme support in 1995–96; and how many enumeration districts within these areas are in the worst 10 per cent. based on the analysis of the 1991 census data.

  Lord James Douglas-Hamilton
  I am arranging for the information to be placed in the Library of the House.

  Alzheimer's Disease
  Mr. Barry Jones
  To ask the Secretary of State for Scotland what estimate he has made of the number of people suffering from Alzheimer's disease aged(a) 65 years and over or (b) under 65 years in Scotland; and if he will make a statement.

  Lord James Douglas-Hamilton
  [holding answer 9 March 1995]: This information is not available. The range of estimates which may be adduced from specific studies of the prevalence of dementia in the population is discussed in an article by Dr. P. W. Brooks which appeared in the March 1992 edition of the "Health Bulletin", a copy of which has been placed in the Library.

  Lanark Blue Cheese
  Mr. Marlow
  To ask the Secretary of State for Scotland if he will make a statement on Lanark blue cheese, setting out the United Kingdom and EC legal instruments governing its production and what assessment he has made of the application of the relevant legislation in France as respects French cheeses.

  Sir Hector Monro
  The hygienic production of cheese is regulated at present by the Food Hygiene (Scotland) Regulations 1959 as amended and by the provisions of the Food Safety Act 1990. All existing milk and dairies legislation is being consolidated into a new set of regulations which will also implement the EC milk hygiene directive 92/46/EEC.

  Although as Minister I have no involvement with proceedings which have been instituted, I understand that on 6 March 1995 a justice of the peace approved an application by the food authority for the destruction of some Lanark blue cheese, that an interim interdict to halt that destruction has subsequently been granted to the manufacturer and that the matter is now before the courts.

  My right hon. Friend has no information on which he can base an assessment of the application of legislation in France as respects French cheeses.

  Discovery Project
  Mr. Bill Walker
  To ask the Secretary of State for Scotland on what date approval was given to provide public funds from the Scottish Office budget for the tourist-related capital project at Discovery point, Dundee; and which Government Department or agency was responsible for approving the project.

  Mr. Kynoch
  Financial assistance was provided to the Discovery project from the Scottish tourist board and Scottish Enterprise Tayside. The provision of that assistance was in both cases within the delegated authority of the body concerned, and the question of Scottish Office approval did not therefore arise.
  437
  Mr. Bill Walker
  To ask the Secretary of State for Scotland if he will give details of the value of public funds which have been spent on building the Discovery centre, Dundee; and if he will list the Government and local government share of these funds.

  Mr. Kynock
  The information requested is not held centrally.

  Homelessness
  Dr. Strang
  To ask the Secretary of State how many households have been accepted as homeless by local authorities in rural areas in Scotland in each year since 1979.

  Lord James Douglas-Hamilton
  The number of households accepted as homeless by rural local authorities is set out in the table. Rural authorities are as defined in the "Scottish Economic Bulletin" in 1985.

  Operation of the homeless persons legislation households accepted as being homeless in rural areas

  Year

  Total number accepted

  1979–80

  1,821

  1980–81

  1,556

  1981–82

  1,810

  1982–83

  1,843

  1983–84

  1,946

  1984–85

  2,132

  1985–86

  2,209

  1986–87

  2,487

  1987–88

  2,606

  1988–89

  2,782

  1989–90

  3,243

  1990–91

  3,800

  1991–92

  4,478

  1992–93

  5,058

  Tourism
  Mr. Bill Walker
  To ask the Secretary of State for Scotland what changes have been made to the statutory provision for public support towards tourist-related capital projects with the transfer of responsibility from the Scottish tourist board to Scottish Enterprise.

  Mr. Kynoch
  None.

  Mr. Bill Walker
  To ask the Secretary of State for Scotland (1) if he will list by name and value tourist-related capital projects in Tayside in the last five years; and which Government body approved the projects;

  (2) how many tourist-related capital projects in East Perthshire have received public support in the last five years.

  Mr. Kynoch
  The information requested relates to operational matters for the Scottish tourist board and Scottish Enterprise. I have asked the chairmen of those bodies to write to the hon. Member.

  Mr. Bill Walker
  To ask the Secretary of State for Scotland if he will give details of the total cost to public funds of tourist-related capital projects in Tayside by funds under the control of Scottish Enterprise Tayside.

  Mr. Kynoch
  This is an operational matter for Scottish Enterprise. I have asked its chairman to write to the hon. Member.
  438
  Mr. Bill Walker
  To ask the Secretary of State for Scotland on what date the statutory power for tourist-related capital projects was transferred from the Scottish tourist board to Scottish Enterprise Tayside; and what impact this had on projects under consideration by the Scottish tourist board.

  Mr. Kynoch
  The Secretary of State and HM Treasury approved the suspension of the arrangements for the giving of financial assistance under section 4(1)a of the Development of Tourism Act 1969 with effect from 29 June 1993. Those completed applications for assistance received by the Scottish tourist board on or prior to that date were considered by the board and approved or rejected in accordance with the provisions of the scheme. Incomplete applications held by the board on that date or those applications received after that date were passed to the relevant local enterprise companies.

  Mr. Bill Walker
  To ask the Secretary of State for Scotland how many inquiries he has received about tourist-related capital projects which have been affected by the change from Scottish tourist board approval to Scottish Enterprise Tayside approval.

  Mr. Kynoch
  The only inquiries on this matter received by my right hon. Friend have been those made by the hon. Member.

  Sites of Special Scientific Interest
  Dr. Strang
  To ask the Secretary of State for Scotland how many sites of special scientific interest have been(a) damaged and (b) destroyed by (i) development and (ii) other means in Scotland in each year since 1979.

  Sir Hector Monro
  Details of damage to sites of special scientific interest are published in the annual reports of Scottish Natural Heritage and the former Nature Conservancy Council for Scotland and Nature Conservancy Council, copies of which are in the Library of the House.

  Hedgerows
  Dr. Strang
  To ask the Secretary of State for Scotland what length of hedgerow has been lost in Scotland in each year since 1979.

  Sir Hector Monro
  Reliable estimates of hedgerow loss are not available in the form requested.

  As part of the work on its national countryside monitoring scheme, Scottish Natural Heritage will be producing, by the end of 1995, further Scottish estimates for the period 1970 to 1988.

  Forestry Commission Land
  Dr. Strang
  To ask the Secretary of State for Scotland what area of Forestry Commission(a) land and (b) woodland has been sold off in (i) England, (ii) Scotland and (iii) Wales in each year since 1979; and what area he now proposes for future sales.

  Sir Hector Monro
  The information is given in the table.
  439

  Year ended 31 March

  All land (hectares)

  Forestry land (hectares)

  England

  1980

  1—

  300

  1981

  414

  189

  1982

  1,309

  676

  1983

  2,523

  2,126

  1984

  4,680

  4,025

  1985

  6,976

  6,561

  1986

  2,789

  2,489

  1987

  2,786

  2,377

  1988

  4,593

  4,108

  1989

  1,629

  1,386

  1990

  1,989

  1,824

  1991

  1,556

  1,452

  1992

  1,737

  1,673

  1993

  1,006

  883

  1994

  1,171

  1,091

  Scotland

  1980

  1—

  300

  1981

  1,465

  368

  1982

  7,371

  1,510

  1983

  8,135

  4,061

  1984

  36,543

  11,345

  1985

  18,359

  7,671

  1986

  10,555

  4,055

  1987

  6,220

  2,674

  1988

  3,359

  1,662

  1989

  4,286

  1,716

  1990

  4,620

  2,633

  1991

  4,754

  2,384

  1992

  3,517

  3,359

  1993

  8,437

  4,930

  1994

  12,462

  12,105

  Wales

  1980

  1—

  0

  1981

  361

  131

  1982

  1,743

  161

  1983

  1,450

  445

  1984

  3,347

  1,137

  1985

  3,522

  1,840

  1986

  3,229

  1,770

  1987

  1,950

  1,135

  1988

  977

  617

  1989

  1,760

  1,226

  1990

  1,242

  1,102

  1991

  1,118

  934

  1992

  1,657

  1,231

  1993

  1,146

  1,014

  1994

  1,317

  1,223

  1 Before 1980 central records were kept only of forestry land.

  As announced in the Government's expenditure plans 1995–96 to 1997–98, the commission plans to sell 15,000 hectares of forest land in Britain in each of the next three years.

WALES

  Heart Disease
  Mr. Simon Coombs
  To ask the Secretary of State for Wales what progress has been made towards the eradication of premature deaths caused by coronary heart disease in Wales.

  Mr. Richards
  The death rate from coronary heart disease for people aged under 65 decreased from 92 to 60 per 100,000 between 1985, when Heartbeat Wales was 440
  established, and 1992 the latest year for which figures are available. This extremely encouraging change has taken place against a background of reduced smoking prevalence among adults and other improvements in lifestyles.

  Welsh Medium Education
  Mr. Sweeney
  To ask the Secretary of State for Wales what plans he has to encourage the provision of Welsh medium secondary schools in Wales.

  Mr. Richards
  The pattern and level of Welsh medium provision is primarily a matter for local education authorities in fulfilment of their statutory duties. Authorities' proposals for Welsh medium education should be considered when they draw up schemes under the Welsh Language Act 1994, and they should take into account parental wishes when doing so.

  South Wales Electricity
  Mr. Hain
  To ask the Secretary of State for Wales what plans he has to meet the chairman of South Wales Electricity to discuss the future of the company.

  Mr. Gwilym Jones
  My right hon. Friend will be meeting the chairman on 20 March.

  Exports
  Sir Wyn Roberts
  To ask the Secretary of State for Wales what plans he has for stimulating Welsh exports in the coming months; and if he will make a statement.

  Mr. Gwilym Jones
  The Welsh Office's programme of trade missions and trade fair representation continues to give small and medium-sized companies in Wales the opportunity to join sales missions to markets throughout the world. Visits will be made to 13 markets over the next 12 months and some of these will be led by Ministers. Representations will also be offered at trade fairs in Dubai and Kuala Lumpar.

  Welsh Office staff will continue to mount seminars, workshops and other events and visit new and existing exporters to provide advice and information.

  Youth Training Expenditure
  Mr. Barry Jones
  To ask the Secretary of State for Wales what public funds he has devoted to training the people aged 25 years and under in order to get them out of unemployment in each of the last five years.

  Mr. Redwood
  [holding answer 9 March 1995]: Figures covering youth training, youth credits and modern apprenticeships are given in the following table. These programmes are specifically aimed at people under 25 years of age. In addition, adult training schemes are available to people over 18 but figures are not available for expenditure on those aged 18 to 25 within these schemes.

  Provision has fluctuated over the period concerned in line with demand and changes to the programmes. Reductions in the numbers of 16-year-olds and increases in the proportion staying on at school or entering further education have caused demand to reduce since 1991–92.
  441
  Funding has always been more than adequate to meet the youth guarantee by providing training and those young people up to the age of 18 who have required it; and 18 to 25-year-olds are treated as a priority group under the adult training for work programme.

  Youth training, youth credits and modern apprenticeships provision in Wales

  Year

  £million

  1990–91

  42.252

  1991–92

  48.897

  1992–93

  42.683

  1993–94

  40.424

  1994–95

  49.421

  Notes:

  1 Figures for first four years represent outturn expenditure; that for 1994–95 is the level of provision available.

  2 Youth credits commenced in 1991–92 on a pilot basis and are now being progressively introduced by training and enterprise councils throughout Wales. Modern apprenticeships were introduced in 1994–95.

  Cardiff Bay Advisory Committee
  Mr. Morgan
  To ask the Secretary of State for Wales what consultations he has had with the chairman of the Cardiff Bay development corporation concerning the setting up of the Cardiff Bay advisory committee: what representations he has had concerning the delays in(a) choosing the members of the committee and (b) commencing its activities; and if he will make a statement.

  Mr. Redwood
  [holding answer 9 March 1995]: The establishment of the Cardiff Bay advisory committee is the statutory responsibility of the Cardiff Bay development corporation.

  I understand that nominations have been received from the 12 organisations selected to be represented on the committee and that the first meeting will take place later this year.

  Car Parking
  Mr. Morgan
  To ask the Secretary of State for Wales what guidance he has given to hospital trusts and health authorities in relation to charging for the provision of car parking for the disabled for both out-patients and emergency admissions; and when this guidance was last reviewed.

  Mr. Redwood
  [holding answer 9 March 1995]: None. Charging for car parking on hospital sites is an operational matter for local management.

  NHS Trust Funding
  Mr. Alex Carlile
  To ask the Secretary of State for Wales if he will make increased funding available to Powys Health Care NHS trust for 1995–96 and if he will make a statement.

  Mr. Redwood
  Responsibility for purchasing health service from NHS trusts rests with health authorities and GP fundholding practices.

  Class Sizes
  Mr. Alex Carlile
  To ask the Secretary of State for Wales what was the average class size in Wales for the 442
  school years (a) 1991–92, (b) 1992–93, (c) 1993–94, (d) 1995–96.

  Mr. Redwood
  The following table shows the average class size in Wales for both primary and secondary schools. Data are not available for 1994–95 and 1995–96.

  Average class size as at (a)

  September 1991

  September 1992

  January 1994

  Primary schools

  25.0

  25.0

  25.6

  Secondary schools

  21.5

  21.4

  20.1

  (a) Average class size is calculated as the number of pupils divided by the number of classes. In the case of primary schools, the number of classes used is the number of registered classes whereas for secondary schools it is the number of classes in which the pupils were taught during a specified period on the day of the schools' census.

  Source:

  schools census.

  Standard Spending Assessments
  Mr. Alex Carlile
  To ask the Secretary of State for Wales what was the change, in real terms, of standard spending assessment per pupil for Wales in(a) 1990–91, (b) 1991–92, (c) 1992–93, (d) 1993–94, (e) 1994– 95 and (f) 1995–96.

  Mr. Redwood
  There are no standard spending assessments for education, or per pupil, for Welsh authorities.

  The standard spending assessments for county councils in Wales, published in "The Local Government Finance Report (Wales) 1995–96", include provision for education.

  Waiting Times
  Mr. Morgan
  To ask the Secretary of State for Wales when he expects to issue figures relating to the waiting times for routine out-patient waits; longest in-patient waits and combined waits for South Glamorgan health authority as at 31 December 1994, comparable with the information given for all other health authorities in the waiting times information bulletin, February 1995 edition, issued by Welsh Health Common Services Authority.

  Mr. Redwood
  As reported in the bulletin, hospitals in south Glamorgan have agreed to provide information on all the medical procedures involved for the next edition.

  Mr. Morgan
  To ask the Secretary of State for Wales how many consultants have been omitted from the schedule published in the Welsh Health Common Services Authority waiting times information bulletin of February for reasons of inability to comply with the current patients charter guarantees on maximum in-patient waiting times.

  Mr. Redwood
  Three consultants were not included in the February edition of the waiting times information bulletin.

  Mr. Morgan
  To ask the Secretary of State for Wales what proposals he has for circulation of the operational guidance on the total waiting times guarantee, and what consultations he has had with the community health councils, local authorities and patient representatives
  443
  concerning the form and circulation of the guidance document.

  Mr. Redwood
  The operational guidance on total waiting times will be distributed widely within the NHS in Wales, with copies being sent to all general practices, hospitals, health authorities and community health councils.

  Comments on the draft were sought from all community health councils in Wales, and community health council representatives attended workshops arranged to discuss practical aspects of the new approach to reducing hospital waiting times.

  Mr. Morgan
  To ask the Secretary of State for Wales what is his current estimate of when the next issue of waiting times information, given 31 March waiting time, will be published.

  Mr. Redwood
  The next edition of the waiting times information bulletin will be distributed to general practitioners in the first week of May. It will contain information gathered from hospitals in the last week of March 1995.

  Mr. Morgan
  To ask the Secretary of State for Wales what guidance he has given the chairman of the Welsh Health Common Services Authority concerning the inclusion of consultants in the waiting times information bulletin who are on extended leave of absence; and if he will make a statement.

  Mr. Redwood
  No specific guidance has been given on this point.

  Mr. Morgan
  To ask the Secretary of State for Wales if he will place in the Library a copy of the draft operational guidance relating to the total waiting time guarantee to be effective from April; what representations he has had from health authorities, family health service authorities and trusts in relation to the form of the final guidance; and if he will make a statement.

  Mr. Redwood
  A copy of the operational guidance on total waiting times will be placed in the Library. It incorporates helpful comments made by health authorities, hospitals, general practitioners and community health councils.

  Mr. Morgan
  To ask the Secretary of State for Wales what representations he has received in relation to the inclusion of consultants in the schedule published in the waiting times information bulletin, who cannot meet current patients charter guarantees on maximum waiting times.

  Mr. Redwood
  One representation from an NHS general manager has been received, and in the light of this we are considering including details of all consultants in future editions.

  Cardiac Surgery
  Mr. Morgan
  To ask the Secretary of State for Wales on how many occasions and for what length of time the contract tender period for the market-testing competition for the cardiac surgery unit to Morriston hospital was extended, and if he will make a statement.

  Mr. Redwood
  The original contract tender period of 150 days was extended three times to 1 December 1994, 28 February 1995 and 14 March 1995.

  Valleys Initiative
  Mr. Ron Davies
  To ask the Secretary of State for Wales if he will list the schemes under way as part of his valleys private finance initiative.

  Mr. Redwood
  All 20 sites contained in the "Investment Opportunities in the South Wales Valleys" portfolio are actively being marketed by the Welsh Development Agency and the Land Authority for Wales.

  Detailed development briefs for Victoria, Navigation park, Llantarnam, Penllergaer, Parc Hendre and South Llanelli will be available from the Welsh development agency at the end of March.

  Briefs for Hirwaun, Cwm Cynon, Mamhilad and the Merthyr Tydfil BR sites will be available in May or June.

  Expressions of interest have been received from developers for the schemes at Brackla, Port Talbot, Ynysallan, Llantarnam, Mamhilad, South Llanelli and Merthyr Tydfil, and work is well under way at Victoria to create the new urban village.

  NHS Staff Eating Disorders
  Mr. Morgan
  To ask the Secretary of State for Wales what guidelines he has issued to health authorities and trusts giving employment of nurses or nursing assistants who are, or have suffered from anorexia nervosa, bulimia or other eating disorders; and if he will make a statement.

  Mr. Redwood
  Guidance on such issues are included in occupational health service guidance letters which are sent out by the Department to all health authorities and NHS trusts in Wales. The most recent guidance letter, DGM(95)13, was issued in February this year and, as a result of the Allitt inquiry–Clothier report–included a paragraph about pre-employment health assessments of staff with a history of behaviour that might give cause for concern. I am placing a copy in the Library of the House.

  Building Signs
  Mr. Ron Davies
  To ask the Secretary of State for Wales if he will make a statement about his plans to make it a requirement of Welsh Office funding that signs are erected, or promotional material made available, publicising the source of funding; how much money he will make available to fund such publicity; and from what budget this money will come.

  Mr. Redwood
  I should like the Welsh dragon to appear on construction signboards where the Welsh Office has contributed significant funding, and have asked my officials to draw up proposals to give effect to this policy. Money is already spent on signboards at each site from project funds.

  Sites of Special Scientific Interest
  Dr. Strang
  To ask the Secretary of State for Wales how many sites of special scientific interest have been(a) damaged and (b) destroyed by development and other means in Wales in each year since 1979.

  Mr. Gwilym Jones
  .: The information is not held centrally in the form requested. However, since the establishment of the Countryside Council for Wales on 1 April 1991 this data has been included in its annual reports. Prior to 1992 it was collated centrally for England, Scotland and Wales, by Nature Conservancy Council and was published in its annual reports. The

  445
  annual reports of both organisations are in the Library of the House.

  Hedgerows
  Dr. Strang
  To ask the Secretary of State for Wales, what length of hedgerow has been lost in Wales in each year since 1979.

  Mr. Gwilym Jones
  .: I refer the hon. Member to the reply given to the hon. Member for Caerphilly (Mr. Davies) on Monday 6 February Official Report, column 94.

  Housing
  Mr. Ron Davies
  To ask the Secretary of State for Wales what estimates he has made of the extent of unmet housing need; and if he will make it his policy to collate figures on unmet housing need so as to qualify the requirements for(a) new housebuilding and (b) renovation activity.

  Mr. Redwood
  For the whole of Wales I have estimates of house condition, population growth and household formation. However it is the responsibility of local authorities to assess housing need in their areas. They are best placed to decide priorities, taking account of local factors, and to devise strategies drawing in developers, housing associations and others to meet housing need.

  Prescriptions
  Mr. Morgan
  To ask the Secretary of State for Wales what proportion and what number of prescriptions dispensed in Wales were written in Welsh in 1993–94; and what has been the change in the proportion of prescriptions written in Welsh in the last five years.

  Mr. Redwood
  This information is not available centrally. Prescriptions are communications between professionals in the NHS and may be dispensed in any part of the United Kingdom. For this reason the British National Formulary states that they should be completed in English, although some Latin abbreviations are acceptable.

TRANSPORT

  Railway Track Maintenance
  Mr. Tyler
  To ask the Secretary of State for Transport what steps he is taking to ensure that Railtrack maintains the same level of maintenance on main and branch line track, including track renewal, re-sleepering and re-ballasting, for 1995–96 as for 1993–94 and 1994–95; and if he will make a statement.

  Mr. Watts
  Railtrack operates within a regulatory and contractual framework, overseen by the rail regulator, which sets high standards of safety and performance for the rail network. Within that framework it is for Railtrack to determine the appropriate level of track maintenance and renewal necessary to meet the standards to which it is subject.

  US-UK Aviation Relations
  Mr. Byers
  To ask the Secretary of State for Transport, pursuant to his answer of 20 February,Official Report, column 4, on what date he visited Her Majesty's ambassador in Washington; what was the purpose of his visit; and which officials accompanied him.

  Dr. Mawhinney
  I visited Her Majesty's ambassador in Washington, unaccompanied by officials, on September 23 1994 to discuss US-UK aviation relations.

  Vehicle Emissions
  Ms Walley
  To ask the Secretary of State for Transport what proposals he has to encourage the use of particulate emission control in heavy goods vehicles and public service vehicles and if he will make a statement.

  Mr. Norris
  Particulate emissions control has been a requirement of all new heavy duty goods vehicles and PSVs since 1 October 1993 by virtue of directive 91/542/EEC. This same directive applies further restrictions to apply to all vehicles registered from 1 October 1996. The Department is also working with the Commission to develop yet further controls from 1 October 1999.

  Ms Walley
  To ask the Secretary of State for Transport, what research his department is currently undertaking in respect of particulate pollution; and at what cost.

  Mr. Norris
  Research into air pollution is a matter for the Department of the Environment. Complementary research undertaken by the Department of Transport includes a £1 million joint study, in conjunction with the Department of the Environment and the motor industry, into means of identifying and analysing particulates by size and composition, and establishing typical levels emitted by petrol and diesel vehicles. A second £1.1 million departmental programme, aimed at improving control of particulate emissions from new heavy duty diesel vehicles, is developing an EC type approval test more representative of typical driving conditions. These programmes are in addition to others aimed at improved modelling—£225,000, and data collection—£200,000 per annum on-going, for better forecasting of all transport fleet emissions, including particulates.

  Radioactive Materials
  Ms Walley
  To ask the Secretary of State for Transport, pursuant to his answer of 1 March 1995,Official Report, column 597, if he will give reasons for the delay in introducing regulations arising from the Radioactive Materials (Road Transport) Act 1991.

  Mr. Norris
  The matters to be dealt with in the regulations are of a complex nature and it was necessary to resolve a large number of technical details.

  Ms Walley
  To ask the Secretary of State for Transport what representations he has received on vehicles carrying plutonium along the M6 and M40 on or around 23 February; if he will investigate them; and what assessment he has made of whether vehicle registration H254 FCJM complied with road traffic regulations at all times.

  Mr. Norris
  I have received no such representations. If I receive any, I shall consider them. I have not made such an assessment of the vehicle referred to.

  Ms Walley
  To ask the Secretary of State for Transport, pursuant to his answer of 1 March,Official Report,

  447
  column 597, what effect the deletion of a higher executive officer post in the radioactive material transportation division has had on the work of that division; and what reorganisation has taken place.

  Mr. Norris
  The tasks of the post holder are being undertaken by other members of the division. The administrative branch of RMTD is now headed by an executive officer.

  Orbital Motorway, Birmingham
  Ms Walley
  To ask the Secretary of State for Transport when he intends to make a further announcement on the progress of his plans for a tolled western orbital motorway around Birmingham; and whether he intends this road to be shadow-tolled.

  Mr. Watts
  There are no plans for a tolled wester orbital motorway around Birmingham. The Highways Agency is continuing preparatory work for a scheme which might prove suitable for private sector finance through the design, build, finance and operate initiative.

  I expect to make a further announcement about progress on the scheme in due course.

  Diesel Fuel
  Ms Walley
  To ask the Secretary of State for Transport, what proposals he has to introduce incentives to increase the availability of sulphur-free diesel fuel.

  Mr. Norris
  None.

  Oceanic Programme and Scottish Centre
  Ms Walley
  To ask the Secretary of State for Transport (1) when he now expects to make an announcement in respect of the Oceanic programme; and on what date he expects the new capability to commence;

  (2) when he expects to make an announcement in respect of the new Scottish centre; and on what date he expects the new facility to be available.

  Mr. Norris
  I refer the hon. Member to the reply that I gave to the hon. Member for Angus, East (Mr. Welsh) on 12 December 1994. There are no plans at present to make an announcement on the new Scottish centre, or on the new Oceanic flight data processing system.

  M62 Relief Road
  Ms Walley
  To ask the Secretary of State for Transport when he intends to make a further announcement of the progress of his plans for the M62 relief road in northern Manchester.

  Mr. Watts
  On 22 June 1994, my hon. Friend the Member for Salisbury (Mr. Key) announced further studies of the M62, which are now in progress. The studies are expected to take about two years to complete and their estimated cost is between £3 million and £5 million.

  London Underground (Safety)
  Mr. Chidgey
  To ask the Secretary of State for Transport what progress has been made into researching the potential development of the remote reversal of escalators to effect rapid evacuation of passengers from underground stations.
  448
  Mr. Norris
  I understand that Her Majesty's railway inspectorate has commissioned a research project into this subject from the health and safety laboratory in Sheffield.

  Safer Cycling
  Mr. Chidgey
  To ask the Secretary of State for Transport if he will list the research projects currently being funded by his Department to promote safer cycling; and what is the budget for each research project.

  Mr. Norris
  The Department is currently funding the following research projects to promote safer cycling:

  Title

  £'000

  Vulnerable Road Users

  378

  Innovative Cycle Schemes

  240

  Toucan Crossings and Cyclists

  170

  Cycle Helmets

  137

  Cycle Training

  105

  Illegal Operations Working Group
  Ms Walley
  To ask the Secretary of State for Transport on what dates the illegal operations working group has met in the last 12 months; and what recommendations it has published.

  Mr. Norris
  The Department's illegal operations working group met on 25 August 1994 and 7 February 1995.

  The working group's 1994 report is being drafted and will be circulated to those organisations with an interest in goods vehicle enforcement.

  Train Skids
  Mr. Meacher
  To ask the Secretary of State for Transport how many cases of trains skidding while in the course of braking have been recorded in each of he last 10 years; and how many in each year involved turbo trains.

  Mr. Watts
  Train skids are not statutorily reportable occurrences unless they cause an accident or dangerous occurrence, such as a buffer stop collision. Statistics on reportable incidents are published in Her Majesty's railway inspectorate's annual report on the safety record of the railways, copies of which are placed in the Library of the House.

  Vehicle Inspectorate
  Ms Walley
  To ask the Secretary of State for Transport (1) how many clerical staff within the Vehicle Inspectorate are currently undertaking traffic examiner duties on temporary promotion;

  (2) how many tachographs were examined by the Vehicle Inspectorate in each of he last 12 months; and how many prosecutions resulted from these checks;

  (3) how many spot checks on vehicles were undertaken by the Vehicle Inspectorate at the ports of Dover, Hull, Felixstowe and Liverpool; and how many traffic examiners were stationed at each port in each of the last five years;

  (4) how many vehicles were weighed by the Vehicle Inspectorate in each of the last 12 months; and how many prosecutions resulted from those checks;
  449
  (5) how many vehicles were examined at vehicle spot checks by the Vehicle Inspectorate in each of the last 12 months; and how many prosecutions resulted from these checks.

  Mr. Norris
  There are operational matters for the Vehicle Inspectorate Agency. I have asked the chief executive to write to the hon. Member.

  Letter from Ron Oliver to Ms Joan Walley, dated 13 March 1995:
  The Secretary of State has asked me to reply to your questions concerning various enforcement activities within the Agency for each of the last 12 months.
  There are currently 2 clerical staff undertaking traffic examiner duties on temporary promotion. The posts are scheduled to be trawled and filled on substantive promotion in the near future.
  Details of the number of tachograph examined, total number of roadworthiness spot checks and number of vehicles weighed in each of the last 12 months are shown in the attached annexes. Current details for the information on prosecutions is not available in the form requested. However, for 1993/94 there were 4,422 successful prosecutions for drivers hours offences, 5,521 for overloading offences and 5,620 other traffic offences. We have recently centralised and refined the handling of prosecution work within the Agency. This will improve the collection and availability of data.
  The road transport enforcement work within the Inspectorate is broadly divided into 23 geographical "Areas" I have provided details of traffic examiner checks at or in the approaches of harbours for the areas in which Dover (Area 14), Hull (Area 21), Felixstowe (Area 17) and Liverpool (Area 6) are based. The figures include checks made at all harbours within the area, we do not have separate Figures for each Port. Traffic examiners are required to work throughout the area and are not "stationed" to work exclusively at the Ports. The current number of traffic examiners for these 4 "Areas" are.

  Number of traffic examiners

  Area 6

  7

  Area 14

  10

  Area 17

  6

  Area 21

  5

  Roadside spot checks February 1994 to January 1995

  PSV

  HGV

  LGV

  February

  2,348

  9,740

  3,477

  March

  1,601

  6,520

  2,104

  April

  1,467

  11,505

  2,522

  May

  2,140

  12,834

  3,349

  Vehicle examination (including weighing) at harbours, within selected enforcement areas

  April

  May

  June

  July

  August

  September

  October

  November

  December

  January

  Total for 10 months

  Area 6

  HGV

  104

  105

  74

  85

  203

  69

  220

  215

  57

  16

  1,148

  Light goods

  134

  136

  100

  120

  282

  85

  309

  280

  74

  19

  1,539

  PSV

  0

  0

  5

  14

  0

  6

  0

  4

  0

  0

  29

  238

  241

  179

  219

  485

  160

  529

  499

  131

  35

  2,716

  Area 14

  HGV

  205

  282

  346

  428

  267

  503

  618

  917

  599

  664

  4,829

  Light goods

  327

  450

  500

  655

  381

  690

  791

  1,098

  707

  906

  6,505

  PSV

  55

  90

  72

  48

  37

  163

  81

  90

  86

  71

  793

  587

  822

  918

  1,131

  685

  1,356

  1,490

  2,105

  1,392

  1,641

  12,127

  450

  Roadside spot checks February 1994 to January 1995

  PSV

  HGV

  LGV

  June

  2,435

  10,578

  3,375

  July

  3,821

  14,277

  4,682

  August

  2,619

  10,982

  4,153

  September

  2,673

  12,296

  7,905

  October

  2,482

  12,080

  4,645

  November

  2,758

  10,622

  6,483

  December

  2,473

  8,860

  5,892

  January

  2,534

  6,773

  7,495

  Monthly checking of tachographs and weighing of vehicles

  HGV tachos

  PSV tachos

  1994

  February

  138,153

  10,700

  March

  133,503

  32,294

  April

  107,742

  9,404

  May

  110,981

  13,620

  June

  107,256

  21,197

  July

  153,115

  34,037

  August

  123,186

  29,488

  September

  129,186

  28,430

  October

  123,170

  21,755

  November

  121,916

  16,204

  December

  110,818

  21,751

  1995

  January

  94,882

  14,277

  Total

  1,454,570

  253,167

  Total tachographs (12 months) = 1,707,737

  Monthly weighing of vehicles

  HGV weighings

  PSV weighings

  Light goods weighings

  1994

  February

  8,549

  31

  411

  March

  9,594

  70

  580

  April

  6,905

  90

  428

  May

  6,797

  145

  487

  June

  6,904

  210

  467

  July

  9,183

  444

  576

  August

  7,573

  231

  523

  September

  10,474

  124

  642

  October

  18,863

  52

  584

  November

  22,907

  62

  561

  December

  18,371

  89

  674

  1995

  January

  6,106

  12

  557

  Total

  132,226

  1,560

  5,690

  Total weighings (12 months) = 140,476
  451

  Vehicle examination (including weighing) at harbours, within selected enforcement areas

  April

  May

  June

  July

  August

  September

  October

  November

  December

  January

  Total For 10 months

  Area 17

  HGV

  958

  892

  776

  1,442

  814

  1,022

  1,676

  2,180

  515

  1,001

  11,276

  Light goods

  1,458

  1,410

  1,187

  1,972

  11,28

  1,104

  1,703

  2,193

  525

  1,348

  14,028

  PSV

  26

  31

  25

  36

  18

  17

  0

  3

  0

  0

  156

  2,442

  2,333

  1,988

  3,450

  1,960

  2,143

  3,379

  4,376

  1,040

  2,349

  25,460

  Area 21

  HGV

  978

  705

  331

  467

  125

  200

  116

  41

  146

  5

  3,114

  Light goods

  1,150

  826

  397

  554

  132

  228

  118

  43

  147

  5

  3,600

  PSV

  210

  165

  0

  0

  29

  128

  17

  107

  16

  0

  672

  2,338

  1,696

  728

  1,021

  286

  556

  251

  191

  309

  10

  7,386

  Night Flying Restrictions
  Mr. Hendry
  To ask the Secretary of State for Transport what review he has carried out of the night restrictions which currently apply at Heathrow, Gatwick and Stansted airports following the recent judicial review; and if he will make a statement.

  Dr. Mawhinney
  Since the judgment of 20 December. I have given very careful consideration to the night flying restrictions which were announced on 6 May last year. The Government recognise the need to ensure that local communities arc not exposed to excessive levels of aircraft noise at night. We have decided not to propose any changes. This fulfils the Government's intention of keeping noise levels at Heathrow and Gatwick below those permitted in summer 1988.

  The new consultation paper explains more fully what was meant in paragraph 34 of the original consultation paper of January 1993, to meet a point which was challenged in the High Court.

  The consultation paper is being widely circulated to Members of Parliament, local authorities and environmental groups, as well as to the aviation industry. The Department is asking for comments on the proposals by 9 May; a copy has been placed in the House of Commons Library.

  Additionally, I am writing to the chief executive of BAA plc to ask him to consider carefully whether there is more that BAA or the airlines can do on a voluntary basis to reduce disturbance caused by night flights.

SOCIAL SECURITY

  Invalidity benefit
  Mr. Rowlands
  To ask the Secretary of State for Social Security what is his estimate of the number of people in receipt of invalidity benefit in the Merthyr/Rhymney/Cynon benefit district who are over the age of 58 years; and who will be exempt from the changes on the grounds of severe disability.

  Mr. Hague
  This 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.
  452
  Letter from Michael Richard to Mr. Ted Rowlands, dated 9 March 1995:

  The Secretary of State for Social Security has asked me to reply to your Parliamentary Question about Invalidity Benefit (IVB) recipients in the Benefits Agency's Merthyr/Rhymney/Cynon district.

  All customers over the age of 58 on 13 April 1995 who have been continuously in receipt of IVB since 1 December 1993 will be automatically exempted from the new all work test for Incapacity Benefit.
  An estimate has been made using information derived from a statistically valid sample obtained by computeer scrutiny of IVB caseloads on 21 January 1995.
  The estimate of the number of people in the Merthyr/Rhymney/Cynon area in receipt of IVB over the age of 58 who will be exempt from the new all work test is 3,360.
  I hope you find this reply helpful.

  Mr. Rowlands
  To ask the Secretary of State for Social Security how many people are currently receiving invalidity benefit in the Merthyr/Cynon/Rhymney benefit district; what percentage this is of the total population of working age; and what are the average percentages for(a) the Welsh and (b) the English and Welsh averages.

  Mr. Hague
  The available information is in the table.

  People in receipt of invalidity benefit and percentage of working population

  People in receipt of invalidity benefit

  3 Percentage of the working population

  Merthyr/Cynon/Rhymney

  district

  123,834

  17

  Wales

  2172,000

  10

  England

  21,184,000

  4

  England and Wales

  21,356,000

  4

  Notes:

  1 Figure obtained from a 100 per cent clerical count of cases in the Benefits Agency offices on the last working day of January 1995.
  The figure will include some people who have claimed but are not actually receiving invalidity benefit because they are in receipt of a higher overlapping benefit.

  2 Invalidity benefit recipients at 3 April 1993, based on a I per cent. sample of claimants, rounded to the nearest thousand.

  3 The working population has been taken to be 16 to 64 for men and 16 to 59 for women. Estimated mid-year population figures supplied by the population estimates unit, Office of Population Censuses and Surveys.

  Child Support
  Mr. Dewar
  To ask the Secretary of State for Social Security how many absent parents are paying the minimum weekly contribution towards child maintenance; and what proportion of assessments this figure represents.

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

  Letter from Miss Ann Chant to Mr. Donald Dewar, dated 9 March 1995:
  I am replying to your recent Parliamentary Question to the Secretary of State or Social Security about the number of minimum weekly contributions to child maintenance and the proportion of the number of child maintenance assessments made by the Child Support Agency this represents.
  Information available following a sampling exercise of Child Support Agency cases conducted in October 1994, shows that 48,800 cases, 16 per cent. of assessments completed at that time, were assessed for the absent parent to pay the minimum weekly contribution. Information on the number of such cases where maintenance was actually being paid is not available.

  Mr. Dewar
  To ask the Secretary of State for Social Security in what proportion of Child Support Agency cases where an assessment has been made no child maintenance has been paid; and what action he has taken.

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

  Letter from Miss Ann Chant to Mr. Donald Dewar, dated 9 March 1995:
  I am replying to your recent Parliamentary Question to the Secretary of State for Social Security about the proportion of cases where no maintenance has been paid following an assessment by the Child Support Agency.
  As at the 3 February 1995 the Agency was dealing with a total of 179,000 accounts that had been set up for the collection of maintenance through the Agency collection service, following the completion of a maintenance assessment. In 42 per cent. of those cases no maintenance had yet been paid. Of course, a number of these accounts have only recently been set up, but of the remainder, interim maintenance assessments (IMA) have been made against the majority of the absent parents who have not met their obligation to pay child maintenance. Enforcement action will be considered against absent parents who still do not pay after the issue of an IMA.
  The Agency continually reviews its accounting procedures to ensure that where a child maintenance assessment has been made and collection requested, that maintenance is collected. It has introduced a number of management action and implemented specially designed work packages to secure the collection of the maximum amount of maintenance.

  Mr. Dewar
  To ask the Secretary of State for Social Security what estimate he has made of the average reduction in the amount of child support bills caused by the changes announced in February 1994 and January 1995.

  Mr. Burt
  It was estimated that, for those absent parents who were affected by the February 1994 changes, the average reduction in maintenance would be £5 to £10 per week. For those who will be affected by the changes to the formula proposed in the recent White Paper, "Improving Child Support", the average reduction in maintenance is expected to be some £8. Any reductions due to the proposed departure system will be in addition to this.
  454
  Figures for average reductions do not indicate the range of reductions, which can vary significantly depending on the circumstances of individual cases.

  Young People
  Ms Jowell
  To ask the Secretary of State for Social Security (1) what plans he has to simplify the procedure by which young people can claim severe hardship payments;

  (2) if he will instruct the Benefits Agency to improve the availability of information relating to young people's benefit entitlement and ensure that it is placed in locations which young people use, including schools, colleges and youth clubs;

  (3) if he will instruct the Benefits Agency to ensure that (a) all staff are aware of young people's entitlement to claim for severe hardship payments and (b) young people are informed of this entitlement when they ask about benefits;

  (4) what plans he has to ensure that compulsory training for Benefits Agency staff is enforced.

  Mr. Roger Evans
  This is a matter for Mr. Michael Bichard, the chief executive of the Benefits Agency. He will write to the hon. Member.

  Letter from Michael Bichard to Ms Tessa Jowell, dated 9 March 1995:
  The Secretary of State for Social Security has asked me to reply to your recent Parliamentary Questions about the availability of information and procedures for young people who wish to claim benefits.
  Every Benefit Agency (BA) District Office is required to have a nominated benefit manager with responsibility for service delivery to 16–17 year olds. All local office staff have been made aware of young people's right to claim severe hardship payments and staff dealing with claims from 16–17 year olds will have completed specialist training. In addition, staff holding a Certificate of Authority from the Secretary of State to make severe hardship directions to pay Income Support, will have undertaken further specialist training in the handling of claims from young people.
  A handbook "Income Support for 16–17 year olds", a copy of which is in the Library, is available in all offices. This details the procedures to be followed and contains a section on best practices. One of the recommendations is that offices set up local liaison groups with other Agencies and outside bodies with an interest in the welfare of 16–17 year olds. Many of these groups exist and work well to resolve local difficulties.
  Consideration is being given to simplifying the process for claiming payments under the severe hardship provision from April 1996 through the delivery of the new benefit Job Seekers Allowance.
  The BA is always looking at ways of improving its targeting of information. We are currently reviewing how the BA targets its main customer groups and the distribution of information to them.
  Currently there are two leaflets specifically for young people. These are FB23 "Young people's guide to Social Security" and IS26 "Income Support if you are 16 or 17". I have enclosed copies of the leaflets, which are also in the Library.
  I hope you find this reply helpful.

  Housing Benefit, Scotland
  Mr. McAllion
  To ask the Secretary of State for Social Security what the cost to the housing benefit bill in Scotland would be of(a) reducing the housing benefit taper to 50 per cent. and (b) increasing the earnings disregard for single people to £10 per week and for couples to £25 per week based upon the 1993–94 distribution.
  455
  Mr. Roger Evans
  The estimated cost of(a) changing the housing benefit taper to 50 per cent. is £50 million, and (b) changing the earnings disregards to £10 a week for single people and £25 for couples is £15 million.

  Notes:

  1. Based on data taken from the 1990–91–92 Family Expenditure Surveys modelled at 1994–95 prices and benefit levels.

  2. Figures have been rounded to the nearest £5 million.

  3. For the earnings disregard, disabled couples are assumed to be entitled to the new couples disregard rather than the disabled person's disregard of £15.

  Disability Living Allowance
  Mr. Mike O'Brien
  To ask the Secretary of State for Social Security (1) how many applicants for disability living allowance seek a review of their case after rejection of first consideration by his Department;

  (2) how many applicants for disability living allowance who have failed to get their application accepted on first consideration or on review then appeal to his Department;

  (3) how many applications for disability living allowance are granted following an application for a review of a refusal by his Department;

  (4) how many disability living allowance applications have been granted on first consideration by his Department;

  (5) how many applications for disability living allowance are granted on appeal by his Department.

  Mr. Hague
  The information requested about awards on claims, reviews and appeals for disability living allowance is not available in the form requested. The available information is in the table. An award on review or appeal may be the result of a variety of factors, such as a deterioration in the claimant's condition or the provision of additional information.

  Disability living allowance

  February 1992–January 1995

  1Numbers (thousand)

  New awards2

  845

  Reviews received3 (within three months)

  299

  Reviews received3 (outside three months)

  336

  Successful reviews4

  277

  Appeals received

  59

  Successful appeals4

  24

  Source:

  Analytical Services Division (100 per cent. data).

  Notes:

  1A claimant may apply for a review or appeal against an award as well as a rejection. The figures quoted are for all applications for review and appeal.

  2New awards are awards on initial claims only and not on review or appeal.

  3There will be registered reviews and appeals which have not yet reached the decision stage of the review or appeal system.

  4Successful reviews and appeals are those where DLA was allowed for the first time, another component was awarded or the rate(s) payable increased.

  Carpal Tunnel Syndrome
  Mr. Waterson
  To ask the Secretary of State for Social Security what plans he has to amend the regulations for 456
  industrial injury benefit to take account of carpal tunnel syndrome.

  Mr. Hague
  Carpal tunnel syndrome in association with the use of hand-held vibrating tools is already included in the list of prescribed diseases for industrial injuries disablement benefit purposes (prescribed disease Al2).

  Jobseeker's Allowance
  Mr. Timms
  To ask the Secretary of State for Social Security what assessment he has made of the impact of the proposed jobseeker's legislation on actors and performers.

  Mr. Roger Evans
  It is appropriate that unemployed actors and performers will have to satisfy the same conditions of entitlement for jobseeker's allowance as other jobseekers.

  Mr. Bradley
  To ask the Secretary of State for Social Security (1) if the new contribution linking arrangements for jobseeker's allowance will take account of the period when a carer is unable to claim invalid care allowance because the disabled person is still within the six or three-month waiting period for attendance allowance and disability living allowance;

  (2) what will be the position of ex-carers who had (a) an underlying entitlement to invalid care allowance or (b) a broken record of receipt of invalid care allowance or underlying entitlement with regard to the new contribution linking arrangements for ex-carers who wish to claim jobseeker's allowance.

  Mr. Roger Evans
  Periods in receipt of invalid care allowance will be included in the linking provisions for contributions-based jobseeker's allowance. The precise details of this arrangement, including the position of carers in cases where a disabled person is serving a qualifying period, are still under consideration.

  National Insurance Fund
  Mr. Frank Field
  To ask the Secretary of State for Social Security what was the size of the Treasury grant to the national insurance fund in 1993–94 and 1994–95; what estimate he has made for grants in each of the next three years; and to what extent these grants are to cover the subsidy being paid to state earnings-related pension scheme contributors transferring into private pension schemes.

  Mr. Arbuthnot
  The Treasury grant to the national insurance fund was £7,589 million in 1993–94 and £6,280 million in 1994–95. For 1995–96 the percentage grant now set by order will amount to a maximum of £4,075 million. The level of Treasury grant for future years will be set at the appropriate time and will depend on the estimated income and outgo of the fund then. Estimates are not therefore available for later years, but working assumptions suggest that the grant could fall to £2.3 billion by 1997–98.

  The Treasury grant is a general contribution to the national insurance fund and is not attributed to any particular aspect of the fund's expenditure, of which the rebates to providers of approved personal pension is just one.

  Funeral Expenses
  Mr. Jim Cunningham
  To ask the Secretary of State for Social Security on what basis he arrived at the figure
  457
  for the maximum amount allowed for funeral payments from the social fund.

  Mr. Roger Evans
  The proposed cap for social fund funeral payments is based on the average funeral payment award for 1993–94.

  Mr. Jim Cunningham
  To ask the Secretary of State for Social Security what plans he has for his Department's exceptions to the capping of funeral payments under the social fund for instances of special needs with special reference to the weight, size and height of the deceased, pacemaker removal and out-of-hours removals.

  Mr. Roger Evans
  The proposed cap on social fund funeral payments of £875 is intended to be a sum sufficient to meet the costs of a straightforward funeral which is dignified and respectful, or to make a very substantial contribution towards it. It is not intended to meet the cost of all variations and eventualities.

  Mr. Jim Cunningham
  To ask the Secretary of State for Social Security how(a) funeral directors and (b) others will be kept informed of procedures following the capping of funeral payments under the social fund.

  Mr. Roger Evans
  I shall be writing to the funeral directors' associations. Advice will be made available locally through revised forms and leaflets. District offices will be encouraged to liaise with local funeral directors.

  Incapacity Benefit (Laryngectomees)
  Ms Walley
  To ask the Secretary of State for Social Security (1) if he will discuss with the National Association of Laryngectomee Clubs the effects of functional disabilities and limitations imposed by alterations in the respiratory system; and if he will make a statement;

  (2) if he will consult the National Association of Laryngectomee Clubs in respect of the new rules regulating invalidity benefit.

  Mr. Hague
  The development of the medical assessment for incapacity benefit included an open consultation process, to which the Cancer Relief Macmillan Fund, an associate of the National Association of Laryngectomee Clubs, contributed. If the National Association of Laryngectomee Clubs has further comments on the medical assessment, I would be happy to receive them.

  Equal Treatment
  Mrs. Maddock
  To ask the Secretary of State for Social Security what plans he has for ensuring the equal treatment of men and women with a dependent spouse in their eligibility for benefits.

  Mr. Arbuthnot
  Our proposals for ensuring that married couples are treated equally in the state pension scheme are set out in the White Paper, "Equality in State Pension Age", Cm 2420, a copy of which is in the Library. The legislation needed to implement these proposals is included in the Pensions Bill. Dependency increases payable with other benefits are already available on an equal basis.

  Income Support and Restart Courses
  Mr. Byers
  To ask the Secretary of State for Social Security how many unemployed claimants have received 458
  a reduced personal rate of income support following failure to attend or complete a restart course (a) nationally and (b) in each region, since March 1994.

  Mr. Roger Evans
  The information is available by Benefits Agency territory and is set out in the table.

  Number of reductions in income support personal allowance following failure to attend or complete a mandatory restart course

  Territory

  Totals (thousands) April 1994 to December 1994

  Southern England

  7.6

  Wales and Central England

  8.2

  Scotland and Northern England

  6.5

  National total

  22.3

  Note:

  Figures are provisional and subject to amendment.

  Pensioners
  Mr. David Porter
  To ask the Secretary of State for Social Security what help is being given to those retired people who were unable to make private pension provisions when they were of working age; and if he will make a statement.

  Mr. Arbuthnot
  People who have retired since 6 April 1979 may be entitled to receive an additional pension from the state earnings-related pension scheme or a contracted-out equivalent, as well as their basic state pension. Those whose employment patterns have been interrupted because of caring responsibilities may have their basic pension entitlement safeguarded by the home responsibilities protection provisions.

  Pensioners who have income below specified levels may, subject to their circumstances, be entitled to receive income-related benefits such as income support, housing benefit and council tax benefit.

  Mr. David Porter
  To ask the Secretary of State for Social Security what steps he has taken and what further steps are planned to assist poorer pensioners; and if he will make a statement.

  Mr. Arbuthnot
  Income-related benefits are kept under constant review and are uprated regularly in line with prices. In addition, income-related benefits for poorer pensioners since 1988 have been increased by some £1.2 billion, over and above inflation.

  Mr. David Porter
  To ask the Secretary of State for Social Security if he will make a statement about the standard of living enjoyed by retired people now, 10 years ago and 20 years ago.

  Mr. Arbuthnot
  Information is not available in the form requested. The information in the table shows the percentage growth in pensioners' average income for the years 1974, 1979 and 1992, the latest year for which figures are available.
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  Increase 1974–92 (net income)

  Increase 1979–92 (net income)

  Before housing costs (Per cent.)

  After housing costs (Per cent.)

  Before housing costs (Per cent.)

  After housing costs (Per cent.)

  Pensioner couples

  54

  64

  46

  56

  Single pensioners

  55

  57

  49

  53

  All pensioner units

  58

  64

  50

  58

  Notes:

  1. Source: Family Expenditure Surveys for 1974, 1979 and 1992.2. Pensioner units are single persons over state pension age and couples of whom the husband is over state pension age.

  Mr. David Porter
  To ask the Secretary of State for Social Security what assessment his Department has made recently of the comparative incomes of retired people in the United Kingdom and other European Union member states; what factors he has taken into account to make such comparisons; and if he will make a statement.

  Mr. Arbuthnot
  A report of research commissioned by this Department from the social policy research unit at the university of York, entitled "Incomes and Living Standards of Older People—A Comparative Analysis", was published on 26 January. A copy is available in the Library. The report is based on a comparison of 11 countries, eight of which are members of the European Union. It found that the United Kingdom has a more equal distribution of income among its older population and a more effective benefit safety net than many other major industrial countries. It concluded that to make meaningful international comparisons it is necessary to take account of all income sources for older people including private occupational and personal pensions and non-cash income sources.

  Mr. David Porter
  To ask the Secretary of State for Social Security what steps he has taken and what further steps are planned to assist disabled pensioners; and if he will make a statement.

  Mr. Hague
  Since April 1992, disabled people aged between 60 and 65 may be entitled to disability living allowance, which meets some of the extra costs of care and mobility needs arising from disability. Attendance allowance is available to disabled people over the age of 65. Both benefits are non-contributory and non-means tested and provide help to increasing numbers of disabled people. Medical adjudication has been replaced by self assessment and entitlement to benefit is determined by lay adjudication officers. The benefits also serve to establish entitlement to other benefits such as invalid care allowance, severe disablement allowance and disability premiums of income support. The policy intention behind all benefits is kept under continuous review.

  Benefit Expenditure
  Mr. Frank Field
  To ask the Secretary of State for Social Security if he will list the expenditure arising from the payment of(a) contributory benefits, (b) non-means tested non-contributory benefits and (c) means tested non-contributory benefits for claimants below retirement age in (i) 1978–79 and (ii) 1993–94 in 1993–94 prices.

  Mr. Hague
  Information is not available in the form requested. Information on benefit expenditure for claimants of any age in 1978–79 and 1993–94 is in the table.
  460

  1993–94 benefit eaxpenditure (£ millions)

  1978–79 benefit expenditure in 1993–94 prices (£ millions)

  Contributory benefits

  39,575

  30,697

  Non-contributory means-testedbenefits

  28,634

  7,714

  Non contributory non-means-tested benefits

  14,189

  7,060

  Note:

  1. These figures have been taken from the 1995 Social Security Departmental Report and earlier equivalents.

  Incapacity Benefit
  Mr. Bradley
  To ask the Secretary of State for Social Security how many people he estimates in 1995–96 who are(a) current claimants of invalidity benefit and (b) new claimants of incapacity benefit will fall in each of the categories to be treated as incapable of work by virtue of (i) receipt of the highest rate of disability living allowance care component, (ii) suffering from a progressive disease, (iii) registration as a blind person, (iv) tetraplegia, (v) persistent vegetative state, (vi) dementia, (vii) paraplegia, (viii) a severe learning disability, (ix) a severe and progressive neurological and muscle-wasting disease, (x) an active and progressive form of inflammatory polyarthritis, (xi) a progressive impairment of cardio-respiratory function, (xii) dense paralysis of upper limb, trunk and lower limb on one side of the body, (xiii) multiple effects of impairment of function of brain or nervous system, (xiv) a severe and progressive immune deficiency state or (xv) a severe mental illness.

  Mr. Hague
  [holding answer 7 March 1995]: We do not have information on the number of existing invalidity benefit claimants who are in receipt of the highest rate of care component of disability living allowance. We estimate that there will be no more than 130,000 such claimants. We estimate that around 405,000 existing invalidity benefit claimants will fall into the exemptions for severe medical conditions; 110,000 of these claimants are expected to be exempt because of severe mental illness. Estimates have not been made for the other individual types of condition. Some of those who fall into the exemptions for severe medical conditions will be among those receiving the highest rate of care component of disability living allowance.

  We estimate that no more than 10,000 new claimants of incapacity benefit a year will be in receipt of the highest rate of care component of disability living allowance. We estimate that around 40,000 new claimants of incapacity benefit a year will fall into the exemptions

  461
  for severe medical conditions; 20,000 of these claimants are expected to be exempt because of severe mental illness. Some of those who fall into the exemptions for severe medical conditions will be among those receiving
  462
  the highest rate of care component of disability living allowance.

  The estimated figures have been rounded up to the nearest 5,000.

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Ripon

World Summit for Social Development
Lord Judd Lord Judd asked Her Majesty's Government:
What action they will take following the World Summit for Social Development held in Copenhagen from 6th to 12th March.
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, we shall decide what action to take once we have studied all the detail in the summit's conclusions, and in the light of national circumstances and priorities.
Lord Judd: My Lords, I thank the Minister for that reply; I recognise that, again, she has demonstrated her personal commitment. However, will she agree that the gap between her own position and that of the Government as a whole remains as wide as ever? Exactly what additional resources were generated at Copenhagen for the fight against poverty and injustice to which she so powerfully referred? What are the Government going to do to meet their share of 20 per cent. in the 20:20 compact to direct aid towards those in greatest need in the third world?
Baroness Chalker of Wallasey: My Lords, first, the Government are completely at one. The speech that I gave in Copenhagen had the full support of the Prime Minister and the Cabinet. The conference was clearly not about additional resources. I have just come here from being with the president of the Philippines, who spoke about the conference in almost identical terms to those in which we have spoken; namely, that there is a need for growth before you can create the industry and the productivity to alleviate the conditions of the poor. But in every project there ought to be concentration on the needs of the poor. The British aid programme is already working well towards the 20:20 concept, which was accepted in essence but not in detail at the Copenhagen Summit.
Lord Ennals: My Lords, bearing in mind that there were 121 heads of government and heads of state present at the conference, and that the Prime Minister, Mr. John Major, was not there, I should like to know whether he was invited, and if not, why not? If he was invited, why did he not go?
Baroness Chalker of Wallasey: My Lords, there were about 100 heads of state and heads of government. Other delegations were led by the responsible Ministers, who were considered by their heads of government to have appropriate knowledge, and possibly even more detailed knowledge than the heads of government might
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have had. Indeed, the Prime Minister was invited, but the noble Lord may note that, as he was in Palestine from yesterday morning onwards, he would have found it extremely difficult to be there for this weekend. I can assure noble Lords that all that could be done to help this summit forward was done by me and my delegation.
Viscount Waverley: My Lords, what action was agreed for debt relief, and on how to make the developing world more competitive?
Baroness Chalker of Wallasey: My Lords, the conference was not about debt. But the noble Viscount may have noted that in addition to bringing the Trinidad terms up to full Trinidad terms at the Pans Club meeting in December, the United Kingdom has also put forward suggestions that will be discussed in April on the whole question of relieving multilateral debt. We have also welcomed the reduction in commercial debt through the Brady plan.
Lord Redesdale: My Lords, under what conditions would the Government think of implementing the 20:20 compact, considering that 11 other EC nations already believe that the time is right, including Japan?
Baroness Chalker of Wallasey: My Lords, first, I should tell the noble Lord that there are not 11 EU nations which believe that the 20:20 proposal is right. The noble Lord's figures are wrong. The whole concept of 20 per cent. of aid being devoted by donors to social projects and 20 per cent. of government assistance from the country that receives the aid is not one that can be put in the simplistic terms in which many have spoken. We seek to target our aid, not only country by country on the poorest, but within country on the poorest, so that basic education and health form part of our assistance.
Baroness Gardner of Parkes: My Lords, will the Minister confirm that one way in which she is carrying out the better targeting of aid—here I declare an interest as chairman of one of the charities that is helping the third world—is through the NGOs using money on behalf of the ODA? Is that not a more effective way of using the money in terms of aid?
Baroness Chalker of Wallasey: My Lords, the non-governmental organisations can be very good with specific projects and specific work. We use the services and work with more than 150 non-governmental organisations in the British aid programme. However, there is no doubt that their work is best done on the ground in these countries. I am glad to say that most of the NGOs who were at Copenhagen with me, and many of whom met me at 8 o'clock on Saturday morning, were extremely supportive of the way in which we work with them.
Lord Elton: My Lords, does my noble friend agree that the proper treatment of the poor nations by the rich is essential to the future of the world economy and stability? Is she aware that we on this side believe that she is fully seized of that and is an utterly fit person to proceed with these policies?
Baroness Chalker of Wallasey: My Lords, I am extremely grateful to my noble friend for his kind

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remarks. Let me say that we have increasingly sought to target our assistance better. A successful outcome of this conference will mean that people all over the world, donors and recipient governments, concentrate on people-centred sustainable development. That can be brought to the best conclusion, namely, the real alleviation of poverty, only if they also have economic growth—and that means sound economics too.
Lord Monkswell: My Lords, will the Government advise the House whether their policy with regard to social development internationally is the same as their policy for social development in this country, which I believe was typified by the Deputy Chairman of the Tory Party as the rich getting richer on the backs of the rest of the population?
Baroness Chalker of Wallasey: My Lords, it is rare that one of your Lordships speaks without knowing what is really going on. But we have one such case now. UK unemployment has fallen by 572,900 and the measures in the last Budget—a package of work incentives worth over £600 million—are part of our programme. That is a very good mirror of what we are trying to do in our overseas development programme.
Lord Judd: My Lords, does the Minister accept that we are all agreed that growth is essential to generate the wealth from which social programmes can be financed? So why is it that, at a time when the Government speak of economic recovery, our aid programme, as a proportion of gross national product, continues to plummet to about half the level that it was when the Conservatives came to office in 1979?
Baroness Chalker of Wallasey: My Lords, as we have said often in this House, it is not just a matter of the quantity of aid; it is about targeting and quality. If we had had the same targeting and the same quality in 1979, then the noble Lord would have a point to make. But we did not. We now have a very much better delivered aid programme. While I shall always be glad to see more resources for it, I shall make the very best of what I have got.

Newbury Bypass
2.41 p.m.
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
What action they are now taking to secure the early construction of the Newbury bypass.
The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen): My Lords, the Secretary of State for Transport has asked the Highways Agency to look again at the plans for the bypass and to explore other options. He will announce his decision on the way forward after he has had the opportunity to consider carefully the Highway Agency's report.
Lord Boyd-Carpenter: My Lords, can my noble friend say when that consideration will be concluded?
554
Is he aware that the situation is extremely urgent? Newbury is crowded out with traffic. The noble Earl, Lord Carnarvon, who unhappily is not able to be present, has reported a four-and-a-half mile queue on the A.34 running into Newbury. Is my noble friend aware that this matter is very urgent indeed and has been delayed for a very long time?
Viscount Goschen: Yes, my Lords, we appreciate the congestion difficulties in Newbury. My right honourable friend has said that he expects to be able to make an announcement in time for the publication of the road scheme starts for the year 1996–97.
The Earl of Huntingdon: My Lords, can the Minister tell us what other options there can be for the bypass? Does he realise that the traffic management schemes put in place for the Sainsbury development only last until 1997? Does he also realise that there is a new development to put alongside the A.343 roundabout which will cause even more problems for the residents of Newbury and travellers through it if it goes ahead before the bypass is built?
Viscount Goschen: My Lords, those are just the kind of issues that have been taken into consideration and will continue to be taken into consideration. The remit of the review is to consider all practical options.
Lord Clinton-Davis: My Lords, will the Minister indicate the stage at which the Government decided to change course on this matter and the specific grounds that necessitated that change of view?
Viscount Goschen: My Lords, my right honourable friend made an announcement in December last year. The Secretary of State felt that this was a scheme which had an unusual degree of continuing public interest. In the light of that, he decided that he would initiate a review to make sure that we had the right solution for the people of Newbury and to investigate other solutions.
Lord Orr-Ewing: My Lords, is my noble friend aware that this scheme has been under considerable discussion for nearly 20 years? Does he appreciate that when anything is stopped it means an exceptionally long delay before it starts up again? Will he accept that we must have an early decision on this matter; otherwise, there are two sets of planning blight—on the west route and the east route—so that many people are affected while nothing is going ahead at all?
Viscount Goschen: Yes, my Lords, this situation has been going on for a long while. We seek to make a decision as soon as possible.
Earl Russell: My Lords, does the Minister agree that some part of the congestion in Newbury arises because it lies between the Midlands and Southampton Docks? Would he therefore consider doing something to avoid the choice between causing congestion in Newbury or pollution in the surrounding countryside, by making progress with the high speed rail link to the Channel Tunnel?
Viscount Goschen: My Lords, that is slightly wide of the Question on the Order Paper. We are indeed making

555
progress on the public transport issue. But the point is that there is continuing demand in Newbury. At the moment there is a bad situation. There is extensive congestion and we need a solution to address that problem which already exists, never mind what might happen in the future.
Lord Clinton-Davis: My Lords, if a decision were to be made in favour of the bypass within the timescale indicated by the Minister, can he say when work would be likely to commence, having regard to the concerns already expressed on both sides of the House about this matter?
Viscount Goschen: No, my Lords, I do not think that I can say that. It would depend on what the review says. I do to want to pre-empt the review. But I said that we would seek to make an announcement as soon as possible and to take forward as soon as possible any further work that might develop.
Lord Stoddart of Swindon: My Lords, is the Minister aware that when I fought the Newbury constituency on two occasions in 1959 and 1964 a grave traffic problem existed at that time also? I have listened carefully to the answers given both now and previously by the Minister and I still cannot understand why the Government ordered the review. What is the mystery? Can the noble Viscount explain why, on the eve of the project being started, the Secretary of State suddenly decided to have a review? We have not had that question answered and I should like it answered now.
Viscount Goschen: My Lords, ultimately, as proposer of the scheme, it is up to the Secretary of State for Transport whether a project should go ahead, even after the statutory processes have been gone through. We have now been through two public inquiries on the issue. I stated that the Secretary of State felt that a review was necessary because of the continuing level of public interest in the scheme. It is the responsibility of the Secretary of State and he must satisfy himself that the right solution has been found.

Barings
2.51 p.m.
Lord Spens Lord Spens asked Her Majesty's Government:
Whether they have assessed the long-term consequences of the decision to allow Barings Bank to be put into "administration" on the earning capacity of United Kingdom financial institutions.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Henley): My Lords, the directors of Barings applied for administration when they formed the view that the bank was unable to continue trading. The Bank of England took the view that the problem was specific to Barings and would not result in major systemic risk to the financial system. The Governor did not recommend the use of taxpayers' money to rescue Barings, and subsequent events vindicated that approach.
Lord Spens: My Lords, while thanking the Minister for that Answer, does he and the Treasury realise that a
556
second Wimbledon has been created in the City of London? It is now a place where it is wonderful to come and play as a foreigner to win the large prizes that exist, but not much good if one is British. Does the Minister realise that 40 per cent. of that business is already in the hands of overseas companies and will rapidly increase. As I understand it, last week the Japanese banks decided to remove all their deposits from London banks, other than the major ones, and put them with German, Swiss, French, American and other banks of that ilk.
Lord Henley: My Lords, I do not accept the analysis of the position as related by the noble Lord, Lord Spens. It was a sad and regretful episode but the circumstances which brought Barings down were unique to that bank and ought not to apply to other banks.
Lord Eatwell: My Lords, is the Minister aware that the 1987 Banking Act defines the Bank of England's Board of Banking Supervision as an advisory and not an investigative body? Is he aware also that the Economic Secretary to the Treasury, Mr. Anthony Nelson, described the Board of Banking Supervision as a,
"cosy club of Governor's appointees"?
Is it not clear that the board is an entirely inappropriate body to investigate the role of the Bank of England in the Barings affair? Only a fully independent inquiry will enjoy the confidence which is so vital to the economic future of the City of London. Why are the Government afraid of an independent inquiry?
Lord Henley: My Lords, the noble Lord's point in relation to my right honourable friend the Economic Secretary to the Treasury is a silly one. My right honourable friend made that comment when he was a Back-Bencher in another place. At the time he was concerned about the number of independent members on the board. Following his intervention in that Bill, the number was increased. At the time he agreed that the increase would enhance the weight and power of the Board of Banking Supervision. As a Treasury Minister he is fully confident that the board can fulfil the tasks set for it by the Chancellor. The board was set up by the 1987 Act and its role is to advise the Bank of England on the discharge of its supervisory responsibilities. It will produce a report in due course which my right honourable friend the Chancellor of the Exchequer will consider.
Lord Eatwell: My Lords, can the Minister say why the Government are afraid of an independent inquiry?
Lord Henley: My Lords, the Board of Banking Supervision is independent. It consists of nine members—I can list them if the noble Lord wishes me to—six of whom are totally independent. The other three are ex officio—the Governor of the Bank of England and two other members of the Bank.
Lord Monkswell: My Lords, will the Government advise the House, and thereby the nation, as to which British banks are secure for the deposit of money

557
belonging to individuals, local authorities and charities and will be safe and guaranteed by the Bank of England?
Lord Henley: My Lords, I presume the noble Lord is aware—he tabled a similar Written Question—that I shall shortly be answering his Question. I can give a preview of that Answer. No lists of such banks exist. Local authorities are responsible for making their own decisions on the creditworthiness of deposit takers.

Iraq: British Exports
2.55 p.m.
Lord Haskel Lord Haskel asked Her Majesty's Government:
Whether they have any plans to encourage and support British industry to export to Iraq.
The Minister of State, Department of Trade and Industry (Earl Ferrers): My Lords, while sanctions continue in force Her Majesty's Government neither encourage nor discourage the supply of those goods which are permitted to be supplied to Iraq by the United Nations.
Lord Haskel: My Lords, I thank the Minister for that Answer. However, is he aware of the pressure on some UK companies to engage in sanctions busting on the grounds that, if we do not trade with Iraq, other firms and other countries will get in first? Does not the Minister agree that the two visits made by groups of 25 people to Baghdad during the past few months sent entirely the wrong signals, particularly as some of the companies represented deal in goods unrelated to humanitarian purposes? Those visits were used to great propaganda effect by the Iraqi authorities.
Earl Ferrers: My Lords, if that is so, it is highly regrettable. I hope that those companies which feel that they are being pressured into sanction busting will have the good sense to reject those pressures. The Iraqi regime behaved in such an intolerable way during the 1990s that all 186 member countries of the United Nations approved the decision to impose sanctions, including Britain. We intend to apply those sanctions rigorously and any company that tries to break the sanctions is doing a disservice both to this country and to the world.
Lord Beloff: My Lords, does not my noble friend agree that the Prime Minister yesterday, in his speech in Israel, made it absolutely clear that this country does not regard the lifting of sanctions from Iraq within the near future as being in any way on the table?
Earl Ferrers: My Lords, I am grateful to my noble friend Lord Beloff for drawing that point to our attention. He is entirely right. The sanctions will not be removed until Saddam Hussein fulfils all the obligations made upon him. First, he must withdraw from Kuwait—which he did. Secondly, he must recognise Kuwait's borders—which he does. Thirdly, he must recognise Kuwait's sovereignty—which he does not. He must dispose of and destroy all the weapons of mass destruction in his
558
possession, and that is presently the subject of a United Nations report. Finally, he must return the 600 Kuwaiti detainees, which has not yet been achieved. Until all those objectives are satisfied, the sanctions will remain in place.
Lord Avebury: My Lords, does not Saddam Hussein also have to comply with the provisions of Resolution 688 which require him to cease repression of the Iraqi people? Is not the report of the UN rapporteur on Iraq, tabled by the Commission in Geneva, proof that the situation for the people of Iraq has deteriorated in the past year? In those circumstances, will the Government resist any proposals to weaken or remove sanctions? In particular, will they draw to the attention of the Security Council the serious breach of sanctions occurring with the traffic of 1,200 trucks a day crossing between Turkey and Iraq and bringing back oil in contravention of the UN resolution?
Earl Ferrers: My Lords, I can assure the noble Lord, Lord Avebury, that we have no intention of weakening the sanctions regime. We intend to keep those sanctions until such time as it is proved that they should be given up. With regard to the latter point, I shall ensure that the anxieties of the noble Lord are drawn to the attention of my right honourable friend.
Lord Bruce of Donington: My Lords, is the noble Earl aware that so long as Her Majesty's Government follow precisely the lines indicated by the Minister this afternoon, many of us on this side of the House will support the Government in their stance?
Earl Ferrers: My Lords, I became rather frightened when the noble Lord, Lord Bruce of Donington, stood up; I felt that he was about to disagree with what the Government were doing. I am deeply indebted to him for reinforcing what we are doing in his usual characteristically forthright way and I entirely agree with him.
Lord Clinton-Davis: My Lords, is the Minister aware that the Official Opposition share the view that for once the Government have made the right decision in relation to this matter? Is he also aware that a carefully orchestrated campaign is being undertaken by the Iraqi Government to which some very ill-advised businessmen, not only here but in France, seem to be subscribing and that the views which the noble Earl has expressed as to the conditions upon which the embargo proposed by the Security Council might be lifted are utterly inconsistent with the views that are being taken by those people? Is he further aware that, in the light of what he said, the view of the French Government that the sanctions might be lifted once the United Nations Security Council representative says that Iraq is complying with resolutions on weapons of mass destruction is wholly inadequate?
Earl Ferrers: My Lords, I am grateful to the noble Lord for saying that the Opposition Front Bench are in agreement with what the Government are doing.
Lord Shepherd: My Lords, it is not just the Opposition Front Bench but the party as a whole which takes that view.
Earl Ferrers: My Lords, perhaps the Cross Benches would like to agree to that, too. I am grateful to the

559
noble Lord, Lord Clinton-Davis, for expressing that approval. The point that he makes is a very real one. There are those people, and sometimes those countries, who always try to seek a way round a regulation in order to try to benefit themselves momentarily and personally. I deplore that totally and I think that your Lordships would deplore it totally. It is up to each country to enforce United Nations sanctions as best they can. As far as I know, they are all doing it correctly. If there is evidence that any country is breaking those sanctions, I should be glad to know of it.
Lord Molloy: My Lords, will the noble Earl acknowledge that many people in countries bordering Iraq were most grateful for the immediate action taken by the British Prime Minister and our American allies which resulted in Kuwait being restored to its people? Are the Government still insisting that those who were taken away by the Iraqis should now be returned? Does he agree that we should not in any way seek any help from Iraq or acknowledge its leadership until those conditions which the British initiated are fully honoured?
Earl Ferrers: My Lords, the noble Lord is quite right. One of the reasons why sanctions were introduced in the first place was to ensure the return of those 600 or so detainees to Kuwait. At present, Iraq has not clone that.
Lord Rea: My Lords, can the noble Earl foresee a way in which some form of sanctions-lifting towards the Kurdish parts of Iraq could be thought about in such a way that an alternative government might be founded there which could offer the Iraqi people a choice against the current murderous dictator?
Earl Ferrers: My Lords, there are always ways of trying to get round a position, but we have to see the position as it is. The position is that Saddam Hussein is in control of Iraq. He is carrying out his activities in a way that is totally reprehensible to the rest of the world. Until that is finished and Saddam Hussein approves and agrees to that which the United Nations has suggested, sanctions will continue.

Pensions Bill [H.L.]
3.4 p.m.
Report received.
Clause 1 [The new authority]:
Lord Ezra Lord Ezra moved Amendment No. 1:
Page 1, line 9, at end insert:
("() It shall be the duty of the Authority to exercise general supervision over the operation of occupational pension schemes coming within the scope of this Act, with a view to ensuring that schemes are efficiently and satisfactorily administered and that the interests of beneficiaries as a whole are safeguarded and to this end the Authority shall be provided with adequate staff and resources to intervene where appropriate in schemes which do not appear to the Authority to meet the standards laid down in this Act.").
The noble Lord said: My Lords, this amendment deals with the general duties of the authority. This issue was debated on an amendment moved by the noble Baroness, Lady Turner, in Committee on 7th February.
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On that occasion the noble Lord, Lord Mackay, spoke against it, mainly on the grounds that it appeared to ask for the authority to monitor every one of the pension schemes. This amendment does not do that. It pays regard to that view and it talks in terms of general supervision.
Subsequent to the debate which we had in Committee I did a little personal research, and I found that the Government, in introducing all the measures which established bodies of this kind—regulatory bodies—since they came to power, have given in the Acts of Parliament concerned a statement of their general duties right at the start. That goes for the Telecommunications Act 1984, the Gas Act 1985, the Water Act 1989, the Electricity Act 1989, the Railways Act 1993 and the Coal Industry Act 1994. In every one of those cases the general duties of the regulatory body are set out at the start of the Act.
Furthermore, my researches took me back to 1946, when the reverse process was undertaken by the post-war Labour Government when these industries were put into nationalisation. In every one of those cases the duties of the new statutory bodies, which were then the boards, were also defined right at the beginning of the Act. Therefore, I feel that the precedent in the actions of the Government and of previous governments is overwhelming for this to be done. I shall not be able, therefore, to understand any further resistance that the Government might have to the wording as now proposed because it is in very general terms.
My surprise if the amendment were to be opposed would be even greater having regard to what the Government themselves have said about the functions of the new authority. I ask your Lordships to turn to Schedule I on page 98 of the Bill as now amended. Paragraph 2 states:
"The Authority may do anything (except borrow money) which is calculated to facilitate the discharge of their functions, or is incidental or conducive to their discharge".
It seems to me that if the authority were disposed, pour encourager les autres, to execute a few recalcitrant trustees and considered that that was in the interests of discharging its functions, or was incidental or conducive to the terms of the instrument appointing it, it would be entitled so to do. This is an extremely wide-ranging statement. I am surprised that the Government should have included it in the Bill. The proposed amendment is much more limited than that. It attempts in simple terms to set out what the authority should be doing. On those grounds, I hope that the amendment will command the support of the House. I beg to move.
Baroness Turner of Camden: My Lords, I rise to support the amendment moved by the noble Lord, Lord Ezra. I have put my name to it because I believe it to be essential to have the functions of OPRA clearly set out right at the very commencement of the Bill. The establishment of a regulatory authority was a key part of the recommendations of the Goode Committee. Indeed, the report went so far as to spell out what it thought the duties of the regulator should be. In Committee we on this side of the Chamber sought to persuade the Government to write into the Bill the recommended duties. The Minister was not prepared to

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accept that. Nor was he prepared to accept a much more modified form of wording which dealt with a monitoring role.
The form of wording suggested in this amendment is even more modified, as the noble Lord, Lord Ezra, said. It gives OPRA the duty of exercising general supervision. It seems to me that the role envisaged by the Government for OPRA is essentially a passive one. It seems to be to react to complainants and whistle-blowers. By that time, of course, irreparable damage can already have been done. Any powers such as those envisaged by Goode which involve the setting of standards, and the checking of trustees' or administrators' behaviour against such standards, have been excluded from the Bill and so has any general overview of the pensions field.
The Goode Committee said quite specifically,
"The new legal framework we have recommended depends for its effectiveness on proper supervisory and enforcement machinery. We therefore recommend that the Pensions Regulator should have wide ranging functions and powers".
Furthermore,
"The tasks we have identified for the Regulator are substantial. If they are to be performed in the way we consider necessary for pension schemes to be properly safeguarded, it is important that the Regulator should be organised in an effective way and that the resources necessary should be made available".
As I have said before in discussions on this Bill, for many years I was a member of the Occupational Pensions Board. One of our problems was that people thought that we had much greater powers than in fact we actually had. It seems to me that we are in danger of repeating exactly that with the establishment of OPRA. At least the Occupational Pensions Board was not, and never claimed to be, a regulatory authority for the whole of the pensions field. But here we have some new legislation, the objective of which is to provide security for occupational pensioners and scheme members generally with a regulatory authority. But, unfortunately, unless we can have the Bill amended, that regulatory authority seems to have no greater powers, at least on paper, than the Occupational Pensions Board—perhaps even less, because the OPB does require certificates from the scheme actuaries stating whether the scheme is solvent, a statement from the scheme auditors that the accounts have been audited and, as a matter of routine, a copy of the accounts where they have been qualified in any way.
The board also has a duty to make reports to the Secretary of State on general issues of importance in the pensions field. It has produced a number of excellent reports, not all of which have resulted in legislation, although some have. After the board has gone, it is not clear whether anyone or any institution will have that function.
The Government's opposition to giving OPRA the type of role envisaged by Goode seems to be based on the large number of schemes. But many of the smaller schemes are insured schemes. There is no reason why there should not be a simplified, streamlined procedure for dealing with insured schemes. It is not satisfactory that, with large numbers of people (perhaps 20 million) relying on occupational schemes for the bulk of their
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retirement income, there should be a regulatory authority that does not have its functions clearly set out at the very commencement of the Bill. It should be a regulatory authority which lives up to its name and to everyone's justifiable expectations. I support this amendment.
3.15 p.m.
Lord Dean of Harptree: My Lords, this amendment appears to be contrary to the principles on which the regulatory authority is to be based. As I understood my noble friend the Minister at Second Reading and during the Committee stage, we were rightly told that it should be the job of the regulator, through the whistle-blowing procedure, to concentrate on those areas where he felt that there might be difficulties arising. Those seemed to me to be the right priorities to adopt.
If the regulator were to have the role of crawling over every single occupational pension scheme which is in existence, how many staff and how much in terms of resources would he require and who would meet the substantial cost involved? With great respect to the noble Lord, Lord Ezra, I do not believe that he gave the House any indication of what the cost would be. When my noble friend the Minister replies, if he is minded to accept this amendment—which I hope he will not—will he say what the cost will be either to the taxpayer or to members of occupational pension schemes?
Baroness Seear: My Lords, it was in order to meet the very point raised by the noble Lord, Lord Dean, that the terms of this amendment were changed from those introduced at Second Reading. That included the word "monitor", which could create the false impression that the regulator was intended, as the noble Lord said, to "crawl all over" all the 150,000 schemes. Nobody seriously imagines that any organisation can crawl all over 150,000 schemes. The provision is to give the regulator a responsibility for general supervision, which is a very different matter from saying that it has to supervise in detail 150,000 schemes.
Therefore, I hope that noble Lords will realise that what is proposed is not in the least what the noble Lord, Lord Dean, has said. It is a general supervisory function and, if the regulator has not got it, it is extremely difficult to see what function he will have. If that is not the function, why may we not be told in a clause which defines what the authority is supposed to do? It is most extraordinary to set up an authority and in the Bill which establishes it to say that an authority shall be set up and then give a list of the things it will do to carry out its duties without at any point telling us what the duties are. It is a matter of clarity and logic. In the tradition of legislation which we have passed on previous occasions, such an amendment should be included in the legislation before your Lordships' House.
The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, the amendment before us this afternoon seems to me to do two things. One is the rather innocent objective put forward at the beginning of this debate of trying to bring together in five or six lines for the layman, so to speak, what the regulator will do. As the debate has gone on,

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a second motive has come forward and has been rightly exposed by my noble friend Lord Dean of Harptree; namely, to extend the scope of OPRA's responsibilities much wider than those laid out in my speech in Second Reading, or indeed in my speeches at Committee stage, or than what is in the Bill itself.
It seems to me that the amendment may well achieve the widening to which the noble Baroness, Lady Turner, addressed herself, but I am not sure that it achieves the clarity which the noble Lord, Lord Ezra, set out to achieve. A quick and readily accessible guide to what the authority can do is already there at the beginning of the Bill. The part of the Bill containing the list of clauses shows a list of the authority's powers, which are provided in Clauses 3 to 13 and 87 to 92. It also gives a good indication of what those clauses are about. As the Bill goes through both Houses, further information about what those clauses do can be found in the Notes on Clauses published with the Bill.
It is a very risky business to put into a Bill clauses which are not supposed to do anything in their own right. It can cause problems when a particular clause is being interpreted in isolation in the courts. We do not want to compromise the provisions of Part I of the Bill. We do not want to risk widening or restricting the scope of the authority by introducing a general list of functions on the face of the Bill. The amendment could jeopardise our common interest, which is the protection of scheme members' interests.
The functions of the authority will be those conferred on it in the Bill. Its role is to investigate schemes; to ascertain whether regulatory provisions are being or have been complied with and to take action as the authority considers necessary to rectify any non-compliance discovered. Such actions could include the imposition of civil penalties, taking criminal proceedings and appointing, prohibiting or disqualifying trustees. Many of these are issues which we shall discuss during the course of the day.
In line with the Government's policy for enforcement agencies, the authority will be expected to publish information about the manner in which it will carry out its function and the standard it will be aiming to achieve. Thus the public will be able to find out about the authority, not by going to the Bill and trying to get it from five or six lines, but by getting it from information published by the authority itself.
We also intend to amend the disclosure regulations to introduce a requirement for schemes to disclose to their members the existence of the new authority. That should ensure that those in whose interest the authority is acting will be aware of and understand the authority's role. We believe that that will be an effective way of disseminating information in a readily digestible form. We do not want pension scheme members to have to go to a copy of an Act of Parliament simply to try to establish what the authority will do. If the aim is to try to inform the public and scheme members about what the authority will do, I must submit to the House that what I have suggested meets that bill.
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The wording of the amendment that has been suggested by the noble Lord, Lord Ezra, would go considerably further than simply specifying the functions of the authority which are conferred upon it by the Bill. It seeks to widen those functions to include,
"general supervision over the operation of occupational pensions schemes".
The noble Baroness, Lady Turner, said that she saw that as one of the advantages of the amendment. However, as I explained in Committee, we do not want the authority to be a general supervisory body for the reasons that my noble friend Lord Dean mentioned. There are 150,000 schemes and I thought that we were all agreed in Committee that we do not want the authority to ghost every pension fund in the country. We want OPRA to have a range of well-defined powers to enforce compliance, with the specified obligations that are set out in both this Bill and the Pension Schemes Act 1993. We want it to target its resources and expertise accordingly, carrying out investigations where there are suspicions or reports of things going wrong or spot-checking schemes where it has good reason to think that there is a risk of something going wrong.
The noble Lord, Lord Marsh, pointed out in Committee that it is the members themselves and those actively involved in the administration and management of the schemes who are best placed to alert the authority to problems. That is why we are introducing the requirement for auditors, actuaries and trustees to blow the whistle on schemes which do not conform to the provisions of the Bill. We believe that that will be a far more effective means of ensuring that schemes comply with the law than giving the authority general supervisory functions which would increase its costs without, we believe, providing any additional benefit.
The noble Lord, Lord Ezra, prayed in aid the regulators for, among others, the telecommunications, gas and electricity industries. We do not believe that any of the bodies which the noble Lord mentioned is sufficiently similar in nature to the authority that we are proposing to provide a relevant analogy. The significant difference is that this authority is not intended to have general duties. Instead, it is intended that it will have the specific duties that are spelt out in the Bill.
The noble Lord prayed in aid Schedule 1(2). I must advise the noble Lord that those provisions do not describe or widen the functions of the authority. That paragraph simply enables the authority to discharge powers and functions which derive from the provisions of the Bill. The authority does not have completely unfettered power to do what it chooses. It can do only what the Bill allows it to do. There will, of course, be checks and balances to ensure that it acts in a fair and reasonable manner and uses its resources wisely. It will be accountable to Parliament through the Secretary of State, and will come within the jurisdiction of the Parliamentary Commissioner for Administration. I hope that that answers the point about Schedule 1(2).
We have had this debate before and I do not believe that it is reasonable to try to encapsulate in about five lines what the Bill does. I believe that the information that will be required by those people who need to know—pension scheme members and the like—will be

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provided by the steps that the authority will take and those that we shall ensure that pension schemes take. I believe that that will provide people with much more detailed knowledge of how the authority works than would the provisions set out in the amendment—and perhaps less legalistically.
Finally, if the four or five lines of the amendment were just a piece of harmless fun, your Lordships might think that it would be rather churlish not to add them to the Bill, but I hope that I have shown the House that they are a bit more than that. They introduce some new ideas about the duties and responsibilities of the authority. With that explanation, I hope that the noble Lord will feel able to withdraw his amendment. If he does not, I ask my noble friends to support me in the Division Lobby.
Lord Ezra: My Lords, the Minister's remarks disturb me on two counts. First, I think that his arguments about not including in the Bill anything about the general duties (however they might be defined) of the new authority fly in the face of precedent. The regulatory bodies that have been set up for the other industries that I mentioned are similar in that they are regulatory bodies. They have certain powers. It might have been argued that their powers could have been found by reading the whole of the relevant Bill and that there was no reason to state their general duties at the beginning of that Bill, but that is what was done. My noble friend Lady Seear made that point strongly.
The other difficulty is that the Minister said that paragraph 2 of Schedule 1 states that the authority can do anything within its powers according to the Bill. In fact, that is not the wording. The provision states that the authority can do anything that is "conducive" to carrying out its duties. That goes very much further than anything that I have seen in any comparable Bill. I was trying to identify more precisely what the general duties of the authority should be in these circumstances and in this Bill.
I do not agree with the view that that involves monitoring every single scheme. The word "monitoring" was introduced in the previous amendment on this matter, which was moved by the noble Baroness, Lady Turner. That word has been removed. Indeed, if it is felt that the words "general supervision" are too strong, I am sure that other words could be used. The whole burden of the amendment is to indicate that the authority would intervene only where it was necessary to do so. I believe that that is common ground. The purpose of the legislation is to ensure that intervention takes place only where it is shown that schemes are not conforming with the provisions of the Bill as laid down in Parliament.
I feel that a strong case has not been made against the amendment. If the wording of the amendment is not correct, I should be delighted if the Government would introduce their own amendment at the next stage. Indeed, the Minister's penultimate remarks suggested the possible wording of such an amendment. As I have said, if the term "general supervision" is shown to go too far, I am sure that it would be possible to think of other wording.
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This is an issue of principle. When statutory authorities are established in major legislation, I believe that the parliamentary draftsmen should introduce, and the Government should support, a general statement of their duties, however worded. It is quite wrong to leave people to trawl through the whole Bill to discover what the general thrust of those duties should be. Furthermore, I believe that people could be misled by the broad wording of the second paragraph of Schedule 1. In those circumstances, I commend the amendment to the House.
3.28 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 93; Not-Contents, 120.

Division No. 1

CONTENTS

Acton, L

Jenkins of Hillhead, L

Addington, L

Jenkins of Putney, L

Allen of Abbeydale, L.

Judd, L.

Allenby of Megiddo, V.

Kilbracken, L

Archer of Sandwell, L

Kinloss, Ly.

Ashley of Stoke, L

Kirkhill, L.

Bancroft, L

Lovell-Davis, L

Barnett, L

Mason of Barnsley, L

Blackstone, B.

Mayhew, L

Bruce of Donington, L

McIntosh of Haringey, L.

Carmichael of Kelvingrove, L

McNair, L

Cledwyn of Penrhos, L

Merlyn-Rees, L

Clinton-Davis, L

Monkswell, L

Cocks of Hartcliffe, L

Monson, L.

Craigavon, V.

Moms of Castle Moms, L

David B.

Nelson, E.

Dean of Berwick, L

Nicol, B.

Dean of Thornton-le-Fylde, B.

Ogmore, L

Desai, L

Phillips of Ellesmere, L.

Donaldson of Kingsbridge, L

Rea, L

Donoughue, L

Redesdale, L

Dormand of Easington, L

Russell, E.

Eatwell, L

Sainsbury, L

Elis-Thomas, L

Saltoun of Abernethy, Ly.

Ennals, L

Seear, B.

Ezra, L.

Sefton of Gaston, L

Falkender, B.

Serota, B.

Falkland, V.

Shannon, E.

Freyberg, L

Shaughnessy, L

Gallacher, L

Shepherd, L.

Gladwin of Clee, L (Teller.]

Simon of Glaisdale, L.

Gould of Potternewton, B.

Simon, V.

Graham of Edmonton, L

Stallard, L

Grey, E.

Stedman, B.

Halsbury, E.

Harris of Greenwich, L [Teller.]

Stoddart of Swindon, L.

Haskel, L

Strabolgi, L

Hayter, L

Taylor of Gryfe, L.

Headfort, M.

Tenby, V.

Henniker, L

Thomas of Walliswood, B.

Hilton of Eggardon, B.

Tope, L

Hollis of Heigham, B.

Tordoff, L

Howie of Troon, L

Turner of Camden, B.

Irvine of Lairg, L

Wallace of Coslany, L

Jay of Paddington, B.

Wharton, B.

Jeger, B.

White, B.

Wigoder, L

Williams of Elvel, L.

NOT-CONTENTS

Aberdare, L

Astor of Hever, L

Addison, V.

Astor, V.

Ailsa, M.

Belhaven and Stenton, L

Aldington, L

Belstead, L

Alexander of Tunis, E

Birdwood, L

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Blaker, L

Johnston of Rockport, L

Blotch, B.

Knollys, V.

Blyth, L.

Lauderdale, E.

Boardman, L.

Lindsay, E.

Borthwick, L

Long, V.

Boyd-Carpenter, L

Lucas, L

Brabazon of Tara, L.

Mackay of Ardbrecknish, L

Braine of Wheatley, L

Mackay of Clashfern, L. [Lord Chancellor.]

Brougham and Vaux, L

Buckinghamshire, E.

Manton, L

Butterworth, L

Merrivale, L

Cadman, L

Mersey, V.

Campbell of Croy, L.

Miller of Hendon, B.

Carnegy of Lour, B.

Milverton, L

Carnock, L

Monteagle of Brandon, L

Cawley, L

Mowbray and Stanton, L

Chesham, L

Moyne, L

Clanwilliam, E.

Munster, E.

Clark of Kempston, L.

Murton of Lindisfarne, L

Colnbrook, L

Newall, L

Constantine of Stanmore, L

Norfolk, D.

Cox, B.

Norrie, L

Cranborne, V. (Lord Privy Seal]

Northesk, E

Cumberlege, B.

O'Cathain, B.

Davidson, V.

Orkney, E

De Freyne, L

Orr-Ewing, L.

Dean of Harptree, L

Park of Monmouth, B.

Denham, L

Peel, E.

Dixon-Smith, L

Pender, L

Elles, B.

Peyton of Yeovil, L

Elliott of Morpeth, L.

Platt of Writtle, B.

Elton, L.

Rankeillour, L.

Faithfull, B.

Rawlings, B.

Ferrers, E.

Renwick, L

Fraser of Kilmorack, L

Rodger of Earlsferry, L

Gainford, L

Roskill, L

Gardner of Parkes, B.

Geddes, L

Seccombe, B.

Goschen, V.

Selborne, E.

Gowrie, E.

Shaw of Northstead, L

Gridley, L

Skelmersdale, L

Hailsham of Saint Marylebone, L

Slim, V.

Harding of Petherton, L

St. Davids, V.

Hayhoe, L.

Strange, B.

Henley, L

Strathcarron, L

Hertford, M.

Strathclyde, L [Teller]

Hives, L

Sudeley, L.

Hogg, B.

Teviot, L.

Holderness, L.

Teynham, L

Hood, V.

Thomas of Gwydir, L

Hothfield, L

Trumpington, B.

Howe, E.

Vaux of Harrowden, L

Inglewood, L (Teller.)

Wedgwood, L

Ironside, L.

Wise, L.

Jellicoe, E

Wynford, L

Jenkin of Roding, L.

Young, B.

Resolved in the negative and amendment disagreed to accordingly.
3.36 p.m.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 2:
Page 1, line 9, at end insert:
("() The Secretary of State shall, in consultation with the Authority, approve an annual budget for the work of the Authority, decide on reasonable levels of funding for the responsibilities of the Authority, arrange for such funds to be made available to the Authority and report annually thereon to Parliament.").
The noble Baroness said: My Lords, I shall speak also to Amendment No. 223. The amendment relates to the funding of the regulatory authority. We are seeking to persuade your Lordships that if the regulatory body is to be statutory, it must be independent, and if it is to be
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seen as independent, it must be funded not by the industry but by the public purse. Why? We are not talking about a large sum, we are talking about f 1 0 million to regulate a £500 billion industry. The sum is not especially onerous for the industry itself, nor for us, the taxpayer.
However, given that pensions, as the noble Lord, Lord Marsh, argued in Committee, are a voluntary and non-profit making activity by employers—something which I am sure which we all want to see continued—we do not want to add to the burden of employers' costs if that can be avoided. Some additional costs, such as the compensation levy or the solvency standard, may be essential, and, in that case, must be borne by the industry. This cost does not have to be, and in our view it ought not to be; which would help secure more willing compliance by the industry.
There are other reasons why we should like to see state-funding of OPRA. A publicly funded OPRA would also inspire greater public confidence in its independence. The Government will say, I am sure, that it is independent already; that government will appoint the chairman and the members, determine the budgets, determine the staff and, by regulation—having refused the last amendment—will determine its powers, duties, and competence. In that case, why is the state not willing to finance what it is so closely prescribing?
If the authority is to be independent in the sense that the state is regulating its activities, why not ensure that it is seen to be independent by funding it? After all, the regulator's job is often to impose on trustees behaviour which is extremely delicate: holding the balance between investment policy, solvency surpluses, and the like. In such difficult and delicate issues of trusteeship, integrity of decision making is ensured by impartiality—not beholden to either party. That is the meaning of "independence". Independent funding would help underpin that.
No one denies that self-regulation, or this, its step-sibling—that is, statutory self-funded regulation—has a bad name. Yet in contributing to pensions, employers and employees are showing huge confidence: confidence by the employer that he can deliver the pension promise; confidence by the employees that the right to invest considerable savings for 25 years or 40 years is building up their single most valuable financial asset.
The size of that asset, the long timescale over which it is built up and the need for its guardianship suggests that the state can provide the most effective guarantee. Companies may come and go, be sold, merged, taken over and go into insolvency. Does anyone doubt that the state, funding the regulator, acts as a stronger trustee of the pension promise than any self-financed body?
In Committee, the Minister advanced two arguments against such a similar amendment. His first argument was that other bodies levy the industry. He gave as an example insurance companies which pay for regulation by the DTI. But insurance companies are commercial, profit-seeking and profit-taking bodies. At this stage, I have no problem with them funding their own

569
regulation. However, pension funds are not commercial, profit-seeking, profit-taking bodies: they are non-profit making trusts.
The second argument that the Minister advanced was that occupational pensions benefit only a proportion of the population—about half—and that therefore the rest should not be expected to contribute. That is a new rule in public finance: unless benefit is enjoyed by everyone there is no public policy interest in funding its policemen. Are we now saying, for example, that only car drivers should pay for traffic wardens; that only restaurant owners and users should pay for the inspection of restaurants and their kitchens; that only the noisy tenants and their neighbours seeking peace from the hi-fi should pay for noise pollution officers; or that only people with children should pay the 50 per cent. of the local authority council tax bill that is spent on schools? No, we never use that argument in public policy. We make a distinction, and rightly so, between the activities of a local authority or any other body which give private gain and private enrichment—for instance, planning fees for enlarging one's house or car parking charges for parking one's car—and the regulatory and policing functions—for instance, drawing up local plans and employing traffic wardens—which indirectly or directly benefit us all. Those are publicly funded.
We all need to have those policing powers and regulatory controls in place, even if at any snapshot in time only a minority are users of the service. In other words, no one is saying that the state should pay for occupational pensions; that is a private matter for personal savings and enrichment. However, we are saying that the state should pay for the regulation of the system because it is in the public interest and we all stand to benefit from it. Why is that? As taxpayers, we are either helping to finance SERPS if individuals do not opt out into occupational pensions or, if they do, we are helping to finance the tax privileges from the Inland Revenue which make pensions such a special form of savings. It is a special form of savings precisely because we as taxpayers recognise that we all have a public policy interest in encouraging as far as possible the policy of provision for oneself in old age.
We believe that the state—that is, we, the taxpayers—should fund OPRA in order to ensure, first, that it not only is but is perceived to be truly independent and, secondly, because the regulating and policing of pensions is of such vital interest to us all directly as pension holders or indirectly as taxpayers and therefore it is a matter of public policy. I beg to move.
3.45 p.m.
Baroness Seear: My Lords, I support the amendment that was so fully and adequately moved by the noble Baroness, Lady Hollis. It is in the interests of us all that there should be good occupational pension schemes. If that had been the case 50 years ago the burden on social security would be much less. It is an insurance by the taxpayers that in the years to come we will not have to bail out people who in old age have inadequate incomes
570
because they did not have proper occupational pensions. That is what we are now suffering from and we wish to avoid that for the future.
The Minister has always said—and I know that he will repeat it many times today, tomorrow and on Third Reading—that we must not discourage employers from setting up occupational pension schemes. If he wants to encourage them to do so, surely he is interested in reducing the charges that are laid on employers. One such charge that he can most easily remove is the cost of running the authority. It is obvious that an authority financed by the state will be seen to be more independent. Whether in fact that is the case is another matter but such a perception is of great importance. The authority will be seen to be independent, which is a strong reason for supporting the suggestion that the payments should come from the taxpayers and not from the industry.
Lord Dean of Harptree: My Lords, the noble Baroness, Lady Hollis, mentioned car drivers. All noble Lords know that in recent years car insurance has risen by leaps and bounds. That has been due partly to the fact that there are more cars on the road and that car thieves have greater opportunities to steal cars. Furthermore, many of us are careless about car security. However, I do not believe that as a consequence anyone has suggested that the taxpayers, some of whom are unable to own cars, should assist with the payment of car insurance.
The analogy relating to the provision is precisely the same. Those of us who are lucky enough to be members of an occupational pension scheme and who are drawing occupational pensions should help to pay the costs of effective regulation. Why should the taxpayers, some of whom have had no opportunity to join occupational pension schemes, bear the costs in this regard?
I do not believe that the analogy drawn with the Occupational Pensions Board holds water. It was the job of that board to administer as an agency of the Government the question of whether schemes fell within the rules laid down by statute. In this case, the regulator has an entirely different job. It is his job to seek out fraud where it exists. No one has a stronger vested interest in avoiding fraud than members of occupational pension schemes. Therefore, it is right that the costs of the authority should be met by those of us who are fortunate enough to belong to occupational pension schemes and not by the general body of taxpayers.
Lord Clark of Kempston: My Lords, I hope that my noble friend resists the amendment because it will provide a precedent. The Securities and Investments Board is funded by the industry. The cost of the Personal Investment Authority is borne by the people who are regulated. It has always been the principle that the industry or the service must pay for self-regulation. If the Government told the taxpayers that they must take on the funding of this new organisation that would be a retrograde step. It should be funded by those who participate and not by the general taxpayers.
Lord Mackay of Ardbrecknish: My Lords, as has been made clear in this short debate, the purpose of the amendment is to prevent the cost of a new regulatory

571
authority being met by and levied on pension schemes and instead to require the Secretary of State to make available appropriate funds from the taxpayer.
I recall from our debates in Committee that both the noble Baroness, Lady Hollis, and the noble Lord, Lord Ezra, acknowledged that even without the amendments which we are now discussing the Secretary of State would determine the authority's budget. We believe—and I do not think there is any quarrel between us—that that is quite right. Indeed, paragraph 8 of Schedule 1 already provides for that.
But the point at issue is whether the authority is paid for by a levy on pension schemes or by taxation. The fact that the Secretary of State has budgetary control has been put forward as an argument for state funding. I do not accept that there is any logical connection between ensuring financial accountability and the source of the funding.
We are committed to keeping the costs of the authority to a minimum compatible with effective regulation. We shall be able to apply checks and balances on its expenditure. The authority's financial affairs will be monitored and scrutinised closely. It will be required to draw up annual statements of accounts which will be examined and certified by the Comptroller and Auditor General. Copies of all statements of accounts and reports by the Comptroller and Auditor General will be laid before both Houses of Parliament and published. They will be available for purchase by the general public.
Most occupational pension schemes are tax exempt approved and members of those schemes enjoy the benefits resulting from a number of special tax reliefs. Members' and employers' contributions are tax deductible. Income and gains from investments are exempt from income and capital gains tax and lump sum retirement benefits are free of tax. Other taxpayers who are not able to join such schemes are not so privileged. As both my noble friends have said, it would be wrong to expect the general taxpayer to foot the bill for the regulation of pension schemes. In effect, they would be paying twice: once for the tax reliefs enjoyed by pension schemes and again for the privilege of having those schemes policed.
We consider that it is right that the costs of the authority should fall on those who establish and run pension schemes because they are responsible for ensuring that their schemes are run properly. It is in their interests to promote members' confidence in them. Employers are able to set up pension schemes within a beneficial tax regime. Each year employers pay well over £18 billion of tax deductible contributions to occupational pension schemes. The current estimated total running cost of the authority is about £10 million per year. We do not consider that to be too great a burden.
While pension schemes are not established to make profits for their sponsoring employers (as the noble Baroness, Lady Hollis, pointed out) that is not to say that employers do not benefit from setting them up. Employers principally establish pension schemes as a means to recruit and retain staff. They are a vital element in the remuneration package, enabling
572
employers to maintain a competitive edge in recruiting the most able candidates. Clearly a company has a direct interest in the calibre of its staff and the contribution that they make to its profitability. Therefore, employers have a direct interest in any measure which increases the confidence of their employees in occupational pensions. Recovering the costs of the authority through the levy would merely be an extension of the existing principles of the pension ombudsman, the Pension Registry and the grant to the Occupational Pensions Advisory Service.
The levy will cover the full running costs and the start-up costs of the new authority. I wholly reject the argument that it will compromise the authority's independence. The authority's board will be appointed by the Secretary of State and, through him, will be fully accountable to Parliament. Its functions and its obligations are set out in the legislation before us today. As now, the rate of levy will be set by the Secretary of State and will be prescribed in regulations. That will allow the levy structure to be amended in the light of experience and to allow rates to take account of changes in costs over time.
The principle that the cost of the authority should be met by those who establish and run pension schemes is important. I very much hope that after listening to the arguments, the noble Baroness will withdraw the amendment. But if she feels that she cannot do that and wishes to continue to impose another £10 million of expenditure on the ordinary taxpayer, I hope that my noble friends will join with me in rejecting the amendment.
Baroness Hollis of Heigham: My Lords, I was disappointed by the Minister's reply because we have not progressed since Committee stage. Two basic arguments have been put forward. The noble Lords, Lord Dean and Lord Clark, have said that other analogous industries pay for their own regulation. I had hoped that I had addressed that point by indicating that, for example, the PIA regulates a profit-making industry. I have no problem with those bodies that are seeking to make a profit having to pay for their own regulation. It is precisely because the provision of pensions is not a profit-making activity but a non-profit making trust that it seems unreasonable, first, to burden the industry with additional costs and, secondly, to treat it in the same way as though it is seeking to make a profit.
The substantive issue that has emerged from all the remarks made is whether there is a wider interest in the regulation of pensions sufficient that the cost of it should be borne not only by those who hold the pensions but by all of us. That is the issue.
That depends on what one believes that job of regulation to be. The Minister said in a very revealing comment that he did not think that it was reasonable to ask the general taxpayer "to pay twice over"; namely, once for the tax privileges afforded by the Inland Revenue and secondly for the policing function. The reason that we are moving the amendment is precisely so that the general taxpayers' investment in the first of those—that is, the Inland Revenue privileges—is protected and policed properly, which requires the second expenditure. In other words, if I, as a taxpayer,

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invest and if I, as a taxpayer, wish to ensure that my investment is safeguarded properly, I expect to pay for that policing as a taxpayer, not as a private investor.
Therefore, in my judgment the very argument which the Minister used—that because the taxpayer is paying for the Inland Revenue privileges he should not therefore pay for the policing—should be turned on its head. If one invests as a taxpayer, one has a need, a right, a duty and a responsibility to ensure that that investment is protected. That means that one must pay also for the policing.
One either accepts the argument or one does not but I believe that it applies to every other area of public life of which I am aware. For example, both central government and local authorities make grants for repairs and maintenance of listed buildings from taxpayers' money. Inspectors from both English Heritage, on the one hand, and from the local authority's conservation department, on the other, then check that the money has been spent properly. That checking is not done and paid for by the recipient of the grant. It is paid for by the taxpayer. Why is that? It is because, in the first place, taxpayers' money has been used to maintain historic buildings as it is public policy that that should be done. We then pay to ensure that our money has been well spent. That applies in this case, but even more so to the field of pensions. If we have a public policy interest in the security and independence of our pensions, we must all expect to pay for that. I wish to seek the opinion of the House.
3.59 p.m.
On Question, Whether the said amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 95; Not-Contents, 135.

Division No. 2

CONTENTS

Acton, L.

Falkland, V.

Addington, L

Freyberg, L

Allen of Abbeydale, L

Gallacher, L

Allenby of Megiddo, V.

Gladwin of Clee, L

Archer of Sandwell, L

Gladwyn, L

Ashley of Stoke, L.

Gould of Potternewton, B.[Teller]

Avebury, L

Bancroft, L

Graham of Edmonton, L[Teller]

Barnett, L

Beaumont of Whitley, L

Gregson, L

Birk, B.

Grey, E.

Blackstone, B.

Halsbury, E.

Bruce of Donington, L

Hamwee, B.

Carmichael of Kelvingrove, L

Harris of Greenwich, L

Cledwyn of Penrhos, L

Haskel, L

Clinton-Davis, L

Henniker, L.

Cocks of Hartcliffe, L.

Hilton of Eggardon, B.

David, B.

Hollis of Heigham, B.

Dean of Beswick, L

Hooson, L.

Dean of Thornton-le-Fylde, B.

Irvine of Lairg, L

Desai, L

Jay of Paddington, B.

Donaldson of Kingsbridge, L.

Jeger, B.

Dormand of Essington, L.

Jenkins of Hillhead, L.

Eatwell, L

Jenkins of Putney, L.

Elis-Thomas, L

Judd, L.

Ennals, L.

Kilbracken, L.

Ezra, L

Kirkhill, L.

Falkender, B.

Lovell-Davis, L.

574

Mason of Barnsley, L

Seear, B.

Mayhew, L

Sefton of Garston, L.

McGregor of Durris, L.

Serota, B.

McIntosh of Haringey, L.

Shaughnessy, L

McNair, L.

Shepherd, L

Merlyn-Rees, L.

Simon, V.

Meston, L.

Stallard, L

Molloy, L

Stedman, B.

Monkswell, L

Stoddart of Swindon, L.

Morris of Castle Morris, L

Strabolgi, L

Mulley, L.

Nelson, E.

Taylor of Gryfe, L

Nicol, B.

Tenby, V.

Ogmore, L.

Thomas of Walliswood, B.

Peston, L.

Tope, L

Phillips of Ellesmere, L.

Tordoff, L

Porter of Luddenham, L.

Turner of Camden, B.

Rodgers of Quarry Bank, L.

Wallace of Coslany, L

Russell, E.

White, B.

Sainsbury, L

Wigoder, L

Williams of Elvel, L

Williams of Mostyn, L.

NON-CONTENTS

Aberdare, L.

Hailsham of Saint Marylebone, L.

Addison, V.

Harding of Petherton, L.

Ailsa, M.

Harmar-Nicholls, L

Aldington, L.

Hayhoe, L.

Alexander of Tunis, E.

Hemphill, L

Ashbourne, L.

Henley, L.

Astor of Hever, L

Hertford, M.

Astor, V.

Hives, L.

Belstead, L.

Hogg, B.

Birdwood, L.

Holderness, L.

Blake, L.

Hood, V.

Blatch, B.

Hothfield, L.

Blyth, L.

Howe, E.

Boardman, L.

Inglewood, L [Teller.]

Borthwick, L.

Jenkin of Boding, L

Boyd-Carpenter, L

Johnston of Rockport, L.

Brabazon of Tara, L.

Kimball, L

Braine of Wheatley, L.

Knollys, V.

Brougham and Vaux, L.

Lauderdale, E.

Buckinghamshire, E.

Lindsay, E

Butterworth, L.

Lindsey and Abingdon, E

Cadman, L.

Long, V.

Caithness, E.

Lucas, L.

Campbell of Croy, L

Lyell, L.

Carnegy of Lour, B.

McConnell, L

Cawley, L.

Mackay of Ardbrecknish, L.

Carnock, L

Mackay of Clashfern, [Lord Chancellor.]

Chesham, L.

Clanwilliam,

Manton, L.

Clark of Kempston, L.

Merrivale, L.

Colnbrook, L.

Mersey, V.

Constantine of Stanmore, L.

Miller of Hendon, B.

Cox, B.

Milne, L.

Craigavon, V.

Milverton, L

Cranborne, V. [Lord Privy Seal.]

Monson, L

Crathorne, L.

Monteagle of Brandon, L.

Mountevans, L.

Cumberlege, B.

Mowbray and Stourton, L.

Davidson, V.

Moyne, L

De Freyne, L

Munster, E.

Dean of Harptree, L

Munster, E.

Denham, L.

Murton of Lindisfarne, L.

Dixon-Smith, L.

Newall, L.

Elles, B.

Norfolk, D.

Elton, L.

Northesk, E.

Faithfull, B.

O'Cathain, B.

Ferrers, E.

Oppenheim-Barnes, B.

Fraser of Kilmorack, L.

Orr-Ewing, L.

Gainford, L.

Park of Monmouth, B.

Gardner of Parkes, B.

Pender, L.

Geddes, L.

Peyton of Yeovil, L.

Goschen, V.

Gowrie, E.

Pike, B.

Gray of Contin, L.

Plan of Writtle, B.

Gridley, L.

Prior, L.

Rankeillour, L.

575

Rawlings, B.

Strathcona and Mount Royal, L.

Renwick, L.

Sudeley, L.

Rodger of Earlsferry, L.

Swansea, L.

Saltoun of Abernethy, Ly.

Swinfen, L.

Seccombe, B.

Teviot, L.

Selborne, E.

Teynham, L.

Shaw of Northstead, L

Thomas of Gwydir, L.

Simon of Glaisdale, L.

Trumpington, B.

Skelmersdale, L.

Vaux of Harrowden, L.

Slim, V.

Wade of Chorlton, L.

St. Davids, V.

Whitelaw, V.

Strange, B.

Wise, L.

Strathcarron, L.

Wynford, L.

Strathclyde, L. [Teller.]

Young, B.

Resolved in the negative and amendment disagreed to accordingly.
4.6 p.m.
Clause 3 [Removal or suspension of trustees]:
Lord Lucas Lord Lucas moved Amendment No. 3:
Page 2, line 18, leave out from ("order") to ("in") in line 19 and insert ("prohibit a person from being a trustee of a particular trust scheme in any of the following circumstances.
(2) The circumstances are—
(a) that the Authority are satisfied that while being a trustee of the scheme the person has been").
The noble Lord said: My Lords, in moving the amendment I shall speak also to Amendments Nos. 4, 6 to 14, 24, 25, 50, 51, 53, 60, 62, 76, 78, 82, 85, 92, 95, 100, 115, 125, 128, 134, 164, 166, 168, 172 and 173.
Lord Hailsham of Saint Marylebone: Well done!
Baroness Hollis of Heigham: Speech!
Lord Lucas: My Lords, we are dealing with a highly technical and, in its consequences, potentially wide-ranging Bill. We have maintained, and continue to maintain, an open mind on many of its aspects. Since its publication, we have continued to consult with interested organisations. We have listened carefully to what has been said in this House, and we have continued to conduct our own reviews of its provisions. The amendments are the first fruits of those reviews—a few additional improvements to the Bill.
The amendments relate to the authority's power to take action against trustees of occupational pension schemes. The integrity and diligence of the trustee is crucial to the security of pension rights. If it is established that, while acting as a trustee of a scheme, such a person puts that security at risk by failing to comply with his statutory duties, then the authority must have the power to prevent him from acting as a trustee of that scheme either now or in the future.
Amendment No. 3 replaces the authority's power to remove trustees with a power to prohibit them, thus enabling it to take action against those who are no longer serving as a trustee as well as those who are. That removes the loophole in the clause as currently drafted which would have allowed trustees to circumvent action being taken against them by the authority by removing themselves first. As a consequence of the amendment, it is necessary to delete references to the authority's power to remove trustees and replace them with references to the authority's power to prohibit trustees. Amendments Nos. 7, 8, 9,
576
11, 12, 13, 14, 24, 25, 50, 51, 53, 60, 62, 76, 78, 82, 85, 92, 95, 100, 115, 125, 128, 134, 164, 166, 168, 172 and 173 do just that.
Lord Hailsham of Saint Marylebone: Well said!
Baroness Hollis of Heigham: My Lords, it is getting better.
Lord Lucas: Yes, my Lords.
Amendment No. 4 adds to the list of circumstances in which the authority may prohibit a person from being a trustee of a particular occupational pension scheme. It allows the authority to prohibit a company or Scottish partnership from being a trustee of a particular scheme where any director of the company, or partner of the partnership, is himself prohibited from being a trustee of the scheme. This is necessary to prevent an individual's prohibition being circumvented by his establishing a company or Scottish partnership.
It also allows the authority to prohibit a person from being a trustee of a particular scheme where that person is a director of a company which is itself prohibited from acting as a trustee by the authority. The authority may only do this where it is satisfied that the company was prohibited because of the consent, connivance or neglect of the particular director. This ensures that a director whose actions contributed to his company being prohibited can himself be prohibited from acting as a trustee. Without this provision, such directors could continue to hide behind the corporate veil and could simply set up a new trustee company and continue to act as before.
The amendment allows a list of circumstances in which the authority may prohibit a trustee to be extended through regulations. Rather than give the authority a wide power to prohibit individuals from being scheme trustees, on the face of the Bill we have sought to specify all the situations where we believe this power should be exercised. The flexibility to add to the list through regulation is needed in case, in the light of experience, other situations arise where it would be desirable for the authority to be able to prohibit an individual from being a scheme trustee.s
The remainder of Amendment No. 4 is concerned with the authority's power to suspend trustees, clarifying and adding to the provisions that are already contained in the Bill in Clause 3. It extends the suspension provisions to allow the authority to suspend trustees who are facing legal action that could lead to them being automatically disqualified in Clause 24. It also allows such a suspension to remain in effect until the proceedings in question are concluded. This is necessary because court action—for example, in respect of a criminal breach—may take longer than the two year limit on the length of suspension that would otherwise apply.
The new subsection (3B) sets down the effects that a suspension order may have, and new subsection (3C) provides that a suspension order may be made in respect of proceedings, petitions or applications made before or after the coming into force of subsection (3). Subsection (4) provides that the authority may, on the application of a person who has been suspended, revoke the suspension order either generally or in relation to a

577
particular scheme or class of schemes. This addresses anxieties raised at the Committee stage by the noble Baroness, Lady Hollis, the noble Lord, Lord Monkswell, and my noble friend Lord Buckinghamshire, about the need to enable a person who has been suspended by the authority to apply for his suspension to be annulled and for him to be exonerated. It brings the process in line with that for trustees who have been prohibited or disqualified.
Amendment No. 6 is consequential on Amendments Nos. 3 and 4. It splits the amended Clause 3 into two, creating a first clause dealing with prohibition orders and a second dealing with suspension orders. The final amendment in this group, Amendment No. 10, further clarifies the procedure the authority must follow when suspending a trustee. It requires the authority to give immediate notice to the person it is suspending. It also requires the authority to give notice of the fact to the other trustees of any scheme affected by the suspension, except where a trustee cannot be found or has no known address in the United Kingdom. The authority's powers to suspend and prohibit trustees are essential elements of the new regulatory framework. They will allow the authority to protect the interests of scheme members by ensuring that trustees who fail in their statutory responsibilities are prevented from acting as scheme trustees. I beg to move.
4.15 p.m.
Baroness Hollis of Heigham: My Lords, this array of amendments—Amendment No. 3 and all the others, whichever they are—invents two new animals: a prohibition order and a suspension order, in place of the original powers to remove or suspend. I do not think we have any particular objection to that at all. However, if I may trouble your Lordships, I wish to raise a general point. We are now at Report stage. We have 171 amendments down for discussion today, 80 of which—almost half—have come from the Government at Report stage.
Noble Lords: Oh!
Baroness Hollis of Heigham: My Lords, I defer to the noble Lord if he thinks the figure is 79. I shall not press the point. But, more substantially, what is actually going on? What is not in this Bill covered by regulation, which is a power unspecified in the future, is being covered by redrafting as we go on. It looks as if this Bill is being redrafted on the hoof as it goes through. Every time it is circulated to a department, new comments appear to emerge and the Bill is amended.
Why was not all of this done before this Bill was brought to your Lordships' House? Why are we having Bills that are so sloppily drafted that whatever is not covered by regulation has to be amended in the course of the passage of the Bill? I believe that is unbelievably sloppy; I think it is improper; and I think it takes up the time of your Lordships which should be more properly spent on the Bill. In the Government's haste to get the Bill on the Floor of the House they have brought to us something which is so poorly drafted that we shall have to spend half of the hours of this evening trying to take
578
through technical amendments which we should not need to be discussing because they should have been cleared before they arrived in the House. I have to say I think this is not an appropriate way for the department to behave.
Lord Monkswell: My Lords, when I first looked through the amendments that we have for discussion today, I must admit that I had to pause at this amendment and the subsequent amendments that seem to be allied to it. I say "seem to be allied" because it was not too difficult to determine that some amendments were allied to this one but until we had the Marshalled List which is only printed on the day of the deliberations ordinary Members of the House had no mechanism to determine which amendments were related to each other.
I am not sure whether it is the way in which the Bill was drafted in the first place, or whether it is the way the Government are bringing forward amendments, but the net result is that we are running into the dangerous procedural situation where the House is being asked to reach decisions on rather complicated matters which—dare I say it?—are almost inevitably not completely explained by Ministers at the point of deliberation.
We have apparently within our procedures and rules no mechanism currently of forewarning Members of the implications of the decisions that they are expected to take. It would seem to me there are two ways in which we can deal with this. One is for us to say to the Government, "Do not bring Bills to the House in this state. Make sure they are properly drafted to enable the House to consider those Bills in a sensible way". One can hope the Bills would be well thought out before they were presented to the House.
The second option is to ask the Procedure Committee to have another look at our procedures and try to work out some scheme whereby when there is significant amendment to Bills —as in this situation where we are faced with a whole raft of amendments—it will come forward with recommendations which will enable all Members of your Lordships' House to arrive at a situation where the decisions they have to take can be made in the light of reasonable information. I leave that matter in the Government's hands to think about. Our own Front Bench may have to think about it and discussions would have to go forward through the usual channels. That is, as it were, the procedural point. I thank the Minister for trying to explain, as best he could, the implications of these amendments. In practice, I suspect the Government will push these amendments and effectively write them on the face of the Bill. I do not think the Opposition will be in a position to be able to say that that is not necessarily a good thing to do.
We have to reserve our position with regard to the implications of the amendments for Third Reading. One aspect of the amendments that the Minister mentioned related to a concern that I raised in Committee. I shall obviously have to consider the implications in terms of what the amended Bill will contain.
Finally, the Minister made great play of the powers to suspend or prohibit an individual trustee or a trustee who was a director of a company which was itself a trustee. He referred to the ability to identify an individual who had transgressed and to ensure that that

579
individual was prohibited from serving as a trustee in the future. Will that apply on an individual basis to a government Minister acting in the capacity of a trustee or the equivalent of a trustee? I raise that question in the light of an amendment which the Government have put down and which we shall discuss later. It will be interesting to know whether the amendments will ensure that an individual government Minister would be subject to exactly the same criteria as an individual trustee.
That is as much as I can say given the very complicated way in which the amendments have been tabled.
Lord Boyd-Carpenter: My Lords, I hope that my noble friend the Minister will have an adequate answer to the, on the face of it, not unreasonable criticism offered by the noble Baroness on the Front Bench opposite. As she reminded us, we are now at the Report stage of a Bill which has already taken a good deal of time in this House. It is a little unfortunate that it is necessary at this late stage to introduce such an enormous number of amendments. I express no opinion on their merits: I am sure that on the whole they are sensible improvements to the Bill, But procedurally it is unfortunate that it should be necessary to make these amendments at this comparatively late stage of the progress of a major Bill which has been before Parliament for a considerable time.
I am not without sympathy for the Minister. At one time I had responsibility for introducing several measures on this subject. I can tell your Lordships that whatever else those measures may have been they were a great deal shorter than this Bill and it was not necessary to amend them to anything like the same extent.
Although I have an open mind on the merits of the matter, I believe that the House is entitled to some explanation from the Government as to why it was necessary to introduce this enormous number of amendments at this very late stage.
Lord Lucas: My Lords, to deal with the questions raised in reverse order, my noble friend Lord Boyd-Carpenter asked why there were so many amendments. This Bill has not been in the public domain for very long. It started in this House. We have received a very large number of submissions and suggestions since the Bill was published. As I said in my opening remarks, we retain an open mind and we have looked again at many provisions of the Bill in the light of what has been said. Much of it is technical rather than controversial. Therefore, it has not been a matter of principle with us to hold to the original decisions. Rather, we have looked again at what we originally decided to see whether what was suggested was a better way of doing things.
As regards the last question of the noble Lord, Lord Monkswell, yes, if a Minister is acting in a personal capacity as a trustee he will be subject to the same arrangements as any other trustee. If that does not answer the noble Lord's question in full perhaps he will write to me, as we shall consider his earlier remarks and take into account the many interesting things that he said. I do not believe that it would be appropriate for me to reply to them now.
580
So far as concerns the remarks of the noble Baroness, Lady Hollis, if we give way on amendments we are said to be sloppy and if we do not we are said to be intransigent. We are being extremely accommodating on many parts of this Bill. As I said in the course of my remarks, this group of amendments results from something that the noble Baroness herself said in Committee. We believe that it is important to get this Bill in as good a state as possible. One of the principle functions of this House is as a revising chamber. We believe that the progress of this Bill is a very good example of how well it works as it is presently constituted.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 4:
Page 2, leave out lines 26 to 33 and insert:
("(b) that the Authority are satisfied that, while being a trustee of the scheme, this section has applied to the person by virtue of any other provision of this Part,
(c) that the person is a company and any director of the company is prohibited under this section from being a trustee of the scheme,
(d) that the person is a Scottish partnership and any of the partners is prohibited under this section from being a trustee of the scheme, or
(e) that the person is a director of a company which, by reason of circumstances falling with paragraph (a) or (b), is prohibited under this section from being a trustee of the scheme and the Authority are satisfied that the acts or defaults giving rise to those circumstances were committed with the consent or connivance of, or attributable to any neglect on the part of, the director;
or any other prescribed circumstances.
(2A) The making of an order under subsection (1) against a person who is a trustee of the scheme in question has the effect of removing him.
(2B) The Authority may, on the application of any person against whom an order under subsection (1) is in force, revoke the order, but a revocation made at any time cannot affect anything done before that time.
(3) The Authority may by order suspend a trustee of a trust scheme—

(a) pending consideration being given to the making of an order against him under subsection (1),

(b) where proceedings have been instituted against him for an offence involving dishonesty or deception and have not been concluded,

(c) where a petition has been presented to the court for an order adjudging him bankrupt, or for the sequestration of his estate, and proceedings on the petition have not been concluded,

(d) where the trustee is a company, if a petition for the winding up of the company has been presented to the court and proceedings on the petition have not been concluded, or

(e) where an application has been made to the court for a disqualification order against him under the Company Directors Disqualification Act 1986 and proceedings on the application have not been concluded.

(3A) An order under subsection (3)—

(a) if made by virtue of paragraph (a), has effect for an initial period not exceeding twelve months, and

(b) in any other case, has effect until the proceedings in question are concluded;

but the Authority may by order extend the initial period referred to in paragraph (a) for a further period of twelve months, and any order suspending a person under subsection (3) ceases to have effect if an order is made against that person under subsection (1).
(3B) An order under subsection (3) has the effect of prohibiting the person suspended, during the period of his suspension, from exercising any functions as trustee of any trust scheme to which the order applies; and the order may apply to a particular trust scheme, a particular class of trust schemes or trust schemes in general.
(3C) An order under subsection (3) may be made on one of the grounds in paragraphs (b) to (e) whether or not the proceedings were instituted, petition presented or application made (as the case may be) before or after the coming into force of that subsection.
(4) The Authority may, on the application of any person suspended under subsection (3), revoke the order, either generally or in relation to a particular scheme or a particular class of schemes; but a revocation made at any time cannot affect anything done before that time.").
On Question, amendment agreed to.
The Deputy Speaker (Lord Murton of Lindisfarne): My Lords, as Amendment No. 4 has been agreed to I am unable to call Amendment No. 5 in the name of the noble Baroness, Lady Hollis of Heigham, because of pre-emption.
[Amendment No. 5 not moved.]
Lord Lucas Lord Lucas moved Amendment No. 6:
Divide Clause 3 into two clauses, the first (Prohibition orders) to consist of subsections (1) to (2B) and the second (Suspension orders) to consist of subsections (3) to (5).
On Question, amendment agreed to.
Clause 4 [Removal of trustees: notices]:
Lord Lucas Lord Lucas moved Amendments Nos. 7 to 10:
Page 2, line 39, leave out from ("section") to ("without") in line 40 and insert ("(Prohibition orders)against a person").
Page 3, line 4, leave out from ("section") to ("the") in line 5 and insert ("(Prohibition orders) against a person").
Page 3, line 6, leave out from first ("the") to ("cannot") and insert ("trustees of the scheme, except that person (if he is a trustee) and any trustee who").
Page 3, line 7, at end insert:
("() Where the Authority make an order under section (Suspension orders) against a person, they must—

(a) immediately give notice of that fact to that person, and

(b) as soon as reasonably practicable, give notice of that fact to the other trustees of any trust scheme to which the order applies, except any trustee who cannot be found or has no known address in the United Kingdom.").

On Question, amendments agreed to.
Clause 5 [Removal or suspension of trustees: consequences]:
Lord Lucas Lord Lucas moved Amendments Nos. 11 to 13:
Page 3, line 12, leave out ("removed or suspended under section 3") and insert ("prohibited from being a trustee of the scheme under section (Prohibition orders) or suspended in relation to the scheme under section (Suspension orders)").
Page 3, line 20, leave out from ("person") to ("or") in line 22 and insert ("purporting to act as trustee of a trust scheme while prohibited from being a trustee of the scheme under section (Prohibition orders) or suspended in relation to the scheme under section (Suspension orders) are not invalid merely because of that prohibition").
Page 3, line 23, leave out ("section 3") and insert ("sections (Prohibition orders), (Suspension orders)").
On Question, amendments agreed to.
Clause 6 [Appointment of trustees]:
Lord Lucas Lord Lucas moved Amendment No. 14:
Page 3, line 26, leave out from ("Where") to ("or") in line 27 and insert ("a trustee of a trust scheme is removed by an order under section (Prohibition orders)").
On Question, amendment agreed to.
The Earl of Buckinghamshire The Earl of Buckinghamshire moved Amendment No. 15:
Page 4, line 1, after ("paid") insert ("reasonable").
The noble Earl said: My Lords, I remind your Lordships that I moved this amendment in Committee. I believe that it is necessary to insert the word "reasonable" in order to have some control over the fees that can be charged by a trustee imposed by OPRA. During the Committee stage my noble friend the Minister said that he would look at the way in which charges for trustees imposed by OPRA were made. I shall be interested to hear his comments having had an opportunity to think about the issue. I beg to move.
Lord Mackay of Ardbrecknish: My Lords, I have considered carefully the representations made by my noble friend and by the noble Lords, Lord Haskel and Lord Monkswell, following the earlier debate on a similar amendment in Committee. However, I still believe that the amendment is unnecessary. Perhaps I may explain to your Lordships why that is the case.
During the earlier debate on the Bill, and in another context, my noble friend Lord Renton highlighted very clearly the difficulty with the word "reasonable". He said that although the word "reasonable" was attractive it gives rise to a great deal of argument in the courts. Where the authority appoints a trustee to a scheme we do not wish to provide a means by which someone can stall the appointment by engaging in time-wasting court action over whether the fees to be charged are reasonable.
It is important that the authority's power to appoint trustees is sufficiently flexible to enable it to set out the terms under which the appointment is made. We accept that, where possible, the appointee should not be a professional trustee. But there will be situations where, in order to secure the interests of scheme members, it will be necessary to appoint professional trustees. This will involve a cost which it is appropriate for the scheme to have to bear. But at the outset, the authority will agree the terms of the appointment including the level of fees to be charged. Scheme members, employers or other trustees will be free to bring to the authority's attention any concerns they have that the terms of the appointment are not being adhered to. If the appointee has abused his position, for example by charging excessive fees, the authority has more than adequate powers to remove the professional trustee; and it would be unlikely to use the services of such a person in the future.
I appreciate the problem to which my noble friend draws our attention. However, I hope that he will agree with me that there is already provision in the Bill to prevent the problem about which he is concerned from arising; and that elsewhere in the Bill the authority has

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appropriate powers to deal with the issue that he raised. After hearing my explanation, I hope that my noble friend will be able to withdraw the amendment.
4.30 p.m.
The Earl of Buckinghamshire: My Lords, I am extremely grateful to the Minister for his full reply. It is extremely important that fees in this area are controlled. Much that he said has gone a long way to reassure me on the issue. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 9 [Civil penalties]:
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 16:
Page 4, line 27, leave out ("a prescribed amount") and insert ("0,000").
The noble Baroness said: My Lords, in moving Amendment No. 16, I speak also to Amendments Nos. 18 and 230. I had thought that I would speak also to Amendments Nos. 177 and 229 but there appears some confusion about the grouping. That is a pity because the amendments would have grouped well together.
I use Amendment No. 16 to raise yet again—although I promise your Lordships probably not again at Third Reading —the problem of regulations in the Bill. While the Minister's amendment would have been appropriate since he goes some way to meet some of the concerns as reflected in the scrutiny committee's report, one of the real worries that the Bill raises for industry is the degree to which vital matters are not set out on the face of Bill but are left to regulation—some 200 regulations. No one doubts that much of the detail or insertion of financial figures—they are essential to a Pensions Bill which might need up-rating or adjustment in the future—is best left to regulation. It is essential that the House is not troubled by a continuous repeat of primary legislation to deal with such technical and not significant issues.
But that is not what we are talking about. At numerous points in the Bill, unnecessarily wide—and in our view often dangerously wide—powers are given to the Secretary of State. What powers are we talking about? Clause 6, for example, allows OPRA to appoint a trustee in prescribed circumstances which could have considerable implications for the balance of the trustee board. Clause 9, to which Amendment No. 16 relates, allows authority to impose a penalty whose limit will be determined by regulation. Is that wise, my Lords? Hence we have an amendment which inserts the figure of £5,000.
I did not propose to trouble your Lordships with each and every point relating to clauses. That was the appropriate task at Committee stage. However, Clause 16 enables the Secretary of State to alter at his discretion any or all of the trustee member relationships and arrangements which have been designated by the Bill. Clause 65 allows the Government to modify significantly a public pensions scheme. That is undertaken by the Minister for Social Security by the negative procedure. If it is achieved by anyone else, it is provided for by the affirmative procedure. As the
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scrutiny committee reminded us, whether your Lordships enjoy a procedure by affirmative rather than negative resolution should not depend which Minister handles the issue.
Clauses 106 and 134 allow regulations by the Secretary of State to create a criminal offence by negative procedure. As I understand it, the amendments that we shall deal with tomorrow at least allow that issue to be brought within the framework of an affirmative procedure. That is why those amendments should have been grouped with the amendments that we now consider. Such a procedure helps a little. However, as your Lordships cannot amend or reject the matter, noble Lords have no power effectively to scrutinise the creation of criminal procedure by regulation. The House of Commons can do that, and we have been marginalised. I believe that will matter to your Lordships.
Why are we worried? There are two points. The first may be better made for me by the noble and learned Lord, Lord Simon: that so many and such extensive powers by regulation are given to the Secretary of State without the direct and active scrutiny of both Houses of Parliament. We do not suggest that there is not a proper role for regulation. There clearly is in such a technical Bill. But we believe that such power goes too far in field after field and vests too much in Secretaries of State who may not always be as well intentioned, and I have no doubt as well informed, as is the present Minister.
The second consideration is practical rather than constitutional. The practitioners in the industry—the pension fund managers, the advisers, scheme members, employers, trustees and the like—do not know what wide swathes of the Bill may mean or may come to mean. There is the Bill that we debate and there is a second Bill in the shadows, or in the back pocket of the Secretary of State, which will interpret, cut out, add to or modify the Bill as he sees fit in ways in which the industry cannot forecast, or with consequences that it cannot anticipate. When that will occur, industry does not know. When so much is left to regulation, no one will know what the Secretary of State can do, will do, ought to do, or is likely to do, as the case may be. Those practitioners will not know therefore how those at the sharp end of the business will manage it.
The scrutiny committee shared our constitutional concerns; and to some extent (but only to some extent) those may be met by the amendments which will be moved tomorrow. However, a second set of concerns is practical: the industry will not know where it stands if so much is left to the discretionary power of the Secretary of State and is not available for our scrutiny today. Amendment No. 16 is the only amendment that I ask your Lordships to consider today. But I believe that the Bill leaves far too wide powers to the Secretary of State and, together with some rather unfortunate sloppy drafting, produces for all of us an unfortunate situation. I beg to move.
Baroness Seear: My Lords, I support the amendment on the general principle about which we have complained again and again in your Lordships House: that the Government legislate more and more by

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regulation, and that that is constitutionally unacceptable. Of course a number of details which change as time goes on have to be provided for by regulation. We do not cavil about that. But the fact that the Government can insert a regulation into the Bill creating a possible criminal offence is totally unacceptable constitutionally.
Lord Boyd-Carpenter: My Lords, to substitute for a prescribed amount in two of the amendments the specific sum of £5,000 introduces an unnecessary rigidity into the Bill. It also does not take account of the fact that the value of money may change. Indeed, if we have a Labour Government the value of money will deteriorate very substantially indeed.
Baroness Hollis of Heigham: My Lords, there may be fewer offences.
Lord Boyd-Carpenter: My Lords, the value will go down enormously with the inflation which a Labour Government always produce. Therefore I believe it wiser to leave the amounts of the penalties to be prescribed in the circumstances of the time, taking into account the then value of money. I hope therefore that my noble friend will resist the amendment.
Lord Simon of Glaisdale: My Lords, I presume to agree with what the noble Baroness said on the general constitutional position. I am sure that the noble Lord the Minister cannot avoid knowing that we regard his department with the utmost suspicion when it comes to constitutional matters. That is, I am afraid, inevitable after the Child Support Act. Nor has it been mitigated by the modifications of that Act, including those that are now proposed in the Bill that is before the other place.
This amendment gives the Minister an opportunity to put things generally right. The Scrutiny Committee has been extremely indulgent and discriminating in its comments on the Bill. It has passed a great many matters as being of the nature of Henry VIII clauses but nevertheless being suitably dealt with by negative resolution. There are, however, one or two issues on which the Scrutiny Committee has drawn your Lordships' attention specifically to matters. I hope that when the noble Lord replies, he will say without any question that where the Scrutiny Committee has so signified a view, it will be unquestionably accepted by the Government.
Lord Mackay of Ardbrecknish: My Lords, I do not think that I will even be tempted to follow the noble and learned Lord down the trail of the Child Support Agency. That is—
Baroness Hollis of Heigham: You will, you will!
Lord Mackay of Ardbrecknish: That is coming to us, if the noble Baroness opposite will be patient. I think the principle of,
"Sufficient unto the day is the evil thereof',
ought to be my maxim in this regard. Coming to the particular—
Baroness Seear: Is the noble Lord then, admitting that it is evil?
Lord Mackay of Ardbrecknish: My Lords, I was using a phrase. Of course it is not evil. I do not want to go down that path. It is perfectly proper that men should pay for their children; they ought not to burden other taxpayers. But that is another issue.
In Committee, we discussed the Scrutiny Committee's comments about Clauses 9, 105 and 64. Noble Lords will recall that I agreed to take away the points raised and consider them. Noble Lords will see, further down the Marshalled List, that we have indeed tabled Amendments Nos. 218 and 229. These will ensure that regulations containing criminal penalties made under the powers contained in Clause 105 of this Bill and Section 168(2) of the Pension Schemes Act 1993 will be subject to the affirmative resolution procedure as the Scrutiny Committee suggested. I am sure that noble Lords will welcome these amendments when we reach them.
Noble Lords: Hear, hear.
Lord Mackay of Ardbrecknish: We have not been able to bring forward amendments on the other two areas of concern at this stage. But I should like to reassure noble Lords that work is under way to bring forward suitable amendments at the earliest possible stage.
I am afraid that I cannot accept the amendments proposed here which seek to make changes to the powers to prescribe the level of civil penalty fines that can be imposed under Clause 9. Amendments Nos. 16 and 18 set down that the maximum civil penalty fine for a breach must not exceed £5,000. While we agree that there should be a ceiling placed upon the amount that can be imposed by way of a civil penalty fine for a breach of a particular duty, I do not believe that these amendments offer the best way to achieve that.
First, civil penalties under this clause will not only be imposed on individuals. Some of the obligations in the Bill will be placed on companies, and a maximum penalty of £5,000 might be considered too low to act as an effective deterrent to wrongdoing. The Financial Services Act regulators, for example, have imposed fines on companies in excess of £100,000.
Secondly, placing an amount on the face of the Bill means that it can be up-rated only by further primary legislation, as my noble friend Lord Boyd-Carpenter mentioned in his intervention. We consider that that would not provide the necessary flexibility for any amount to be changed—for example, to allow for periodic up-rating.
We are continuing to explore the options open to us for addressing the understandable concerns raised to ensure that we find the most appropriate solution which overcomes these difficulties. Amendment No. 230 contains one option, but we would prefer to give it a little more thought and come back with a fully developed solution.
Turning now to the final part of Amendment No. 230 concerning the powers to modify public service schemes, the noble Baroness, Lady Seear, moved an amendment in

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Committee which sought to ensure that orders made under Clause 64 would be regulations subject to the negative procedure. I promised to consider that. I am consulting the departments responsible for public service schemes, as I promised I would. Although we have not yet had time to prepare a suitable amendment, I want to reassure the House that it is our intention to make all the orders made under Clause 64 subject to scrutiny by the House by the negative resolution procedure.
Amendment No. 230 goes somewhat further than that. It seeks to make such regulations subject to the affirmative procedure. The Scrutiny Committee did not suggest that this was appropriate, and I do not believe it to be justified. Regulations made under this clause would not come into a category that the Brooke Committee suggested was appropriate for affirmative regulations, and I would not want to set such a precedent.
In view of what I have said about what is to come (I suspect later tomorrow) and my commitment to return either in this House or in the other place with amendments to deal with the other problems that I have outlined, I hope that the noble Baroness will withdraw her amendment.
4.45 p.m.
Baroness Hollis of Heigham: My Lords, I thank the Minister for his reply. It is a pity in a way that we could not have grouped all these amendments together. The Minister has indeed shown that he took the opinion of the House in Committee in respecting the problems that were identified by the Scrutiny Committee and is at least switching those powers by regulation which have a significant effect on the working of the schemes from a negative to an affirmative procedure. That is indeed to be welcomed.
This was a probing amendment. I take the Minister's arguments about company schemes. But I would point out that this was, again, one of those regulatory powers that the Scrutiny Committee suggested should not be handled by the negative, but by the affirmative, procedure. I think I am right in saying that the Minister did not accept the Scrutiny Committee's recommendation to that effect. If I am wrong, I should be grateful if he would correct me. He seems to be going down quite a lot of the paths outlined by the Scrutiny Committee—which is to be welcomed—but in respect of this particular one, which was also part of the Scrutiny Committee's recommendation for affirmative procedure, he appears not to be doing so. Is that a correct reading?
Lord Mackay of Ardbrecknish: My Lords, perhaps I can help the noble Baroness. We are currently looking to see what possible options are open to us to address the concerns of the House. That may be along the lines of the Scrutiny Committee, but it may be that other options are open to us. I should not like to go further than that.
Baroness Hollis of Heigham: My Lords, that is probably so far as we can go today. With the permission of the House, I should like to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Buckinghamshire The Earl of Buckinghamshire moved Amendment No. 17:
Page 4, line 27, at end insert:
("() No penalty may be imposed on a trustee under this section except in respect of the trustee's own personal act or default and then only if the Authority is of the opinion that—

(a) the trustee deliberately disregarded his duties or was reckless as to whether or not he was properly discharging his duties, or

(b) the trustee knew that he had contravened, or failed to comply with, relevant provisions of this Act or regulations and then deliberately, recklessly or negligently failed within a reasonable time either to remedy his act or default in an appropriate manner or to take other appropriate action.").

The noble Earl said: My Lords, at Second Reading I made a comment about the civil and criminal penalties that were being imposed on member trustees under this Bill. I believe that the noble Baroness, Lady Turner, made the same comments.
The Bill seeks to encourage, among other things, the appointment of member trustees. Yet at the same time, Clause 9 enables a regulatory authority to impose new penalties on trustees who contravene regulations. There are at least 17 references in the Bill to the application of Clause 9 to trustees who fail to observe the new requirements and subsection (2) enables any number of additional contraventions where Clause 9 applies to be created.
The problem with Clause 9, as drafted, is that it gives too much discretion and direction to the authority regarding the precise circumstances in which a penalty can be levied. It is likely that new trustees will be put off from coming forward to be trustees of pension schemes; and indeed existing trustees may well wish to resign when they understand the full import of what this Bill is doing to them.
The amendment that I put forward this afternoon seeks to do two things. First, it restricts the imposition of a penalty on a trustee to cases where he has acted or defaulted. In other words, no penalty can be levied against the trustee for acts or defaults on others. For example, if he voted against a particular incorrect course of action but was overruled by his fellow trustees, he would not be able to be penalised.
Secondly, the amendment would authorise the authority to impose a penalty only if they believe that the trustee was deliberately negligent, reckless, or knew that he had done wrong and then failed to put it right within a reasonable time. That will mean that an honest and conscientious trustee does not need to be concerned about being penalised the next morning for some inadvertent offence, committed by him or the scheme administrator, about which he knew nothing the night before.
The Minister may argue that, under the Bill as drafted, it is likely that the authority will act reasonably and not impose unfair penalties. Even if that turns out to be true, it will be some years before a pattern of changing penalties has been established. In the meantime, I have concerns about people coming forward to be trustees; or they may well hesitate about becoming or remaining a trustee.
I commend the amendment to the House as a way of removing uncertainty on what I regard as a very important matter and as facilitating the appointment of more member trustees. I beg to move.
Lord Mackay of Ardbrecknish: My Lords, if the new regulatory regime is to be effective, the authority must be able to impose sanctions upon people found in breach of their statutory obligations introduced by the Bill. My noble friend's amendment seeks to limit the circumstances under which the authority may impose civil penalty fines on trustees of pension schemes.
While I have some sympathy with the intention behind the amendment, I consider that it would be wrong to restrict the ability of the authority to impose civil penalties on trustees in the rigid way that his amendment does. The authority must be able to impose a penalty on a trustee responsible for a breach, even though the trustee may not have committed that breach deliberately, recklessly or negligently. It must be clear that any breach of duty can attract a penalty, so that there is an effective deterrent to wrongdoing. No doubt higher fines will be imposed on a person who has committed a breach deliberately or recklessly; but that does not mean that breaches resulting from other causes—for example, sloppy administration or something of that nature—should not attract a penalty, albeit perhaps at a lower level.
We acknowledge that most trustees do a good job. We do not want to discourage people from taking up trustee posts. Nevertheless, the fact that a penalty can be imposed for any breach of a duty makes it clear to them that they must comply with the responsibility. The authority will have the discretion to decide in every case whether a civil penalty should be imposed, at what level, subject to the maximum, and upon whom. In many cases the authority may decide that a civil penalty is not needed. However, in other cases, circumstances may warrant the imposition of a civil penalty, even though action has been taken to put things right—for example, where the breach was found to be especially severe, was one of a number of similar breaches or it was found to have taken place after there had been a warning by the authority to the trustees.
In fact, we have just discussed a number of amendments introduced by my noble friend Lord Lucas, designed to enable the authority to target its civil penalties appropriately. I hope that my noble friend will agree that they go a long way towards meeting his concerns. For example, they take account of the fact that a trustee board may be a corporate body or a Scottish partnership. In those cases it may be more appropriate for the authority to impose a fine on those individuals whose actions, omissions or neglect resulted in the body or partnership breaching an obligation, rather than on the whole body or partnership.
The amendments will also ensure that those who had no part to play in the wrongdoing and who may indeed have alerted the authority to the breach can be excluded from the punishment where appropriate. For example, in
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the case of a trust board set up as a company, it will not be necessary for every trustee to be held responsible for a breach.
I hope that my noble friend, especially when he looks at the amendments to which we agreed earlier, can see that there are checks and balances to ensure that the authority makes fair and reasonable decisions on the imposition of civil penalties. In the light of my explanation and the amendments moved earlier today by my noble friend Lord Lucas, I hope that my noble friend Lord Buckinghamshire will be able to withdraw his amendment.
The Earl of Buckinghamshire: My Lords, I thank my noble friend the Minister for his full reply. I have to admit that in regard to the points made by the noble Lord, Lord Lucas, I got somewhat lost in the numbers, probably along with other noble Lords. I shall read what he and the Minister said. What he has indicated goes a long way to meeting the concerns raised in my amendment. On that basis I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 18 not moved.]
Lord Lucas Lord Lucas moved Amendment No. 19:
Page 4, line 30, at end insert:
("(2A) Where

(a) apart from this subsection, a penalty under this section is recoverable from a body corporate or Scottish partnership by reason of any act or omission of the body or partnership as a trustee of a trust scheme, and

(b) the act or omission was done with the consent or connivance of, or is attributable to any neglect on the part of, any persons mentioned in subsection (2B),

this section applies to each of those persons who consented to or connived in the act or omission or to whose neglect the act or omission was attributable.
(2B) The persons referred to in subsection (2A) (b)—
(a) in relation to a body corporate, are—

(i) any director, manager, secretary, or other similar officer of the body, or a person purporting to act in any such capacity, and

(ii) where the affairs of a body corporate are managed by its members, any member in connection with his functions of management, and

(b) in relation to a Scottish partnership, are the partners.
(2C) Where the Authority requires any person to pay a penalty by virtue of subsection (2A), they may not also require the body corporate, or Scottish partnership, in question to pay a penalty in respect of the same act or omission.").
The noble Lord said: My Lords, in moving this amendment I shall speak at the same time to Amendments Nos. 215 and 217.
Amendments Nos. 19 and 215 insert additional subsections in Clauses 9 and 135 respectively. They provide for the authority to target the appropriate individual in any civil penalty fines that it may impose. That is similar to the way in which it may target criminal proceedings under Clause 104.
The amendments take account of the fact that a trustee board may be a corporate body or a Scottish partnership. In these cases it may be more appropriate for the authority to impose a fine not on the body or partnership but on those individuals whose actions,

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omission or neglect resulted in a body or partnership breaching an obligation. The individuals who may be so fined are limited. In the case of a corporate body, it would be its directors, manager, secretary, or other similar officer. In the case of a corporate body managed by its members, it would be any member with management functions. In the case of a Scottish partnership, it would be its partners.
The amendments provide that where the authority imposes a fine on an individual it may not impose a fine on the body or partnership in respect of the same breach. The amendments will ensure that those who had no part to play in the wrongdoing, and who may have alerted the authority to the breach, are excluded from punishment. For example, in the case of a trust board set up as a company, it will not be necessary for every trustee to be held responsible for a breach and tarred with the same brush as the wrongdoers.
In view of the references to a Scottish partnership, introduced into Clause 135 by Amendment No. 215, Amendment No. 217 adds a definition of the term to that clause. I beg to move.
On Question, amendment agreed to.
Clause 10 [Powers to wind up schemes]:
Lord Lucas Lord Lucas moved Amendment No. 20:
Page 4, line 34, at beginning insert ("Subject to subsection (6)").
The noble Lord said: My Lords, in moving this amendment I shall speak at the same time to Amendments Nos. 22, 23 and 150.
These amendments all relate to public service schemes. The first three relate to powers to wind up such schemes; the fourth concerns powers to modify them. In general, public service schemes will be subject to the same regulatory framework as private sector ones. They will also be subject to similar provisions on winding-up.
While it must be regarded as an action of last resort, it is important that the authority should be able to wind up a public service scheme in a situation where it is not in the interests of the generality of the scheme members that it should continue. In this way, the protection for members of public service pension schemes will be no different than for those of private pension schemes.
Similarly, the new clause after Clause 10 re-enacts Section 143 of the Pension Schemes Act 1993, which provides that the "appropriate authority" can wind up a scheme that is being replaced or is no longer needed where the scheme itself does not have an adequate wind-up power. That may occur, for example, where a new scheme needs to be set up to reflect a restructuring of working practices. Without such a provision, schemes without an adequate wind-up power may have to be maintained where there are no active members or even no members at all. In such situations, where alternative provision can be made for any remaining deferred or pensioner members, it makes administrative sense to allow the "appropriate authority" to wind up the scheme.
Turning to Amendment No. 150, Clause 150 already provides that orders under the Bill can contain such transitional, incidental and supplementary provisions as
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appear necessary to the authority making the order. Amendment No. 150 removes an unnecessary duplication of this provision in Clause 64.
These provisions do not mean that orders amending public service schemes will not be scrutinised. I should like to take this opportunity to reassure the House that it is our intention to make all orders made under this Bill for modification and wind up of public service pension schemes subject to scrutiny by the House by the negative resolution procedure rather than only some of them. This issue was raised by the noble Baroness, Lady Seear, at Committee stage and we agreed to take it away for consideration. I repeat that work is currently underway on suitable amendments to make this clear in the Bill. I beg to move.
5 p.m.
Lord McIntosh of Haringey: My Lords, we have a lot of sympathy with the objectives of this series of amendments. It is certainly right that public sector schemes should be treated appropriately and that there should not be any way of them continuing when they are no longer in anybody's interests.
To some extent the amendments improve the wording introduced at Committee stage. However, to my mind a major problem exists—and I am sorry to see that the noble and learned Lord, Lord Simon of Glaisdale, is not in his place. My noble friend Lady Hollis referred on a previous occasion to the views of the Delegated Powers Scrutiny Committee. That committee did not consider the Henry VIII provisions in relation to these amendments—in particular Amendments Nos. 22 and 23—nor indeed in relation to Clause 10 as presently drafted. In fact, the Henry VIII provisions were not there and the committee therefore could not see them.
When Amendment No. 44 was moved in Committee by the noble Lord, Lord Lucas, he made only the briefest reference to Amendment No. 50, which introduced the bulk of the text of the present Clause 10. Clause 10 reads,
"An order under this section may be made and complied with … in spite of any enactment or rule of law … or without regard to any such enactment, rule of law".
Those are Henry VIII procedures; they enable not only the Secretary of State, but also the occupational pensions authority to change the statute law.
In introducing the amendment, which was grouped with the principal Amendment No. 44, the noble Lord simply said that it mirrored the provisions of the Pension Schemes Act 1993. He did not refer to the fact that it allowed the authority to make changes to the statute law and, to my shame, I did not notice that. I was concentrating on the defects of Amendment No. 44 rather than the defects of Amendment No. 50.
We go further in Amendments Nos. 22 and 23. I did not hear any reference in the Minister's speech to what is now provided in Amendment No. 22, under subsection (6) (b), that,
"such an order may, as the Authority think appropriate, adapt, amend or repeal any enactment in which the scheme is contained or under which it is made".
Similarly, in Amendment No. 23 subsection (4) states:
"Such an order may, as that authority think appropriate"—s

593
interestingly, the wording is slightly different—
"adapt, amend or repeal any enactment in which the scheme is contained or under which it is made".
I should have thought that the least the Government could do in introducing the power for an authority to change legislation is to give an explanation as to why it is necessary and to recognise that it does not seem to be desirable for these amendments to be introduced in such a way and in such a time that the Delegated Powers Scrutiny Committee could not see them or have an opportunity to comment on them.
Lord Monkswell: My Lords, I too am concerned about these amendments. I shall not repeat the arguments made by my noble friend Lord McIntosh—he expounded them very well. But I must declare an interest. I am married to a teacher who is a member of the teachers' superannuation fund. One of my concerns is the implication for members of public service pension schemes and what the Government can do if the amendment before us is agreed.
I am concerned about a situation where a public service pension scheme, for various reasons, develops a surplus of assets over liabilities. Once the benefits of the scheme have been approved up to the Inland Revenue limits and the surplus still exists, the Government would have a vested interest in winding up the scheme and effectively saying, "Let us have a different scheme or a different set of schemes for these people". They may encourage the members to believe that the new schemes are better than the old ones. The scheme is then wound up and effectively the Government pocket the surplus.
The private sector have engaged in such a practice for the past 10 or 15 years. It is well established and is effectively part of company takeover ploy. I am not sure that it is right for Government Ministers to make decisions in relation to the winding up of schemes. The whole record of this Government is that they are not concerned with individual employees and public service workers. They are not concerned with the public good and seem to be concerned only with the financial elements involved. In those circumstances, we must have grave reservations in relation to the way in which the Government utilise the powers that they are conferring on themselves by the amendment.
What are we to do? It is interesting that not only do the Government take powers to themselves to change statutes, as my noble friend Lord McIntosh pointed out, but they say also that there will be adequate scrutiny by Parliament by the utilisation of the negative procedure. It is perhaps not well known that one of the difficulties of dealing with the negative procedure is that one must obtain agreement through the usual channels—by and large that means the Government Benches—to debate the subject, whereas if the affirmative procedure applies, then the Government must table an order of some kind. That must then be debated or taken on the nod.
To introduce powers that can change statutes and that have the ability to change public service pension schemes without the express approval of Parliament is
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extremely dangerous. I hope therefore that the Government will think again on a number of these issues.
Lord Lucas: My Lords, I propose to end my remarks by giving some comfort to the noble Lord, Lord McIntosh. We believe that the procedures we have set in place are the right ones, given the specific nature of the public service pension schemes. Some of the schemes are set up by statute and therefore can only be amended by statute; in other words, we need a statutory means of dealing with them. Others—for instance, the teachers' pension schemes—are not funded schemes at all and therefore do not come within the scope of the problems mentioned by the noble Lord, Lord Monkswell.
We believe that the negative resolution procedure will properly cover all the circumstances in which the powers may be used. However, we shall be drawing the attention of the Select Committee to this clause and to these powers and we shall consider extremely carefully anything which it may have to say to us.
On Question, amendment agreed to.
The Earl of Buckinghamshire The Earl of Buckinghamshire moved Amendment No. 21:
Page 5, line 5, at end insert:
("; and, unless the Authority consider that at the time when the order is made the scheme does not meet the minimum solvency requirement, an order may only be made under this section after consultation with each of the persons mentioned in paragraphs (a) to (c) (other than any on whose application the order is made).").
The noble Earl said: My Lords, Clause 10 deals with the wind up of schemes. If a scheme is no longer required or is to be replaced by a different scheme, an application for wind up can be made by the trustees, a manager, a person who has the power to alter the scheme, or the employer. I moved this amendment in Committee. I am bringing it back to the House because it is important that other interested parties should also be consulted. In Committee my noble friend the Minister gave assurances that OPRA would wind up a scheme only if it was deemed to be the most appropriate course of action. However, my noble friend took on board the argument that sometimes in the case of a surplus in a scheme wind-up may be in the short-term interests of those current members but not necessarily in the interests of the long-term members of the scheme. On that basis, my noble friend agreed that he would look at the issue again. I shall be very interested to know how his thoughts have progressed. I beg to move.
Lord Mackay of Ardbrecknish: My Lords, this amendment attempts to introduce a requirement for consultation between the authority and those involved in the administration and management of the scheme before an order for wind up is made by the authority. This requirement would relate only to wind ups precipitated by application made to the authority by the employer, trustees, or any other person authorised by the scheme's own rules to amend the scheme. I appreciate that my noble friend's amendment is designed to apply checks and balances for applications for wind up orders, but I do not believe that the

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introduction of this extra bureaucracy would be helpful to the authority, to managers of the schemes, or to scheme members.
The purpose of this part of Clause 10 is to provide that orders can be made to wind up a scheme that is being replaced or is no longer needed and where the scheme itself does not have an adequate wind up power. This might occur where working practices are being restructured and where the pension scheme needs to be altered to reflect that process. I am sure that your Lordships will agree with me that this provision is essential for the efficient management of occupational pension schemes.
These powers are intended to be the same as those currently available to the Occupational Pensions Board under Section 142 of the Pension Schemes Act 1993. The power in that section is limited by Section 138 of that Act, Section 138 requires that an application cannot be entertained if wind up can be achieved in a different way or if it could be achieved only by an unduly complex or protracted process. But the introduction of a formal consultation process between managers of a scheme would be bureaucratic and unnecessary, especially since such consultation is likely to have taken place informally anyway.
I believe that the best way to address my noble friend's concerns may be to make an amendment which restores provisions similar to those in Section 138 of the Pension Schemes Act 1993. I shall therefore look carefully to see whether such an amendment is necessary. If it is, we shall bring it forward in another place. With that assurance I hope that my noble friend will withdraw his amendment.
The Earl of Buckinghamshire: My Lords, I am extremely grateful to my noble friend. It serves the purpose of moving amendments at this stage if we get the answers that we like to hear. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.15 p.m.
Lord Lucas Lord Lucas moved Amendment No. 22:
Page 5, line 20, at end insert:
("(6) In the case of a public service pension scheme—

(a) an order under subsection (1) directing or authorising the scheme to be wound up may only be made on the grounds referred to in paragraph (c), and

(b) such an order may, as the Authority think appropriate, adapt, amend or repeal any enactment in which the scheme is contained or under which it is made.").

The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 20. I beg to move.
Lord Boyd-Carpenter: My Lords, although this amendment was spoken to with Amendment No. 20 that does not exclude discussion now that the amendment itself has been put. On that basis I should like to say that the powers conferred, particularly in the final paragraph of the amendment, are very wide indeed. It is a question of whether the powers taken are confined entirely to the pension scheme concerned or whether, as think it could be read, they go wider and involve the
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whole structure of the particular organisation of which the pension scheme was a part. Paragraph (b) of the amendment states that such an order may,
"adapt, amend or repeal any enactment in which the scheme is contained or under which it is made".
It looks to me that that goes beyond the actual existence of the scheme and relates, or could relate, or could be construed as relating, to the whole apparatus of the organisation as part of which the scheme was made. The powers seem very wide. I do not want to detain your Lordships any longer than necessary but I would welcome some reassurance that the width of these powers, which I understand are to be exercised subject only to the negative procedure, is being reconsidered.
Lord McIntosh of Haringey: My Lords, I support what the noble Lord has just said. He is, I think he will recognise, expanding the argument which I made in speaking to Amendment No. 20. I was pleased to have, although I was too slow on my feet to say so, the assurance of the noble Lord, Lord Lucas, that these amendments will also go before the Delegated Powers Scrutiny Committee. That may go some way towards reassuring the noble Lord. But he is quite right that the power to repeal, in the extreme case,
"any enactment in which the scheme is contained",
sounds very broad indeed. It may be that the enactment is extremely limited and needs to be repealed as a whole. But it may be that the enactment is a very much larger enactment; for example, one of the privatisation Acts. The idea that the Occupational Pensions Regulatory Authority should have the power to repeal one of those Acts might be pleasing to some of us, but I do not think it can be what the amendment actually intends.
Lord Lucas: My Lords, my understanding is that the ability to adapt legislation is confined to the power to wind up schemes and that no other changes could be made under it. But it is a point which the Delegated Powers Scrutiny Committee will wish to confirm.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 23:
After Clause 10, insert the following new clause:
Powers to wind up public service schemes
(".—(I) The appropriate authority may by order direct a public service pension scheme to be wound up if they are satisfied that—

(a) the scheme, or any part of it, ought to be replaced by a different scheme, or

(b) the scheme is no longer required.

(2) In this section "the appropriate authority", in relation to a scheme, means such Minister of the Crown or government department as may be designated by the Treasury as having responsibility for the particular scheme.
(3) An order under this section must include such directions with respect to the manner and timing of the winding up as that authority think appropriate.
(4) Such an order may, as that authority think appropriate, adapt, amend or repeal any enactment in which the scheme is contained or under which it is made.").
The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 20. I beg to move.
On Question, amendment agreed to.
Clause 13 [Directions]:
Lord Lucas Lord Lucas moved Amendment No. 24:
Page 6, line 12, leave out (" 3") and insert ("(Prohibition
orders)").
The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 3. I beg to move.
On Question, amendment agreed to.
Clause 85 [Review of decisions]:
Lord Lucas Lord Lucas moved Amendment No. 25:
Page 51, line 28, leave out paragraph (a) and insert:
("() to make an order against the applicant under section (Prohibition orders)").
The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 3. I beg to move.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 26:
Page 51, line 30, after (" 9") insert ("of this Act or section 168(4) of the Pension Schemes Act 1993").
The noble Lord said: My Lords, this amendment extends the requirement for the Occupational Pensions Regulatory Authority to review upon application decisions to impose penalties made under this Bill to cover decisions to impose penalties arising from the provisions of the Pension Schemes Act 1993, as amended by this Bill. I am sure noble Lords will agree that that is desirable. I beg to move.
On Question, amendment agreed to.
Clause 86 [References and appeals from the Authority]:
The Earl of Buckinghamshire The Earl of Buckinghamshire moved Amendment No. 27:
Page 52, line 31, leave out from beginning to ("may") in line 32.
The noble Earl said: My Lords, in moving this amendment perhaps I may give some of the background to it. I believe that there should be stronger rights of appeal to the court on the exercise of OPRA's powers; for instance, where it is going beyond points of law. I suspect that my noble friend the Minister will say that there are already provisions in the Bill for OPRA to review its decisions and its further regulation-making powers in this area. However, I wish to re-emphasise that OPRA will be a body with very strong powers. While it is supported by everyone in your Lordships' House and in the industry, there are points where OPRA will be both the investigator and the enforcer. In that situation I believe that there should be stronger rights of appeal in primary legislation. That would bring OPRA into line with analogous regulatory bodies. For instance, under the Charities Act individuals may appeal to the High Court against decisions of the Charity Commissioners. I am sure that noble Lords are aware that under the Financial Services Act bodies such as IMRO operate procedures for appeals to separate appeals tribunals. On that basis there is a strong reason
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for introducing this amendment which gives stronger rights of appeal to the court where OPRA's powers have been used. I beg to move.
Baroness Seear: My Lords, in view of the anxieties which we have expressed as regards this Bill and many others about the way in which the Government are taking powers which should be under control elsewhere, we are very glad to support any amendment which requires reference to the courts rather than leaving the matter in the hands of the authorities.
Lord Mackay of Ardbrecknish: My Lords, as I said in Committee when we discussed an identical amendment from the noble Baroness, Lady Hollis, our concern is that OPRA should be an effective regulator. I am sure that the noble Baroness, Lady Seear, agrees with me, despite her last comment, that we want OPRA to be a body with considerable authority and teeth to act when it believes that something is going wrong with a pension scheme. To do that OPRA will sometimes have to take difficult decisions, but such decisions will be made by the board of the authority whose members will be drawn from a wide field of expertise. They will be taken only after careful and lengthy consideration of the issues involved.
We expect the authority to have close involvement with schemes which appear to be experiencing difficulties. OPRA will resort to significant sanctions or major steps, such as directing the wind-up of a scheme, only when it is the sole means of securing members' rights without a further deterioration in the position of the scheme. Once made, such decisions will need to be implemented swiftly to ensure that we stop the rot.
I made clear that we recognise the case for providing that decisions of the authority can be re-examined. To that end the Bill provides a mechanism for the authority to review its own decisions. Anyone with an interest in the decision has the right to ask the authority to review significant sanctions such as the removal or disqualification of trustees and the imposition of fines. We intend to establish a clear framework in regulations for this review process which will ensure that the decision is re-examined in an impartial manner. We intend to consult the Council on Tribunals on these regulations.
However, I still believe that extending the right of appeal—
Baroness Seear: My Lords, how can the Minister say that the body will be impartial? Or have I misunderstood him? In effect, is not the review being undertaken by the same body which made the initial decision? There are occasions when one wants a completely outside, independent and different body to examine the decision. That is the whole point of going to court.
Lord Mackay of Ardbrecknish: My Lords, I understand the point the noble Baroness makes. Perhaps that does not show a great deal of confidence in the ability of OPRA to undertake its proper functions. Under the regulations, and with the help of the Council on Tribunals, we can have a procedure which means that

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if someone complains about a decision by OPRA they can feel that OPRA's own appeal procedure ensures that the case is again carefully examined and reconsidered.
We believe that if one extends the right of appeal—this is an important point which I hope the noble Baroness will take on board—to a court on any grounds, that will undermine OPRA's ability to act decisively and endanger its regulatory role. I believe that we are all agreed that we want this enforcement authority to be able to act swiftly and effectively. I believe that the amendment and the possibility of the case being taken to court, with all the costs and time that that can sometimes entail, would compromise the authority's ability to do that.
As I said, court action can also be very time consuming and there are already concerns about the load on the courts. As I pointed out earlier, the time taken for a case to come to court, let alone to resolve an appeal, could mean that the position of a pension scheme deteriorated further with members' legitimate pension rights being eaten away. I do not believe any of us want to lay out a scheme in this Bill which would bring about that sort of situation. One of the reasons for having a powerful regulator, able to take decisive and effective action, is precisely to avoid the delays and costs of court action. That is what, in the past, has made it so difficult for scheme members or trustees to take action. I do not believe that, with the rigorous review procedures that we will put in place, there is any need to hamstring the authority's effectiveness with an unnecessary mechanism of appeal to the courts.
I hope that having listened to what I have said and on reflection, my noble friend will be able to withdraw his amendment.
The Earl of Buckinghamshire: My Lords, I thank very much the noble Baroness, Lady Seear, for her support for the amendment. For much of this Bill we have had discussions on the balances and counter-balances required. We should be well aware of the very strong powers that OPRA has been given through this Bill. I listened to what my noble friend said; I am disappointed with his reply. I understand the points about bureaucracy and going through the law courts. But there is no method, unless we adopt this amendment or something close to it, of having some checks on OPRA's powers.
The noble Lord puts forward the opposite argument, saying that OPRA needs to be very effective in what it is doing. I do not believe that the amendment removes that effectiveness. It brings some fairness into the situation. I listened to my noble friend's words and I am disappointed, but at this stage I do not wish to take the matter forward. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 28 not moved.]
Clause 88 [Inspection of premises]:
Lord Lucas Lord Lucas moved Amendment No. 29:
Page 53, line 32, after ("means") insert ("provisions made by or under").
The noble Lord said: My Lords, it has been argued that, as drafted, the inspector's powers to inspect premises under the Bill could be interpreted as being restricted to checking compliance with provisions in the primary legislation alone. That is clearly not desirable. The amendment puts beyond doubt that the inspector will be able to work under the regulations as well as the primary legislation. I beg to move.
On Question, amendment agreed to.
Clause 89 [Warrants]:
Lord Lucas Lord Lucas moved Amendment No. 30:
Page 54, line 22, leave out ("or").
The noble Lord said: My Lords, in moving this amendment I shall speak at the same time to Amendments Nos. 31 and 32. The amendments concern Clause 89, under which the authority may apply to a justice of the peace for a warrant to enter and search premises. Amendments Nos. 30 and 32 add to the circumstances in which the authority may apply to the court for such a warrant. They provide that justices of the peace may issue a warrant if they are satisfied that there are reasonable grounds for believing that a person is liable to be prohibited from being a trustee of a scheme.
Amendment No. 31 is a minor drafting amendment which clarifies the meaning of "penalty" in Clause 89(1) (c) (iii). The meaning of "penalty" may be unclear and open to different interpretations. The amendment substitutes a reference to the authority's power to impose civil penalties under Clause 9 and Section 168(4) of the Pension Schemes Act and is intended to avoid doubt. I beg to move.
On Question, amendment agreed to.
5.30 p.m.
Lord Lucas moved Lord Lucas moved Amendments Nos. 31 and 32:
Page 54, line 23, leave out ("this Act or") and insert ("section 9 of this Act or section 168(4) of").
Page 54, line 25, at end insert ("or
() a person is liable to be prohibited from being a trustee of a trust scheme under section (Prohibition orders),").
On Question, amendments agreed to.
Lord Lucas Lord Lucas moved Amendment No. 33:
Page 54, line 46, leave out ("three") and insert ("six").
The noble Lord said: My Lords, this amendment extends from three to six months the period for which the authority may retain documents obtained by exercise of a warrant under Clause 89. The only exception to this limit is where proceedings are commenced within the six-month period, in which case any relevant documents may be retained by the authority until those proceedings are concluded.
Extending the time limit to six months will allow the authority a reasonable length of time in which to decide whether any proceedings are appropriate. The authority will not hold documents for any longer than is absolutely necessary and will be well aware of the need to keep disruption of the scheme to a minimum. Nevertheless, it is important that investigations are not hampered by an unduly restrictive deadline.
The power to obtain warrants will be used only where there are reasonable grounds for believing that a serious breach of a statutory obligation has occurred. Given the potential complexity of an investigation into the management of a large pension scheme, it is vital that the authority's inspectors have the time they need to conduct a thorough and proper investigation. A six-month time limit will bring the period for which documents may be held in line with the time limit for laying information in a magistrates' court.
When investigating offences or executing warrants issued under this provision, the authority's officers will have due regard to the appropriate code of practice issued under the Police and Criminal Evidence Act 1984. There is a code which specifically covers the exercise of powers to search premises and to seize and retain documents or records relating to the administration of a scheme. Among other things, the code provides that property shall not be retained for the purposes of an investigation, or for use as evidence, if a copy would suffice. It also provides for the person who had custody or control of any such property to have access to it, or to be provided with a copy of it, unless that would prejudice the investigation or proceedings.
It would be contrary to the authority's interests, having been set up specifically to ensure that those running schemes comply with their statutory obligations, if it were to allow its investigations to obstruct the day-to-day running of a scheme in a way which made it difficult for those running it to comply with the law.
We have selected a period for the retention of documents which we believe to be reasonable and which fits in with other provisions. We recognise that the removal of scheme documents may cause some inconvenience to schemes, but believe that it is a price worth paying to ensure that schemes are properly run. I beg to move.
On Question, amendment agreed to.
Clause 93 [Restricted information]:
Lord Lucas Lord Lucas moved Amendment No. 34:
Page 56, line 23, leave out from ("Authority") to (which") in line 25 and insert ("in the exercise of their functions").
The noble Lord said: My Lords, this amendment is a drafting refinement. It is unnecessary to repeat the reference to the Bill and corresponding enactments for Northern Ireland. Moreover, as drafted, Clause 93(2) only protects information in the authority's possession gathered for the purposes of the authority's functions under the Bill. This is not our intention.
Where the authority investigates a particular scheme, it is likely to have access to a considerable amount of sensitive information relating to the affairs of the scheme and the parties to it. Not all of this information will necessarily be relevant to the exercise of the authority's functions, but could nevertheless be of a sensitive nature. It is therefore important that all information gathered by the authority while investigating possible infringements of duties and obligations should be protected by the safeguards in Clause 93. I beg to move.
On Question, amendment agreed to.
Clause 94 [Information supplied to the Authority by corresponding overseas authorities]:
Lord Lucas Lord Lucas moved Amendment No. 35:
Page 56, line 39, leave out from ("functions") to ("by") in line 40.
The noble Lord said: My Lords, in moving Amendment No. 35, I should like to speak also to Amendments Nos. 36, 37, 38 and 42.
These amendments all reflect legal advice to the effect that, as all the authority's functions are under the Bill, the Pension Schemes Act 1993 or corresponding provisions in Northern Ireland, it is not necessary to refer to those enactments in order to refer to the authority's functions. These amendments delete the unnecessary references. I beg to move.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 36:
Page 57, line 4, leave out from ("functions") to ("or") in line 5.
On Question, amendment agreed to.
Clause 95 [Disclosure for facilitating discharge of functions by the Authority]:
Lord Lucas Lord Lucas moved Amendments Nos. 37 and 38:
Page 57, line 10, leave out from ("functions") to end of line 12.
Page 57, line 14, leave out from (functions") to ("the") in line 15.
On Question, amendments agreed to.
Clause 96 [Disclosure for facilitating discharge of functions by other supervisory authorities]:
Lord Lucas Lord Lucas moved Amendment No. 39:
Page 58, column 2, leave out lines 9 to 14 and insert ("Functions under the enactments relating to insolvency").
The noble Lord said: My Lords, in moving Amendment No. 39, I should like to speak also to Amendments Nos. 40 and 41. These amendments are all concerned with the disclosure of restricted information by the authority.
Amendment No. 39 enables the authority to provide restricted information to the Official Receiver, or in Northern Ireland to the Official Receiver for Northern Ireland, to enable or assist him to discharge his functions under the enactment relating to insolvency. It widens the "information gateway" to the Official Receiver so that it is not unnecessarily restrictive and brings it into line with similar provisions in other enactments providing for information to be passed to the Official Receiver.
Amendment No. 40 provides for the authority to disclose restricted information with a view to instituting proceedings under Sections 7 or 8 of the Company Directors Disqualification Act 1986 or Articles 10 or 11 of the Companies (Northern Ireland) Order 1989. It removes the inappropriate restriction that limited it to disclosing information in respect of a director or former director of a company which is or was a trustee of a trust scheme, because the authority may come into possession of relevant information concerning a person who does not fall into the category.
Amendment No. 41 provides for the authority to disclose restricted information in connection with any proceedings under the Insolvency Act 1986 or the Insolvency (Northern Ireland) Order 1989 which the

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authority instituted or in which it has a right to be heard. The amendment removes the restrictions that limited disclosure to functions under certain parts of the Insolvency Act 1986. I beg to move.
Lord McIntosh of Haringey: My Lords, the intention of the amendment is acceptable, but we wonder whether the Insolvency Service was consulted before the Bill was drafted.
Lord Lucas: My Lords, I can confirm that it was consulted. I commend the amendment to the House. On Question, amendment agreed to.
Clause 97 [Other permitted disclosures]:
Lord Lucas Lord Lucas moved Amendments Nos. 40 and 41:
Page 59, line 25, leave out from ("1989") to end of line 26.
Page 59, line 27, leave out from ("proceedings") to second ("the") in line 29 and insert ("under the Insolvency Act 1986 or"). On Question, amendments agreed to.
Clause 98 [Disclosure of information by the Inland Revenue]:
Lord Lucas Lord Lucas moved Amendment No. 42:
Page 60, line 9, leave out from ("functions") to end of line 11.
The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 35. I beg to move.
On Question, amendment agreed to.
Clause 14 [Requirement for member-nominated trustees]:
The Earl of Buckinghamshire The Earl of Buckinghamshire moved Amendment No. 43:
Page 6, line 32, leave out ("deferred members of the scheme") and insert ("those deferred members of the scheme from whom it is reasonably practicable to obtain approval").
The noble Earl said: My Lords, in moving Amendment No. 43, I should like to speak also to Amendment No. 48. I moved a similar amendment in Committee and should like to remind your Lordships that this amendment deals with the practical problems of consulting deferred members. When trustees consult members about changes to the rules of a scheme, they have to consult current pensioners and active members, but have discretion about whether to consult deferred members.
The current drafting of the Bill suggests that if the trustees decide to consult deferred members they must consult all or none. Practically, that would mean that none of the deferred members would be consulted, because in many schemes current addresses are not available for all deferred members.
In Committee my noble friend the Minister accepted the principle behind the amendment, but felt that the amendment as drafted would enable the trustees to be discriminatory. The amendments have therefore been redrafted to achieve the same purpose, but will no longer allow discrimination. On that basis, I beg to move.
Lord Mackay of Ardbrecknish: My Lords, the substance of these amendments was raised in Committee. At that time, I recognised that an important issue had been identified and I undertook to consider the matter very carefully.
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I acknowledge that not all deferred members may be known to the trustees. For example, they may not hold up-to-date addresses for all deferred members. If trustees are faced with the difficulty and expense of tracing all deferred members they may be reluctant to use their discretion to include them in the statutory consultation procedure. I do not want this clause to work to the detriment of deferred members.
I am happy to accept the principle of this amendment. However, I do need to consider in more detail the specific wording needed and I hope my noble friend will allow the Government more time to consider what the appropriate criterion should be. We will thus be able to bring forward any necessary amendments in another place. With that answer, I hope that my noble friend will feel able to withdraw his amendment.
The Earl of Buckinghamshire: My Lords, I am grateful to my noble friend for his reply. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn,
Clause 14 [Requirement for member-nominated trustees]:
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 44:
Page 7, line 6, at end insert ("or, in the case of a money purchase scheme, at least two-thirds of the total number of trustees").
The noble Baroness said: My Lords, the amendment relates to trustee membership. In Committee we pressed an amendment that 50 per cent. of trustees of a defined benefit or final salary scheme should be scheme members. We argued that on the ground that it was standard practice among the country's blue-chip firms—Shell, Unilever, ICI, Boots, Sainsbury, Courtaulds, Albright and Wilson, Allied Lyons and many more —and that such companies valued such arrangements as they offer better scrutiny, a better information flow, and more confidence in the pension scheme and the company.
It seemed right that trustees should reflect the balance of interest involved to bring the poorer schemes up to the practice of the best. We emphasised, too, that it in no way reduced the employers' existing freedoms, in the sense that the pension remained voluntary: employers would still define rules of eligibility; they could still veto any improvement in benefit; they could still take contribution holidays; and they could still wind up the scheme. In other words, all the long-stop powers remained with the employer—a recognition of the fact that he stood guarantee for any deficit on the scheme.
When we argued in Committee that 50 per cent. of the trustee members for defined benefit schemes and final salary schemes should be scheme members, we were defeated. The Government made three points in reply. Two of them were contradictory. The third, I hope, makes my case tonight.
The Government argued, first, that trustees held a fiduciary duty on behalf of the scheme: they were not delegates and therefore it did not matter from which side of the management divide they came. Whether one-third

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or 50 per cent. of the trustees were scheme members should not alter their behaviour, according to the Government. The proportions were irrelevant.
The Government's second argument was precisely the opposite. So far as concerned the employer, the proportion suddenly became relevant. The Minister said:
"The employer is the one giving the guarantee. He is the one who has to top up or make good the fund in the event of any deficiency. Therefore the employer has a major interest in the successful operation of the fund. We believe that it is appropriate that that should be recognised in the composition of the trust board".— [Official Report, 13/2/95; col. 448.1
In other words, on the second argument the Minister was saying that trustees drawn from scheme members had a fiduciary duty to all interests and so it did not matter whether they formed one-third or one-half, but that the trustees nominated by the employer clearly had a primary duty to protect the employer's interests because of his responsibility for funding the deficit. Therefore the employer was entitled to claim, said the Minister, a majority two-thirds of the trustees. Scheme member trustees, on the Government's arguments, were stewards for all; employer trustees, however, were stewards for the employer.
Finally, the Government emphasised that because defined benefit and final salary schemes were voluntary, and they lay off the risk on the employer, who is obliged to meet the deficit, any tilt of power away from the employer on the trustee board would encourage employers to wind up defined benefit schemes and go instead for defined contribution or money purchase schemes, where the investment risk was laid off not on the employer but on the employee. And that, said the Government, was why Goode recommended that only one-third of trustees in defined benefit schemes should be drawn from the members whereas two-thirds of the trustees should be scheme members where money purchase schemes were being handled. That is the point of the amendment. We seek to follow word for word the logic of the Government's argument in Committee.
We are arguing tonight that if scheme members should represent only one-third of the trustees in defined benefit schemes, while the employer should have two-thirds because he takes the risk, then for those same reasons, in money purchase schemes, where the risk is taken by the employees, they too should have two-thirds of trustee members.
If the Government wish to argue the fiduciary point then each, in both sets of schemes, should have 50 per cent. of the trustees. If the Government wish to argue the opposite —that the majority interest of trustees should lie with where the financial risk is laid off—then if it is appropriate for the employer to have two-thirds on final salary schemes, it is appropriate for the scheme members to have two-thirds of the trustees on money purchase schemes. I do not mind which way the argument goes, but the Government cannot argue both, because they are contradictory.
As the Government said, either all trustees have a fiduciary duty, in which case we have 50 per cent. on both, or the majority reflects where the financial deficit
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funding lies, in which case, on money purchase schemes, the majority of trustees should remain with the employees.
Every argument the Government adduced for the two-thirds of trustees representing employers on defined benefit schemes applies word for word for two-thirds of scheme members on defined contribution schemes—no more, no less. That is why Goode recommended it, and stated:
"For money purchase schemes … where the employer has no liability beyond the employers' contribution, scheme members should be entitled (but not obliged) to appoint at least two-thirds of the trustees, with the employer being able to reserve the right to employ the remainder".
The Government Actuary's recent report makes it clear that whereas in final salary schemes employers may often be contributing between 10 per cent. and 15 per cent. while employees contribute about 5 per cent. to 7 per cent. only of salary where the scheme is not in surplus—in other words, employers contribute about 2:1 on final salary schemes—when it comes to money purchase schemes, the employees' contribution is usually larger than that of employers: employees contribute 6 per cent. to 7 per cent. while the employer usually contributes under 4 per cent. In other words, whereas in final salary schemes the employer pays more, takes the risk, and, therefore, according to the Government, has two-thirds of the trustees, in money purchase schemes, the employee pays more—a higher proportion—takes the risk, and should therefore also have two-thirds of the trustees.
We now wish to hold the mirror up to every argument put forward by the Government in Committee to make the same arguments on behalf of scheme members where they are dealing with their money, their savings, their financial contributions, their risk, and their right. I beg to move.
Baroness Seear: My Lords, the arguments were clearly put forward by the noble Baroness, Lady Hollis. I reiterate merely that the employers are not taking the risk in the case of money purchase schemes and they do not need to have a majority control; that is, if one accepts the argument, which I do not, that they need it for the other schemes. They can agree to a majority of two-thirds and they stand to lose nothing by so doing. I hope that the Government will accept the amendment.
Lord Mackay of Ardbrecknish: My Lords, in Committee I wondered why the Opposition did not argue the case for a majority of two-thirds in money purchase schemes. They concentrated on defined benefit schemes and divided the Committee on the issue of 50 per cent. I strongly suspect that however powerful I and my noble friends consider my argument the Opposition are intent on dividing the House on this matter. However, I shall try.
It is interesting and a little flattering to have my words in Committee quoted back to me. I have often wondered whether anyone bothers to read Hansard but I am glad to know that the noble Baroness finds it such good reading material. I did not say "such good bedtime" reading but in a sedentary intervention the noble Baroness indicated that that is what it is. I am sure that it is so riveting it does not help to put her to sleep.

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The amendment is based on the recommendation of the PLRC that the balance of interest in a money purchase scheme is such that it is appropriate to provide that members, rather than employers, should have a majority on the trust board.
I certainly accept—with the noble Baroness scrutinising my words, of course I do—that in a money purchase scheme the employer's interest is less direct than it is in relation to a defined benefit scheme. The employer does not take on such substantial financial exposure. However, the employer retains a significant interest in the proper running of the scheme. First, it is normally a major part of the remuneration package and the employer has a significant business interest in the successful operation of the scheme and in the performance of its fund, Secondly, employers sponsoring defined contribution schemes, while formally insulated from the investment risk, may well, if the scheme runs into serious difficulty, feel under a moral obligation to ensure that former employees receive a reasonable pension.
Finally, and most importantly, under the proposed compensation arrangements we expect employers sponsoring defined contribution schemes to make good any deficiencies caused by the misappropriation of assets. Compensation will be payable only once the sponsoring employer is insolvent, having done his utmost to restore the fund. Those factors suggest that employers sponsoring defined benefit schemes can justifiably claim a significant interest in the fund, although perhaps not as intense as the interest of an employer sponsoring a defined benefit scheme—
Baroness Hollis of Heigham: My Lords, I accept the Minister's phrase "a significant interest". Does he believe that it is a majority interest?
Lord Mackay of Ardbrecknish: My Lords, if the noble Baroness will contain herself I shall address the question of why I believe that the PLRC was wrong in its suggestion that defined benefit schemes should have a majority of two-thirds whereas salary-related schemes should have only one-third.
I have mentioned the employer's interest, and the noble Baroness indicated that she does not disagree with that. However, pointing to the PLRC report, she justifiably indicates that the employer's interest is less in the kind of schemes which we are discussing than in defined benefit schemes.
I believe that the practicalities are important. How does one define a money purchase scheme? What arrangements should apply to the many different types of hybrid schemes? It seems easier to minimise the scope for argument and adopt a similar approach for all schemes, which at least delivers the basic policy intention of broadening the perspective of the trust boards.
The requirement is that at least one-third should be member nominated. As I said in Committee, there is nothing to prevent a trust fund being set up and employers agreeing the composition of a board on which more than one-third are member-nominated. There could be half or more and there is nothing to stop that happening. The requirement is for at least one-third, so that money purchase schemes could have two-thirds of member-nominated trustees if they wished.
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Perhaps I may explain the problem of complexity. We have tried to make our provisions as straightforward as possible and to give the schemes the maximum freedom to make the rules which suit their particular circumstances. We had in mind the wide variety of schemes and arrangements currently operating. For example, hybrid schemes are a combination of salary related benefits with a money purchase top-up, or vice versa. In some arrangements, the same individual trustees may act for both a money purchase scheme and a salary related scheme. An additional point is that since 6th April 1988 all schemes approved by the Inland Revenue are required to allow their members to make additional voluntary contributions. Those contributions are passed to the scheme trustees, who invest them with the other scheme resources or with an outside agent. They can be used to purchase additional years and final salary schemes or, more frequently, to provide a range of benefits on a money purchase basis. Therefore, a salary related scheme can have funds to provide both salary related and money purchase benefits. I understand that approximately 1 million people have elected to pay voluntary contributions.
Obviously, that kind of hybridity could cause a great deal of argument about which way it falls. It may mean that people will try to separate schemes and that may not be to the benefit of the members of the scheme. There are practical reasons why we have decided that the statutory minimum should apply to both kinds of scheme and that it should apply at least at the one-third member nominated level. As I said, schemes are free to add more member-nominated members than the one-third, which is the minimum.
Those are the practical points which arise from the fact that some companies sponsoring different types of scheme have single trust boards. We believe that unnecessary difficulty would be caused to such trust boards if they had to split themselves up to meet the differing requirements in respect of different parts of their current responsibility.
Therefore, largely for practical reasons and based on the real world in which pension schemes operate we have concluded that it would be best if both types of pension schemes had to meet the same requirement. I hope that having listened to my compelling argument the noble Baroness, Lady Hollis, will withdraw her amendment. In the unlikely and surprising event of her putting the amendment to the test of a Division, I hope that my noble friends will support me.
Baroness Hollis of Heigham: My Lords, I can well understand the Minister hoping that his noble friends will support him. He can rely on nothing other than hope; certainly not his arguments. We are invariably delighted to hear well-argued or reasonably argued presentations from the Minister. However, tonight even he must accept that he was scratching around for an argument with which to support a proposal that so offends natural justice.
The Minister made two points, both of which were dealt with by the Goode Committee, as he knows perfectly well but chose not to remind the House. First, the Goode Committee specifically dealt with hybrid schemes. They are nothing new. The Government have

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not suddenly thought about the issue; it is not some sudden complexity with which they do not know how to deal and must therefore throw it away and keep to the basic lowest common denominator of one-third. Goode suggested the regulator rule as regards the side of the divide on which a particular scheme should fall and therefore which trustee board membership rules apply. It is very simple. That is what the regulator is there for. He is there to provide codes, guidance, regulations and rulings. Goode anticipated, addressed, answered and demolished in advance every argument the Minister has made this evening. That was the first of them.
The second argument, which Goode recognised the Minister might wish to employ and which was answered and demolished in advance, is that regarding where financial interests and responsibility lie. If the primary responsibility of a trustee was fiduciary, employers and employees should have an equal 50 per cent. on both sets of schemes. But in Committee the Minister persuaded your Lordships that if the employer had an overriding, rather than significant, financial interest in final salary schemes because he contributed more and picked up the deficit—it is correct that they contribute more and pick up the deficit—those interests should be protected by two-thirds trustee membership.
What happens now? We are now discussing money purchase schemes, not hybrid schemes. What do the Government now say, in precisely the same circumstances, where scheme members pay more than the employer, and scheme members rather than the employer accept the financial risk? They are not consistent. The Minister has made a 180 degree turn. Is that because we are dealing with scheme members rather than employers? Is that what is going on?
This deeply offends natural justice. There is no practical or administrative problem but there is a problem in relation to fairness and justice if the Minister will not allow scheme members to protect their savings, investment and risk in their pension schemes. By definition, money purchase schemes, unlike final salary schemes, are the members' schemes. They are not a joint arrangement and a joint sharing of risk with the employer. The Minister's answer was deeply unfair and I think he knows it. Therefore, I propose to test the opinion of the House.
6.1 p.m.
On Question, Whether the said amendment (No. 44) shall be agreed to?
Their Lordships divided: Contents, 74; Not-Contents, 129.

Division No. 3

CONTENTS

Acton, L.

Bruce of Donington, L.

Airedale, L.

Carmichael of Kelvingrove, L.

Ashley of Stoke, L.

Clinton-Davis, L.

Barnett, L.

Craigavon, V.

Beaumont of Whitley, L.

David, B.

Birk, B.

Dean of Beswick, L.

Blackstone, B.

Dean of Thomson-le-Fylde, B.

Bledisloe, V.

Desai, L.

Brookes, L.

Donaldson of Kingsbridge, L.

610

Dormand of Easington, L.

McIntosh of Haringey L.

Eatwell, L.

McNair,L.

Elis-Thomas, L.

Merlyn-Rees L.

Ennals, L.

Milne L.

Ezra, L. [Teller.)

Molloy

Falkland, V.

Monkswell, L.

Farrington of Ribbleton, B.

Monson, L.

Freyberg, L.

Moms of Castle Morris, L.

Gallacher, L.

Nelson, E.

Geraint, L.

Nicol, B.

Gould of Potternewton, B. (Teller.)

Perry of Walton, L.

Peston, L.

Graham of Edmonton, L.

Prys-Davies, L.

Hamwee, B.

Rea, L.

Harris of Greenwich, L.

Redesdale, L.

Haskel, L.

Richard, L.

Russell, E.

Healey, L.

Seear, B.

Hollis of Heigham, B.

Sefton of Garston, L.

Hughes, L.

Serota, B.

Jay of Paddington, B.

Stedman, B.

Jeger, B.

Stoddart of Swindon, L.

Jenkins of Hillhead, L.

Taylor of Gryfe, L.

Jenkins of Putney, L.

Thomas of Walliswood, B.

Kennet, L.

Turner of Camden, B.

Kilbracken, L.

Varley, L.

Kirkhill L.

Westmorland, E.

Lovell-Davis, L.

Williams of Mostyn, L.

Mason of Barnsley, L.

Winchilsea and Nottingham, E.

NOT-CONTENTS

Addison, V.

Gage, V.

Ailsa, M.

Gardner of Parks, B.

Aldington, L.

Glenarthur, L.

Alexander of Tunis, E.

Goschen, V.

Allenby of Megiddo, V.

Gray of Contin, L.

Astor of Hever, L.

Greenway, L.

Astor, V.

Gridley, L.

Barber of Tewkesbury, L.

Harding of Petherton, L.

Belhaven and Stenton, L.

Harmar-Nicholls, L.

Blaker, L.

Harrowby, E.

Blatch, B.

Hayhoe, L.

Borthwick, L.

Hemphill, L.

Boyd.Carpenter, L.

Henley, L.

Brabazon of Tara, L.

Hertford, M.

Brains of Wheatley, L.

Hives, L.

Brougham and Va., L.

Holderness, L.

Buckinghamshire, E

Holderness, L.

Burnham, L.

Holmpatrick, L.

Butterworth, L.

Howe, E.

Cadman, L.

Hylton-Foster, B.

Caithness, E.

Inglewood, L. [Teller.]

Campbell of Croy, L.

Jenkin of Roding, L.

Carnegy of Lour, B.

Killearn, L.

Carnock, L.

Kimball, L.

Cawley, L.

Kingsland, L.

Chalker of Wallasey, B.

Lauderdale, E.

Charteris of Amisfield, L.

Lindsey and Abingdon, E.

Chelmsford, V.

Long, V.

Chesham, L.

Lucas, L.

Clanwilliam, E.

Lyell, L.

Clark of Kempston, L.

Mackay of Ardbrecknish, L.

Colnbrook, L.

Mackay of Clashfern, L.[Lord Chancellor.]

Colwyn, L.

Cork and Orrery, E.

Marlesford, L.

Courttown, E.

McColl of Dulwich, L.

Cox, B.

Melville, V.

Cranborne, V. (Lard Privy Sea]

Mersey, V.

Cumberlege, B.

Miller of Hendon, B.

Davidson, V.

Milverton, L.

Dean of Harptree, L.

Monteagle of Brandon, L.

Dixon-Smith, L.

Montgomery of Alamein, V.

Elles, B.

Mottistone, L.

Elton, L.

Mountevans, L.

Faithfull, B.

Munster, E.

Fanshawe of Richmond, L.

Murton of Lindisfarne, L.

Fraser of Carmyllie, L.

Napier and Ettrick, L.

611

Newall, L.

Saltoun of Abernethy, Ly.

Norfolk, D.

Seccombe, B.

Norrie, L.

Shaw of Northstead, L.

Northesk, E

Skelmersdale, L.

O'Cathain, B.

Stewartby, L.

Orkney, E.

Strange, B.

Oxfuird, V.

Strathclyde, L. [Teller.]

Park of Monmouth, B.

Strathcona and Mount Royal, L.

Pearson of Rannoch, L.

Sudeley, L.

Peel, E.

Swansea, L.

Pender, L.

Tebbit, L.

Peyton of Yeovil, L.

Thomas of Gwydir, L.

Platt of Writtle, B.

Trumpington, B.

Rankeillour, L.

Ullswater, V.

Rawlings, B.

Vivian, L.

Rees, L.

Wade of Charlton, L.

Renton, L.

Whitelaw, V.

Renwick, L.

Wise, L.

Rodger of Earlsferry, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
6.10 p.m.
Baroness Seear Baroness Seear moved Amendment No. 45:
Page 7, line 9, at end insert:
("() Once a scheme provides for a majority of pensioner members, the arrangements must provide for at least one trustee to be nominated by pensioner members of the scheme.").
The noble Baroness said: My Lords, I am hoping that the Minister will see the light even at this late hour. Indeed, perhaps I may anticipate what I know he will say—namely, that everyone who is a member of a trustee board is there as an independent person and is thinking about the interests of the scheme and not about the interests of any special group. We all know that is the case, and therefore we need not waste any time in your Lordships' House by having it repeated yet again. It is not as a representative of special interests that I am moving the proposal that there should be at least one pensioner on a trustee board where such a board represents a substantial number of pensioners.
The person who is a pensioner has a different experience and knowledge about how the scheme is working from someone who is either an employer or a working member who is anticipating a pension later on but who is not currently a pensioner. Surely it stands to reason that someone who is already a pensioner has something to contribute, not an interest to defend. He or she has knowledge, experience and a point of view to contribute to the running of the scheme. It seems to me to be quite extraordinary that schemes which are there for the benefit of pensioners should exclude from their managing body the very people for whom the whole exercise is being undertaken. Therefore, briefly, but very determinedly, I wish to move the amendment. Pensioners should be allowed a place on the trustee boards of schemes. I beg to move.
Baroness Turner of Camden Baroness Turner of Camden: My Lords, I rise to express my support for the amendment moved by the noble Baroness. It will be recalled that we attempted to persuade the Government in Committee that it was necessary for pensioners to be represented among trustees. Unfortunately, we did not succeed. However, there are mature schemes where there is a very high proportion of scheme members who are actually
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pensioners. In such circumstances, it would seem quite undesirable that there should not be pensioner representation on the board of trustees.
The amendment before the House is a modest one. It simply provides that, once the scheme has a majority of pensioner members, the arrangements must provide for at least one trustee to be nominated by pensioner members of the scheme. I should have thought that was very fair and reasonable. I cannot see how the Minister can argue against it. I am sure that he will, but I do not know upon what basis. The proposal seems to me to be so fair, right and proper that I shall be amazed if the Government persist with their opposition to the notion. As I said, I support the amendment.
Lord Pearson of Rannoch: My Lords, in supporting the amendment, I should declare a slight interest in this part of the Bill in that I am a trustee of my own company's pension scheme. The company is a young one, only 30 years old. Most of the members still have a long way to go until they reach pension age. So I can look forward to the day when the majority of members will have retired. I cannot help feeling that the deliberations of the trustees at the time would be very much helped by those who, after all, will by then be the main beneficiaries of the scheme.
I was inspired into joining support for the amendment by the National Federation of Post Office and BT Pensioners whose members are in a different category altogether so far as concerns size. I would be most interested to hear any comments that my noble friend the Minister may have as to why the amendment should not be accepted.
Lord Dean of Harptree: My Lords, I believe that the arguments are very finely balanced on the issue. However, I am inclined to favour the amendment proposed. When my noble friend the Minister resisted similar amendments in Committee, I remember that he said that it was important to retain flexibility in the selection of trustees. I believe that noble Lords would agree with that view. My noble friend also said that it was important that trustees should recognise that they represent all members and not a particular group in a scheme.
However, I suggest to your Lordships that we must bear in mind the fact that the Bill has, to some extent, moved away from that position. It provides that members should have the right to select one-third of trustees. Therefore, we can say that there has been some move away from that rigid principle.
From my experience when I was a trustee, I found that pensioners, for the most part, made good trustees. Indeed, they have the time, the experience and by definition, because they are pensioners, they have a good knowledge of the company concerned. It may be a little out of date; but, nevertheless, they have a good knowledge in that respect. Further, they are not subjected to the pressures which sometimes apply to employee members. Their pensions cannot be withdrawn from them, whereas in the case of employees there is always the risk that some subtle pressure could be exerted upon them.

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One could ask why we do not leave all such matters to the good practice of occupational pensions schemes. Indeed, many such schemes already have pensioner trustees. I take the point made by my noble friend; namely, that made by the National Federation of Post Office and BT Pensioners. In their closed schemes, there are a great many more pensioner members than there are employee members. However, I am told by the federation that it has repeatedly requested that there should be at least one pensioner trustee on the board, but that that request has been turned down. I am informed that the reason for refusal of the request in that case—and, I gather, in others—is that the employee trustees are nominated by trade unions which are not prepared to have a pensioner trustee. If that is the case, I suggest to your Lordships that it is really not reasonable for trade unions to have a veto on the nomination of pensioner trustees.
It seems to me that the latter information spreads a somewhat different light on the discussions which took place in Committee. Moreover, I wonder whether there is a precedent under the Railways Act. When that legislation was being discussed during the Session before last, the point was made that there should be the possibility for BR pensioners to be represented on the board. However, I gather that that provision was not written into the legislation. But if my information is correct, the BR pension schemes do now have trustees on the board. I do not know whether that arises as a result of government pressure. Nevertheless, if that is so, I suggest to my noble friend the Minister that there is perhaps a precedent in that respect. There is at least something to be looked at if in fact it is true that trade unions do exercise a veto in some cases as regards pensioner trustees.
Lord Boyd-Carpenter: My Lords, I hope that the Government will think again about this amendment. I recall—as I am sure does my noble friend the Minister—the discussion in Committee which I found a rather unhappy one. There is no doubt at all that there is a considerable demand for something of this sort, including—this has relevance to what my noble friend behind me has just been saying—among some very responsible trade unions. Therefore it seems to me that to have at least one pensioner trustee where the majority of people in the scheme are already pensioners is a reasonable reassurance to them, and, so far from introducing any unnecessary rigidity into the scheme, would give a certain element of support to it which I think might well be found helpful by those responsible for running it. In other words, I hope that my noble friend will not persist in the line that he took in Committee. I think he will find that on the whole Members of your Lordships' House are in favour of this, or something of this sort. I beg of him to think hard about it.
Lord Ezra: My Lords, like the noble Lord, Lord Pearson, as chairman of a medium-sized company I have experience of a scheme which has a pensioner trustee. In the light of the Maxwell affair —like many other companies, I have no doubt—we reviewed the
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constitution of our pension scheme and its operations. We decided that we would immediately bring on member trustees, and we also decided—this was a specific recommendation which I made—that we would have a pensioner trustee. The reasoning behind that was simple, and indeed the noble Lord, Lord Boyd-Carpenter, has referred to it: it gives a good cross-section of interests in the matter. The parties most involved in pension schemes are the employers, the members—in other words those still in the employment of the company—and those who are past employees who are drawing their pensions. It seems totally logical and rational that those three parties should be able to have representatives on the schemes and to express opinions from their particular point of view.
Lord Desai: My Lords, I, too, wish to add my support to the amendment. Noble Lords will recall that in Committee I moved an amendment to this effect. While we did not like the Minister's answer, this is a good matter to which to return. It is said that trustees should do their job, as it were, freely and fairly and should not represent particular partisan interests. That is quite right. That is the duty of trustees. But at the same time we have to recognise that interests have to be represented broadly on the trust. We have recognised the employers' interest throughout this Bill. We have also recognised the employees' interest. There is a third interest; namely, that of pensioners. I am sure that trustees who represent these different interests will also do their job properly as trustees without any conflict between their role as trustees and their representation of separate interests.
Lord Mackay of Ardbrecknish: My Lords, although this issue was raised in a different form during the Committee stage of this Bill, I regret to have to tell your Lordships, despite the blandishments of the past few minutes, that my argument against it remains the same. The effects of this amendment are no different. It would oblige schemes to allow pensioner members to select trustees and would therefore give them a status and privilege greater than that given to other members. We believe that schemes should be free to determine their own arrangements and we will therefore oppose any amendment which seeks to elevate one section of scheme membership above another.
It seems to us that there is no justification for moving towards a rigid and uniform selection process which would not do justice to the wide variety of schemes which currently operate. It is, as I have said, our intention that schemes should be free to develop their own arrangements for the selection of trustees, subject to the approval of active and pensioner members. It is these arrangements which will determine who is eligible to nominate trustees. Members' interests will be protected by a rigorous statutory consultation procedure.
I would say to my noble friend Lord Dean and to my noble friend Lord Pearson of Rannoch who referred to BT that the matter they raised in your Lordships' House concerns the current position of the BT pension scheme. But under the statutory consultation procedures all active and pensioner members will have the chance to approve the nomination and selection procedure. If

615
members want a pensioner trustee or pensioner trustees, they will be able to take steps to do something about that. If they want open nomination and not trade union nomination, as my noble friend drew to our attention, they will be in a position to take steps to bring that about because pensioner members—like active members —will have a right to approve selection rules.
Common sense dictates that if a majority of scheme members are pensioners, they are likely to communicate to their existing trustees that they wish to take part in the selection procedure. However, we do not intend to fetter this freedom by insisting that a certain section of the membership must nominate a trustee. As the Bill stands, it gives equality of opportunity both to active and pensioner members and it is for scheme members to decide together the best way to nominate trustees, hearing in mind the needs of their particular scheme. If it goes to election, it is up to the members to decide who they want to elect. If they want to elect more active members than pensioner members, that surely is up to them. If they want to elect more pensioner members, that is equally up to them. To start dividing up the democratic process and saying, "This little group and that little group will be able to elect somebody", is not the proper way to proceed.
However, the prime argument against requiring any particular interest group—after all, there are not just pensioner members; there are deferred members and there are active members, all of whom have an interest in how the pension scheme is run—to select a trustee representative of that interest is that it would undermine one of the fundamental strengths of trust law which is that each trustee must act impartially in the interests of all the beneficiaries.
I am sorry if the noble Baroness, Lady Seear, does not wish to hear this argument again, but she will hear it again because it happens to be a relevant and good one. While we are talking about Goode, that was the reason why the PLRC opposed the idea of compulsory pensioner trustees. Perhaps we all do a little picking and mixing as regards what we like and what we do not like and as regards what we accept or what we do not accept. However, it is not more than an amendment ago that I was being lambasted because I was not taking the Goode proposals hook, line and sinker, so to speak.
Baroness Hollis of Heigham: My Lords, I was asking for consistency!
Lord Mackay of Ardbrecknish: My Lords, I am not sure whether the noble Baroness is saying that she is being consistent, because if she is being consistent she will agree with me about this particular amendment because the PLRC opposed the idea. I believe its argument continues to be persuasive. I am not arguing that pensioner trustees would be partial but if they had to be appointed—that is the point—there would be a serious risk that members and others would begin to classify all trustees as representative of one interest or another. That would not enhance confidence in trust boards.
We defeated a similar amendment in Committee. I trust that if it comes to it this amendment will also be voted down. As the Bill stands, pensioner members have
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the same rights with regard to member-nominated trustees as active members; that is, to approve any selection rules proposed by their schemes' trustees. If it is the wish of the members, I have no doubt they will indeed elect pensioners as trustees. The chances of that happening will obviously be greater in schemes where pensioner members are in a majority. I would say to my noble friend Lord Pearson that nothing in the Bill prevents pensioner members being elected as trustees. If a scheme consists of a considerable number of pensioner members—a majority of pensioner members for example—and those pensioner members want to elect someone onto the board who is a pensioner, it seems to me that the numbers will stack up and they will find themselves with a pensioner on the board. Equally, there is a good argument for saying that active members may think it sensible to have a pensioner on the board.
I believe that when one begins to compartmentalise democracy those people who are outside the group which has been singled out will stop even considering voting for people in the group singled out because they will feel that they have already been catered for. I do not believe that that would be in the interests of pensioner members or of the members as a whole. After all, all the members of the scheme have an interest. Pensioner members may have a more immediate interest, but active members have a long-term interest which they will wish to feel all the trustees are considering.
I believe that to accept the amendment would fetter the choice of both pensioners and active members by imposing preconceived selection arrangements. It would restrict the freedom of schemes to develop their own selection rules and would increase the risk of trustees being perceived as representatives of whichever group or interest selected them. I hope that the noble Baroness will withdraw her amendment. If she does not, I hope that my noble friends will support me in the Division Lobby.
6.30 p.m.
Baroness Seear: My Lords, I am disappointed but not in the least surprised, because the Minister's mind is not open to new ideas. He indulged in a wide variety of conflicting arguments. We have been told that having one pensioner trustee would create rigidity. We have already created the great rigidity that the majority of trustees have to be employer members, What greater rigidity could there be? Compared with that rigidity one miserable pensioner representative would not make the scheme positively arthritic, as the Minister seems to think. He appears to believe that to introduce such a requirement would introduce rigidity to an intolerable extent.
In view of the votes that we have just had and of the support all round the House, and in view of the fact that a great many people who would vote if we called a Division now would not have heard not only the eloquent arguments from this side of the House but also the very convincing arguments from the other side of the House, I propose not to press the amendment tonight. However, I give the Minister fair warning that I shall reintroduce it at Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 46:
Page 7, leave out lines 22 to 25 and insert:
("(b) a simple majority of members eligible and voting has supported such a proposal;").
The noble Baroness said: My Lords, with this amendment I should like to return to an issue that we discussed at Committee; namely, the balloting arrangements. Most pension schemes at present do not have a minimum of one third of trustees drawn from scheme members. Two-thirds of schemes have no scheme members at all. That will need to change once the Bill becomes law. There will be a presumption in favour of one third of trustees being drawn from scheme members unless there is general agreement that the present arrangements work well and should remain unchanged.
We do not object to that. Our problem is how that general agreement to leave matters unchanged is to be determined. The Minister insists that 10 per cent. of employees must signal that they wish to make a change. Why should they have to take the initiative to secure the rights bestowed on them in the Bill? We believe that the presumption should be on the employer who is seeking no change to ensure that he has support for his proposal. In other words, the employer who seeks to withhold rights should seek consent by ballot; those who wish to exercise their democratic rights should not first have to ballot in order to do so.
Why do we believe that it should be that way round? In Committee, in a remarkable reply which becomes even more remarkable when one re-reads it, the Minister said that the employer should be required to circulate information about the scheme and trustees and should attach a tear-off slip which scheme members could return if they wanted to trigger a ballot. If 10 per cent. did so there would be a ballot, the outcome of which would determine whether there were scheme members as trustees. The Minister said that that would reduce costs and friction. The exact opposite is true. As a species of sophistry that was a quite effective argument.
I have two points. First, employers have to circulate proper information together with a tear-off slip—a ballot paper on whether scheme members want a ballot. If 10 per cent. want a ballot there is a second ballot. Since when have two ballots cost less than one? If one makes that original tear-off slip the ballot costs are reduced and justice served. Having a ballot on whether to have a ballot is absurd, costly and time-consuming, unless the Minister's intention is to place hurdles in the way of those wishing to exercise their rights under this Bill.
On reflection, there is a difference between the one-ballot procedure which we seek and the two-ballot procedure which the Minister favours. The one-ballot procedure would presumably be a secret ballot in which scheme members would express their views free of pressure from the employer or their trade union. It would represent their true opinion. However, under the two-ballot procedure proposed by the Minister, scheme members who call for a ballot in order to have a ballot will presumably be identified by name, so it will not be
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a secret ballot. It becomes a "stand up and be counted" ballot in which scheme members face the potential annoyance of their employer or pressure from trade unions.
Why should those who wish to exercise their democratic rights be asked to put themselves into a confrontational position? It is simply not fair. I honestly do not see why the Government are doing this. The one ballot procedure which the amendment would restore is cheaper, because one ballot is always cheaper than two; confidential because one does not have to sign up in order to obtain one's rights; fairer; quicker and sensible. The Government's proposals are costly, confrontational and against natural justice. I beg to move.
Baroness Seear: My Lords, I support the amendment. This is a right which the members ought to have, whatever the size of the organisation. The intention in the Bill is that that right goes by default unless specific steps are taken in order for people to assert that right. We say that the right is there and that people should be able to operate it. The size of the scheme or the enterprise makes no difference whatever.
Lord Mackay of Ardbrecknish: My Lords, this amendment resurrects an issue which was defeated during the Committee stage of the Bill. In effect, it requires employers to hold a ballot of scheme members if they wish to opt out of the requirement to appoint member-nominated trustees, even where members may be perfectly content with their existing arrangements.
In our view it is not the means of consulting members that is important but how effective that consultation is; in other words, the statutory consultation procedure. I can assure your Lordships that the statutory consultation procedure we propose will leave members in no doubt as to their rights and options. We intend that it will require employers to hold a ballot if their proposals are rejected by a given percentage of members (possibly 10 per cent). Our proposals will not deprive members of the right to a ballot and if employers want to opt for a ballot at the outset as a way of avoiding the possibility of extra costs they will be free to do so. We see no justification for imposing the requirement of a ballot at the outset in all cases. However, we see considerable advantages, both to scheme members and to the employer, in the more flexible statutory consultation procedure that we are proposing.
We arrived at these proposals following a consultation exercise in June last year, when we received a great many comments from pensions professionals, schemes and employers asking us not to make a ballot an automatic requirement. Those respondents were concerned about the inflexibility of such a requirement. They were also concerned that an automatic ballot could enable a vociferous or disaffected minority to overturn otherwise satisfactory arrangements.
We have listened carefully to those views and, on balance, we agree with them. A ballot is inflexible. Members can either approve or disapprove. On the other hand, under our proposals, the employer would be able to test the water and find out members' views before committing himself to a full ballot. He could then, if

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appropriate, rethink and perhaps modify his proposal to meet members' concerns before putting his revised proposal to a full ballot. I would also argue that a "10 per cent. objection process" could prove to be a more favourable arrangement from a member perspective. It is I think inevitable that some scheme members will be apathetic whatever consultation procedure is used. However, it would clearly be easier to achieve a 10 per cent. objection against an employer's proposal than to obtain majority disapproval at a ballot. If a ballot then followed as a direct result of a 10 per cent. objection, members who were originally apathetic might actually take more notice.
To some extent, the noble Baroness rather assumed that every scheme would go to a ballot. I do not think that that would be the case. Therefore the suggestion that our proposals will place extra cost on schemes by requiring an objection exercise and then a ballot does not hold water. It would be the case only where members object to the proposals. If the employer wishes to rethink and submit other proposals, then a ballot would still not be necessary. If members do not object, there will be no need for a ballot and such schemes will have been spared the extra expense that a formal ballot would involve.
I believe that a rigorous statutory consultation procedure which directs that all pertinent information must be given to members and leaves the choices to them is the best way to protect members' interests.
At first sight, an automatic ballot may appear attractive. However, it does mean that a disaffected minority could be the only ones who bothered to vote, thus producing an unbalanced or unrepresentative result. We believe that a full disclosure of proposals and sound directions by way of the statutory consultation procedures are the best way to protect members' interests. While there is nothing in our proposals to prevent a ballot at the outset, our arrangements will allow employers an opportunity to gauge members' views, and, if necessary, to make the kind of alterations to the scheme which their members require. If the required proportion of members object to the employer's proposals, then those proposals must be put to a full ballot.
I believe that the position that we take up is a more flexible situation which leaves it in the hands of the members to decide whether they wish to go so far as to have a ballot. It allows the employers to modify their schemes in the light of the representations that they receive. Many schemes, as my noble friend Lord Pearson of Rannoch mentioned earlier, are quite small and are perfectly satisfactory. Their members will be perfectly satisfied with them. They will not need to ballot. Our procedures allow for that situation as well as for the other situation in which members are very unhappy and at the 10 per cent. level can trigger the kind of ballot which the noble Baroness would like to apply to every scheme.
Baroness Hollis of Heigham: My Lords, again I find the Minister's reply quite baffling. I should be surprised if he believes most of it himself.
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Does the Minister believe that when the employers send out the first information as part of the statutory consultation procedure it will be full, complete and in such a form that members can make up their minds? I assume that the answer is yes, otherwise the employers would be failing in their duties. Does he believe that when the employers send out that information they will have to include a piece of paper asking whether the members seek a ballot? In the light of what the Minister said at Committee stage, I assume that the answer is also yes. Therefore what will have happened? The employer will have sent out all the information required on which to make a decision. He will have sent out, secondly, a piece of paper on which a disagreement would have to be registered. The only two differences between that and a full-scale ballot is, first, that returning the paper would not be confidential. The Minister did not address that point. Secondly, there would be the minor cost of counting the responses. That is all. To avoid the minor cost of counting the response on that first consultation exercise, the Minister proposes to go to the cost of a second ballot. That is absolutely absurd. Does the Minister really seek to persuade the House that two ballots are cheaper than one? Does he really seek to persuade the House that the Minister's scheme will require such modifications that he needs time in which to consider, consult and modify before he goes back to the members a second time? Should he not have done that before he first sent out the ballot paper?
I invite the Minister to respond to some of these points. I must say that of thin answers tonight, this is one of the thinnest. Does the Minister believe that two ballots are cheaper than one? Does he believe that members will not have the full information at the first ballot? Does he think that more confrontation or less will arise as a result of people having to put their names to the ballot, it therefore being no longer secret? I invite the Minister to reply.
Lord Mackay of Ardbrecknish: My Lords, with the leave of the House, perhaps I may respond, although, frankly, I have nothing to add to the points that I made. One's impression of thin ice depends upon whether or not one is on it. I think that I am on pretty reasonable ice on this issue. The noble Baroness obviously disagrees.
The position is quite clear. First, I suspect that for most schemes the proposals will be perfectly satisfactory and there will be no need for postal returns, with the costs involved or of ballots, and so on. Secondly, if there are some problems, they may be minor and can be addressed. I should have thought that that was a much more reasonable way to proceed. The idea that we have people in embattled positions is perhaps dear to the mind of the noble Baroness who likes to paint everything fairly black or white. However, that idea seems pretty alien to what will occur when the consultation procedures take place. Perhaps minor or not significant amendments will make the scheme proposed by the employer satisfactory to his members. If it is not satisfactory, then it seems to me that the members have the right, if they wish, to call a ballot. If the employer is not prepared to move, then that ballot will go ahead and the members will be in a position to make whatever decision they will.

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I believe that we should stick to the position that I have outlined, which has support in the industry, and so on. The consultation procedures that I have mentioned and the statutory procedures that we have laid down, will I believe lead to a proper consultation with the members, and a proper conclusion. It will mean that those many schemes which are perfectly satisfactory to the members will not need to go to the expense of a ballot.
Baroness Hollis of Heigham: My Lords, I am sorry to turn the discussion into a Committee-style debate. However, I am even more baffled now by what the Minister says. If the employer produces a first scheme, the responses might in the normal process have triggered a ballot. However, the Minister says that such responses would be used by the employer to modify or tweak the scheme, in the light of the representations made. What happens then? Does the employer reissue the scheme before he goes to a ballot? Will it be an everlasting series of proposals by the employer? Will the employees vote on the modified scheme? It will be different from the scheme on which they called for a ballot in the first place.
The Minister needs to clarify the position. It seems as though people are being invited to ballot on proposals on which they were not balloted. Perhaps the Minister will enlarge further. The more he continues, the more he walks on quicksands. What will happen between the first and second ballot? The proposals put forward can be modified. What then will people believe that they are voting on? What chance will they have to consider the further modifications if the employer produces a second ballot paper on a quite different set of proposals from the first? I apologise, but the Minister really must clarify further.
Lord Mackay of Ardbrecknish: My Lords, if I have the leave of the House—it is beginning to look more like a Committee stage; we ought to have dealt with those issues then if that is what the noble Baroness wished—perhaps I may simply say this to her. It is difficult to envisage what the objection might be. It might not be a serious objection. It might be one on which the scheme can easily be amended. The employer will then have met the objections and the scheme will be satisfactory. That is perfectly sensible.
My recollection of the Bill—if I am wrong, I shall write to the noble Baroness—is that there are some time limits. As I think the noble Baroness suggests, if I understand her correctly, the employer could not string the process along for ever and a day so that he never got round either to having member-nominated trustees or to having his own proposal accepted. Although I cannot find the provision as quickly as I need, I am pretty certain that there are time limits. If there are not, I shall certainly write to the noble Baroness.
The safeguards are there; I do not think that we need to go to a ballot. I have made my point. The noble Baroness clearly wants ballots at every possible turn.
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She wants a ballot right at the beginning. I do not believe that that is necessary. I am afraid that there is just a bit of a division between us.
Baroness Hollis of Heigham: My Lords, the reason that we are treating this matter rather as we would in Committee—for which I beg the indulgence of the House—is that the Minister is producing arguments on Report that were never even mentioned in Committee. We have heard for the first time tonight that employers will have the right to modify what they propose to members between the first circulation of the information and the right to a ballot. It is the first time that we have heard of it. This is a significant change, so far as I am aware. I defer to the Minister.
Lord Mackay of Ardbrecknish: My Lords, I intervene for the last time. If the employers were not in a position to modify what they had proposed, there would be no point in their proposing it. The whole proposition is to ensure that the members are satisfied with what is being proposed.
Baroness Hollis of Heigham: My Lords, when the Minister reflects on the debate tonight, as I am sure he will, I hope that he will see that the further he goes, the more entangled—I really mean this—his argument has become. It was a pretty sorry argument. It is for that reason that I shall not press my amendment tonight: I hope that the Minister will come back to the House on this matter. He is in an impossible position. He faces a set of receding issues. However, with the leave of the House I should now like to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 47 and 48 not moved.]
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 49:
After Clause 15, insert the following new clause:
Protection against victimization
(". In relation to a member-nominated trustee appointed under section 14, the Employment Protection (Consolidation) Act 1978 and the Trade Union and Labour Relations (Consolidation) Act 1992 (referred to in this section as "the 1992 Act") shall each have effect as if—

(a) the purposes specified in section 146(1) of the 1992 Act (action short of dismissal on grounds related to trade union membership or activities) included preventing or deterring him from carrying out any relevant functions as a trustee, or penalising him for doing so; and

(b) the reasons specified in section 152 of the 1992 Act (dismissal on grounds related to trade union membership or activities) included the reason that he had carried out, or proposed to carry out, his functions as a trustee.").

The noble Baroness said: My Lords, we are revisiting issues that we debated in Committee, when I am sure many noble Lords on all sides of the House were sympathetically inclined to the amendment that I moved. The Bill rightly gives a key role to trustees and in that regard it follows the recommendations of the Goode Report. It also envisages election or selection of employee trustees, as we know.
The duties and responsibilities of trustees are quite onerous, and we have to get the balance right to ensure that suitable employees are not frightened off. We have already discussed this point in connection with penalties

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and other matters. But if, added to that, trustees are to be concerned for their jobs if they attempt to do what they believe to be a proper task on behalf of the employees as a whole, it will be even more difficult to persuade the right type of people to come forward.
As I said in Committee, the late Robert Maxwell had employee trustees. But one cannot imagine that they would have felt able to stand up to the force of his dominant personality. Trustees are likely to be the first people to know if something has gone wrong or may be going wrong. A good trustee could well make himself or herself unpopular with the employer simply by asking too many questions deemed to be awkward. Trustees may make mistakes in good faith or out of naivety. But they must feel free to express a view without being fearful of the consequences. It is possible for employers to be quite vindictive, particularly if they have something to hide.
My amendment seeks to give extra protection against victimisation in such circumstances. It would mean that an employee trustee, if dismissed as he or she believes through endeavouring to exercise the trustee function effectively, would have the immediate protection of the 1978 Act without any qualifying service, the present period of two years being non-applicable in such circumstances. This could be quite important, since it is by no means certain that all trustees would have had two years' continuous service.
Secondly, such an individual would be entitled, if a claim to an industrial tribunal succeeded, to the maximum amount of compensation available. In Committee, the noble and learned Lord, Lord Hailsham, asked whether,
"something could be put into the employment protection legislation that would put the burden of proof on the employer who wanted to disadvantage a person who happened to be a trustee of the scheme in the conditions of his employment to show that it was nothing to do with the way in which he had behaved as a trustee".—[Official Report, 13/2/95; col. 471.]
However, that is what my amendment does. It reverses the burden of proof.
In Committee, the Minister said that he thought I had intended my amendment to refer to Section 152 of the 1992 Act, and I agree. I therefore amended the wording appropriately. There was support in Committee from all sides of the Chamber; and the Minister himself seemed sympathetic, and promised to look at what had been said. I had hoped therefore that there would be a government amendment. But as there is not, I wonder whether I can, this time round, persuade the Minister to accept this amendment. I beg to move.
Lord Mackay of Ardbrecknish: My Lords, as the noble Baroness, Lady Turner, indicated, I was struck by the force of the arguments put to me at Committee stage from all sides of the House about extending protection for employee trustees against victimisation by their employers. In this Bill, we are emphasising the responsibilities that trustees have for ensuring that a pension scheme is properly run and for looking after the interests of scheme members. We are aware that member-nominated trustees will often be in a minority on trustee boards, and that sufficient protection should be provided to an employee trustee in the same way as
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we are seeking in the Bill to provide protection, in a number of important areas, for trustees in their role as trustees.
In the Committee debate, I gave an undertaking that, if I could see a gap in the legislation, we would give serious consideration as to how we could close it. Having considered the position carefully, I can reassure noble Lords that, after consulting colleagues responsible for the relevant legislation, we do not believe that such a gap exists.
Individuals who have two years' service fall under the generalised protection against unfair dismissal. In such a case any dismissal is potentially unfair and the onus is on the employer to show that it was not. Employees would, of course, have to show that they have been dismissed and have not, for example, simply resigned, before they can establish their case. The Government do not believe that all employees, regardless of their length of service, should have such a general protection. The two-year qualifying period is necessary to ensure that the legislation does not create too heavy a burden on employers making them reluctant to recruit.
The Government have recognised that there should be specific protection in certain kinds of areas where fundamental rights are at stake, even where individuals do not have two years' employment—for example, for trade union and health and safety activities. In these cases it is up to those seeking to rely on this special protection to show that their complaint falls within its scope. That is in line with the time-honoured principle of UK law that it should be for those whose case depends on establishing certain facts to prove those facts.
The qualifying period is a major component of government policy, to ensure that employment protection legislation does not weigh unjustifiably on employers. The likelihood —I also mentioned this point in Committee—of pension scheme trustees having fewer than two years' service is perhaps minimal. We do not therefore see their position as justifying extending the list of exclusions. To do so might well bring pressure to extend the list still further.
In Committee, the noble Baroness, Lady Turner, expressed concern about the effect that mergers and takeovers might have on an employee's length of service, and how that came into the two-year rule. Indeed, I took her point, and that was one of the matters that we looked into.
I say to the noble Baroness that this is unlikely to be a problem, either generally or in relation to pension scheme trustees. The reason is that events such as mergers and takeovers would not normally break an employee-trustee's continuity of employment. I should like to make three main points about that, because it was one of the valid points that the noble Baroness brought to my attention.
First, employment protection legislation provides for continuity of employment to be preserved in most cases where a firm is taken over by another, either by the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) or under paragraph 17 or 18 of Schedule 13 to the Employment Protection

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(Consolidation) Act 1978. Secondly, TUPE provides broadly for the continuity of employment where a business or part of a business is transferred to a new employer. Thirdly, Schedule 13 to the 1978 Act provides for continuity when a wider category of business is transferred or if the employee moves to an associated employer.
I hope that I have managed to persuade the noble Baroness that the particular problem that she envisages of somebody having to go back to the beginning in the light of a merger, a takeover or something of that nature and start the two-year clock running again, is very, very unlikely. Indeed, I submit that under the three points that I have made it will not happen at all.
I turn to the related matter of victimisation and bullying by an employer which falls short of actual dismissal, a point that was also raised in Committee. In the Government's view, employees are already protected against significant victimisation or bullying by employers for whatever reason. If they suffer financial loss, they may be able to complain to an industrial tribunal or to the civil courts. If the employer's actions amount to a fundamental breach of contract, the employee will be entitled to resign and, if he qualifies, complain of unfair dismissal to an industrial tribunal. In any event, we do not believe that acting as a pension scheme trustee will put individuals in any more vulnerable a position with regard to victimisation by an employer. After all, employers set up pension schemes voluntarily; so any real employer-trustee conflict should be something of a rarity.
As I indicated, I have great sympathy with the concerns expressed during our debate in Committee. I undertook to look seriously into the position, which I have done. I appreciate the concern of noble Lords in Committee and that of the noble Baroness this afternoon. However, I am satisfied that the present unfair dismissal provisions already provide the legislative protection that we all believe the trustees need.
In the light of that explanation of to where trustees can look for protection in existing law, I hope that the noble Baroness will be reasonably satisfied and feel able to withdraw her amendment.
7 p.m.
Baroness Turner of Camden: My Lords, I thank the Minister for that detailed response to the amendment, but I am not entirely satisfied.
In the first place, the Minister produced the argument that an employee, if he were a trustee, would normally have had at least two years' service. That is not entirely true. There could be a fairly new firm in operation which decided to introduce a pension scheme. The individuals concerned would not have had the opportunity of working for two years with the same employer.
Secondly, he advanced the arguments in relation to TUPE and the Acquired Rights Directive in regard to mergers and takeovers. I understand that continuity of employment is guaranteed to a certain extent by the TUPE regulations. However, one of the reasons for
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attempting to write into the Bill some protection to trustees was, as it were, to flag up to employers who might feel inclined to exercise some intimidation or intimidatory tactics that there was special protection available to a trustee in such circumstances.
There was one aspect of my amendment to which the Minister did not address himself. It was my intention that if an individual succeeded in demonstrating to an industrial tribunal that he had been victimised, he would then be entitled to the maximum damages available to somebody dismissed under that particular section of the legislation. In other words, the employer would know that should an individual succeed before an industrial tribunal in demonstrating victimisation, then by decision of that tribunal the maximum amount of compensation could be claimed and made payable.
I am not entirely satisfied with everything that has been said. On the other hand, in view of previous votes that have taken place this evening and considering the hour, I do not feel inclined to press this matter to a Division. I shall consider very seriously what the Minister said. It may be possible to come back at Third Reading with a different form of words. The Minister's explanation does not entirely satisfy all the arguments that we advanced. I do not feel that trustees are adequately protected against victimisation or intimidation. However, in the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Lucas: My Lords, I beg to move that further consideration on Report be now adjourned. In moving the Motion, I suggest that the Report stage begin again not before 7.50 p.m.
Moved accordingly, and, on Question, Motion agreed to.

Battersea Power Station
7.5 p.m.
Lord Dubs Lord Dubs rose to ask Her Majesty's Government whether they will investigate the circumstances surrounding the disposal of Battersea Power Station by the Central Electricity Generating Board, and the reasons for its present dereliction.
The noble Lord said: My Lords, I welcome this opportunity to ask a complicated and important question of the Government about Battersea Power Station. The history of the power station over the past 11 or 12 years has been a sorry one. It is a history of neglect, incompetence, muddle and lack of will. I shall develop that history in a few moments.
First, let us look at the way in which our capital city is developing. Every now and again, there is an opportunity—it may come only once every 100 years—when a major site of importance to London and Londoners is ready for redevelopment. We have seen that happen in Canary Wharf where, I contend, we made a mess of it. We have seen it in the case of County Hall where I believe that we are also in danger of making a mess of it. We have seen it in the case of Battersea

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Power Station where I fear that we are missing opportunities that may not come again perhaps for 100 years or longer.
I want briefly to trace the history of the power station in relation to its original owners, the Central Electricity Generating Board; to record the fact that it is now a semi-derelict building that has no roof and that if the building becomes a dangerous structure it may have to be pulled down; and to point out that what we need, even at this point in time, is an exercise in imagination and co-operation between different sectors to do something sensible with an important and valuable site.
Let me turn to the history. About 1983 the CEGB decided that it no longer needed Battersea Power Station to provide electricity. A plan was prepared to dispose of the building by means of a competition. The winning consortium would have a golden opportunity to develop the site in line with the competition's winning entry. The consortium that won the competition did so on the basis of developing a theme park on somewhat similar lines to Alton Towers.
At that time I happened to be the Member of Parliament representing the Battersea constituency. I wrote to the Central Electricity Generating Board asking what safeguards there would be should the consortium which had won the competition be unable to proceed with the entry that had given it victory. The answer was that, apart from Wandsworth Council's own planning controls, no safeguards were necessary or would be sought.
As I understand the matter, the original consortium acquired the power station for £1.5 million. It is a Grade II listed building. Although the members of the consortium have changed several times, the original idea for development was proceeded with for some years. The Prime Minister in office at that time hailed the head of the consortium and said that she would be there at the power station on the day that it opened in 1990. I am bound to say that on the day I was there but she did not appear. That was hardly surprising, as the building was empty. It had no roof; work on it had stopped; and it was as derelict then as it is today. At some point in that period, Wandsworth Council found itself owed around £150,000 in planning fees. It was perfectly clear that the consortium had run out of money.
But perhaps I may go back a stage or two. The consortium had promised that it would involve the local community in further developments on the site. I do not believe that that happened. So far as I am aware, there was no sign of it. The building was then sold to a Hong Kong consortium, which I believe is called Parkview. It is not clear whether that consortium has any clear proposals for developing the site.
However, there is another and more serious issue. I understand that, if the building were to be pulled down, the value of the site would increase to between £100 million and £150 million. That is an enormous incentive for any developer to do nothing; to wait until the building becomes too dangerous to be allowed to stand. The local authority will then issue a dangerous structure notice. The developer will be able to pull down the listed building and make a large profit.
I do not know for what sum of money the original consortium sold the site to the present owners. The present owners, Parkview Estates, bought the original consortium's debts rather like the Dutch bank bought the debts of Barings. It is not clear therefore who would benefit if the building were to be pulled down and there were to be a green field site. Whoever benefits, the public will have lost because the Central Electricity Generating Board disposed of the building without even the minimum safeguards one would have thought a public body at the time would insist upon; which means that someone can make a large killing for negative effort, given that nothing is happening.
That is a sorry saga. I regret that the Public Accounts Committee in the other place did not bother to look into the issue. It may have unearthed rather more than I am able to reveal today. It is a miserable and murky story. We now have a situation where English Heritage has a responsibility for the building because it is listed. Wandsworth Council appears to find the issue too big for it to cope with. Its involvement has been a story of neglect and of doing very little other than trying to recoup the money in planning fees. If ever there was a need for a Greater London Council, it is here. It would be a body that could take a strategic view of that part of London and ensure that the site is developed in a way that meets the needs of London as a whole as well as the local community in Battersea.
Over the years the issue has been kept alive by a local group—the Battersea Power Station community group—and by the South London Press, which battled valiantly to try to draw the attention of people to what has been happening on the site. I believe that there are ways ahead in which, despite the history, we can look forward in a positive sense. Other cities in the world have shown that there are imaginative ways in which key sites can be developed and used for the good of the local community as well as of the wider community. Developments in parts of Hamburg indicate an exciting approach to urban regeneration. Developments in San Francisco arose from the city council setting up a task force in order to see what could be done to develop key areas of that city. I am sure that examples exist in other cities which indicate that there are possible and imaginative ways ahead.
We need a sense of excitement in relation to the opportunities. We need to create a way forward which will seek to bring in new and exciting ideas; a way that will recognise that we need a mixed development on the site rather than only one. After all, the site consists of 35 acres, a large building and an adjacent site which could complete the opportunities and possibilities. We need a mixed private and public development. We need to make sure that commercial benefits can accrue from the site; that social, community and leisure benefits can accrue.
I suggest that the Government should bring together the private sector—after all, Parkview owns the site—English Heritage and, despite what I have said about it, Wandsworth Council. Architects from around the world could be invited to find exciting ways of developing the potential of the site. In Hamburg teams of architects worked openly so that members of the public could see

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what was going on and could engage in a dialogue with them. In that way ideas were developed and local people had an input.
The Hamburg opportunity seems an exciting one. One of the architects involved, Mr. Alsop, made me feel extremely enthusiastic about the opportunities that exist for that type of approach. I do not know what is the right answer for the Battersea site, but I know that opportunities exist. I ask that the Government take that on board. I accept that the history has been miserable and unfortunate. But let us use our imagination, grasp the exciting opportunities that exist, and make something of an important part of London. At the moment it is neglected and signifies failure. Let us be positive. Let us feel the excitement and move forward on that basis.
7.16 p.m.
Lord Ponsonby of Shulbrede: My Lords, Battersea Power Station has evoked strong feelings from the generations of people who have known it. For two generations it was the wonder of the industrial age—from 1933 when the London Power Company first commissioned it, through to its peak of activity in the 1950s when it burnt 1 million tonnes of coal a year and sucked up 340 million gallons of water a day from the Thames. I am an engineer and I make no apology for saying that the colossal structure, with its four chimneys, each 337 feet high, captures my imagination. To me it evokes heavy engineering at its unfashionable best; it evokes battleships, ocean liners, steam trains and oil rigs.
I spend much of my working life travelling through Moscow. In Moscow working power stations still exist in the city centre. I have no doubt that those power stations are unloved brutes, barely functional and very dirty. For the Muscovites, heavy engineering evokes today's difficulties, not yesterday's successes. But Battersea Power Station is not unloved; it is a brute, but a brute with style. That has been acknowledged by all parties involved with it over the years.
Today Battersea Power Station has been standing idle for 13 years. It is now a desolate empty hulk with the west wall down and the roof removed. We heard something of the failure of private enterprise, of Wandsworth Council and of the Government to develop the site and preserve the structure. It is too easy to catalogue the broken promises, the back scratching, the waste of public money and bankruptcies that have characterised the site's history for the past 13 years.
Noble Lords may remember that in June 1988 the then prime Minister, Mrs. Thatcher, attended a ceremony at Battersea Power Station in which she referred to it as,
"the wonderful example of private enterprise and local government working hand in hand for the benefit of Britain".
She went on to congratulate the developer, Mr. John Broome —who was subsequently honoured—on,
"seizing the opportunity not only to save this magnificent building, but to put it to work again for the nation … This colossal undertaking has that touch of pure genius that has always made Britain great".
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I take no pleasure in reminding the Government of those words. They illustrate their misplaced faith in the private sector. But, much worse, they have given Wandsworth Borough Council an excuse for doing nothing over the past 13 years. No initiatives have been taken; no leadership shown. The planning brief is over 11 years old. Wandsworth itself could update it; for example, there is no need for there to be a single developer, as we heard earlier. As a statutory authority Wandsworth Borough Council should be leading both public and private investment in the site's development. That is how it would happen in many European cities—I think of Hamburg, Marseilles, Barcelona and Paris.
I hope that the aspirations for Battersea Power Station which Mrs. Thatcher set out in her speech in 1988 may yet be fulfilled. But it will take leadership and imagination. I urge the Government to consider their role so that future generations of Londoners may enjoy the sight of heavy engineering with style.
7.19 p.m.
Lord Desai: My Lords, we are grateful to my noble friend Lord Dubs for introducing this important Question. Although not much interest has been shown on the other side of the House about it, I do not think it is a partisan issue.
Battersea Power Station is part of London's and the nation's heritage. It is a magnificent building if in a somewhat brutal style, as my noble friend said. Not all schemes where private enterprise has bid for a public place have been failures. In Islington, the Royal Agricultural Hall was converted very successfully into the thriving Islington Business Centre. On the other hand, County Hall—perhaps I should declare some kind of interest because the London School of Economics where I work bid for County Hall and lost—was left to lie unoccupied for many years. Something is being done to it—we do not know what—and we hear constant rumours that the hotel plan may be abandoned and that we may be in another Battersea Power Station situation. Battersea Power Station is an example of a private enterprise scheme being aborted, thwarted or neglected.
What I want to do is not so much to apportion blame to Wandsworth Council, the private sector or the Government, but to ask whether it is not time for someone somewhere—be it English Heritage, the Millennium Commission, or whoever—to have a thought about public buildings which are in danger of being vandalised, if not totally destroyed. Either they will be put to a use which is not suitable—County Hall is an example—or they will be prematurely destroyed and the space will be put to another use.
Partly it is a matter of profitability; and why not? But I think there should be some way of conveying to people who own the building that rather than let it go to waste and become dangerous, and then destroy it and redevelop the site over a period of 10 or 15 years, it may be more profitable even from their point of view to adopt an alternative strategy—a co-operative strategy. With a little imagination from English Heritage, or whoever, we could both preserve the building and use it to generate profits for the private company and benefit the public interest.

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I really wish that the Government would think along those lines. They could thereby save the building and make it profitable and useful rather than let it go to waste, become dangerous and then have to have it destroyed.
7.23 p.m.
Lord Ezra: My Lords, I should like to declare right at the start of my remarks that I have been involved in this project in the sense that in 1983 the CEGB invited me to chair the body that was to select the scheme to be pursued.
The CEGB' s original proposition was to tear down the station and redevelop the site. But when the building was listed the CEGB was unable to do that, and it therefore decided to appoint a body, which ran a competition in order to come up with various proposals. It was a pretty eminent body, apart from its chairman, who was not eminent at all. It included Sir Hugh Casson, President of the Royal Academy; Sir Robert Lawrence of the British Railways Board; the Editor of the Standard; the chairman of Wandsworth technical services committee; the chief executive of the London Docklands; and a leading member of the CEGB. So quite an eminent body of people examined the matter, as the noble Lord, Lord Dubs, will no doubt recall.
My full recollection is that this was done extremely fairly. The competition was advertised. Six competitors were selected. We were not told the names of the competitors. Their projects were closely examined; the financial, environmental and transport implications were all looked at, and finally the syndicate in which the Alton Towers group was involved was selected. The proposition was that the Battersea Power Station should be converted into a replica Alton Towers, having regard to the fact that the structure had to be preserved. All seemed to be going well until financial difficulties arose. As a result of those financial difficulties, which meant that work on the project stopped in 1989, it was then sold—or the debts were sold, as the noble Lord rightly said. Since then, regrettably, the whole thing has been in abeyance.
I share the views expressed by other noble Lords who have spoken: the noble Lord, Lord Dubs, to whom we are grateful for introducing this Question; the noble Lord, Lord Ponsonby, who told us in glowing terms how much attachment he has as an engineer to this building; and the noble Lord, Lord Desai, who addressed the Question in his usual practical way.
When it was first built a lot of Londoners were shocked at the appearance of this upturned table in their midst. But since then they have grown to love it and do not want it to disappear. The conclusion I would reach, having been involved at the start and having had high hopes that the project would go ahead and provide some leisure for Londoners and for tourists visiting our shores, is that I very much hope that some way will be found of finding a solution at long last.
There are difficulties in the way. As the noble Baroness will probably remind us, the matter is still going through the courts. The question of ownership is not entirely resolved. But we shall have to see whether
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the Government can try to expedite these matters in some way. We can then perhaps pursue the proposal put forward by the noble Lord, Lord Dubs, that we should have another look at the matter and make use of the site which is becoming so derelict that this revered building could one of these days collapse from lack of attention. I look forward with great interest to hearing what the noble Baroness has to say to us.
7.27 p.m.
Lord Graham of Edmonton: My Lords, I rise not to apologise for the fact that the noble Lord, Lord Donoughue, is unable to be here because he is here. However, the circumstances were such that he needed to be out of the House for a very important reason and as he was so uncertain as to whether he could get back in time, I drew the short straw. The noble Lord, Lord Donoughue, who is sitting next to me, takes a keen interest in this matter, as indeed do all other noble Lords. I am delighted that the noble Baroness, Lady Trumpington, is to make a contribution and, I hope, to give us some words of comfort.
The noble Baroness should recognise that the terms of the Question are reasonable and gentle. It is couched in low key terms. There has been a remarkable lack of rancour from those two Members of the House who can speak most knowledgeably about Battersea. One of them represented Battersea in another place and another represents it on Wandsworth Council. We begin, therefore, in a positive and constructive way. However, sadness pervades the air because anyone who is a Londoner—I am a Londoner merely by emigration and by accident—must accept that the skyline, the riverscape and the unity of London are unique in many ways but not least because of the buildings and the functions that have been carried on in them. One can create rhapsodies about the importance of the River Thames. We are talking about a priceless asset which we believe is in danger of—I shall not say "being sold down the river"—coming to a very sad end.
I certainly have a great deal of sympathy with a number of groups; first, with the people of Battersea and Wandsworth. I am grateful to the noble Lord, Lord Ezra, for the brief history. He told us that when the structure was first created—now almost 60 years ago—it must have caused a hiatus among the populace. If one were to ask people throughout the world what they associate with Battersea they would mention the dogs home, the power station and the Festival of Britain. No doubt those who know more about Battersea can give many more examples. One of the few things that people think about when asked about Battersea is the power station.
I have a great deal of sympathy with Wandsworth Borough Council, which is the unit of government that has been landed with having to take some initiatives and exercise some power and authority in the absence of the GLC. That was an ideal unit of local government both to accept responsibility and to find the moneys necessary. The sad fact is that the GLC is not with us.
I certainly have sympathy with the Department of National Heritage because in a very busy life, with a great deal to do and not always with sufficient funds, we are asking it to take on board the responsibility for

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trying to sort out the mess. Anyone who looks at the matter cannot but agree that it is a mess and that someone has to take the initiative to sort it out. We are saying that here is an opportunity for the Department of National Heritage and the Department of the Environment to come to the rescue of Londoners in that way.
I certainly agree with Mr. Victor Hwang, head of the current consortium, when he says,
"Battersea Power Station is a symbol of London and we would like to use that to recreate the spirit of the art deco era".
Whether that is the function for which the consortium finally gets planning permission is another matter. But the building is quite unique.
I also endorse completely Mr. Brian Barnes of the Battersea Power Station Community Group when he asks Wandsworth Borough Council to publish a new development brief for the site. Mr. Barnes is quoted in the local press as saying,
"Wandsworth should take a more active role in the planning process and work with Parkview to speed up the redevelopment of the power station".
We are asking the Minister to be sympathetic and helpful.
The noble Lord, Lord Desai, and others have drawn our attention to the fiasco of the manner in which County Hall was taken out of public use by the residual body. It was bought and tinkered with. The project has lapsed, and the building has a history. I am not making a point about the way in which private developers can buy something for what I might call "nefarious purposes".
I served as chairman of a planning committee in Enfield some years ago and as leader of the council. A suspicion was introduced by one of the speakers that a possibility may exist that if this site finally became derelict and an eyesore the clearing of the site itself would bring in millions and millions of pounds. I am not in the business of causing anyone to talk about bogeymen and produce scare stories, but those factors exist.
My noble friend Lord Dubs said that we are looking for a sense of excitement in the future. That is what we need. He also said that there is a lack of will. I can see quite clearly that the noble Baroness, Lady Trumpington, and her colleagues in the Ministry are listening very carefully to the strength of feeling in the debate. A noble Lord said that there is no party animus in this, and that is absolutely right. There is nothing to be gained.
A great many headaches will come to whoever takes up this problem. The building was described by the noble Lord, Lord Ponsonby, as a "brute with style". It should still have a part to play in the overall planning of the river. I remember that it was Frank Sinatra who sang, "London by night is a wonderful sight". It is. Among the sights which Londoners see beside the other great buildings like this House and County Hall is Battersea Power Station. There are opportunities here. I very much hope that the Minister can be positive and give the people of Battersea—but more importantly the
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people of London and millions outside it—a sense that the Ministry has grasped this opportunity, which may never come again.
7.35 p.m.
Baroness Trumpington: My Lords, I am very grateful to the noble Lord, Lord Graham, for having stepped into the shoes of the noble Lord, Lord Donoughue, much as I regret being able only to admire him but not to hear him this evening.
We are all grateful to the noble Lord, Lord Dubs, for providing us with an opportunity to discuss this important London building. Since I live within a stone's throw of Battersea Power Station, I am at a loss as to whether or not I should declare an interest. My feelings are every bit as passionate as those of the noble Lords who have spoken.
The power station is listed as a building of special architectural or historic interest. Its listing status is Grade II. It was constructed from the 1930s onwards to the designs of Theo Halliday and Sir Giles Gilbert Scott, and is an important example of industrial architecture of that period. The power station is in fact the largest brick building in Europe. To illustrate its size, one could drop the whole of St. Paul's Cathedral into it and still have room to spare.
The noble Lord, Lord Ponsonby, will be interested to know that it is perhaps ironic that when construction was first mooted in the 1920s, fears were expressed that smoke emitted would ruin the paintings in the Tate Gallery across the river. Time moves on and, as we all know, Scott's other Thameside power station, at Bankside, is now itself to become part of that gallery.
The noble Lord, Lord Dubs, is right, the building remained in use as a power station until 1983. In 1984 the then owners—the Central Electricity Generating Board—launched a competition for its disposal. The bids were assessed not by the CEGB but, as he said, by a panel of independent assessors under the distinguished chairmanship of the noble Lord, Lord Ezra. I believe that he has given sufficient details about what went on at that time.
Listed building consent was given by Wandsworth Borough Council for the removal of part of the building, and work commenced accordingly. We understand that Mr. Broome spent a considerable sum of money on consolidating the building's foundations, but his plans subsequently fell through and circumstances forced him to sell the building. Parkview International, as agent for the Hwang brothers from Hong Kong, has now acquired the debt on the site, and is proceeding to full ownership.
The argument has been heard that, given the continuing uncertainty over the power station's future and the current state of the building, the right course now is to de-list it. The Government do not agree with that, for two reasons. Here I agree with the gist of the remarks of the noble Lord, Lord Desai.
First, although the power station at present stands empty with no roof and no west wall, it still retains the special qualities that were held to justify its listing in the

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first place. The most significant features of the interior, including the directors' staircase, bronze doors and Art Deco control room, are unaltered and protected.
Secondly, to de-list the building would send out entirely the wrong signals to other owners of historic buildings who would like to redevelop. The listing system does not in itself rule out any particular option for the building or its site. Its purpose is to flag up the special character of a building, and to ensure that decisions determining a building's future take that special character into account. The owner of a listed building may apply to the local planning authority for consent for its demolition. However, we are not aware that any application for consent to demolish Battersea Power Station has been made.
The Government's general policy on the conservation of historic buildings was set out last year in Planning Policy Guidance Note No. 15, Planning and the Historic Environment. This guidance, which local planning authorities must take into account in carrying out their statutory functions, restated the long-standing presumption in favour of the preservation of listed buildings.
I must emphasise that it is important that the Government do not comment on the merits of any particular option so as not to prejudice any decision which the Secretary of State for the Environment might eventually have to make on a planning or listed building consent application.
The guidance note also emphasised that viable new uses are often the key to the long-term survival of historic buildings. As your Lordships may be aware, many other major industrial buildings, which at one time might have seemed total white elephants, have subsequently been found very successful new uses. The Albert Dock in Liverpool and Dean Clough Mill in Halifax are good examples. I must tell the noble Lord, Lord Dubs, that the current position regarding Battersea Power Station is that Parkview International is in discussion with Wandsworth Council and English Heritage on a master plan for the complete site. I understand that mixed use of the site is among the options being considered. The Government are not a party to the discussions and it is not for me to speculate on the outcome. So far as we are aware, no new formal planning applications have been made. I have to say that both English Heritage and the Government accept that a viable new use for the site may in due course require substantial adaptation of the existing building, or some additional building, or a combination of both.
However, at this stage English Heritage's aim is to ensure that, until the long-term future of the building can be clarified, the condition of the fabric does not further deteriorate, and in particular that the directors' staircase and the control room are kept weathertight.
English Heritage inspects Battersea Power Station regularly. The last inspection took place on 6th December, and another will be carried out this week. The need for a number of minor repairs (such as patching minor leaks) was identified in the course of December's inspection, and these have now been completed by the owners. English Heritage has also requested Parkview to arrange for a structural engineer
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to look at the steelwork supporting the north-west chimney. A report on that should be available by the end of this month.
Both English Heritage and Wandsworth Council are well aware that they both have powers to serve a repairs or urgent works notice against an owner who neglects a listed building. However, English Heritage does not consider that Battersea Power Station has deteriorated to an extent that would warrant action of that kind at present. As I have said, English Heritage continues to monitor the condition of the building, and considers that for the moment there is no cause for alarm.
The Government fully acknowledge that the recent history of Battersea Power Station has not been as one might wish. However, I hope that your Lordships will draw some comfort, first, from the fact that discussions on the future of the site are proceeding; and, secondly, from the assurances that I have given that the building is subject to regular inspection by English Heritage, which is satisfied that the current condition of the building gives no immediate cause for concern. I hope that I have allayed the fears of the noble Lord, Lord Dubs, and of those of us who are interested in the future of Battersea Power Station.
Lord Graham of Edmonton: My Lords, before the noble Lord sits down—
Baroness Trumpington: Noble Lady!
Lord Graham of Edmonton: My Lords, I am sorry. Given that everyone is waiting for the current discussions to produce something positive, can the noble Baroness say whether it is in the minds of her ministerial colleagues to say that, if required, they would welcome becoming involved in helping to produce a good solution? We are not talking about merely finance. I am concerned about the impact on the river and on similar great buildings.
Baroness Trumpington: My Lords, I understand what the noble Lord says. At the moment, the Government are not a party to the discussions, so it is not for me to comment. However, as I said earlier, I understand that joint planning for the future is being discussed.
Lord Dubs: My Lords, before the noble Baroness sits down, may I ask whether she will agree to think again about the points that have been made? If reports from English Heritage say that because the building has not yet fallen down, all is not disaster, perhaps I may advise her that that is a low level of achievement. Will the noble Baroness take away with her the thought that the Government could be the catalyst and could generate some excitement by getting architects involved and seeing the scheme as one of the most wonderful opportunities for the future of London? Does the noble Baroness agree that if we leave things as they are now, this situation might drag on for years?
Baroness Trumpington: My Lords, as Battersea Power Station is a listed building, it is the duty of English Heritage to make sure that it is protected. I hope

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that I have made it quite clear this evening that it will continue to be a listed building. I do not think that I can go any further than that at the moment.
Viscount Long: My Lords, I beg to move that the House do now adjourn during pleasure until 7.50 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.46 to 7.50 p.m.]

Pensions Bill [H.L.]
Consideration of amendments on Report resumed.
Clause 16 [Member-nominated trustees: supplementary]:
Lord Lucas Lord Lucas moved Amendment No. 50:
Page 8, line 9, leave out (" 3") and insert ("(Prohibition orders)").
The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 3. I beg to move.
On Question, amendment agreed to.
Clause 23 [Section 22: Consequences]:
Lord Lucas Lord Lucas moved Amendment No. 51:
Page 12, line 18, leave out (" 3") and insert ("(Prohibition orders)").
On Question, amendment agreed to.
Clause 24 [Persons disqualified for being trustees]:
Lord Lucas Lord Lucas moved Amendment No. 52:
Page 12, line 26, at end insert:
("(bb) where the person is a company, if any director of the company is disqualified under this section,
(bc) where the person is a Scottish partnership, if any partner is disqualified under this section").
The noble Lord said: My Lords, I shall speak also to Amendments Nos. 54, 55, 56, 57, 58 and 59. These amendments introduce changes to disqualification provisions in Clauses 24 and 25. Amendment No. 52 provides that a company is automatically disqualified from being a trustee of an occupational pension scheme if any of its directors are disqualified from acting as a trustee of a pension scheme under the provisions of Clause 24. Similarly, a Scottish partnership is automatically disqualified from being a trustee of an occupational pension scheme if any partner is disqualified. That automatically prevents individuals who are disqualified from acting as a trustee from being able to circumvent their disqualification by hiding behind the legal identity afforded to a company or Scottish partnership.
Amendment No. 57 is consequential on Amendment No. 52. It removes subsection (6) which is made redundant by the new wider automatic disqualification provision introduced by Amendment No. 52. That provides greater protection to schemes than that provided by Clause 24. As it currently stands, Clause 24 provides for the authority to remove or prohibit the company or partnership only in respect of a particular scheme. Companies and Scottish partnerships can
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ensure that they are not disqualified under the new provisions simply by ensuring that none of their directors or partners is a disqualified person.
The authority will be able to use this power only if the individual in question has breached an obligation placed upon him by Part I of the Bill and is to be prohibited in respect of it. That individual will be able to ask for prohibition to be reviewed in the usual way. If the decision to prohibit were to be overturned, the authority would not be able to disqualify him.
Amendment No. 54 provides for the authority to disqualify any person it has prohibited from acting as a trustee for a breach of the provisions of Part I of the Bill, if it considers it desirable to do so. It enables the authority, when considering whether to disqualify a person who has been prohibited, to take into account all relevant factors—to consider disqualification "in the round" and not just in the more restricted context of the particular actions which led to the prohibition.
Amendment No. 55 provides for the authority to disqualify a person from being a trustee of an occupational pension scheme if he is incapable of acting as such because of a mental disorder or where he is a company which has gone into liquidation. I am delighted to see that the usual third of that triumvirate—the mad and and the bankrupt—in other words, the Peerage, is not included in that provision. That provides the authority with the power to disqualify such people form being trustees and increases the protection that can be afforded to occupational pension schemes.
Amendment No. 56 is consequential upon Amendment No. 55. It adds a reference to new subsection (3A) so that the authority can consider revoking or waiving its disqualification on the application of the person who is disqualified.
Amendments Nos. 58 and 59 address the concerns expressed by the noble Lord, Lord Haskel, in Committee, when he moved Amendment No. 118L, that everyone who needed information on whether a person was disqualified should be able to get it.
I explained then the intention of Clause 25(7) to allow for any person who has concerns about either a particular person acting as a trustee of a scheme or a person under consideration for appointment as a trustee to be able to check whether the person in question is shown in the authority's register as being disqualified. These amendments enable a person who has an interest in a scheme to obtain the information from the authority.
The subsection will ensure that the authority is required to state only whether a person named by an inquirer is disqualified in respect of a particular scheme named by the inquirer. The reason is that some people may be disqualified in respect of a particular class or group for schemes only. There is also a need to protect those listed in the register from having the information held on them being used for purposes which have nothing to do with whether or not they should act as the trustee of a particular scheme. That is why the register will not be available for public inspection. I commend the amendment to the House.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendments Nos. 53 to 57:
Page 13, line 3, leave out from ("person") to ("(whether") in line 6 and insert:
("() is prohibited from being a trustee of a trust scheme by an order under section (Prohibition orders), or
() has been removed as a trustee of a trust scheme by an order made").
Page 13, line 11, leave out from ("if") to ("by") in line 12 and insert ("in their opinion it is not desirable for him to be a trustee of any trust scheme").
Page 13, line 13, at end insert:
("(3A) The Authority may by order disqualify a person for being a trustee of any trust scheme where—

(a) in their opinion he is incapable of acting as such a trustee by reason of mental disorder (within the meaning of the Mental Health Act 1983 or, as respects Scotland, the Mental Health (Scotland) Act 1984), or

(b) the person is a company which has gone into liquidation (within the meaning of section 247(2) of the Insolvency Act 1986).").

Page 13, line 17, after ("(3)") insert ("or (3A)").
Page 13, line 23, leave out subsection (6).
The noble Lord said: My Lords, I spoke to these amendments with Amendments Nos. 3 and 52. I beg to move.
On Question, amendments agreed to.
Clause 25 [Persons disqualified: consequences]:
Lord Lucas Lord Lucas moved Amendments Nos. 58 and 59:
Page 14, line 9, leave out from ("so") to ("disclose") in line 10.
Page 14, line 11, at end insert ("in respect of a scheme so specified").
The noble Lord said: My Lords, I spoke to these amendments with Amendment No. 52. I beg to move.
On Question, amendments agreed to.
Clause 26 [Trustees not to be indemnified for fines or civil penalties]:
Lord Lucas Lord Lucas moved Amendment No. 60:
Page 14, line 24, leave out (" 3") and insert ("(Prohibition orders)").
The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 3. I beg to move.
On Question, amendment agreed to.
The Earl of Buckinghamshire The Earl of Buckinghamshire moved Amendment No. 61:
Before Clause 27, insert the following new clause:
("Trustees may keep benefits
A trustee of a trust scheme shall not be required to forego or account to the trustees or any beneficiary of the scheme for any benefit that may be payable to him or any other person—

(a) by virtue of his membership of the scheme, and

(b) by reason of any decision regarding the exercise of a power or discretion conferred on the trustees (including a decision to exercise or refrain from exercising a power to reduce benefits),

if the trustee did not take part in making that decision or the actuary certifies in writing that in his opinion it is fair and reasonable for the benefit to be paid.").
The noble Earl said: My Lords, the amendment is designed to remove a legal difficulty to which attention was drawn last year in the so-called Drexel case. The judge in that case pointed out that it is a long-established principle of trust law that trustees cannot derive personal
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benefit from their decisions as trustees. He thought that there was therefore a danger that those trustees of a pension scheme who were also members and beneficiaries may not be able to have the same benefits as other members; for example, if trustees awarded additional benefits out of surplus, something which concerned the Drexel case.
In Committee, the noble Lord, Lord Haskel, moved an amendment which was later withdrawn, which made it clear that trustees had the power to make amendments to the scheme even though one or more members were trustees. My amendment is slightly different. It assumes that the trustees may or may not already have sufficient power to amend the scheme, and deals directly with the question of whether, when such an amendment is made, the trustees who are members of the scheme can benefit from it.
As noble Lords are well aware, some trust documents allow for trustees to benefit from benefit improvements in schemes of which they are members, but others are silent or ambiguous. My amendment would make it clear that such a trustee could benefit provided that he took no part in the decision, or, if he did take part in the decision, the actuary certified that in his opinion any benefit improvements were reasonable and fair to be paid.
In his reply in Committee, my noble friend the Minister indicated that he believed that the present legal situation, as developed in case law, was satisfactory. I believe that that statement may have been made a little too easily. I should like him to reconsider the views that he expressed in Committee.
I conclude by reminding your Lordships of what was said by the judge in the Drexel case. He stated:
"When the legislature considers how far and in what terms to embody the report of Professor Goode and his colleagues into law or otherwise to reform the law in this area, I commend to it consideration of the creation of a clear exception to the so-called 'general rule of equity' so that in appropriate cases the administration of pension trusts by trustee-beneficiaries might safely proceed without expense and delay of proceedings".
My amendment makes clear that the member trustees would be able to proceed safely. It is an important amendment. I believe that the arguments made in Committee were too lightly dismissed. I look forward to hearing my noble friend's views. I beg to move.
8 p.m.
Lord Ezra: My Lords, I support the amendment. The issue needs to be clarified. Throughout the Bill we have talked repeatedly about the need for balance, and a subject of anxiety is the position of trustees. Of course, trustees must properly perform their duties but in this case they could be vulnerable if the law were not clarified. Naturally, member trustees are potential beneficiaries of any improvements that are introduced in the schemes of which they form members. Therefore, I hope that the Government will accept the arguments so effectively put forward by the noble Earl.
Lord Haskel: My Lords, I too support the amendment, which is similar to an amendment I tabled in Committee. The noble Earl has improved upon it and

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his amendment deals with some of the comments that were made in Committee by the Minister. I am sure that it will be easier for the Minister to accept.
Lord Mackay of Ardbrecknish: My Lords, the amendment seeks to address the issues brought up by the recent case of Manning v. Drexel Burnham Lambert Holdings Limited. The issue concerns a matter of trust law, commonly referred to as the "general rule of equity" whereby a person in a fiduciary position should not put himself in a position where his interest and his duty conflict. Very briefly, the question is whether it is necessary to legislate in the Pensions Bill in order to make clear that trustees who are also scheme members are not prevented from taking decisions simply because they, among others, may benefit from decisions in which they take part.
This matter has been brought into focus by our proposed legislation on member-nominated trustees. But it is not applicable only to them. It is relevant for all member trustees regardless of who nominates them. We have heard today from the noble Baroness, Lady Hollis, that there are already many pension schemes which have member trustees. These schemes operate very successfully and make decisions without recourse to the courts, despite the fact that their trustees are potential beneficiaries. I said in Committee that if there were any grounds for thinking that recent judgments in the Drexel case and the earlier Makin case cast serious doubt on the validity of trust boards containing trustees who are also scheme members, we would ourselves have introduced an appropriate amendment. I reiterate that.
Both the Drexel and Makin cases had particular features which rarely arise in schemes. In both cases, the sponsoring employer was insolvent and the scheme was winding up with a large surplus. The trustees in both the Makin and Drexel cases had discretion to distribute surplus funds. These cases are atypical. First, it is unusual for trustees to have such a discretion in a modem trust deed, and, secondly, both arose before the Social Security Act 1992, which requires an independent trustee to be appointed if the sponsoring employer becomes insolvent. The difficulties may not have arisen if there had been an independent trustee.
This amendment would give trustees two options when taking decisions on matters in which they might be faced with a conflict of interests. The first is for the trustee to decline to take part in the decision. This is already a route which trustees can take if they believe that they have an irreconcilable conflict of interest. I must say, however, that in many schemes this option would not be practical because all, or most of, the trustees would also be scheme members and if they all withdrew there would be no one left to take the decision.
Secondly, the amendment suggests that, as an alternative, the actuary could certify that it is fair and reasonable for the benefit to be paid. I do not consider that this is part of an actuary's role. To my mind, it puts him in a position where he has to make a qualitative judgment about a decision made by a trustee, in effect, to act as a kind of independent trustee but without the fiduciary responsibilities. As I see it, the actuary's role
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is to advise trustees on decisions of fact on scheme funding matters. With all respect to actuaries, that is not a decision for them.
My noble friend has clearly tabled his amendment with very good intentions in order to ensure that member trustees are free to participate fully in decisions of the trust board. We are confident that in fact they can and that there is no threat to the position of member trustees, providing that they act in good faith and consider the interests of all scheme members. There is a general acceptance that decisions in which member trustees participate should not be invalidated simply because they, among others of their class, could benefit.
We have considered all the issues very carefully. However, we believe that it is unnecessary and possibly unwise to legislate in this Bill. Our concern is that, by specifying the position for member trustees, not just member-nominated trustees, we might prejudice the interests of scheme members generally. And, after all, that is the purpose of the general rule of equity, which this amendment is seeking to override. The courts can enforce and develop that rule in a way that legislation cannot and we believe it would be unwise to do anything that might endanger this. I have explained the matter at length but I believe that it is important. I hope that I have reassured my noble friend that his fears are unjustified. I hope that he is now able to withdraw his amendment.
The Earl of Buckinghamshire: My Lords, I thank the noble Lords, Lord Ezra and Lord Haskel, for their support. I listened with great interest to what my noble friend the Minister said. I am aware of the unique features of the Drexel case. I am sure that in summing up the learned judge was aware of the uniqueness of the case but felt obliged to widen the scope of his comments.
I commented on the actuary certifying that it was fair and reasonable and I believe that my noble friend the Minister said that it was a qualitative judgment. In fact, it is a quantitative judgment introduced to make sure that trustees, on the direction of the company, do not unfairly award themselves improvements in benefits to the detriment of other beneficiaries. Therefore, the actuary has a role to play in this matter.
It is interesting to believe that every single trust deed and rule of the 150,000 schemes that now exist states that the trustees can make benefit improvements of which they will be the beneficiaries. I suspect that many trust deeds and rules do not have that power. The amendment, even though it may be deficient in some areas, would provide that those trust deeds and rules are dealt with in this legislation. One cannot amend trust deeds and rules in isolation because one cannot alter the balance of powers in such a way within the trust document.
I am not a lawyer—and perhaps a lawyer will correct me—but it is my understanding that the balance of powers issue must be treated with great care. The amendment would have gone some way towards dealing with that. I am disappointed by my noble friend's reply and I do not agree with all that he has said. But on that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 27 [Decisions by majority]:
Lord Lucas Lord Lucas moved Amendment No. 62:
Page 15, line 18, leave out (" 3") and insert ("(Prohibition orders)").
The noble Lord said: My Lords, I spoke to this amendment when moving Amendment No. 3. I beg to move.
On Question, amendment agreed to.
Clause 28 [Investment powers: duty of care]:
The Earl of Buckinghamshire The Earl of Buckinghamshire moved Amendment No. 63:
Page 15, line 22, leave out ("investment functions,") and insert ("functions relating to investment (within the meaning of the Financial Services Act 1986),").
The noble Earl said: My Lords, I hope to inject some excitement into your Lordships' House this evening because we are now dealing with vicarious liabilities. I set the Minister a test and look forward to hearing what that actually means!
We are now dealing with amendments to Clauses 28 and 29, and I shall speak to all the amendments in the group. The combined effect of Clauses 28 and 29 is to curtail severely the delegation of discretions relating to investment decisions and in particular to prevent the trustees from passing responsibility for decisions to fund managers except where the investment is an investment within the meaning of the Financial Services Act.
For example, under the current arrangements, it will not be possible to delegate to an overseas investment house in the United States without landing the trustees in quite a considerable difficulty as regards liability. The same arguments would apply to property.
In short, this group of amendments seeks to enable sensible arrangements for delegating trustee investment functions and to allow them to continue as they do at present. I have mentioned already the difficulties with regard to property managers and overseas investment managers. If the amendments are not accepted, serious difficulties will arise.
The amendments seek to allow the trustees the power to delegate decisions as regards investments to such managers and the trustees will not be responsible for the acts and defaults of such managers if the trustees have taken reasonable steps to satisfy themselves that the managers have the necessary knowledge and experience and that they are acting competently.
The clause does not allow sub-delegation by managers, whereas my amendment seeks to allow that. Among other things, it would permit schemes to continue to use common investment funds where they are appropriate. This amendment needs to be included in the Bill and I commend it to the House. I beg to move.
Lord Ezra: My Lords, I support this amendment which is similar to an amendment which I tabled in Committee. The position is that unless the amendments moved by the noble Earl are accepted, present Investment practices by pension funds will be curtailed
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and no additional safeguards will thereby be achieved. I can see very little point in doing that and I hope that the amendments will be accepted.
8.15 p.m.
Lord Mackay of Ardbrecknish: My Lords, 1 thank my noble friend for explaining his detailed amendments to the House and I thank him also for setting me a test about vicarious liability. I thought that perhaps it had something to do with the behaviour of vicars and in the absence of any bishops on their Benches I thought that I should let it pass at that. But of course, vicarious liability is to do with liability for the actions of a deputy, which is perhaps more boring than my first suggestion but, nevertheless, that is the position.
In considering the issues which my noble friend raised—and as the noble Lord, Lord Ezra, pointed out, he raised the same points in Committee—I agreed to consider further the question of trustees powers to permit sub-delegation among fund managers.
We have also looked further at the issues of whether or not trustees should continue to benefit from any exclusions from liability contained in trust deeds where they delegate discretion to fund managers who do not need to be authorised under the Financial Services Act. That point is also covered in the amendments before us.
As a result of our review of Clause 29 we have concluded that, in respect of sub-delegation, the clause as drafted is too restrictive and we are considering an appropriate amendment. This would make it clear that sub-delegation should indeed be possible. We are also looking carefully at the issue of whether delegation should be possible to persons who are not fund managers in the context of common investment funds—a point raised by the noble Lord, Lord Ezra.
On the second point, the clause as drafted follows the PLRC recommendation in providing a statutory exemption from trustees' vicarious liability in respect of FSA investments managed by persons authorised under the Financial Services Act. The PLRC report did not specifically address the issue of whether trustees should continue to benefit from exclusions to their liability contained in trust deeds when other fund managers, who do not need to be authorised, are appointed to manage non-FSA investments.
The clause as drafted prevents the operation of such exclusions. We have taken careful note of the arguments which have been put to us, both in this debate, in Committee and elsewhere, suggesting that the clause as drafted may go beyond the intention of the PLRC and may have a significant adverse effect on trustees' willingness to make investments outside the scope of the Financial Services Act, even though such investments would be perfectly proper, given a scheme's circumstances. On the other hand, we obviously need to ensure that we do not place scheme members at risk through inappropriate or unregulated investments.
We have come to the view that the clause probably does go too far in limiting trustees' readiness to invest in non-FSA investments and unnecessarily interferes with scheme rules. Therefore, we are looking closely at all of the issues which my noble friend's amendments cover.

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We will then, if necessary, introduce suitable amendments in another place to permit appropriate sub-delegation to occur. We will also give serious consideration to introducing further amendments in respect of non-FSA investments. I trust that this response will enable my noble friend to withdraw these amendments.
The Earl of Buckinghamshire: My Lords, I am extremely grateful to the noble Lord, Lord Ezra, for his support. I thank my noble friend for his constructive reply and I look forward to seeing the amendments when they appear in the other place. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 29 [Power of investment and delegation]:
[Amendments Nos. 64 to 73 not moved.]
Clause 30 [Investment principles]:
Lord Haskel Lord Haskel moved Amendment No. 74:
Page 16, line 45, at end insert:
("() the exercise of voting rights and other powers conferred by virtue of their investments;").
The noble Lord said: My Lords, in moving this amendment I shall speak also to Amendment Nos. 77 and 78. I am delighted that the Minister seems to be in such an accommodating mood this evening.
Baroness Hollis of Heigham: Long may it last¡
Lord Haskel: My Lords, similar amendments were moved in the Committee but the amendments now before your Lordships are altered in order to satisfy the Minister; when he responded to my amendments in Committee we shared a surprising amount of common ground. We agreed that institutional investors have a responsibility for good corporate governance and that that responsibility is crucial to our economic prosperity.
We agreed also that that responsibility is consistent with the trustees' duties to act in the interests of the beneficiaries. We agreed further that active ownership of shares was consistent with best practice. As an example, the Minister gave us the lead taken by the National Association of Pension Funds which recommends that trustees should decide on their voting policy and that that voting policy should be made public. That is the purpose of these amendments.
Indeed, the National Association of Pension Funds recognises the scale of the problem with regard to proxy voting by pension funds. At its conference in February, its vice-chairman, Graham Allen, commented:
"The statistics on the voting pattern of pension funds are still disappointing and significant further progress needs to be made".
The question, then, is: how can the "significant further progress" of which Mr. Allen speaks be achieved? It seems to me that it could be done by finding clauses in the Bill where the duties in my amendments can simply be incorporated with the duties already in the legislation. Let us take, for example, Clause 31 which deals with choosing investments. The Bill says,
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"The trustees or fund manager must have regard—

(a) to the need for diversification of investments, so far as appropriate to the circumstances of the scheme, and

(b) to the suitability to the scheme of investments".

That means that trustees and fund managers must "have regard to" the need for diversification and the suitability of investments.
My first amendment neatly adds a third element to the duties of the trustees and fund managers; namely, to "have regard to"—exactly the same words—good, corporate governance. We agree that this is vital for the nation's economy and for the beneficiaries. With the wording, "have regard to", the amendment gives trustees and pension fund managers the flexibility of applying those principles as they arise. For example, when shareholders indicated that bonuses and share options should depend on company performance and that wish was obviously ignored, trustees and fund managers—having regard to the wishes of the beneficiaries—would obviously be required to act. That would have saved the Prime Minister the embarrassment of a U-turn. In future, trustees and managers can adapt to the recommendations of the Greenbury Committee as and when they become known. They will also be able to adapt to the proposals of the Cadbury 2 Committee and introduce them as and when they become known.
By allowing the trustees the option of having regard to their duty, it enables them to ignore shareholdings which are too small, too far away, or matters which are not contentious. They do that by choosing to abstain. Here we have a way in which our purpose can be achieved without what the Minister called in Committee, specific or detailed obligations on pension funds which risk being regulatory and burdensome.
I now turn to the need for trustees and pension fund managers to report their voting intentions and record them. Again, there is another section of the Bill into which that requirement neatly fits. Clause 30 requires trustees of a pension scheme to prepare and maintain from time to time a written statement,
"of the principles governing decisions about investments for the purposes of the scheme".
Subsection (2) says that the statement must cover, among other things,
"the trustees' policy for securing compliance … and … their policy about the kinds of investments to be held, the balance between different kinds of investments, risk, the expected return … the realisation of investments, and such other matters as may be prescribed".
The Government have recognised the need to set out those duties and responsibilities of the trustees and fund managers. While carrying out those duties, surely it is neither burdensome nor bureaucratic to add the requirement to state the principles of voting and to keep a record. Let us bear in mind that abstaining is also an option which can be chosen and, indeed, may be the choice on many occasions.
It is important to find common ground in order to incorporate the amendments in the Bill. We all want shareholders to vote. The survey of the National Association of Pension Funds shows that there has been no significant increase in voting at company meetings over the past few years. Speaking at its conference in

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February, the vice-chairman, Mr. Graham Allen, quoted from the annual survey for 1994 of the members of the National Association of Pension Funds, as follows:
"There is still a very long way to travel before the majority of large UK funds regularly exercise their votes".
The purpose of the amendment is not simply to increase the quantity of voting; the quality is in fact more important. When pension funds vote, all too often they are simply rubber stamping the proposals of company management. For example, M&G announced that it will vote with company management as a matter of policy.
In Committee, the Minister questioned the logic of a duty being imposed on the pension funds only and asked why such a duty should not be placed on individuals and other collective investment vehicles. My response is that individuals act in their own right and can do what they want. Trustees and fund managers hold proxies from individuals, and they have a fiduciary duty to act.
The Minister also asked in Committee why that should apply to pension funds only and why should not other collective investment vehicles have a duty to vote. I believe that the same principle should apply. Indeed, putting such amendments in the Pensions Bill would have a powerful effect on fund managers. If they supply that service to pension fund trustees, they would probably do so for other clients as it enhances the quality of their service. In fact, insurance companies have a reasonably good record. However, we are now dealing with a pensions Bill and pensions represent one-third of all the shares on the London Stock Exchange. It is a good start and we have to start somewhere.
The Minister will remember, while reading the thoughts of Chairman Mao a few years ago, that Chairman Mao said that the journey of 6,000 kilometres started with one step. My proposed amendments take that first step. If we bring the voting process within the framework of the legislation, we recognise, in the words of the Cadbury Committee, that voting rights are an asset which must, like any other asset, be managed with care in the sole interests of the beneficiaries.
With the amendments as now worded, we would not be introducing compulsory voting; we would be advocating compulsory, corporate responsibility. I beg to move.
Lord Ezra: My Lords, we had some debate on the issue in Committee. Those who contributed to the discussions at the time, like the noble Lord, Lord Haskel, myself, and others, made the point that here we have a unique opportunity to support the cause of corporate governance without departing too much from the Bill. As the noble Lord, Lord Haskel, pointed out, the amendments could very easily be dovetailed into the existing provisions. As the noble Lord rightly said, pension funds now represent a massive part of investment on the Stock Exchange. Indeed, it amounts to no less than one-third.
Many of us have been worried over the years about the role of institutional investors. Those of us who are concerned with such matters have felt that they should be taking a more positive role. As legislative opportunities present themselves, surely they should be
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seized. The same attitude has been adopted in environmental matters: when appropriate legislation is there, why not seize it? Therefore, I very strongly support what has been so ably proposed by the noble Lord, Lord Haskel. I believe that it would be a big step forward. I do not think that it is a small step; I believe that it would be a big, notable step forward in emphasising the responsibility of institutional investors—in this case, in the form of pension funds—for taking a more positive role in the use made of their investments.
Lord Mackay of Ardbrecknish: My Lords, the noble Lord, Lord Haskel, set out the reasoning and logic behind the amendments this evening as, indeed, he did when we debated similar amendments in Committee. Among the arguments he put forward was that I should take the advice of Chairman Mao as regards every journey beginning with a step. As the bamboo curtain is being raised, I am not entirely sure that I like all the places where Chairman Mao ended up on some of his journeys, or indeed where his country ended up. Therefore I do not consider that argument terribly good.
I agree with the noble Lord, Lord Haskel, and the noble Lord, Lord Ezra, that shareholders of all kinds have a crucial say in influencing and ensuring the competitiveness of British industry and that they should take those responsibilities seriously. I confirm that in Committee I said that what he envisaged in those amendments reflected good practice. I still hold to that view. However, I believe that good practice is not necessarily appropriate for legislation. I believe that good practice has to have an air of flexibility and that it must be geared to individual trustees and individual schemes and the various circumstances which arise. We are talking about a guide to trustees who must be careful under trust law not to fetter their own discretion by laying down, or having laid down for them, very strict rules which they have to follow regardless of what may be the situation facing them on a particular issue.
I spoke at some length about these amendments in Committee. As I said then, this is something which goes well beyond pension funds and their strategies. Both noble Lords who spoke agreed but thought the Bill was a good place to start taking action along those lines, arguing that pension funds were big holders of UK equities and for them to play a full part in decisions made at shareholders' meetings would be a considerable step forward from where we are today. I am sure the House will be aware that my right honourable friend the Prime Minister said in another place that the Government would wish to consider any recommendations from the Greenbury Committee and whether there was a need for any further legislative action to support any recommendations the committee might make. I therefore think that that is the appropriate way to proceed.
I hope that having brought this issue to our attention for a second time the noble Lord will agree that we should, as my right honourable friend the Prime Minister suggested, await the views of Sir Richard Greenbury and his colleagues before we decide what, if any, action we require to take. If we require to take any action, clearly that would be taken on a wider basis than

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just the pensions industry. I hope that having ably paraded his argument once again, and having heard my remarks, the noble Lord will feel able to withdraw his amendment. I am sorry that he thought I was only starting off in a good frame of mind. I hope that I am still in a good frame of mind. I wonder whether he should talk to his noble friend Lady Hollis about whether I have been in a good frame of mind all day.
8.30 p.m.
Lord Haskel: My Lords, I thank the Minister for that considered reply which I found disappointing. He put forward no new arguments as to why these amendments should not be incorporated in the Bill. The amendments are tailored so that they dovetail exactly into the Bill. It seems to me extraordinary that there are some duties which the Government think should be imposed on trustees and pension fund managers but not others. It seems to me that the duties I am asking them to undertake are entirely consistent with the things the Government are asking them to undertake.
As regards waiting for the conclusions of the Greenbury Committee, that committee is looking into the matter of remuneration. Shareholders are interested in a whole range of matters. I can well imagine that shareholders, as well as being interested in employment policies, are interested in environmental matters, moral matters and all sorts of things in a company. One cannot have a committee look into each of these aspects as soon as they arise. It would seem sensible for shareholders to be encouraged to take their proper interest in all matters relating to the company; if that were done the Prime Minister and other Ministers in the Government would not have to deal with these things as they crop up. Shareholders would deal with those matters as a matter of routine.
I did not wish to remind your Lordships that this provision is now obligatory on American pension fund managers and will apply to their shares held in British companies in London. I can well imagine that American pension fund managers will start to take a lot more interest in the activities of British companies. It seems a pity that we have to wait for them to become more active and then follow on, as inevitably we shall have to. For obvious reasons I shall not divide the House on this matter. I find the Minister's response disappointing. I shall try to find a more suitable quotation from the thoughts of Chairman Mao which may convince him on a later occasion as it is obviously some time since he read them. In the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Buckinghamshire The Earl of Buckinghamshire moved Amendment No. 75:
Page 17, leave out line 10 and insert:
(" () take into account the interests of beneficiaries and contingent beneficiaries (including employers).").
The noble Earl said: My Lords, Clause 30 provides for trustees to have the same power to make an investment of any kind as if they were absolutely entitled to the assets of the scheme. It also entitles the trustees to delegate discretion over day to day
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investment decisions. Clause 31, however, requires trustees to prepare, maintain and periodically review a written statement of the principles governing the trustees' investment decisions. The trustees are required to consult the employer and obtain and consider the advice of a qualified and experienced financial person before preparing or revisiting this statement.
The point I made on Second Reading and in Committee, when it was raised obliquely, is that there is no obligation on trustees to take account of the views of the employer in drawing up their policy. They are only required to consult. It seems to me reasonable that the trustees should take account not only of the interests of the beneficiaries but also of the likely financial impact of any investment decision on the employer as the contributor to the scheme. If the Bill is introduced unamended there will be no explicit obligation on the trustee body to take account of any views expressed by the employer. I believe there is a difficulty as regards the use of the word "consult" rather than "consultation". That will leave employers exposed potentially to additional costs over which they have no control.
The argument may be made that the employers accept that the trustees will not wish to prejudice the continuing sponsorship of the employers, but I believe that unless specific duties are placed on the trustees to take account of the employers' views in the new law, trustees may well think that they have a duty and are best advised to take the most conservative view on funding and investment decisions. This is an important amendment. I look forward to hearing my noble friend the Minister's reply. I beg to move.
Baroness Hollis of Heigham: My Lords, we are uneasy about the amendment for several reasons. It appears to move the trustees away from having a fiduciary responsibility to consider all the interests of all the associated parties and ask them to give particular regard to one party; that is, the employer. We have already accepted, apparently, that two-thirds of the trustees will be nominated by the employer himself. Nobody can believe for a moment that as a result the employer's view on investment policy will not be well argued and well reflected within the trustee body. That is accepted. However, we also argue that within that body a trustee should operate within a framework of fiduciary duty. If the Bill is to allow employers to nominate two thirds of the trustee membership one needs to make sure that the framework within which the trustees operate is a fiduciary one.
If the noble Earl's amendment were accepted in addition to the fact that employers already nominate two-thirds of trustees, that would seem to us to tilt the balance away from the notion of stewardship too much towards consideration of employers' interests, which is something which trustees are required to consider but not necessarily to regard as of overriding importance. I hope that on this occasion the Minister feels that he has the balance about right in the Bill as it stands.
Lord Mackay of Ardbrecknish: My Lords, I noted the points that my noble friend made on this important issue and the points made by the noble Baroness, Lady Hollis.

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I fully understand the anxieties which have been raised on this issue since the publication of the White Paper in June last year. It is, of course, vital for the future well-being of occupational pension schemes that they continue to be supported by sponsoring employers. The question to be addressed is whether it is either necessary or appropriate for trustees to be required in statute to take into account the interest of the employer when deciding their investment strategy. The conclusion we have reached is that it is not, and for the following reasons.
First, trust law requires trustees to act only in the interests of the beneficiaries to the trust. This cannot be clouded by statutory requirements to take into account the interests of any other parties to the trust. Trustees can, however, take account of the interests of the employer when this affects the interests of the beneficiaries.
In preparing their written statement of investment principles, trustees will need to consider all of the factors which affect the interests of the members. That will obviously include the employer's views. Trustees who propose undertaking an investment strategy which does not have the employer's support will be failing in their duty to act in the interests of the beneficiaries if that results in the employer's continuing support for the scheme being prejudiced.
Secondly, the amendment develops the view of the employer as a contingent beneficiary to the scheme, requiring the trustees to take account of his interests, not as the employer, but as a beneficiary. Employers may or may not, be contingent beneficiaries to a trust. Whether they are will depend on the terms of the trust deed or particular circumstances which may arise, such as where a fund is in surplus. But it is by no means certain that an employer will automatically be considered a contingent beneficiary of the scheme.
Even if employers were considered to be contingent beneficiaries, my legal advice is that it is inappropriate for the Bill to refer specifically to any one party to the trust. Trustees must act in the interests of all the beneficiaries to the trust. Any attempt to single out one particular party to a scheme will beg the question as to how much weight trustees should give to the interests of that party compared with others. This would require some form of statement setting out the relative weighting trustees should give to the interests of each of the parties to the trust, including scheme members, pensioners and the employer. That would be impossible.
I am glad that the noble Baroness, Lady Hollis, is a recruit to my use of the word "balance". I have to say to my noble friend in this case that we have to get the balance right. I know that he is concerned about the issue, but he has not yet convinced me of his case. However, I shall read carefully what he had to say and I have no doubt that he will read carefully what I said, and we shall see where he goes from there.
The Earl of Buckinghamshire: My Lords, I thank my noble friend the Minister for his reply and the noble Baroness for her intervention. Both answers demonstrate the great difficulties in this area. The Minister mentioned in his reply that, in part, what I wanted to
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happen would happen. My problem is with the word "consult", because one can consult someone and take no notice of their advice or requirements.
I accept that this is an extremely difficult area within which to legislate. I would have preferred to have seen something more positive, but on the basis that there is an on-going dialogue, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.45 p.m.
Lord Lucas Lord Lucas moved Amendment No. 76:
Page 17, line 16, leave out (" 3") and insert ("(Prohibition orders)").
The noble Lord said: My Lords, I spoke to this amendment, with Amendment No. 3. I beg to move.
On Question, amendment agreed to.
Clause 31 [Choosing investments]:
[Amendment No. 77 not moved.]
Lord Lucas Lord Lucas moved Amendment No. 78:
Page 18, line 12, leave out (" 3") and insert ("(Prohibition orders)").
The noble Lord said: My Lords, I spoke to Amendment No. 78 with Amendment No. 3. I beg to move.
On Question, amendment agreed to.
The Earl of Buckinghamshire The Earl of Buckinghamshire moved Amendment No. 79:
After Clause 31, insert the following new clause:
("Custodianship of investments
.—(1) The trustees or managers of an occupational pension scheme or a personal pension scheme must secure that investments held for the purposes of the scheme are held in accordance with an agreement made between the trustees or managers and an appropriate authorised person ("the custodian") which contains the provisions mentioned in subsection (2).
(2) Those provisions are—
(a) that the investments are vested in the custodian's name and he maintains adequate records for identifying them as belonging to the scheme and not to himself or any other person,
(b) that the custodian is required to safeguard the investments,
(c) that all documents of title relating to the investments are kept in the custodian's possession and may not be delivered to any other person except—

(i) to another appropriate authorised person with whom the trustees or managers have made an agreement within this section or in accordance with instructions from the scheme's fund manager, and

(ii) upon a request which is signified in the manner specified in the agreement,

(d) that all transactions relating to the investments are conducted and recorded in the manner and within the period so specified, and, in particular, that any transactions which do not occur in the normal course of the holding of investments generally or of investments of the description in question are immediately reported to the Authority and the trustees or managers by the custodian,
(e) that adequate arrangements are made for the deposit or investment of money received by the custodian in pursuance of the agreement and for the payment by him of money required for the purposes of the scheme,
(f) that the custodian is responsible for securing that the trustees and managers are fully informed of all matters relating to the investments within a period which is reasonable having regard to the importance of the information,
(g) that, in any case where the custodian is also a person to whom any discretion to make any decision about investments has been delegated under section 29, the functions exercisable by him as custodian are adequately differentiated from those exercisable by him by virtue of that delegation,
(h) that the custodian must establish and maintain adequate arrangements for the purpose of securing so far as practicable that none of his employees or officers has the opportunity to perform any action which would or might result in a breach of the agreement,
(i) that the custodian is liable for any reduction in value in the assets of the scheme arising from any breach of his obligations under the agreement, and
(j) such other provisions as the trustees or managers consider appropriate for securing the safeguarding of the investments of the scheme.
(3) Where an agreement in relation to the investments held for the purposes of a scheme has been made with a custodian in accordance with this section—
(a) except in prescribed circumstances, the custodian shall not be regarded as a trustee or manager of the scheme by virtue only of complying with such provisions of the agreement as are mentioned in subsection (2), and
(b) the trustees or managers of the scheme are not responsible for any act or default of the custodian in the course of exercising his functions as such if they have taken all reasonable steps to satisfy themselves—

that he is an appropriate person to appoint as custodian, and

(ii) that he performs his functions under the agreement competently.

(4) Subject to any restriction imposed by the scheme, an agreement under this section may include provision enabling the custodian to make arrangements with another person for him to exercise any of the custodian's functions under the agreement; and where the custodian makes such arrangements this section shall, except in prescribed circumstances, apply in relation to the other person as it applies to the custodian.
(5) Regulations may—

(a) provide that this section does not apply, or

(b) modify it in its application,

to schemes or investments falling within a prescribed class or description.").
The noble Earl said: My Lords, in moving Amendment No. 79 I shall speak also to Amendment No. 80. The amendments concern custody. The issue of custody was discussed fully at Second Reading and an amendment was moved in Committee by the noble Baroness, Lady Dean, with greater eloquence than I can achieve this evening.
I believe that there is agreement on all sides of the House that custody is desirable. The difficulty facing my noble friend the Minister is how that can be implemented. We had a full discussion of the issue in Committee and I do not want to repeat the arguments in detail.
It is true to say that most schemes in this country already have custody, but some do not. The purpose of the amendment is to make sure that those schemes which do not at present employ custody do so in the future. I am concerned that without the amendment it would be easier to commit fraud. One could go to the
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safe in one's back office and pick up share certificates. It is much easier to exchange these if one does not haw to go through a third party, with the controls that that implies.
Questions have been raised as to how this proposal would be regulated. The most appropriate authority for regulating custodians would be IMRO. IMRO may have thoughts on that proposal. I do not believe that the regulatory situation should be a bar on your Lordships' House accepting the amendment. I beg to move.
Baroness Dean of Thornton-le-Fylde: My Lords, I support the amendment moved by the noble Earl, Lord Buckinghamshire. When we discussed this subject in Committee stage a few weeks ago the Minister said that custodianship is not a simple matter. I accept that it is not simple, but it is essential. There is no doubt about that. That is why we are pursuing the matter yet again at this stage of the Bill.
As has been made clear as we have discussed the Bill, pension law is not a simple matter. However, that has not held us back from trying to legislate in this Bill, which will eventually become the Pensions Act (although it is weaker than we originally wanted) in areas where that has proved necessary. I believe that it is necessary to legislate on this particular issue.
At Committee stage the Minister rightly asked who the authorised person will be. Amendment No. 80 deals with that problem and sets out supplementary provisions.
Large numbers of pension funds already have independent custodianship. That is not an argument for saying that most people are doing this and therefore it is not necessary to force everyone to have it. Those funds which do not have independent custodianship are more likely to be subject to potential fraud than those which are currently covered, legitimately and voluntarily, by independent custodianship.
When we discussed the issue a few weeks ago in Committee, whoever would have thought that the Barings scandal would be before us now? Who would have thought that Barings investment managers, using Barings Bank as the custodian of those investments, would have the problems that they now have? But they do. Although the situation has been retrieved, and there is general support that the Governor of the Bank of England was right in not stepping in to save Barings, what would have happened if ING had not bought the bank? The millions lost on pension fund investments would have made the Maxwell missing millions look small fry. I suggest that because Barings was bought by ING, it obviated what would have been an enormous scandal, and I suggest an enormous well of pressure. The Government could not then have failed to agree to introduce the amendment.
I gather that the SIB is currently carrying out a review of custodian arrangements under the Financial Services Act. However, there is no indication when it will report. With the emergence of the Barings scandal, and other situations, it is a fact that while trustee boards at present consider carefully the investment policies of their portfolio managers, they rarely consider who will be the independent custodians of their investment certificates.

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In future the boards will have to consider that. Without such provisions in the Bill, against what criteria will they consider the issue?
It is essential that such a provision is in the Bill. I hope that the Minister will agree to it.
Lord Ezra: My Lords, the amendments raise a central issue in the Bill. The whole purpose of the Bill is to safeguard schemes. The custodial aspect is crucial to it.
The amendments modify what was proposed at Committee stage, taking full account of what the Minister then said. He expressed concern about how one defines the custodian. As the noble Baroness, Lady Dean, points out, it is important that if schemes wish to employ custodians, it should be laid down somewhere what criteria should be used. The Bill provides another unique opportunity to help pension funds to regulate their affairs better. I hope that in the light of the modified presentation the noble Lord will find it possible at this late hour, and in his more helpful mood, to agree to the proposal.
Lord Mackay of Ardbrecknish: My Lords, clearly it has been decided to deploy flattery as the weapon against the Government this evening. I begin by acknowledging that the case for independent custody has some top quality support on both sides of the House. The provision was originally moved by the noble Baroness, Lady Dean. It has now been taken forward in an amended form by my noble friend. It continues to draw support from other noble Lords.
I remind noble Lords, as I did in Committee, that the Government, too, believe that independent custody is a good thing. We believe it is right that schemes should regularly review their custody arrangements. Indeed, I accept the case which has been put to me that even those schemes which have independent custodians should pay a little more attention to this important area and consider whether their custody arrangements really are secure and appropriate. No doubt, as the noble Baroness, Lady Dean, has pointed out, custody will be rather more of an issue in the minds of institutional investors in the immediate aftermath of the Barings affair; but it is of course something which pension funds in particular should review on a regular basis.
When we discussed this issue in Committee, I left a challenge with the noble Baroness, Lady Dean, which my noble friend Lord Buckinghamshire has gallantly picked up in his amendments. I invited her to consider how custodianship should be regulated and how agreement should be reached on who should be authorised to offer custody services. It is now proposed that custody should be regulated by IMRO under the general umbrella of the Financial Services Act.
Before I turn to that, I wish to pose a few questions. How real, for example, is the mischief which these amendments seek to remedy? What grounds are there for believing that the wide range of other measures in this Bill will not adequately address whatever concerns there may be about asset custody in some schemes? How convincingly have proponents of independent custody dealt with the reservations expressed, for
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example, by the PLRC? Is the proposal to establish a whole new regulatory regime for custodianship really a proportionate response to the threat?
I believe that it is widely accepted that the vast majority of pension schemes already have independent custody arrangements. The assets of insured schemes are of course secured through the arrangements made by the insurance companies and the overwhelming majority of self-administered schemes already use independent custodians, partly for security but also, I imagine, for the facility it offers for trading their portfolios. So at best this measure is aimed at a small number of relatively small self-administered schemes.
In so far as there may be a risk associated with the fact that such schemes may not have independent custody arrangements, there are some grounds for believing that the measures being put in place by this Bill will reduce it. As I pointed out in Committee, the Bill emphasises and reinforces the rights and duties of members, trustees and scheme professionals in relation to many different aspects of pension scheme security and that should focus attention on asset security among other issues.
I believe that there are still unanswered questions about the extent to which a requirement to appoint an independent custodian would reinforce this new level of scheme security. The key factor is that custodians, by their very nature, exercise administrative rather than managerial functions and have no duty to investigate the propriety of apparently valid instructions they may receive. Accordingly, as the PLRC pointed out,
"if fraud is committed by the ultimate source of authority, the trustee board, or by one of their number or by a third party acting within the scope of his or her apparent authority from the board, the fact that the assets are held by a custodian will not by itself be a sufficient safeguard. In other words,"
the PLRC continued,
"custodianship should be seen as an additional barrier to wrongdoing which may or may not prevent it".
It concluded, as the Government are inclined to do, that,
"the most effective controls are the monitoring of pension fund administration and the authorisation and supervision of investment managers".
However, despite what I have said, noble Lords might say that there would be no harm—it is always a dangerous argument—in accepting custodians as another requirement. My concern on that score would be that the price, in terms of new regulatory burdens, might be too high. First, there would be the requirement on pension schemes to use independent custodians. That would fetter their freedom to determine their own policy—perhaps only at the margin, but it all adds up. There might be some additional costs to some schemes—again small, as I acknowledged in Committee —but again it all adds up. That provision might itself trigger a little flurry of detailed secondary legislation. There are half a dozen references to "prescribed circumstances" in the amendment before us. All that would need to be supervised and, if necessary, enforced by OPRA.
Then there would be the regulatory burden of setting up and policing the overall regulatory regime for custodianship. That would presumably apply to the custody of assets generally, not just to those owned by

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pension schemes. There would need to be an additional rule book for IMRO. Any company wishing to offer custodian services would need to seek authorisation for that purpose, perhaps incurring compliance costs. IMRO's compliance checks and enforcement procedures would need to be extended. One needs to ask whether it would constitute a proportionate response to the perceived threat. Government are committed to deregulation. That does not mean we are not prepared to regulate where that is necessary, and this Bill demonstrates that; but we are wary of regulation where the case is not fully made out.
As has been mentioned, the Securities and Investments Board has been preparing a report on the regulation of custodianship. If that were to recommend that custody should be a regulated investment service under the FSA then, clearly, a part of the argument that I have just advanced would be undermined. and there would be a case for going back to see whether pension schemes should be required to use such services, but I do not believe it would be right for the pension tail to wag the dog.
I have gone into some detail because I want to show that we have thought seriously about this issue since the interesting debate that we had in Committee, and because I do not lightly resist the well-meant and sensible sounding advice from the wide range of supporters of this amendment, and indeed this cause.
However, I am bound to conclude that I do not believe that the case for mandatory independent custody arrangements for pension scheme assets has been made out. Nevertheless, I accept that this is an important issue and I am keen that the "best practice" recommended by the PLRC should be encouraged. It recommended that trustees should periodically review their custody arrangements and satisfy themselves that these are satisfactory. If your Lordships accept my advice and these amendments are withdrawn, I am certainly prepared to consider using the regulation making powers under the various disclosure provisions of the Bill and the Pension Schemes Act 1993 to require trustees to make regular statements in scheme annual reports about their policy on asset custody. That will reinforce the "good practice" requirement recommended by the PLRC and publicise the results. I believe that would be a positive and appropriate response to the concerns expressed by noble Lords,
I hope, having heard my remarks, and perhaps on reading them in Hansard tomorrow, noble Lords will see that I have listened to the argument and have tried to go along with it a little, though not quite as far as setting up a new regulatory body and bringing in new regulations for schemes to use custodians under the law so to speak, and ensuring that they consider this aspect of their duties and place that in front of their scheme members in the reports.
9 p.m.
The Earl of Buckinghamshire: My Lords, I should like to thank the noble Baroness, Lady Dean, for her support and the noble Lord, Lord Ezra. I also thank my
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noble friend the Minister for his very full reply. I shall certainly look at Hansard tomorrow to see the full impact of that.
The whole thrust of the Bill is about preventing mischief. Certain sections of it deal with other matters, but it mainly deals with mischief-making and preventing fraud. It has been said that this Bill will not prevent fraudulent acts within pension schemes. Every amendment that we make that puts another ratchet in place to prevent fraudulent acts is to be encouraged rather than to be rejected.
I am interested in what my noble friend the Minister had to say on the disclosure to members; it was most useful. On that basis, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendment No. 80 not moved.]
Lord Monkswell Lord Monkswell l moved Amendment No. 81:
Before Clause 32, insert the following new clause:
("Payments to members of scheme
. At the end of paragraph 3(3) of Schedule 22 to the Income and Corporation Taxes Act 1988 there shall be inserted
"() Making payments to members of the scheme.").
The noble Lord said: My Lords, in moving this amendment, I should also like to speak to Amendment No. 165 on the Marshalled List. Perhaps I may read that into the record. It would amend Clause 69. It reads as follows:
"Page 42, line 46, at end insert ('and/or to the members of the scheme.')".
This is our second time around this course. We cantered round it at Committee stage. I read very closely the remarks that the Minister made during that debate. I also thank him for the letter that he sent to me, and to a number of other noble Lords, in which he referred to the situation. I quote:
"Another issue raised in this context was that of protecting scheme members' interests when there is a surplus in a scheme that is being wound up. The treatment of that surplus, including provisions for the protection of scheme members' interests, is dealt with under clauses 68 or 69".
I have to say that I am not happy with the response, having read in Hansard the Minister's remarks in Committee and the comments that he makes in his letter. Perhaps I may try to explain why I am not happy. Before I do so, I should probably apologise to the House for not explaining adequately my reasons for tabling this amendment at the Committee stage. I can quite understand why the Minister and other Members may not have felt that it was all that important.
In Committee, I referred to the unfairness of the situation whereby employers reacted to circumstances that resulted in a surplus in the pension fund assets, generally speaking from a rise in the Stock Market and the investments that the pension fund had made. However, it is rather worse than that. It is not just a situation where an accidental surplus is created and therefore a decision arrives on the desk of the powers-that-be to ask what is to be done with the surplus. I am thinking of a situation in which the employers, through acts that they commit, generate a

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surplus, effectively by reducing the advantages of employees. There may be other ways, but in general there are two particular ways in which they may do that.
First, they may do it by winding up established pension schemes and effectively constituting a new pension scheme. Usually that will come about when two companies merge. The argument will be: "We are all in the same company now and we should all be in the same pension scheme. So let us wind up the two old ones and have a new one". Because of the circumstances, that may provide a surplus. The other way is where, by a deliberate act, the employer creates redundancies and makes employees redundant.
One effect of creating redundancies is that it reduces the liabilities of the scheme, but does not necessarily affect the assets of the scheme. There could be a combination of both those acts—the winding up and the redundancies—which would be deleterious to the employees. They are either out of a job or end up in a pension scheme which is probably not quite so good as the one that they were in before.
As the law currently stands, the employer can effectively get his hands on the surplus assets that he has generated by making things worse for the employees. There could be an argument that that is totally unfair and that any surplus assets generated in that way should automatically go to the disadvantaged employee. But, obviously, it would be very difficult to determine whether it was the hand of the employer making things worse for the employee which generated the surplus.
I suggest that there is a way around the problem. There is capacity for fund surpluses to be disbursed to employees in the same way that at the moment there is capacity for surpluses to be disbursed to the employer. The result would be that, if there were a final surplus available after the benefits had been raised, and probably after pension fund contribution holidays had been determined for employers and employees, it would be for negotiation between the employer and employees as to how it should be disbursed. It would then not be seen as only available to the employer. There would be a negotiating situation.
The reason for trying to create that situation is that it would be a signal to what I would describe as, generally speaking, anti-social employers—though they might not be breaking the law, they sail very close to it—that they should not engage in action which is deleterious to the employees and from which they sought to gain some advantages. On that basis, I beg to move.
Lord Mackay of Ardbrecknish: My Lords, when the noble Lord, Lord Monkswell, spoke to a similar amendment in Committee, he expressed disappointment that I used financial arguments in response. I am sorry to tell him that I intend to use those arguments again tonight because, as I am again sorry to tell him, they remain equally as valid tonight as they were the first time that I used them.
The Income and Corporation Taxes Act 1988 provides trustees with a range of options to use a surplus to improve members' existing benefits or to provide new ones; so members can benefit when an employer is eligible to seek a payment from surplus assets.
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I recognise that the noble Lord, Lord Monkswell, wants members to receive payments on the same basis as employers when a scheme winds up in surplus. However, I believe that his amendment is misconceived. Clause 69 already provides that a payment can be released to the employer only after members have had their pensions increased to the maximum permitted under Inland Revenue limits. Those Inland Revenue limits are as follows, for example, in the case of retirement: the maximum benefit that an approved scheme may pay is a pension of one-thirtieth of final salary for each year of service up to 20 years, which—if my arithmetic is right—means two-thirds; and a lump sum of 2.25 times that amount. Those limits are there to protect the Exchequer costs of tax relief which are given to approved pension schemes.
In the circumstances envisaged by Clause 69, the members' benefits have therefore been fully secured, indexed and enhanced to Inland Revenue limits. Members would get more than their legitimate pension expectations. The employer, who has borne the investment and other risks of the scheme, is entitled to benefit as well. The only way that he can do so is by having access to any residual assets. I can see no justification for suggesting that members should be able to share in that particular benefit, given the other gains that they would already have had.
The noble Lord suggested that employers could create a surplus by winding up an old scheme or creating redundancies. I must point out that in neither case can the employer reduce the accrued rights of any scheme member. That, I think, is what the noble Lord suggested might happen but I do not believe that he is right. I do not think he is right in that regard.
As I said, the legislation as framed, in case of wind-up, already gives considerable benefits to the employee, pension scheme member or whoever it may be. It gives them considerable benefits as the first bite of the cherry. The employer can only receive surplus benefit after those obligations to the employee have been met. To go further, as the noble Lord suggests, would be going beyond the existing tax-approved arrangements, which are substantial—they cost the taxpayer around £7 billion a year—and employers may consider that it is perhaps tilting the balance a little unfairly in the direction of the employee. After all, during all the years of the scheme the employer has paid his share of the contributions—of course the employee has paid also—and has had to stand behind the scheme. It is a bit of a quid pro quo. The employer must give a guarantee all the time the scheme is running and, if there is a surplus and after the interests of the employees have been properly dealt with, it seems right that an employer should gain some advantage to offset the risks he has taken during the years of the scheme.
9.15 p.m.
Lord Monkswell: My Lords, I thank the Minister for that response. I am intrigued by one of his arguments, and I shall come back to that in a moment. The scenario I envisaged was one in which there would be a good pension scheme that was already paying the maximum benefits allowed under the Inland Revenue rules. I

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accept the Minister's point that there is a need to protect the Exchequer and to place limits on the tax reliefs available for pension schemes. But perhaps I can try to explain to the Minister the mechanisms that I believe work to generate the surplus.
One may have a situation where an employee is made redundant. He worked for 20 or 30 years for a company and has another five, 10 or 15 to go before he receives his pension. Effectively, therefore, he is a deferred pensioner. I accept that the situation is rather different now, following the 1990 Act; nevertheless the mechanism still works. The current rules require that, as inflation progresses, the benefits accruing to the deferred member increase accordingly up to a limit of 5 per cent. Obviously, if the fund is well invested, an increase at least in line with inflation and probably a bit more can be expected. But what is the situation if inflation rises above 5 per cent.? Effectively the benefits for the deferred member are capped at 5 per cent.; but the scheme assets would be expected to generate income in excess of that 5 per cent. if inflation was running at 7 or 10 per cent. That is where the scheme surpluses build up.
Effectively one makes an employee redundant and reduces his situation; his money is frozen in a pension scheme and at the end of the day the employer receives the benefit. That is the crucial problem. I am concerned with the Minister's argument that the company, having invested in the pension scheme, should, if there is a surplus, retain that surplus as a reward for its investment in the scheme. That is a dangerous argument. I hope that the Minister did not intend the meaning he seemed to convey—that it is OK for companies to invest in pension schemes, which have tax beneficial regimes, with a view to recouping some reward for that investment at a later time. I am sure that that was not the Minister's intention but it appeared to be the meaning of what he said. Given that interpretation, perhaps the Minister would care to address the situation.
Lord Mackay of Ardbrecknish: My Lords, I am sorry that the noble Lord interprets my remarks in that way. I did not intend them to convey that meaning and I do not believe that they did. All I was saying was that for an employer who sets up a pension scheme and runs it for many years there is always the threat hanging over his head that he may have to underwrite it; he has committed himself to obligations. On the other hand, if the circumstances we are envisaging come about and the scheme has been wound up, and all the benefits that the employees can look for if the scheme has been wound up in surplus are already being honoured, it does not seem unreasonable in those circumstances that the employer should then be able to get, so to speak, his share of the surplus back if the employees have by that time had the first bite at their share.
I do not think that it is a quid pro quo and I do not think that any employer would put a lot of money into a pension scheme against the day when it might wind up and it might have a surplus at that date which might be more than is needed to honour all the obligations to the employees and then might give him some money after that. I am not sure that it would be a wise employer who came to that conclusion.
Lord Monkswell: My Lords, I thank the Minister for that explanation. However, he misses the point. It is not the prudent, wise, careful and considerate employer that we are talking about. We are talking about, generally speaking, a corporate raider whose one eye is on the assets that he can get his hands on and his perspective is very definitely not in terms of the long-term beneficial interests of his employees.
We have had an interesting to and fro. Some different points have emerged in this debate from those which came out at the Committee stage. I do not intend to press the matter to a Division. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 32 [Payment of surplus to employer]:
Lord Lucas Lord Lucas moved Amendment No. 82:
Page 19, line 12, leave out (" 3") and insert ("(Prohibition orders)").
The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 3. I beg to move.
On Question, amendment agreed to.
Baroness Dean of Thornton-le-Fylde Baroness Dean of Thornton-le-Fylde moved Amendment No. 83:
After Clause 32, insert the following new clause:
Protective costs orders
(" .—(1) Where, on the application of a member (in this section referred to as "the representative member") representing the views of not less than 10 per cent. of the members of a scheme or of a member-nominated trustee appointed under section 14, a court is satisfied that serious or persistent breaches of trust may have been committed which do not fall within section 3, the court may grant an order in such form as it considers appropriate compelling the trustees of the scheme to pay to the representative member or to the member-nominated trustee the reasonable costs of obtaining legal and other advice in order to pursue claims on behalf of the scheme.
(2) Any costs ordered to be paid in accordance with subsection (1) shall only be payable upon the presentation of a certificate by the solicitors acting for the representative member or the member-nominated trustee, as the case may be.
(3) A court may only grant an order under subsection (1) of this section if it is satisfied that—

(a) an independent trustee properly advised would have applied to the court for directions to commence or continue proceedings;

(b) on such application the court considers that it would have given leave to such independent trustee to proceed.

(4) Where a court grants an order under subsection (1) of this section it may from time to time renew or amend such order.
(5) Where a court grants an order under subsection (1) of this section it may make provision for the payment of past, as well as future, costs.
(6) On an application under subsection (1) of this section, a court may grant an order notwithstanding the fact that the breaches of trust which are or which form part of the grounds for the application fall within section 3, if it is satisfied that it is in the best interests of the members so to do.").
The noble Baroness said: My Lords, this matter came before your Lordships during the Committee stage of the Bill. At that stage the Minister said that he had no objection in principle to the amendment but felt that it was not necessary. During the discussion he mentioned a procedure known as the Beddoe's summons procedure, which provides that those who wish to engage in proceedings involving a trust can apply to the court for an order that the costs should be met by the

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trust. The Minister then put forward the view that what is already in the Bill is a belt and braces protection for individuals and trustees of pension schemes. The noble Lord said that the new authority can receive and deal with complaints from anyone in a pension fund and that therefore the intentions of the amendment would be met, either by existing law—trust law—or the new regulatory authority.
I do not wish to repeat the details I gave of why I put forward this protective costs order at the Committee stage except to say that it was the Minister's response which led me to put down this amendment again today. I must challenge the Minister's reliance on what is known as the Beddoe's procedure to cover those situations when the regulatory authority, OPRA, does not cover them. The Beddoe's procedure, I am given to understand, having checked after the Committee stage, is only for trustees. It is a kind of fail-safe for trustees who might decide that they need to embark on litigation but go to the court to get sanction in case of a future challenge by a beneficiary. It is a decision which gives them protection if at some point in the future a beneficiary takes action. It does not cover individuals. An individual with a complaint could not invoke the I3eddoe's summons procedures.
I turn to the other arm of protection, which the Minister put forward; namely, that individuals could go to OPRA. They could of course, but I have some concerns about that because the regulatory authority has a quite specific remit under this Bill which does not cover all situations. On 7th February, at Committee stage, the Minister said in response to an amendment moved by my noble friend Baroness Hollis that OPRA,
"will have the powers necessary to enforce compliance with the law".
Later during the same day of the Committee stage, in answer to another amendment moved by my noble friend Lord Haskel, the Minister said, referring to OPRA:
"We should not widen its powers in such a way that it becomes involved in trust law—and other matters which are best left to the courts".
There we have it. I suggest that the individual within a scheme, or groups of individual members who are not trustees and who cannot have a case decided by the regulatory authority because it is outside the powers of the regulatory authority, do not even have the procedure which is there under the Beddoe's summons procedure.
I suggest that this exposes a major gap in this Bill as regards the rights of individuals in pension schemes. Where do they go if they cannot invoke the Beddoe's procedure and the regulatory authority cannot help them?
At this stage I should like to quote from the judgment of Lord Justice Hoffman when he was giving his decision in the Melton Medes case. That is a case where a group of individuals, with the support of their union, went to court to get their costs covered. It was only when they had reached something like half a million pounds that the case was heard. As I said, the funding came from the union.
Lord Justice Hoffman said,
"What distinguishes the shareholder and pension fund member on the one hand from the ordinary trust beneficiary on the other is that the former have both given consideration for their interests. They
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are not just recipients of the settlor's bounty which he, for better or worse, has entrusted to the control of trustees of his choice. The relationship between the parties is a commercial one and the pension fund members are entitled to be satisfied that the fund is being properly administered. Even in a non-contributory scheme, the employer's payments are not bounty. They are part of the consideration from the services of the employee".
Expert pensions lawyer, John Mesher, in Occupational Pensions Law Reports, went on to say about that judgment that,
"there is little guidance on which to predict how the discretion will or will not be exercised in the future"—
that is a discretion which Lord Justice Hoffman gave—
"since the factors identified in it will be common to most cases where pension scheme members bring claims against the trustees or the employers".
At the moment I suggest that what we have in this Bill is a gap which leaves individual members exposed without any kind of back-up support unless their individual complaint is covered specifically within the regulatory authority remit in this Bill. It does not cover any problems which may arise in trust law. As the Minister said in the debate on 7th February, the intention is not to give the regulatory authority the right to interpret or indeed to intervene in trust law. I beg to move.
9:30 p.m.
Lord Mackay of Ardbrecknishds, I understand why the noble Baroness wishes to ensure that scheme members are not prevented by lack of funds from challenging the trustees of a scheme in court where they believe there is a breach of trust. I am sure that we all share her concern that the interests of scheme members should be protected and that where members have cause to challenge the actions of trustees, effective and straightforward methods of redress are available.
I believe at Committee stage I answered questions about the Beddoe's principle. The noble Baroness has pointed out that that covers trustees acting in good faith and that the trustees may apply for a Beddoe's order to indemnify them for the cost of litigation. I do not believe that anyone has gone on to speak about scheme members. The cost of litigation can indeed be very high. The noble Baroness mentioned the Melton Medes case. That certainly illustrates the level of costs. However, that case stems from events which began in 1986. In the intervening period there have been a number of developments which have an important bearing on this issue. I believe that those developments, taken together with various provisions in this Bill, make the amendment unnecessary.
First, the services of both the Occupational Pensions Advisory Service and the pensions ombudsman are free of charge and readily available to scheme members. OPAS offers independent advice to anyone who has a problem with their pension scheme. Since 1991, it has been receiving grant-in-aid from the Occupational Pensions Board. The Pension Law Review Committee recognised the worthwhile work carried out by OPAS in its report and the Government remain committed to providing financial support for this valuable service. If OPAS is unable to resolve the dispute, the scheme member may take his case to the pensions ombudsman.

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The office of the pensions ombudsman was set up in 1991. It was established specifically to provide scheme members with an inexpensive and readily accessible means of resolving disputes as an alternative to the courts. The ombudsman is an independent commissioner who may investigate complaints of maladministration and disputes of fact or law referred to him by individuals. He has the same powers as the courts in requiring information and examining witnesses. His determinations are final and binding upon the parties and may be enforced in the courts.
When this issue was discussed in Committee, I spoke about the role of the new regulatory authority which we are introducing. Scheme members will be able to report their anxieties to the authority, which will have the power to investigate allegations and to take action to ensure that schemes comply with their statutory obligations.
There are also provisions in the Bill which will require the trustees or managers of occupational pension schemes to establish and operate procedures to resolve disagreements. We believe that it is in the interests of schemes and of members that, where possible, disputes should be resolved by the schemes themselves. The trustees will be required to give a written response explaining the position, and it is intended that they should refer to the appropriate part of the scheme rules. If the member is dissatisfied with the response he receives, he will be able to take his case to OPAS and, if necessary, to the pensions ombudsman.
In addition, as noble Lords will be aware, the noble and learned Lord, Lord Woolf, is undertaking a review of rules and procedures of the civil courts with the aim of reducing the costs of civil litigation. I submit, however, that the developments of the past few years, when added to the new provisions in the Bill, mean that taking the matter to litigation should not be necessary.
Taken together, the arrangements and developments I have described will ensure that scheme members can obtain redress for their grievances without the need for lengthy and costly litigation. It is surely in everyone's interests that court action should be avoided. The measures we have already put in place, together with those we are introducing in the Bill, will ensure that scheme members will not be prevented by lack of funds from pursuing their proper concerns—whether that be through OPAS, the ombudsman or the new authority. I hope that I have reassured the noble Baroness sufficiently for her to feel able to withdraw her amendment.
Baroness Dean of Thornton-le-Fylde: My Lords, I thank the Minister for that detailed and helpful reply which does not, however, reassure me as much as he had hoped that it would. Perhaps I may give the House an example. I refer to the well-known Imperial case. A company was sold and the members of the pension fund were guaranteed that their benefits under the scheme would be protected. They were told that their benefits would not be eroded in any way. Well, they were eroded. The scheme members would not have been covered by the regulatory authority proposed in the Bill.
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It would not have been able to intervene on their behalf. So, who would be able to protect them? They would have to find some other means of redress. My information is that neither OPAS nor the pensions ombudsman could intervene in that situation. Such a case would come under trust law and would be a matter for the courts.
I agree entirely with the Minister that disputes in regard to pension funds should be settled within the fund. We welcome the disputes procedure that is established under the Bill. No one wants costly litigation where that can be avoided.
The amendment has been tabled at this stage because it is felt strongly that there is an omission in that the individual is given no assurance that either the provisions in the Bill, OPAS or the pensions ombudsman could deal with those situations which, fortunately, occur only from time to time. They are not regular events but when they occur they have such an effect upon the individuals within the pension fund that one feels strongly, as one did in the Melton Medes case, that that must never be allowed to happen again.
It is clear that the Minister will not be persuaded this evening to accept the amendment. So, taking everything into consideration, I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 33 [Restriction on employer-related investments]:
Lord Ezra Lord Ezra moved Amendment No. 84:
Page 19, line 23, leave out from ("that") to ("invested") in line 24, and insert ("no more than 5 per cent of its resources is").
The noble Lord said: My Lords, I shall speak also to Amendment No. 105. The amendment deals with the issue of self-investment. A simple matter is raised by the amendment. The Bill provides that the scheme must comply,
"with any prescribed restrictions with respect to the proportion of its resources that may at any time be invested in … any employer-related investments".
Those are quite properly described in the following paragraph.
The issue is that from 1992, in the wake of the Maxwell affair, it has been laid down that self-investment should not exceed 5 per cent. That was referred to in the Goode Report and in the Government's White Paper. I feel that the reference to prescribed limits introduces an area of uncertainty where there was certainty.
It is important that fund managers know where they stand in this matter. The principle has now been well established. I have no doubt that the prescribed limit probably would be 5 per cent. That is all the more reason why it should be on the face of the Bill. There should be no doubt.
Some feel that there should be a total prohibition on self-investment but, as the Goode Report pointed out, that would create serious difficulties, particularly in the case of larger schemes of companies with many associates. Some of those companies track the market, and their own shares obviously play a part in that process. It would be virtually impossible to eliminate their own share of that market-tracking operation.
Therefore a certain limit has to be allowed. That has been established as 5 per cent. I believe there is a strong case for that to be endorsed in the Bill. I beg to move.
Lord Haskel: My Lords, I support the amendment. As the noble Lord, Lord Ezra, said, the 5 per cent. limit on self-investment appeared in the White Paper. For some reason it does not appear in the Bill. The Bill has prescribed limits. I feel strongly that the 5 per cent. should be on the face of the Bill to prevent any misunderstandings. There are many examples of things going wrong in this regard. There are the Bellings, the Burlington International, and the Lewis's and Lep cases. They are just but four examples.
The Goode Report gave reasons for allowing some level of self-investment, but, as the noble Lord, Lord Ezra, said, 5 per cent. seems a reasonable compromise to avoid difficulties which arise from time to time and to help promote the principle of prudent diversification of investments.
The object of Amendment No. 105 is to prevent the value of employer-related investments being included in the total value of assets. The reason is clear. The amendment is essential if the MSR is to be at all effective. If employer-related assets are to be permitted for the purpose of calculating the MSR, that is even less of a solvency safeguard than we originally believed. I support the amendment.
Lord Mackay of Ardbrecknish: My Lords, Amendment No. 84 would place on the face of the Bill a limit on the amount which schemes may invest in the sponsoring employer and associated companies. The proposed limit at 5 per cent., mirrors that currently required by regulations which took effect in March 1992. These regulations are made under existing legislation. The PLRC considered the limit and considered that there had been insufficient time since its introduction to judge whether or not it was an appropriate one. It recommended that the 5 per cent. limit should stand.
That recommendation, together with the other PLRC recommendations on self-investment, have been accepted by the Government. We propose to bring forward regulations which put these recommendations into effect. We are all agreed, therefore, that a 5 per cent. limit on the level of self-investment is currently considered appropriate and one which, I submit, has been properly introduced into legislation by regulations. I find it difficult to see the need for this limit to be placed on the face of the Bill if it can be, and indeed already has been, satisfactorily introduced by secondary legislation.
I have noted the points made by the noble Lord. However, the danger in this amendment is that while it will have no immediate effect on the level of permitted self-investment it will make it much more difficult for any changes to be made to that limit if, in the course of time, 5 per cent. is felt no longer to be an appropriate level. The inflexibility inherent in introducing a particular figure onto the face of the Bill, combined with the fact that it is simply not necessary to do so, leads
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me to conclude that any advantages are clearly outweighed by the disadvantages. I therefore hope that the noble Lord will not press the amendment.
Perhaps I may now turn to Amendment No. 105. It would exclude any employer-related investment from the calculation of the minimum solvency requirement. In Committee, I explained that investment managers may invest in a range of unitised securities which ensure the performance will reflect the market. These unit trusts may themselves be invested in the sponsoring employer or those associated with it. The complex world of mergers and acquisitions make it difficult to keep track of who owns which particular companies. To require the investment manager to be continuously monitoring the holdings of the parent company would be something of an administrative nightmare.
It is, of course, the trustees of the scheme who will decide whether employer-related investments are appropriate. This duty has been further strengthened by the provisions of this Bill. When making such a decision, as in all their duties, trustees 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.
If the likely rate of return from an employer-related investment is not as good as could be achieved elsewhere, the trustees should consider whether to retain the investment. Similarly, if they are of the opinion that there is a real risk of employer insolvency, they would be acting in breach of trust if they were to agree to any employer-related investment. On the other hand, there may be situations where employer-related investment is acceptable and judged to represent prudent investment.
Given that a blanket exclusion on all employer-related investment is not practical, which noble Lords accept, it would be illogical to exclude up to 5 per cent., which is legally permitted, from the minimum funding calculation. Apart from any other reasons, we would be placing an exclusion on trustees that could be breached without their intent or knowledge. It would have the effect of raising the minimum funding requirement threshold for any scheme that had up to 5 per cent. self-investment.
Finally, I would remind noble Lords that the Government have accepted the PLRC's recommendation that all loans or other financial assistance to an employer or associated companies should be prohibited. We believe that this will significantly limit the potential risk involved in financial dealings between a pension scheme and its sponsoring employer. I must therefore agree with the PLRC's conclusion that a 5 per cent limit on employer-related investment will ensure an adequate diversification of risk.
I hope that with that explanation of the way in which we have reached our conclusion, the noble Lord will withdraw his amendment.
Lord Ezra: My Lords, I thank the Minister for his comments. I am a little disappointed, in particular that Amendment No. 84 has not been accepted. That has been recognised as the limit, and the reference in the legislation to "prescribed" limits introduces a degree of

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uncertainty which could have been avoided. Of course, those limits cannot be fixed for all time. But on the other hand, it is not a matter which should be changed too rapidly or too easily. Fund managers need to know the rules under which they are to operate. The 5 per cent. limit has been accepted. We have had what is tantamount to an assurance from the noble Lord that that will be the prescribed limit. Therefore, it would have been extremely easy to put that on the face of the Bill.
However, I shall study carefully what the Minister said about both Amendments Nos. 84 and 105. If we need to return to those issues at the next stage, we shall certainly do so. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Lucas Lord Lucas moved Amendment No. 85:
Page 19, line 45, leave out (" 3") and insert ("(Prohibition orders)").
The noble Lord said: My Lords, I spoke to this amendment when I moved Amendment No. 3. I beg to move.
On Question, amendment agreed to.
Clause 34 [Provision of documents for members]:
The Earl of Buckinghamshire The Earl of Buckinghamshire moved Amendment No. 86:
Page 20, line 16, at end insert:
("() if the scheme is subject to the minimum solvency requirement and the actuary has prepared a certificate under section 48 or 50, a statement by the actuary concerning such aspects of the certificate as may be prescribed and containing such other information as the actuary considers to be relevant and appropriate in the circumstances,").
The noble Earl said: My Lords, in moving this amendment, I shall speak also to Amendment No. 87 which stands in the name of the Minister. I believe that Amendment No. 87 may well meet the prime objective of Amendment No. 86. In those circumstances, I should prefer to hear what the Minister has to say about Amendment No. 87. I beg to move.
Lord Mackay of Ardbrecknish: My Lords, it may be for the convenience of the House if I intervene at this point to explain the intention behind the government amendment. If other noble Lords wish to intervene afterwards, I shall try to answer any questions raised.
I am grateful to my noble friend for his brief introduction. I agree with him that trustees should obtain comprehensive information from the scheme actuary concerning the financial position of the scheme. It is also important that members have access to information about the funding position, especially in relation to the minimum solvency requirement.
Powers are already contained in Clause 49(5) to prescribe what information and statements should be produced about the scheme's ability to meet the minimum solvency requirement. I agree that this is not wide enough and propose in my alternative amendment a wider power. This effectively preserves the existing powers in the Pension Schemes Act.
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Subject to the amendment which I propose, the powers in this clause enable the introduction of comprehensive requirements along the lines that I have mentioned. I am glad to have my noble friend's support in relation to this amendment which largely achieves what his amendment seeks to secure. I congratulate my noble friend on raising the matter for which, on second thoughts, we clearly saw the argument. I am sure that my noble friend will withdraw his amendment and will allow my amendment to proceed.
The Earl of Buckinghamshire: My Lords, I thank my noble friend for his kind words. Having listened to what he said, I am very pleased to allow his amendment to proceed. On that basis, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 87:
Page 20, line 17, leave out from beginning to ("a") in line 18.
On Question, amendment agreed to.
[Amendment No. 88 not moved.]
Baroness Dean of Thornton-le-Fylde Baroness Dean of Thornton-le-Fylde moved Amendment No. 89:
Before Clause 35, insert the following new clause:
Training for trustees
(".—(1) Every person appointed as a trustee shall undertake a short course of training approved by the Authority (unless he has already undergone such a course or holds a relevant professional qualification).
(2) The appointment as trustee of any person who fails to undertake such an approved course within six months of his appointment shall lapse and may not be renewed without the approval of the Authority.").
The noble Baroness said: My Lords, when I was discussing this Bill—and indeed the whole area of trustees—with colleagues of mine, one of them said to me that it beggared belief that someone having the responsibilities conferred by this Bill, who will be managing trust funds for beneficiaries which equate, as has been said earlier this evening, with something like one third of the value of all the shares on the London Stock Exchange, cannot be compelled to have some kind of training. It is really quite incredible if one considers the matter in depth. Indeed, I tried to think of any job that does not have some kind of training. It was difficult. The position involves the management of large amounts of money and carries considerable responsibilities and penalties for the individual. Not to require compulsory training is quite amazing and needs rectifying.
Nevertheless, the world is full of courageous people and perhaps they would be courageous enough to take on board the responsibilities of being a trustee. That is what we all want to see. However, I looked again at the Bill. Under the penalties to which the individual trustee can be subjected—mere suspension, or removal from office—there are 12 offences, all of which can be imposed upon the individual trustee.
If we take the next ratchet up penalty, we see that the penalty of a fine could be imposed on individuals responsible for pension funds. That makes a total of 17

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offences. Fourteen of those offences with a penalty of a fine relate to individual trustees. If we take the ultimate sanction under the Bill—the criminal penalty—which attracts a fine or imprisonment, that amounts to five offences, three of which relate to trustees. In fairness and equity, how can we subject individuals to that kind of potential penalty and then tell them that they are not required to have some kind of compulsory training? How can they be guilty of a misdemeanour if they have had no training?
In Committee the Minister said that he felt that it was up to schemes to decide the training needs of their trustees. That is not the view of many; indeed, that is not the view of many people who have lobbied very hard on the matter, despite the fact that the Goode Committee stated that it would not put forward the requirement for compulsory training. We feel that it is right to seek training from a body outside the scheme administrators and consultants. They are far too inclined—and I have personal experience of this—to give their impression as professionals within the scheme on how things should be done and on the correct way that the scheme should operate. Let us bear in mind the fact that exposure to the individual perceptions of those professionals could result, if the legislation is breached, in suspension, removal, a fine or, at its worst, imprisonment.
There has to be some kind of quality control on courses. There are many quite reputable bodies which currently provide courses of three days or one week. They do not last long. Indeed, the TUC put about 1,000 trade union trustees through training courses, and I gather that the National Association of Pension Funds has a range of courses that cost between £100 and £900. They are not expensive in the way of things as regards pension schemes that are handling so much money. If you give people responsibilities, I believe that you must also give them rights. By imposing a compulsory requirement to train, we would in fact be giving individual trustees a right. I beg to move.
Baroness Seear: My Lords, I should like briefly to support the amendment. However, unlike the noble Baroness, Lady Dean, I can think of far too many jobs for which no training is required, starting with membership of both Houses of Parliament. But that is not an argument against having training; indeed, I should have thought it is very much an argument in favour of it. Given the risks that trustees are undertaking, it is only fair to them that they should have training, if only to expose to them the nature of the risks involved.
I can well envisage a number of well-meaning people who, for a variety of reasons, might agree to be trustees while having very little idea about what it is that they are required to do or what the penalties may be if they slip up. I hope very much that the Government will not resist this sensible requirement. It would be very much better if it applied in a great many other areas too.
Lord Mackay of Ardbrecknish: My Lords, as the noble Baroness, Lady Dean, explained, this amendment would require a trustee to undertake a short course of approved training within six months of his appointment.
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In effect, the amendment requires compulsory training for all trustees. The Government do not dispute for a moment that trustees should be properly trained but we believe there are very sound reasons why such training should not be made compulsory.
Compulsory training does not by its very nature take account of the different training needs of individual trustees. It is not simply a matter of exempting those who have undertaken such a course or who hold relevant professional qualifications, as described in the amendment. Some trustees would have been doing the job for years and have a wide background in pension matters. Others would be new to the job. Yet others would fall somewhere in between. Compulsory training would not, and could not, take account of their different needs, learning abilities, personal preferences or even their domestic arrangements. For example, a training course away from the workplace—
Baroness Seear: My Lords, does not the Minister agree that some of the people who have been doing jobs for years are very much the ones who most obviously need training?
Lord Mackay of Ardbrecknish: My Lords, there may be some to whom that applies, but there may be others to whom it does not apply. It seems a little unfair to those who are doing the job perfectly well—I am sorry that the noble Baroness intervened and spoke in a disparaging way about people who are doing the job at the moment, most of whom are doing it very well—to suggest that they should go off and attend some form of compulsory training. As I was saying, the amendment would also mean that the authority had to determine what could be regarded as an approved training course. We do not see a role for either the Government or for the authority in attempting to approve, regulate and set standards for the various training media that are available. More will no doubt become available as a result of the Bill and the publicity arising from it. We consider that the interventionist role envisaged in the amendment would be impracticable, costly and, we believe, unnecessary.
The amendment refers to "professional qualification". It is important to appreciate that trusteeship is not a job just for experts or professionals with particular qualifications. It is a job where lay volunteers have an important contribution to make. Anyone undertaking trustee duties must, of course, be well informed about his role and responsibilities. But personal qualities and an aptitude for the task are equally important.
The important point is not to make training compulsory but to ensure that trustees and potential trustees are fully aware of the role expected of them and the nature of their responsibilities. They must have access to information and guidance on how to carry out that role, including the various training options that are available to them. Training for trustees is essential. It is vitally important that trustee boards should contain properly trained and informed trustees who are fully aware of their role. However, rather than impose a regime of compulsory training which may or may not be appropriate for each individual, it is better for trustee

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boards, individual trustees and the sponsoring employer to decide the most appropriate form and method of training which will meet their particular needs.
The Government want to encourage trustee training and to this end we have made it a requirement that employers give paid time off for that purpose. We are also supporting the initiatives being taken by the pensions industry in the preparation of industry sponsored codes of practice and we know that those developing the codes are planning to cover training.
We do not believe that the amendment is the right way to proceed. I imagine it would be but a short step to compulsory examinations and the like. As a former schoolteacher dare I suggest that one can put people through courses but it does not necessarily mean that at the end of the day they learn much? It would be no time at all before we established an examinations board and the whole business would become over-regulated. I believe that the task we are discussing is a responsible and important one; it is not one for which we need the kind of professional qualifications that I envisage would follow, if we were not careful, the training proposed by the amendment, which, if it was to be properly understood, would mean establishing an examinations board and the like.
Baroness Dean of Thornton-le-Fylde: My Lords, the Minister has been less than generous in interpreting the amendment which is before the House this evening. He said that we do not want professionally qualified people but lay people. The Bill provides for special trustees to be put in place in particular circumstances who will have professional qualifications. We wanted to make sure that we were not attacked for having no regard for trustees who have professional qualifications.
The noble Baroness, Lady Seear, quite rightly chided me. She said that she could think of many jobs where people did not receive any training. I could probably match that, but I could not provide examples of many jobs which carry the penalties that this Bill imposes. That is the problem.
The Minister's arguments in response to the amendment this evening were shallow. They did not address the reasons for the amendment. The responsibilities of individual trustees under the Bill are such that they are entitled at least to some form of compulsory training. The amendment does not specify in detail what that would be. I am most disappointed that the Minister has not seen the sense of that. It is not a question of bureaucracy or the thin end of the wedge before we require academic qualifications. The intention is to make the Bill work and to put people in place who have the courage and the necessary knowledge to carry out their responsibilities.
Having said that, it is clear that the Minister has not been moved by an argument which stands on its own merits. It is with regret that I ask the leave of the House to withdraw the amendment.
Amendment, by leave, withdrawn.
10 p.m.
Clause 39 [Professional advisers]:
[Amendment No. 90 not moved.]
Lord Lucas Lord Lucas moved Amendment No. 91:
Page 22, line 28, at end insert:
("() For every trust scheme the assets of which consist of or include investments (within the meaning of the Financial Services Act 1986) there shall be an individual or a firm appointed by the trustees as fund manager.").
The noble Lord said: My Lords, in moving Amendment No. 91 I shall speak at the same time to Amendments Nos. 93, 94 and 96. Before doing so I should draw the attention of the House to an error in Amendment No. 93 as printed on the Marshalled List. It should read:
"leave out ("and (2)") and insert ("to (3)")".
It is incorrectly printed as "("to (2)")".
Amendment No. 91 provides that trustees who intend to invest directly in investments which fall within the scope of the Financial Services Act must appoint an authorised fund manager. As drafted the Bill provides trustees with the power to delegate investment decisions to authorised fund managers but does not require them to appoint one. In view of the importance attached to scheme investments we consider it appropriate that the Bill should require trustees to appoint an appropriate person to manage those assets. That person may be an external fund manager or an appropriately authorised in-house fund manager. Amendments Nos. 93, 94 and 96 make changes consequential upon Amendment No. 91. I beg to move.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendments Nos.
92 to 96:
Page 22, line 33, leave out (" 3") and insert ("(Prohibition orders)").
Page 22, line 40, leave out ("and (2)") and insert ("to (3)").
Page 23, line 9, leave out from ("scheme") to ("sections") in line 10 and insert ("an auditor, actuary or fund manager is required under this section to be appointed but the appointment has not been made, or not been made in accordance with any requirements imposed under this section,").
Page 23, line 10, leave out (" 3") and insert ("(Prohibition orders)").
Page 23, line 12, leave out ("such an appointment") and insert ("compliance").
The noble Lord said: My Lords, I spoke to Amendment No. 92 with Amendment No. 3. I have also spoken to Amendments Nos. 93 to 96 with Amendment No. 91. I beg to move.
On Question, amendments agreed to.
Clause 40 ["Blowing the whistle"]:
[Amendment No. 97 not moved.]
Lord Lucas Lord Lucas moved Amendment No. 98:
Page 23, line 36, at end insert:
("(5) If it appears to the Authority that an auditor or actuary has failed to comply with subsection (1) or (2), the Authority may by order disqualify him for being the auditor or, as the case may be, actuary of any trust scheme specified in the order.
(6) An order under subsection (5) may specify the scheme to which the failure relates, all schemes falling with any class or description of trust scheme or all trust schemes.
(7) The Authority may, on the application of any person disqualified under this section who satisfies the Authority that he will in future comply with those subsections, revoke the order disqualifying him; but a revocation made at any time cannot affect anything done before that time.
(8) An auditor or actuary of a trust scheme who becomes disqualified under this section shall, while he is so disqualified, cease to be auditor or, as the case may be, actuary of any scheme specified in the order disqualifying him.
(9) A person who, while he is disqualified under this section, purports to act as auditor or actuary of a trust scheme specified in the order disqualifying him is guilty of an offence and liable—

(a) on summary conviction, to a fine not exceeding the statutory maximum, and

(b) on conviction on indictment, to a fine or imprisonment, or both.

(10) An offence under subsection (9) may be charged by reference to any day or longer period of time; and a person may be convicted of a second or subsequent offence under that subsection by reference to any period of time following the preceding conviction of the offence.").
The noble Lord said: My Lords, the purpose of Amendment No. 98 is to provide within Clause 40 the powers to enable the authority to sanction auditors and actuaries who fail to comply with their duty to "blow the whistle".
The amendment introduces further powers for the authority, but our intention is that for the time being the new subsections will remain uncommenced. It is the same as we proposed for subsection (4) which allows the authority to fine auditors and actuaries. The reason is that we believe that the auditors' and actuaries' professional bodies are the ones best placed to discipline members who fail to comply with their statutory duty. Those bodies will take on this role as part of their already well-established professional disciplinary procedures which have an appropriate range of penalties—for example, the removal of a professional's practising certificate. We intend to introduce those additional powers only in the unlikely event that the respective professional bodies are unable or unwilling satisfactorily to discipline their members who breach the whistle-blowing duty.
The amendment allows the authority to disqualify a person from being an auditor or actuary of a trust scheme—if that person fails to comply with the duty to "blow the whistle". It also allows the authority to revoke a disqualification if, at a later date, it becomes satisfied that an auditor or actuary will in future comply with that duty. Those powers broadly reflect those contained in the Financial Services Act 1986 and the Insurance Companies Act 1982. Furthermore, it makes it a criminal offence for a person who is disqualified under this section to act as auditor or actuary of a trust scheme.
These sanctions are necessary, first, because the Pension Law Review Committee recommended that every breach of a duty should carry a sanction; secondly, because the authority needs to be able to enforce the whistle-blowing duty should the relevant professional bodies fail to do that; and, finally, because we wish to adopt an approach that is not out of step with that taken in other areas of regulation. I beg to move.
On Question, amendment agreed to.
Clause 41 [Other responsibilities of trustees, employers, etc.]:
[Amendment No. 99 not moved.]
Lord Lucas Lord Lucas moved Amendment No. 100:
Page 24, line 13, leave out (" 3") and insert ("(Prohibition orders)").
The noble Lord said: My Lords, I have already spoken to this with Amendment No. 3. I beg to move.
On Question, amendment agreed to.
Clause 43 [Annual increase in rate of pension]:
[Amendment No. 101 not moved.]
The Chairman of Committees (Lord Boston of Faversham): My Lords, in calling Amendment No. 102, I should point out to your Lordships that if Amendment No. 102 is agreed to, I cannot call Amendment No. 103.
Clause 48 [Minimum solvency requirement]:
Lord Eatwell Lord Eatwell moved Amendment No. 102:
Page 28, 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: My Lords, in moving Amendment No. 102, I speak also to Amendments Nos. 104, 106 to 109, 111, 113, 119, 121, 123 and 126.
The ordering of amendments at this stage is a little unfortunate. It would have been better if we could have taken Amendment No. 103 in the name of the noble Earl, Lord Buckinghamshire, first, because the noble Lord, Lord Mackay of Ardbrecknish, has put his name to that amendment. Before I proceed, I wonder whether I may assume that the Government intend to accept the noble Earl's amendment. Would that be correct?
Lord Mackay of Ardbrecknish: My Lords, I should have thought that that was fairly self-evident from reading the Marshalled List.
Lord Eatwell: My Lords, with that simple statement by the noble Lord, Lord Mackay, the Government's case for the minimum solvency requirement has been destroyed. I am grateful to him. He has acknowledged that the minimum solvency requirement is not a solvency requirement. He will acknowledge that by changing its name, it no longer has the characteristics which the Government have pretended that it had. We now have a funding requirement in which the scale of funding is to be determined by an arbitrary procedure related once upon a time to solvency but so related no more.
However, the minimum solvency requirement, or the minimum funding requirement as we shall certainly soon learn to call it, still bears the disfigurement of its misconception. The funding requirement is still defined as though it were a solvency requirement, albeit very much watered down. The watering down has steadily proceeded. Times of periods for compliance have been

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lengthened; asset valuation has been more flexible. The funding requirements on large schemes have been relaxed.
In Committee the Government moved amendments which transformed the solvency requirement in Clause 49 of the Bill from a requirement that a pension fund should be solvent into a requirement that a pension fund's investment policy should be adequate for the purpose of securing that the requirement of solvency will be met.
At the time I characterised that amendment as being similar to the role of the England cricket team believing that their abilities were adequate for the purpose of securing the Ashes. So we could call the Government's then position "the Atherton position". But now, with the abandonment of any pretence that there is a minimum solvency requirement in the Bill, the Government's position has become that they continue to support a requirement while they acknowledge in advance that it will not be fulfilled. Their position has switched from the Atherton position to the "Eddie the Eagle position". Eddie the Eagle knew that he could not ski-jump, but he tried all the same. The Government know that their solvency requirement will not guarantee solvency, but they continue to use it all the same.
Now that the intellectual case of the Government's position has collapsed, surely it is time for the Government to acknowledge that the minimum solvency requirement, though advanced with the best of intentions, was a thoroughly misconceived proposal in the first place.
Over the past couple of days I obtained the evidence of the Government Actuary as submitted to the Goode Committee on this proposal. The Government Actuary recommended against the minimum solvency requirement. The Government Actuary argued, in a report dated 14th December 1992:
"It can happen … that a scheme is insolvent on such a discontinuance basis, whilst comfortably in surplus on an on-going funding basis.
Since in the majority of cases a scheme is not discontinuing, this [the discontinuance basis] seems a rather artificial process. It is also unrealistic to think that medium to large pension funds could be readily bought out with an insurance company".
Why did the Government ignore their own Actuary's advice?
The noble Lord, Lord Mackay, committed the basic error of which the Government Actuary warned. He fell into exactly the error of accepting the artificial process. The noble Lord told us in Committee that he was,
"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".
He went on:
"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".—[Official Report, 16/2/95; col. 822.]
What the Government will admit by accepting the amendment of the noble Earl, Lord Buckinghamshire, is that the propositions that the noble and learned Lord,
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Lord Mackay, made in Committee are not going to be fulfilled. It is simply not true that under the Government's proposals the scheme will be able to secure the promise at all times. That is not true. So why do the Government not realise that they have now created the worst of both worlds: a minimum solvency requirement that is not about solvency, and now a minimum funding requirement that is not about funding?
I am quite willing to accept that the amendments that are tabled in my name are imperfectly drafted. These amendments remain in the nature of probing amendments. But their objective is clear; namely, to establish a minimum contributions requirement which is defined by best actuarial practice and which seeks to maximise the returns to the contributions of employers and employees within the context of an ongoing fund, as the Government Actuary recommended. There is no hybrid standard, as the Minister claimed in Committee. Instead, there is the standard for evaluating an ongoing fund that was proposed not by me but by the Government's own Actuary.
I am advised by the National Association of Pension Funds and by other actuaries whom I have consulted that a "best practice" requirement would provide extremely good protection against the possibility of employer insolvency. It would certainly provide far better protection than the Government's now discredited minimum solvency requirement or minimum funding requirement. That is all that these amendments seek to achieve: a basis for the evaluation of funds on an ongoing basis. However, in doing so, they would establish criteria for the operation of pension funds which would provide real protection to employees, provide an efficient funding base for employers and allow the regulator to identify with ease the rogue employer; for instead of requiring a complex, separate actuarial assessment dealing with the increasingly vague and irrelevant solvency conditions, the regulator could easily refer to the actuarial standards adopted to run the fund on an ongoing basis.
I do not mind if the Minister wants to call my minimum contribution requirement a minimum funding requirement. I do mind that whatever minimum is set should protect the interests of members. The Government's hybrid jumble of criteria does not meet that simple goal. Instead, it creates an artificial standard which, regrettably, for many pension funds will become the norm and which by its very nature will be seriously inferior to the position that will be established by best actuarial practice. Instead of protecting the pensioner from rogues, the Government are creating an environment which will discourage employers from adequately funding their pension funds, for the solvency requirements are now so far removed from the real requirements of adequate funding that they will be at the same time expensive and inadequate.
Surely, now that the Government are about to acknowledge that the case for a minimum solvency requirement is lost in its own contradictions, they should withdraw the entire sorry mess and begin to work on the framework of proposals that I have put forward. Incidentally, by so doing, it would make unnecessary

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the complex exceptions which are to be moved later by the noble Lord, Lord Clark of Kempston, exceptions which would be completely unnecessary if the Government were to accept that a minimum contributions requirement should be based on best actuarial funding practice.
The Government should now obey the wise advice of my noble friend Lord Healey: "When you are in a hole, stop digging". The minimum solvency requirement is not just a hole but a hole rapidly filling with water. The Government acknowledges the intellectual failure of their proposals by accepting the amendment of the noble Earl, Lord Buckinghamshire. They should accept the logic of their own position and transform the new minimum funding requirement into a minimum contributions requirement. I beg to move.
10.15 p.m.
Lord Stewartby: My Lords, I hope that the House will not accept Amendment No. 102. The noble Lord, Lord Eatwell, explained it in the context of the contribution proposals that he deployed to your Lordships at an earlier stage in the proceedings on this Bill; but he has not explained why a concept of matching contributions to benefits is sounder than a concept of solvency or funding. That is not just a technical aspect of the wording of his amendment; it is fundamental to it. The noble Lord, together with his noble friend, argues that the concept of a contribution requirement should be that the contributions match the benefits.
Any system in which contributions are related directly to the benefits becomes a pay-as-you-go scheme. I do not see how we could possibly graft that onto the existing structure of our pension funds. Unless the rentability of the assets of the scheme are taken into account, the contributions which are paid—whether paid by the employer or taking account of the members' contributions—will never be related to the benefits in the direct way that he suggests.
This may indeed be a matter of terminology. But before the noble Lord rubbishes the idea of solvency or funding, he ought at least to make a case for his own terminology on contributions. That he has not done.
Lord Mackay of Ardbrecknish: My Lords, I am surprised that this was not a longer debate.
We first heard during Committee how the noble Lord, Lord Eatwell, opposes the minimum solvency requirement and favours a "minimum contributions requirement". His proposal is based on the enforcement of,
"best practice funding standards on an ongoing basis".
He suggested that that would provide "a truly viable" alternative to the minimum solvency requirement. Therefore, in view of that rather ambitious claim, it was something of a let-down to realise that this seems to be no more than maintaining the status quo. In fact, it would seem that the noble Lord, Lord Eatwell, is urging the Government to turn their back on their duty to improve member security and, instead, to take the easy way out—the "do nothing" option.
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I hope to be able to explain to noble Lords why our proposal is superior to that of the noble Lord, Lord Eatwell. I shall attempt to do that with as few clever remarks as I can. My disadvantage is that I have been at the Dispatch Box since 3 o'clock this afternoon, whereas the noble Lord, Lord Eatwell, has clearly been on the substitute bench for a few hours now preparing his clever remarks.
The simple fact is that an employer who undertakes to provide a defined benefit scheme takes on responsibility for the balance of cost. He is responsible for paying the extra needed to provide benefits over employee contributions and investment return. The minimum funding requirement reinforces that responsibility up to a certain level. We know from the results of the consultation exercise we carried out last year to test the impact of the minimum solvency proposals that the vast majority of schemes were normally funding at a level comfortably above the minimum. The new requirement will not affect those schemes and will not, as the noble Baroness, Lady Seear, asserted in Committee, mean more money would have to be put into schemes than is necessary. But our survey also identified a minority of schemes that were very weakly funded. For such schemes, the minimum requirement is crucially important for improving security for members.
During Committee, I said that the central weakness of an ongoing funding requirement is that it does not aim to provide any level of protection in the event of a scheme winding-up. I know that some noble Lords may want to argue that the bulk of employers do not become insolvent and that it is therefore unreasonable to require schemes, at all times, to have sufficient assets to meet their accrued liabilities. I do not accept that argument. On the contrary, I believe that scheme members have the right to a clearly defined measure of protection. I should like to remind noble Lords of what the PLRC had to say on this issue:
"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 the assets of the scheme are sufficient to cover its liabilities".
Several commentators have said that it would be damaging for employers to require them to pay contributions at a time when equity markets are depressed. Nevertheless, there is a definite relationship between a decline in the market value of equities and employer insolvency. Thus, it is at the very point that accrued benefits are at their most vulnerable that an employer is most likely to become insolvent. Members who have had their benefits reduced on a wind-up are unlikely to take much comfort from the fact that they would have been secure had their employer remained in business. To put it another way, it is quite unacceptable that employers should be able to continue trading at the risk of leaving their employees' legitimate pension expectations unfulfilled.
The central weakness of the ongoing valuation basis proposed by the noble Lord, Lord Eatwell, is that it does not ensure that assets accumulate quickly enough to enable a scheme to meet its accrued benefits. Study of the experience of the Pension Benefit Guaranty Corporation in the United States is most illuminating in

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this respect. Its minimum funding rules were originally based on an ongoing valuation basis, possibly along the general lines of the proposed minimum contributions requirement of the noble Lord, Lord Eatwell. This allowed insolvent pension funds to pass millions of dollars of unfunded liabilities on to the Pension Benefit Guaranty Corporation, leading to its near bankruptcy. We shall come to that when we come to debate the question of a central discontinuance fund. It was therefore necessary to change the basis of the minimum funding rules in the US. Pension plans are now also required to consider whether they could meet their liabilities if the pension plan were to terminate, which looks suspiciously like our own proposals under another name.
I think I should repeat the merits of the minimum funding approach and what it is intended to deliver. It will require schemes to hold sufficient assets to be able to secure pensions already in payment, either by buying annuities or paying benefits as they fall due, and provide younger members with a sum of money to be invested further. The pensions they eventually draw will obviously depend on how the money is invested and the rates of return on the investment, but there is every chance of it producing a pension at least as good as, and probably better than, that which would be paid from a deferred annuity. The minimum funding proposals offer a far better measure of security for all members of defined benefit schemes than any alternative affordable proposals.
Ever since a minimum funding requirement was first proposed as the minimum solvency requirement by the PLRC there have been rather wild allegations about it leading to a massive shift out of equities which could, in turn, depress the UK equity market. While we accept that some of the more mature schemes may want to change their investment strategy in order to reduce the risk of falling below the 90 per cent. limit, we think that the position has been highly overstated and we totally reject the doomsday scenarios that have been drawn by certain commentators. Indeed, last December my right honourable friend Peter Lilley announced a number of changes, but I think we shall come to them in a debate on a later group of amendments.
The noble Lord, Lord Eatwell, made much of our responding to the pressures and suggestions that have been made that we should change the name of the scheme. It was a clever debating point. But, frankly, we do not believe that it has quite the significance the noble Lord wishes to pray in aid. The requirements which are set out in Clause 48 may not guarantee that a scheme will be able to meet its liabilities in full on a buy-out basis but they should ensure that schemes always have enough money to meet the value of their members' accrued rights calculated on a realistic actuarial basis. That is something which the proposals of the noble Lord, Lord Eatwell, could not hope to deliver on a reliable and consistent basis.
The noble Lord, Lord Eatwell, made much of the Government Actuary's alleged opposition to minimum solvency. The references he made were, I suggest, misleading. The Government Actuary was concerned
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about a requirement that would have required schemes to fund at a level of buying out all pensions with annuities. The Government and the PLRC have always accepted that that would be impractical and unduly costly. That is why we have gone for the minimum requirement proposed in the Bill. It is not the Government's intellectual case that has collapsed. It is close to a contradiction in terms for the noble Lord to speak of defining best practice. If we were to try to define an ongoing valuation basis in place of the minimum funding requirement it would produce a funding target higher than the MFR for the great majority of schemes and that would not endear the party opposite, or indeed your Lordships' House if it were to agree with the noble Lord, to British industry.
We have in this country thus far managed without a minimum funding requirement. For most scheme members this has produced the benefits which they have expected and were promised. Schemes were thus funded, and still are, on the basis of actuarial advice. But we need to respond for scheme members who are unfortunate enough to work for employers who go out of business and are thus unable to stand behind their pension fund. These members could well find that, as the law stands at present, they would receive less than they have a right to expect.
We live in the real world where employers do go out of business. We believe that schemes must be funded at a proper level to secure benefit rights if that should happen. I do not see how the noble Lord, Lord Eatwell, can say that there is no intellectual case. The PLRC recognised it and in years to come scheme members will, should their employers go out of business, have a great deal for which to thank the PLRC, to thank this Bill and to thank your Lordships' House this evening if it rejects the noble Lord's amendment and sticks with the minimum funding requirement as proposed in the Bill.
10.30 p.m.
Lord Eatwell: My Lords, I can understand that the noble Lord would lose his sense of humour when he has to defend the indefensible. I am not at all surprised that he has found it so difficult to do so.
The noble Lord, Lord Stewartby, asked me to explain more generally the implications of the minimum contribution requirement versus the minimum funding requirement. The key point is comparing the viability of pension schemes on an ongoing basis which the minimum contribution requirement seeks to do, with those on a discontinuance basis.
The central problem involved in comparing the scheme on a discontinuance basis is that if a pension fund is at every moment of time to be able to guarantee the pensions of its members, then it will have to move out of an equity basis for funding and strongly towards a gilts basis of funding.
The Government have recognised that problem and to try to deal with it they have steadily watered down the minimum solvency requirement as it used to be called, and in doing so they no longer provide the protection of pensions which was initially claimed. The noble Lord,

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Lord Mackay, has admitted that that is so. He has admitted it again this evening when he said that the purchase of guaranteed annuities would be too expensive.
We now have something called a clearly defined level of protection. I suggest to your Lordships that the noble Lord, Lord Mackay, gave the game away when he stated that the minimum contribution requirement would tend to be,
"higher than the minimum funding requirement".
Quite so, because the minimum funding requirement, as now watered down, is inadequate to support and protect the pensions of members.
The minimum contribution requirement would, as the noble Lord also admitted, embody what in his survey was identified as best practice. He explained to us that the pension funds survey revealed that the vast majority were adequately funded; that they were conducting themselves on the basis of a standard balance of equities and gilts in a manner which would secure the pensions of their members. It is exactly that best practice which his survey has identified that my amendments are attempting to incorporate into a minimum contribution requirement.
The noble Lord referred to the problems which have been encountered in the United States with the PBGC. Those problems were created primarily because the regulations which established that central discontinuance fund did not take adequate account of future inflation in benefit levels. It was simply a general mistake and something which could be dealt with in a proper minimum contribution requirement.
We are really seeing here two different approaches to the protection of members; namely, the protection of members' positions either by attempting to establish best practice in an ongoing environment or the protection of members' rights by a discontinuance standard. Either of those approaches is intellectually defensible. The Government have started from the position of a discontinuance standard and then steadily watered it down as the costs and difficulties associated with it have emerged. That is why in the next amendment of the noble Earl, Lord Buckinghamshire, we are going to see the name of the minimum solvency requirement changed.
But there still remains the problem that the noble Lord himself identified. The now minimum funding requirement will tend to become the norm and that norm does not, as he himself has admitted, actually protect the members' pensions. That is the great danger with the minimum funding requirement, and that is why it is desirable that a minimum contributions requirement, based on best practice, should be incorporated into the Bill. As we shall clearly have to return to this matter on a day when the Minister's temper is better, I now beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Buckinghamshire The Earl of Buckinghamshire moved Amendment No. 103:
Page 28, line 10, leave out ("solvency") and insert ("funding").
The noble Earl said: My Lords, we have probably already had the debate on this amendment; but as my noble friend the Minister has added his name to mine on it, I shall be pleased to hear whether he wishes to add anything to what he has already said.
Lord Mackay of Ardbrecknish: My Lords, I am grateful to my noble friend Lord Buckinghamshire for tabling this amendment. As he knows, we have received many representations on this matter, including in particular from the Institute of Actuaries and the Faculty of Actuaries. At the risk of being chided again for having lost my sense of humour - of course, I have not done so in the least - perhaps I may advise the noble Lord, Lord Eatwell, that I acknowledged on Second Reading that we may not have got the name of the minimum solvency requirement quite right. It should not, therefore, have come as a great surprise to the noble Lord that I was prepared to have an open mind on the subject, just as I have had on a number of issues.
In accepting the proposal which has been suggested from a number of sources, perhaps I should explain that by changing the name to a "minimum funding requirement", there is not the slightest deviation from what the requirement will do. It will mean that members can be confident that the value of their accrued rights is secure, especially in the event of the scheme or the employer company winding up.
The noble Lord, Lord Eatwell, took pains to explain to the Committee that true solvency could only mean the ability to buy out all benefits with guaranteed insurance annuities. The PLRC recognised that such a measure of solvency would not be practical and would be unduly costly. The Government fully accepted this. We also listened carefully—as I have said many times, we are always open to a good argument —to concerns about the original valuation method and the White Paper proposals. Changes were agreed to the valuation method to address those concerns. They will reduce the risk of any unnecessary costs on employers, yet maintain an acceptable level of protection for members.
It is only right that the members' investment, and their accrued pension rights, should be properly protected. Our proposals are designed to provide that protection. As suggested by the PLRC Report, we had called the vehicle for providing that protection a "minimum solvency requirement". The change of name in no way reduces what the requirement is intended to achieve. Therefore, I commend the amendments in this group, and the change of name, to the House.
Lord Eatwell: My Lords, I support the amendment which stands in the name of the noble Earl, Lord Buckinghamshire, since it provides at least a more honest name for the proposal which has never been a minimum "solvency" requirement, as the Government well know.
On Question, amendment agreed to.
[Amendments No. 104 to 109 not moved.]
Lord Eatwell Lord Eatwell moved Amendment No. 110:
Page 28, line 32, at end insert:
("() The Secretary of State shall by order establish a central discontinuance fund.").
The noble Lord said: My Lords, we return to some of the issues that we discussed in Committee - in this case, to the proposal for a central discontinuance fund. The amendment is offered in a friendly spirit - indeed, in a comradely spirit - to try to get the Government out of the hole into which they have dug themselves with regard to the minimum funding requirement.
The Government have already acknowledged that in most cases it would be severely detrimental to members' interests to wind up a fund simply because the employer has become insolvent. They have done that by arguing that large pension funds should be run on as closed funds. The whole point of a central discontinuance fund would be to provide the same facility for smaller funds which could not be maintained as closed funds and for larger funds which, for a variety of reasons, the trustees were unable or unwilling to maintain as closed funds.
One of the peculiar aspects to the Government's opposition to the creation of a central discontinuance fund is that the creation of such a fund was recommended to the Goode Committee by, once again, the Government Actuary.
I have here a document dated 21st January 1993 prepared by the Government Actuary entitled A Central Fund for Private Sector Occupational Pension Schemes: Supplementary Memorandum by the Government Actuary. In that document the Government Actuary argues what he calls "the need for a central fund". His case is:
"Because many schemes would find it difficult to secure their liabilities on discontinuance, a mechanism is needed for handing over the liabilities to another vehicle, similar to an on-going pension fund … The answer would appear to be to have a Central Fund (or Discontinuance Fund) … The Fund would simply act as an administrative arrangement and investment vehicle for running off the liabilities of discontinued pension funds".
The Government Actuary then examines in detail the operating basis of such a fund, dealing with a wide range of legal and practical problems. Since the Minister must have had access to the Government Actuary's memorandum, I am sure that he will not raise a whole series of bogus objections to the central discontinuance fund which the Government Actuary disposes of so effectively in his memorandum. I am sure that the Minister also knows that the Government Actuary cites the successful operation of similar funds in Finland and Japan, while emphasising that a British central discontinuance fund should be attuned to British circumstances.
The Government Actuary notes, for example:
"In practice immediate funding of a deficit (or a reduction of liabilities) might not be necessary, any more than it is for an ordinary occupational pension scheme"—
the essential scheme of an on-going fund. But if deficits should arise because of inappropriate transfer terms or inappropriate investment strategies, then legislation could provide for either a levy on other pension funds, or for the Government to act as reinsurer of last resort. That is what the Government Actuary recommends. I am advised by actuaries that if such a levy were chosen, it would be small. Indeed, the word used to describe it to me was "trivial".
The Government Actuary then goes on to examine in his document a wide range of additional advantages which would stem from the existence of a central discontinuance fund. In particular it could act as:
"a central clearing house for financial adjustments between schemes, so as to permit the whole of an individual's pension to be paid by a single scheme."
That is apparently what the Finnish version of a central discontinuance fund does. If that were done, it would overcome the major weakness of occupational pension schemes: that they discourage mobility between jobs and thus reduce the flexibility of the labour market.
I do not wish to press the Government Actuary's proposals for extension of the central discontinuance fund concept this evening, but I wish to impress upon the House that the establishment of a central discontinuance fund was the Government Actuary's preferred option for dealing with the problems created by employer insolvency. Why did the Government ignore his advice? Why are the Government prepared to leave employees at the mercy of a MSR which is not a solvency requirement, in circumstances in which, because there is no central discontinuance fund, the funds will have to be wound up to the considerable detriment of members and pensioners?
The Government have recognised that winding up is detrimental in their proposal that large funds should not be wound up. Why should pensioners in small funds have to suffer that danger?
This proposal is separate from my earlier proposal for a minimum contributions requirement, but reinforces the case for a minimum contributions requirement defined as efficient in on-going terms. It is a device to underwrite a pension funding system which is efficient for employers and employees, and which provides pensioners with the maximum level of protection which is possible within the structure of occupational pension funds. I beg to move.
10.45 p.m.
Lord Ezra: My Lords, I support the concept of the central discontinuance fund. In the light of the Government's recent amendment—that is, to change the name and to some degree the concept of the minimum solvency fund—this amendment would properly complement that. The noble Lord, Lord Eatwell, made the clear point that whereas on discontinuance larger schemes can continue to operate as closed schemes, many smaller schemes could be in difficulty on the terms now laid down for minimum funding. Therefore, the concept of a central discontinuance fund would be most appropriate.
There appears to be a wide practice abroad, from which we can derive much benefit, not only in the United States but also in Finland and elsewhere. I believe that, in the light of the Government's modified approach to minimum solvency, the concept merits serious consideration.
The Earl of Buckinghamshire: My Lords, at the risk of extending our debate deep into the night, I declare an interest and say to my noble friend the Minister that if the Government Actuary is to be thrown at him my new

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employer, Watson, will throw something at me. It proposed the setting up of a central discontinuance fund. Fortunately, an article stated, "Bail out fund the bankrupt idea". I believe that the issue is extremely complex, whether it is minimum funding, minimum contribution or minimum solvency. I suggest that your Lordships enter upon it with trepidation because overnight one is supposed to become expert in a most technical area.
As regards the concept of the central discontinuance fund, it is said that successful funds have been set up elsewhere. I am not sure what the size of the pensions market is in Finland; I suspect that it is not very large. Nor am I sure how large the Japanese market is. The experience that may be of greater relevance is that of the United States. However, even there there have been unhappy experiences with the fund.
It would require pre-funding and the good schemes to bail out in part the poor schemes. It is true to say that the American central fund is now experience rated; nonetheless, the costs of the fund have increased. I believe that the present winding-up clauses within pension schemes were devised at a time when we did not have personal pensions and Section 23 buy-out contracts and when there were no alternatives to the deferred annuities, which winding-up schemes are forced to buy in many cases.
It is the winding-up area that is causing so many difficulties. In the situation described in the previous amendment, moved by the noble Lord, Lord Eatwell, the minimum contribution required on discontinuance would be greater than on an ongoing basis. I hope, therefore, that my noble friend will treat this amendment with great care. I look forward to hearing his response.
Lord Mackay of Ardbrecknish: My Lords, in Committee a few references were made to the possibility of establishing a central discontinuance fund. We are now coming to a full-fledged debate on the fund, with the Government Actuary prayed in aid as someone whose views I ought to take, standing to attention and saluting.
One aspect of government, which is always difficult, is that governments have to take all the views that are submitted and then try to work out the sensible course of action in the light of them. In that regard, that includes the Government Actuary's report. I do not deny the points that have been made praying him in aid.
It has been claimed that a central fund would be cheaper than requiring each scheme on an individual basis to comply with the minimum funding requirement. I do not accept that argument. Our analysis indicated that it is only where a scheme is weakly funded on an ongoing basis that the minimum funding requirement will require more funds to be paid into the scheme than might otherwise be thought necessary.
It is incorrect to view a central discontinuance fund as a cheap alternative to the minimum funding requirement. We envisage that the terms on which such a fund would accept the transfer of liabilities could in effect impose a de facto requirement on all schemes. My noble friend Lord Buckinghamshire, who has professional experience in this area, suggested that we
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should all tread with some trepidation. I confirm to him that I certainly tread with some trepidation into these matters because they are not only complicated but they are extremely important for the people who have put their money into pension schemes.
In order to avoid any great risk of insolvency, I suggest that a central discontinuance fund would set transfer terms on a fairly conservative basis. Perhaps it is envisaged that a central discontinuance fund would just take what was thrown at it and would just be the recipient of any scheme which collapsed and would not try to control the world outside in order to ensure that what falls into its lap is not absolutely horrendous.
I noticed with some interest that the noble Lord, Lord Eatwell, mentioned Finland and Japan but did not mention the United States, although the noble Lord, Lord Ezra, did. On the last occasion on which we debated this matter, my noble friend Lord Buckinghamshire gave us an indication of why the United States was not a very good example to pray in aid. At the risk of detaining the House, I should say a few words about the experience of the Pension Benefit Guaranty Corporation in the United States. We understand that between 1974 and 1993 annual levy payments increased from 1 dollar per member to 72 dollars. Despite that level of increase, the agency still remains concerned that its reserves may not be adequate.
That position of near-bankruptcy is thought to have been caused by the fact that the PBGC was supported by a funding requirement that was based on an ongoing valuation basis. It failed to ensure that pension plans were properly funded, with the result that certain plans were able to pass on large unfunded liabilities to the PBGC. The US has now been forced to change its funding rules to something more akin to our proposed minimum funding requirement. The American experience of running a central fund clearly underlines my earlier point that a viable central discontinuance fund would need to be supported by a discontinuance-based test, and therefore cannot be viewed as an alternative to the minimum funding requirement.
There does however, remain the question of whether the central discontinuance fund has merit, not as an alternative to the minimum funding requirement, but as a bolt-on to it. It may be true that it could provide a cheaper alternative to buying insurance company deferred annuities. That is an attractive idea, but would it really be workable in practice? Pension schemes provide different pensions and benefits. Such a fund would be highly complex and expensive to administer unless some attempt were made to standardise benefits, which could in itself disadvantage some members and unfairly reward others.
Similarly, there is the issue of who would underwrite such a fund in the event of any deficit. No matter how conservative the terms on which the central discontinuance fund would accept liabilities, there would be some risk of a shortfall arising. I suggest that it would be inappropriate to use taxpayers' money to underwrite a fund that would benefit only those people who are in defined benefit schemes. Likewise, I am sure that solvent employers would object to paying a levy to secure benefits for members of insolvent schemes.

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We have given serious consideration to the idea of a central discontinuance fund and of course we have taken account of the memorandum which the Government Actuary submitted to the PLRC. I know that the PLRC considered it carefully before it concluded that it could not make that recommendation. As my noble friend Lord Buckinghamshire indicated, it is clear that not everyone agrees with the Government Actuary. We believe that a central fund would do nothing to ensure that schemes are adequately funded, which is the prerequisite of scheme security.
We have had a good debate on the idea of a central discontinuance fund, even though it is late at night. I hope that in the light of what I have said, the noble Lord, Lord Eatwell, will withdraw the amendment; but if he does not, I hope that my noble friends will join with me in resisting that idea.
Lord Eatwell: My Lords, I am afraid that the noble Lord has not seriously addressed the question of the proposed central discontinuance fund. Instead, he presented a caricature. The noble Lord suggested that it has been proposed as an alternative to either a minimum funding requirement or a minimum contributions requirement; it is not. Moreover, the noble Lord suggested that it was designed to absorb insolvent schemes. It is not. The whole point is that the fund should take over schemes of insolvent employers, not necessarily schemes which are insolvent. Indeed, the schemes might be in perfectly good shape; it is simply the employer who has gone broke.
As I said, the Minister has presented a caricature of the schemes. The whole point of a central discontinuance fund is to do what the noble Lord is proposing for large funds. If the noble Lord is so sure that the notion of a central discontinuance fund is undesirable, why is he proposing that large funds be not wound up but maintained as closed funds? The noble Lord is absolutely contradicting himself in the very proposals that he is advancing.
I should like to make some comments on the PBGC in the United States. The key problem that was faced by the PBGC was that it had insolvent schemes dumped on it by employers who were still solvent. The proposals that I have put forward would simply involve a central discontinuance fund, absorbing schemes from insolvent employers. Therefore, it would not have the moral hazard problem of employers deliberately under-funding schemes and then dumping them while they are still in business. That problem would not have to be faced.
All that we are proposing is a very simple idea of the establishment of what is, effectively, a public trustee to absorb relatively small funds or those larger funds which the trustees, for one reason or another, cannot keep in operation in terms of a closed fund and maintain them on an ongoing basis to protect the members' benefits. It would always be in addition to some form of funding or contributions requirement; it could not stand on its own, although, as the Government Actuary points out in his memorandum its terms and conditions could provide a
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floor under which the practices of pension funds would not fall. In other words, it would provide standards which could be maintained.
The Minister should consider what he said in response this evening. He should withdraw from his speech the elements of caricature upon which he decided to rely in rejecting the proposal, look seriously at the memorandum advanced by the Government Actuary and consider the ways in which a central discontinuance fund could provide an important level of security in addition to those levels which we have already discussed this evening. In the meantime, although we may return to the proposal at a later stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 49 [Valuation and certification of assets and liabilities]:
[Amendment No. 111 not moved.]
Lord Lucas Lord Lucas moved Amendment No. 112:
Page 28, line 41, leave out ("solvency") and insert ("funding").
The noble Lord said: My Lords, the above amendment was spoken to with Amendment No. 103. I beg to move.
On Question, amendment agreed to.
[Amendment No. 113 not moved.]
Lord Lucas Lord Lucas moved Amendment No. 114:
Page 29, line 4, leave out ("solvency") and insert ("funding").
On Question, amendment agreed to.
11 p.m.
Lord Lucas Lord Lucas moved Amendment No. 115:
Page 29, line 31, leave out (" 3") and insert ("(Prohibition orders)").
The noble Lord said: My Lords, this amendment was spoken to with Amendment No. 3. I beg to move.
On Question, amendment agreed to.
Clause 50 [Schedules of contributions]:
The Earl of Buckinghamshire The Earl of Buckinghamshire moved Amendment No. 116:
Page 30, leave out lines 10 to 12.
The noble Earl said: My Lords, in moving Amendment No. 116 I wish to speak also to Amendment No. 118. I mentioned at Second Reading that I thought that my noble friend the Minister had made an omission in drafting this particular clause. I shall give the House some background on this matter. This subsection would leave trustees with the ultimate power to decide on their own the overall rate of the employer contribution to the scheme. I believe that the purpose of a schedule of contributions in this clause is to provide part of a framework to ensure prompt payment of contributions in order to meet the minimum solvency requirement, not to give trustees the ultimate power to decide the overall rate of employer contributions.
If this amendment is not accepted, tremendous power is granted to the trustees to control the overall pace of funding which currently lies with the employers. These amendments aim further to ensure that contributions must at least be equal to those certified by the actuary

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as necessary to meet the minimum solvency requirement, but with an agreement on any further contributions subject to the provisions in the individual trust document, which will lay down how the employer's contribution and the pace of funding is agreed. I beg to move.
Baroness Hollis of Heigham: My Lords, I am afraid this is another amendment about which we are uneasy. As I understand it in the light of the noble Earl's explanation, the Bill currently says that the contribution level is set by the trustees, if possible with the agreement of the employer, but nonetheless the responsibility rests with the trustees. Under the noble Earl's amendments, as I understand them, instead the responsibility for deciding contribution levels would be taken not by the trustees but by the actuary and would require them to be agreed by the employer. That would mean a very decisive shift of responsibility for contribution levels and the associated issues away from the trustees to the employer, yet the whole thrust of this Bill, which we support in its broad outlines, is to make such central decisions the responsibility of the trustees. We feel again that the balance goes too far away from the trustees in the noble Earl's amendment and we would therefore oppose it.
Lord Mackay of Ardbrecknish: My Lords, I have listened with care to what my noble friend has had to say and to what the noble Baroness, Lady Hollis, has had to say. I have some sympathy with the concerns expressed by my noble friend and we need to look at the wording of this clause. But I have anxieties that the amendment tabled by the noble Earl might not work. The amendments would remove the fallback altogether so we would have to rely always on the employer and trustees agreeing the appropriate level of contributions to be entered in the schedule. My worry—which I think the noble Baroness shares—is that agreement may not always be possible.
If the trustees and employers do not agree, Clause 50 puts an obligation on the trustees to prepare and revise the schedule of contributions. They must do this within a specified time limit. If they fail to do this, the trustees can be removed or they can be fined. But failure to reach agreement might not be the trustees' fault. It might be the employer who was reluctant to sign up. Therefore I still think that we need to have a fallback arrangement, but one that will work properly and fairly.
I propose that we should take this away and come back with an amendment, possibly in another place, which would retain the fallback but limit the power of trustees. The trustees would be able to set a contribution rate only at the minimum that the actuary could certify as necessary to ensure that the scheme was funded to the minimum level.
It is entirely appropriate that the trustees should be responsible at the end of the day for setting the contributions if agreement is impossible. This is consistent with the many other new provisions in this Bill which strengthen and clarify the position of trustees. I trust that your Lordships will accept this as a fair arrangement and I hope that with that commitment my noble friend will withdraw his amendment.
The Earl of Buckinghamshire: My Lords, I listened with great interest to what the noble Baroness, Lady Hollis, said about the amendment and also to the Minister's response. The problem with this clause of the Bill is that too much responsibility for the funding of schemes has been moved away from employers. I am very pleased with the Minister's response. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 117 to 121 not moved.]
Lord Lucas Lord Lucas moved Amendment No. 122:
Page 30, line 22, leave out ("solvency") and insert ("funding").
The noble Lord said: My Lords, the amendment was spoken to with Amendment No. 103. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 123 and 124 not moved.]
Lord Lucas Lord Lucas moved Amendment No. 125:
Page 30, line 33, leave out (" 3") and insert ("(Prohibition orders)").
The noble Lord said: My Lords, Amendment No. 125 was spoken to with Amendment No. 3. I beg to move.
On Question, amendment agreed to.
Clause 51 [Determination of contributions: supplementary]:
[Amendment No. 126 not moved.]
Lord Lucas Lord Lucas moved Amendment No. 127:
Page 31, line 3, leave out ("solvency") and insert ("funding").
The noble Lord said: My Lords, the amendment was spoken to with Amendment No. 103. I beg to move.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 128:
Page 31, line 8, leave out (" 3") and insert ("(Prohibition orders)").
The noble Lord said: My Lords, Amendment No. 128 was spoken to with Amendment No. 3. I beg to move.
On Question, amendment agreed to.
Clause 52 [Serious underprovision]:
Lord Clark of Kempston Lord Clark of Kempston moved Amendment No. 129:
Page 31, line 12, after ("(2)") insert ("or (2A), as the case may be,").
The noble Lord said: My Lords, in moving Amendment No. 129 I should like to speak also to Amendments Nos. 130, 131, 132, 133 and 135. The amendments were explained fully in Committee by the noble Lord, Lord Marsh. Consequently, at this late hour I do not intend to delay your Lordships. The amendments concern the minimum solvency requirement, now the minimum funding requirement.
The Bill is overshadowed by the tragedy of the Maxwell case. When a government is faced with a situation of that kind they may be guilty of over-reacting. If I may digress, I remind my noble friend that when the Financial Services Bill went through another place many of us said that the regulation of the City of London might prove onerous. That has been the case. The compliance costs of the Financial Services Act are crippling some financial advisers.
I agree entirely with the Government that there should be control of pension funds. The amendments deal with deficits in pension funds. I appreciate that since the publication of the White Paper the Government have moved some way to alleviate the provisions relating to the handling of a deficit within a fund. If the value of the fund is less than 90 per cent. of the liabilities the employer has one year to put another tranche of money into the fund. Five years is allowed to increase the value from 90 per cent. to 100 per cent. Those are welcome concessions.
One of the difficulties is that the Government have overlooked the fact that any company, whether large or small, has to operate at a profit and must have a positive cash flow. If it did not have a positive cash flow a company would be in trouble. I remind my noble friend that in many profitable small businesses the cash flow position is such that they may go out of business. I should have thought that where there is a deficit that deficit need not necessarily be made up by cash alone. In some cases a deficit can be made up by increased contributions. But an employer could easily have a subordinated loan. He could have a bank guarantee. We have to make certain in the Bill that the regulations should not mean that the normal investment policy of a company should be impaired. Consequently the nub of the amendments provides that there should be complete flexibility regarding making good the deficit. I do not suggest that the fund should be in any way weakened. However, if the Government believe that a deficit has to be made good—I agree with that—the question is how one makes good that deficit.
The deficit may become a surplus. Your Lordships will appreciate that the stock market goes up as well as down. If one has a bear market, the value of the fund goes down. The noble Lord, Lord Eatwell, has rightly pointed out that if there is a swap from equities to gilts, in many cases that decreases the paper value of the fund. I hope that my noble friend will not say that under the Income and Corporation Taxes Act 1988 one can get the money back. That is too slow a process. Business moves faster than that. We cannot wait for the Inland Revenue to make up its mind as to whether or not there is a repayment. Any employer should have the duty to make good a deficit, but he should have the right to take out the surplus, the extra money that he has put in.
Occupational pensions are an important part of our economy. The funding of occupational pensions is absolutely essential. I remind my noble friend that if one considers the shift in ages over the years, in 2030 we shall probably have 15 million retired persons. The Government should not do anything to discourage employers from setting up pension funds. If employers have a pension fund, they obviously have employees who belong to the pension fund. However, I am worried about the position for new employees if the conditions for running a pension fund are too onerous for the company.
The Government must be flexible. As my noble friend knows, I have discussed the matter with my right honourable friend the Secretary of State for Social Security. I hope that we shall hear some sympathetic noises regarding payments into and repayments out of a
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fund. The key player in all occupational funds is the actuary. The actuary will say whether there is a deficit or a surplus. Where there is a deficit I hope that the employer will have the flexibility to make up that deficit in any way he thinks fit which satisfies the actuary and trustees; and, conversely, I hope that he can get his money back with the consent of, and on the valuation of, the actuary.
I do not believe that payments into and out of a fund should be left to regulation. I should like to see some provision in the Bill. I hope that my noble friend will give some consideration to these points. I hope that he will indicate that the Government will think again. I know that the period has been too brief for the Government to have put forward any amendments. However, there will be a Committee stage in another place and I hope that my noble friend will make certain that when the Bill is considered in another place the points that I seek to make will be implemented. I beg to move.
11.15 p.m.
Baroness O'Cathain: My Lords, I should like to say a few words in support of Amendments Nos. 129, 130, 131 and 133 in the name of my noble friend Lord Clark and his new clause in Amendment No. 135. Before doing so, I declare an interest. I am currently a non-executive director of three major plcs, including British Airways, and I have been a non-executive director on several other boards in the past. I therefore have both a likely interest and an understanding of some of the issues behind these amendments. Many companies, large and small alike, are increasingly concerned about the implications of what we now call the MFR.
As my noble friend Lord Clark said, the aim of this group of amendments is to extend the circumstances in which it would be possible for employers to secure an increase in scheme assets by means other than cash contributions. My noble friend the Minister is, of course, aware of the profound impact on any company's bottom line of a significant increase in cash outflow. The amendments, if they are agreed, would allow the prescribed alternatives to increased contributions—a bank guarantee, subordinated loan or other alternatives which provide exactly the same level of protection for scheme members and pensioners—currently applicable only when a scheme is less than 90 per cent. funded, to apply where the shortfall is less than 10 per cent.
Many employers with mature pension schemes, and a large number of pensioners compared with active members, will find the provisions of the MFR quite burdensome. These are generally companies that have fully funded schemes on the conventional actuarial basis of valuation—a basis which has successfully dealt with high inflation and stock market volatility. The amendments aim to provide flexibility to the employers, as my noble friend Lord Clark said, in managing their finances and seeking to hold a competitive position in world markets.
I do of course appreciate that the Government have to steer a difficult path, striking a balance between providing help for employers on the one hand and security for pension scheme members on the other. I also recognise that the Government have already modified their original proposals to accommodate

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employers' concerns. However, these amendments in no way undermine the security of pension funds. That needs to be stressed. Nor do they attack the protection of pensioners.
I turn briefly to the new clause in Amendment No. 135. It seems fair to me that employers should have the right to the repayment of moneys paid into a pension scheme to meet the MFR and shown at subsequent assessments as no longer being required for MFR purposes. As my noble friend said, that is particularly true in the case of mature schemes which have limited opportunity to recover MFR shortfall payments through lower contributions later on.
It cannot be right that, following a temporary drop in the stock market, an employer may have to pay quite possibly a large sum of money into his pension scheme to meet the MFR with no prospect of recovering that money over a reasonable timescale when the stock market recovers. This new clause seeks to correct that unfairness.
Without it, the Bill would undoubtedly accelerate moves by employers to close defined benefit schemes to new members and move towards defined contribution and money purchase schemes. Therefore, the employee of the future will pay a very high price.
Lord Eatwell: My Lords, if I were being charitable I would begin my remarks by saying, "I told you so". The difficulties which have been accurately identified by the noble Lord, Lord Clark, and the noble Baroness, Lady O'Cathain, are difficulties that arise precisely from the structure of the minimum funding requirement and which would not arise in the case of a minimum contributions requirement or the evaluation of funds on an ongoing basis. It seems to me that the difficulties that they have identified are real difficulties to which the Government should attend in a serious manner.
I am not entirely happy, however, with Amendment No. 132, which states that there could be a,
"bank guarantee or by an unsecured loan or by any other"
method of guaranteeing the maintenance of the funding of a scheme. The phrases "or by any other", and "by an unsecured loan", seem to me to be rather too broad. Perhaps I have misunderstood that and the noble Lord, Lord Clark, can enlighten me when he replies to the debate.
But it seems to me that in particular cases, especially in the case of closed funds which are not associated with the insolvency of a company but with the change of status of a company, or which have been closed for other reasons while the company is ongoing, the minimum funding requirement will create a bizarre situation in which companies have to put money in to sustain the requirement, then have to take it out again, then put it in again and then take it out again. If we had a proper assessment of funds on an ongoing basis, the problem would not arise. It is a difficulty which the Government have created for themselves; but more, especially it is a difficulty which they have created for British industry.
Lord Mackay of Ardbrecknish: My Lords, we debated identical amendments to those that we are
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looking at this evening when the noble Lord, Lord Marsh, put forward his amendments in Committee—the noble Lord apologised to me for being unable to be present this evening —and there was some misunderstanding over what particular amendments we were discussing. Subsequently, I wrote to the noble Lord, Lord Marsh, to explain why there was no need to introduce amendments intended to allow an employer the choice of making good a deficit by paying a lump sum into the scheme. Perhaps I can share that point with the House, in case anyone reading over the debate that we had in Committee becomes confused. A cash payment will count as a payment due under the schedule of contributions. So, if an employer paid a lump sum, there would be no requirement to pay contributions on top. I hope that that explanation will clear up any difficulties over that particular question.
My noble friend, Lord Clark, aided by my noble friend Lady O'Cathain, set out most cogently their concerns about the minimum funding requirement and what it might mean if employers have to put money into pension schemes which turn out not to be needed to provide benefits. I hope that I can reassure them—and even help the noble Lord, Lord Eatwell —by explaining that those considerations have been very much in the Government's mind throughout the process of preparing this Bill.
I shall turn shortly to the question of alternatives to cash payment and payments to the employer out of the scheme. But perhaps I may first say that when we published our initial proposals in the White Paper, they were tested very carefully through a consultation exercise. In fact, I have already mentioned the results, which show that 86 per cent. of schemes would at that time have fully satisfied the requirements, and the vast majority of schemes had a comfortable margin between their ongoing funding level and the proposed minimum requirement.
Despite those encouraging results, there continued to be widespread concern, as I said earlier this evening. The fear was that the combination of calculating market values on a particular day, with the proposed time limits for restoring funding levels, would have a destabilising effect. In particular, the three-month limit for getting back to the 90 per cent. minimum level aroused considerable concern.
We listened carefully and we are determined that our proposals should provide scheme members with the security that they have a right to expect. But we also recognise that any requirement should not impose undue burdens on employers or schemes.
As a result, my right honourable friend Mr Peter Lilley announced last December that the calculation would take account of market values over a number of months—earlier in the Committee stage, I suggested that we were thinking about six months—rather than focusing on one particular day. That smoothing effect was designed to avoid the risk of schemes being categorised as being below the minimum level simply because the valuation took place on, for example, Black Friday. Also, the time limits for restoring the scheme to 90 per cent. and 100 per cent. were extended to one year and five years. That will apply to all schemes and will,

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we believe, have a significant effect. It will mean less volatility in contribution rates. Moreover, if there were a fall in the market and if market values were to rise again—despite the six months point that I made—within a year or less, an employer's contributions could then be safely scaled back. We believe that those changes will add stability for employers and schemes without endangering the security of scheme members.
Those important changes will together reduce significantly the potential volatility in the minimum funding requirement. They will minimise the risk of employers having to respond suddenly to short-term movements in the markets. The calculations will be smoothed and the time limits we now propose will allow funding levels to recover in step with normal stock market recovery.
Our analysis indicates that the main risk of serious underfunding is now likely to be caused by something going wrong with the scheme itself rather than because of external changes or fluctuations. However, we accept that in exceptional cases schemes may find themselves falling below 90 per cent. We are content that, in those cases, alternatives to cash such as bank guarantees or ring-fenced securities should be available as an option if the trustees are willing to accept it.
I believe that our proposals are sound and that it is far more appropriate that these alternatives are defined fully in regulations. It is surely better to do that than to introduce terms into the Bill which do not have clear-cut meanings or application.
The most important feature of the alternatives we propose to immediate cash injections is that they will provide security until such time as the scheme is funded to 90 per cent. of the minimum requirement. They therefore cover a temporary situation during the early years of a five-year plan to restore 100 per cent. funding. They are certainly not suitable and were never intended to be used as a permanent alternative to a cash injection. To move to a situation where any deficit below 100 per cent. could be covered by a bank guarantee or unencumbered loan would effectively remove any requirement for employers to make cash contributions to their pension schemes. They would be able to fund them entirely by loans or ring-fenced securities. That does not seem sensible.
The importance of trust funds as a basis for pension schemes is that the trust should be separate and distinct from the employer. Long-term reliance on a bank guarantee or some form of loan would blur that crucial distinction. The same considerations apply on the question of repayments. It would be damaging to the whole concept of trust-based schemes to enable funds to pass freely from the scheme to the employer. As I am sure my noble friend agrees, one of the most important reasons for setting up a trust fund is that the assets of the trust are separate from the employer's property.
I recognise the strength of the anxieties raised in this debate. As my noble friend Lord Clark mentioned, I am aware that he discussed these matters with my right honourable friend the Secretary of State. But we believe that we have demonstrated our concern to avoid any unnecessary burden on employers, and I hope that I
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covered those points this evening. The Bill is rooted in the need to encourage funded pension provision by providing scheme members with the security and confidence they must have if they are to invest for their retirement. I believe that we have met those two objectives.
I hate to return once again to the word "balance", but I seem to be moving inevitably towards it, and I apologise. I am receiving dissenting voices from the other side of the House—one nodding and one dissenting. But balance is an important aspect of this whole business between employers' rights and the rights of employees.
I hope that my explanation will enable my noble friends to see that we have struck that balance. I hope that my noble friend Lord Clark will take note of what I said and no doubt read Hansard in the morning. As he said, there are other opportunities between now and the end of the passage of the Bill in the other place for those who continue to have anxieties on this matter to take them up. Of course, as we do on all the matters discussed on the Bill, we shall continue to listen, discuss with, and consider the concerns of the industry on this and every other important part of the Bill. While, at the end of the day, the Government must make decisions, we want to ensure that we make the correct decisions and that they are decisions with which the majority of people involved in this industry are comfortable so that pension schemes can have a reliable and secure future.
I invite my noble friend to read what I have said. I hope that he feels able to withdraw the amendment even if, knowing him of old, he intends to return to it or find somebody else to return to it in another place.
Lord Clark of Kempston: My Lords, I thank my noble friend for his reply. It would have been much nicer if a message could be sent from this House to the other place saying that the anxieties I have tried to express would be considered carefully in another place and by the Government. That would encourage my colleagues in another place to press the matter harder than they might otherwise do. My noble friend is absolutely right. I shall see that the argument continues. That may be on Third Reading; if not then I know a lot of people in another place. I might be able to persuade one or two of them to press the Government there.
I should like to thank my noble friend Lady O'Cathain for her support. The noble Lord, Lord Eatwell, referred to bank guarantees and subordinated loans. One can also, as an employer, deposit securities with the pension fund, so there are many ways in which employers can do it. My concern is with the cash flow problem of industry. I accept the concessions—if they are concessions—that have been made. I refer to the valuation over six months rather than on a one day basis. I also accept the fact that the one-year period and the five-year period are a concession. Nevertheless, it does not in my view tackle the liquidity position of a company. However, in view of the lateness of the hour and of the fact that my noble friend has invited me to get my colleagues in another place to take up the matter, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 130 to 133 not moved.]
11.30 p.m
Lord Lucas Lord Lucas moved Amendment No. 134:
Page 32, line 2, leave out (" 3") and insert ("(Prohibition orders)").
The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 3. I beg to move.
On Question, amendment agreed to.
[Amendment No. 135 not moved.]
Clause 53 [Sections 48 to 52: supplementary]:
[Amendment No. 136 not moved.]
Clause 55 [Equal treatment rule: supplementary]:
Lord Lucas Lord Lucas moved Amendment No. 137:
Page 33, line 8, after ("other,)") insert:
("() for section 2(4) there were substituted—
"(4) No claim in respect of the operation of an equal treatment rule in respect of an occupational pension scheme shall be referred to an industrial tribunal otherwise than by virtue of subsection (3) above unless the woman concerned has been employed in a description or category of employment to which the scheme relates within the six months preceding the date of the reference.",").
The noble Lord said: My Lords, in moving this amendment I wish to speak at the same time to Amendments Nos. 140 and 141. Amendment No. 137 will replace Section 2(4) of the Equal Pay Act 1970 for the purposes of Clause 54 of the Bill. We are concerned that without this amendment there may be confusion about the operation of Section 2(4) of the Equal Pay Act in the context of pensions. We wish to clarify the position. The substitution of this amendment will have the same effect as Section 2(4) of the Equal Pay Act and will impose the same time limit. The effect of Amendments Nos. 140 and 141 is to bring the terminology used into line with that in the Equal Pay Act, on which much of the equal treatment provisions of the Bill are based. I beg to move.
Baroness Hollis of Heigham: My Lords, I am sorry that we are dealing with some of these issues at such a late hour. However, when we agreed two Report days we had not realised that there would be quite so many government amendments and other amendments which perhaps we might more usefully have dealt with at the Committee stage. We now come to issues which are properly Report stage issues; that is, further clarification, refinement and discussion of issues first raised in Committee.
With Amendment No. 137, our understanding is that it appears to impose a time limit on claims for lack of an equal treatment rule of six months from the end of the description or category of employment. I am thinking, for example, of a woman who had been a part-timer for, say, 10 years while her children grew up and then went back into full-time work for another 15 years up to retirement and discovered only then that she had been differently treated as a part-timer when reviewing her pension benefits on coming up to retirement. There must be a danger that this would bar the majority of affected people from claiming and that as a consequence the Government face being taken
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straight back to the European Court of Justice on adequacy of remedies. Can the Government reassure the House that that is not the case?
Lord Lucas: My Lords, I do not believe that anything in this amendment changes the position which we believed applied at Committee stage—that is to say, that the relevant section of the Equal Pay Act applied. It has merely been pointed out to us subsequently that there is a possibility of some confusion because the Equal Pay Act was not, at the time it was written, designed to deal with pensions. The purpose of this amendment is to re-write that particular section of the Equal Pay Act to deal with the problems of interpretation which have been suggested to us. I am told that the answer to the question of the noble Baroness about the six-months' time limit is yes.
On Question, amendment agreed to.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 138:
Page 33, line 10, at end insert:
("() references to the period of two years before the date on which proceedings are instituted, for the purposes of subsection 2(5) of the Equal Pay Act 1970 shall be interpreted as references to payments of benefits during such period and not to service giving rise to benefits during such period.").
The noble Baroness said: My Lords, in moving this amendment, I shall speak to Amendment No. 139. This follows up some of the issues of the previous amendment. At Committee stage we raised a number of issues presented to women by the series of European Court judgments last September, plus Barber and Coloroll.
At Committee stage we were particularly concerned about the issue of direct as opposed to indirect discrimination. We were also concerned about the time limit for damages and how far back those damages may be claimed. The Minister subsequently wrote to me very helpfully. I am hoping that he will be able to put some of those assurances on the record tonight.
As regards indirect discrimination, the Minister explained in his letter that as pensions were deferred pay they were indeed covered by the Equal Pay Act 1970 where the law Lords ruled that that also refers to indirect discrimination and therefore it was not necessary to invoke the Sex Discrimination Act 1975. I believe that the Minister referred to the 1987 case of Rainer v. Greater Glasgow Health Board. It would be helpful to have that confirmed.
I propose the amendment which applies to the issue of time limits. The amendment seeks to ensure that the limit on retrospective claims for equal treatment will not apply in respect of the period of service which is taken into account in the calculation of members' benefits, but, as with equal pay, only to the back payment of benefits, otherwise we fear that the current ambiguities will remain.
Our understanding is that only two years of back pension payments can be claimed but that service back to April 1976 must be taken into account in the discrimination conditions of entry and back to May 1990 in the case of discriminatory benefits. We believe that

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is what the European Court of Justice had in mind in the cases of Fisscher, Vroege and Barber. This amendment would clarify and confirm that reading. We hope that the Minister will agree. I beg to move.
Lord Mackay of Arbrecknish: My Lords, I am grateful to the noble Baroness for setting out what is intended by Amendments Nos. 138 and 139. Amendment No. 138 is designed to allow people who have been excluded from a scheme to be awarded up to two years retrospective benefits of that scheme. However, the objective of Section 2(5) of the Equal Pay Act, when modified by powers under the Bill, will not be to provide for the award of any benefits. Our intention is to provide a period of equal access to the scheme which, together with any continuing membership of the scheme in the future, will provide an improved prospective entitlement to pension benefits on retirement.
The whole purpose of the equal treatment clauses is to ensure that men and women in employment have equality of access to pension schemes and to equal pensions from those schemes when they retire. In order to have the benefits one must clearly first be a member of the scheme. The benefits then flow from that membership of the scheme. We propose a two year limitation on such awards of retrospective membership. That is entirely consistent with the regulations which have applied since 1978 to other types of equal access case.
Turning to Amendment No. 139 the European Court of Justice, in the Barber 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. This is what the provisions of Clauses 54 and 55 require.
The court also ruled in the Dutch cases of Vroege and Fisscher that the cut off date of 17th May 1990 did not apply to the right to join a scheme and that, in appropriate cases, access could be granted as far back as 1976. However, it went on to make clear that national time limits may be applied to such cases.
As I said in Committee, 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. They will place a limitation on retrospective membership of schemes of two years before the date of claim. The application of the time limits is entirely logical given that the European Court has ruled, as the noble Baroness rightly said, that occupational pensions are pay, and is consistent with the approach which has been taken since 1978 under the existing, more limited equal access regulations made when the noble Baroness, Lady Castle, was Secretary of State for Social Services.
Those regulations—known as the Occupational Pension Schemes (Equal Access to Membership) Regulations 1976—enable those who have been unlawfully excluded from membership of their employer's pension scheme to claim access to membership on an on-going basis and for two years
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prior to the date of their claim. Even at this late hour and in the absence of the noble Baroness, Lady Castle, I am delighted to be able to agree with something that she did. We usually joust about other matters on which we disagree.
I was asked about indirect discrimination and whether that was covered by the Equal Pay Act. I confirm that, as I said in my letter to the noble Baroness, the case of Rainer v. Greater Glasgow Health Board confirmed that indirect discrimination is covered by the Equal Pay Act 1970. With those explanations of these difficult matters in which different time scales and different issues come together, I hope that the noble Baroness will withdraw her amendment.
Baroness Hollis of Heigham: My Lords, I thank the Minister for that reply which we shall obviously need to study. I am sure that we shall be happy with what he said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 139 not moved.]
Clause 56 [Equal treatment rule: exceptions]:
Lord Lucas Lord Lucas moved Amendments Nos. 140 and 141:
Page 33, line 19, leave out ("women and men") and insert ("a woman and a man").
Page 33, line 22, leave out ("men and women") and insert ("a man and a woman").
The noble Lord said: My Lords, I spoke to these amendments with Amendment No. 137. I beg to move.
On Question, amendments agreed to.
The Earl of Buckinghamshire The Earl of Buckinghamshire moved Amendment No.142:
Page 33, line 28, at end insert:
("() A variation is permitted by this subsection if it results from compliance with the requirements of sections 13 to 17 of the Pension Schemes Act 1993 (requirements for certification of occupational pension schemes providing guaranteed minimum pensions), sections 87 to 92 of that Act (protection of increases in guaranteed minimum pensions ("anti-franking")) or sections 108 and 110 of that Act (guaranteed minimum pensions) in circumstances where, if those requirements had not applied, the variation would not have occurred.").
The noble Earl said: My Lords, much to my surprise I find myself moving an amendment on guaranteed minimum pensions—one of the matters with which I promised myself that I would have absolutely nothing to do because this is an area of great complexity.
However, to move on, my amendment deals with a point that has been causing a considerable amount of uncertainty and practical difficulty in the administration of pension schemes. There is a need to make it clear that guaranteed minimum pensions for the members of contracted-out schemes do not have to be equalised for periods of pensionable service after 17th May 1990. Such equalisation is required for most scheme benefits following the European Court judgment in the case of Barber v. GRE, and some commentators have suggested that that applies also to guaranteed minimum pensions.
My amendment makes it clear that that process of equalisation is not required. The amendment is consistent with the principle established by the European Court decision on bridging pensions in the case of Roberts v. Birds Eye Walls, where it was ruled

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that bridging pensions were acceptable in occupational pension schemes, even though given to men and not women, because they resulted directly from a difference between the two sexes in the provisions of the state scheme; that is, in respect of the state retirement age.
Similarly, the different provisions between men and women in the calculation of guaranteed minimum pensions result from the differences in the state retirement age. If differing bridging pensions are acceptable under European law, as they are, then so are differing guaranteed minimum pensions.
I understand that the executive office of the Occupational Pensions Board has also written to practitioners with its view that unequal guaranteed minimum pensions are permissible under European law, though making it clear that schemes may wish to obtain their own legal advice on the point. Given that, why is the issue so unclear in the minds of trustees and scheme administrators? The reason appears to be because some legal advisers have not been willing to commit themselves to giving firm advice that the bridging pension principle is necessarily extensible to fields other than bridging pensions.
There are many schemes where the implementation of the decision in Barber v. GRE is being held up pending clarification of this issue. There are many schemes which are still refusing to accept transfers from other schemes until this question is resolved beyond doubt. Action by your Lordships' House, and by my noble friend the Minister, to clarify that issue would be welcome. I beg to move.
11.45 p.m.
Lord Mackay of Ardbrecknish: My Lords, the effect of the amendment would be to permit salary-related occupational pension schemes, which are contracted-out of SERPS, to pay pensions which are unequal between men and women. It would permit them to do so where the difference is the result of compliance with the legislation relating to the payment of guaranteed minimum pensions. It would permit them to do so only where, but for compliance with that legislation, the pension would otherwise be equal between men and women.
We are very well aware of the difficulties which face contracted-out salary-related schemes which are doing their best to comply with the requirements of equal treatment under European law, and at the same time comply with the contracting-out rules which are based on the current difference in the state pension age between men and women. We know that compliance with those rules makes it difficult for schemes to achieve equality. That is one of the reasons why we are taking the step of so-called breaking the links in 1997.
However, we cannot solve that problem by, in effect, saying in the Bill that, where inequality is the result of compliance with those rules, such inequality may be permitted. That would run counter to European law, and the Government could not possibly countenance such a step. The European Court of Justice has made absolutely clear, in rulings over recent years, that equality is required for periods of pensionable service from 17th
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May 1990—the date of its ruling in the Barber case. It has ruled that there may be certain exceptions to equal treatment where differences result from the use of sex-related actuarial factors, or where bridging pensions are payable, and we are providing for those exceptions in Clause 56. But it has not ruled that differences may be permitted where they result from GMPs.
GMPs do, in certain circumstances, create inequalities. But European law is clear that pensions must be equal for service from 17th May 1990. We do not believe that an exception along the lines envisaged by my noble friend would comply with European law.
As I said, one of the main reasons why the Government have decided to break the links with SERPS for future service, and to move to a contracting-out test of overall scheme quality, has been in recognition of the difficulties which the present unequal GMP arrangements create for schemes in equalising their overall benefits. We propose that the new arrangements should come into force, as I said, in 1997. We realise that that still leaves a problem for schemes with regard to GMPs accrued in the period between the Barber ruling in 1990 and the new arrangements in 1997. Of course there is no problem with regard to GMPs accrued between 1978 and 1990, since the law is clear that pensions may remain unequal in respect of pre-May 1990 service.
There can be no doubt that equality must be provided in the overall rate of pensions accrued since 1990, but we have concluded that contracted-out salary-related schemes should have the freedom and flexibility to make their own arrangements as to how that should be achieved, rather than having arrangements imposed on them by government. Unfortunately we do not believe that my noble friend's amendment would comply with European law. With that explanation of what I freely accept is a difficult and, I can understand for some people, unsatisfactory position, I trust that he will be able to withdraw the amendment.
The Earl of Buckinghamshire: My Lords, having listened to my noble friend's reply, I am even more convinced that I should have had nothing to do with moving an amendment on guaranteed minimum pensions. It is an important issue that needed to be raised. The position is still unsatisfactory. I shall read with great care my noble friend's words in Hansard, and feel free to return at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 57 [Equal treatment rule: consequential alteration of schemes]:
The Earl of Buckinghamshire The Earl of Buckinghamshire moved Amendment No. 143:
Page 34, line 1, at beginning insert ("Subject to subsection (1A)").
The noble Earl said: My Lords, this amendment relates to equalisation. In Committee I moved amendments which dealt with the matter. The amendments relate to the equalisation of pension rights and ensure that the employer's consent is sought before trustees or managers alter scheme rules to implement equalisation. Where the employer refuses consent, the

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trustees or managers of the scheme, or the employer, may apply to OPRA for an order to modify the scheme to secure conformity with the equalisation rule.
The amendment is being moved again because it is important to understand that the employer must pick up the balance of costs in pension schemes' defined benefit plans. Therefore, wherever possible, consent to the way in which the trustees equalise what is in effect a benefit improvement should also rest with the employer.
There are several ways of equalising pension ages. Some are more costly than others. It is only right that the employer should be involved in the decision. In Committee the Minister said that the Government believed that the trustees would consult the employer in those instances but that they appreciated the possible areas of conflict. He also said that they understood the anxieties that I had raised and would consider the amendment further. I beg to move.
Lord Mackay of Ardbrecknish: My Lords, the European Court of Justice has ruled that employers and trustees of a scheme are bound by Article 119 of the Treaty of Rome. They must ensure that pension schemes treat men and women equally within the limits of their respective powers. Clause 57 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.
As I said in Committee, I can certainly understand that employers might be wary of giving trustees the power to make changes to schemes, seemingly without any prior reference to them, and I have given careful consideration to the arguments then put forward by my noble friend. However, I have concluded that the situation which I think he envisages, in which trustees proceed to make changes to the scheme without the employer's consent, would be very unlikely to occur in practice.
Employers, like trustees, are already directly bound by Article 119 to provide equal treatment in schemes. Clause 54 of the Bill will provide for schemes without an equal treatment rule to be treated as including one and for the more favourable treatment to apply. The effect of Clause 54 therefore is that if a scheme's rules have not been amended they are deemed to have been amended at the more favourable level. Clause 57 would permit further changes for the future; for example, to equalise at a higher age, or simply to amend the rules so that they are in line with the changes deemed to have been made by Clause 54. Scheme rules themselves normally require trustees to seek the employer's consent to changes to schemes. Under Clause 57 it is not intended that trustees should go any further than is necessary to comply with the equal treatment requirement. Nor should it interfere with any of the existing arrangements for making changes to scheme rules. Given all the legal requirements on employers to provide for equal treatment in schemes, we envisage that Clause 57 would probably come into play only rarely.
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I can appreciate that employers would feel more at ease if there were a requirement in the Bill that any changes to scheme rules should be expressly consented to by them. However, I do not believe that they need worry that the powers in Clause 57 will be abused for the reasons I have explained. In view of the explanations, I hope that my noble friend will be able to withdraw his amendment.
The Earl of Buckinghamshire: My Lords, I thank my noble friend for his full reply. I shall read Hansard tomorrow and digest what he said. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 144 to 149 not moved.]
Clause 64 [Modification of public service pension schemes]:
Lord Lucas Lord Lucas moved Amendment No. 150:
Page 38, line 23, leave out from ("may") to end of line 26 and insert ("adapt, amend or repeal any such enactment as is referred to in paragraph (a) or (b) of subsection (3) as that authority thinks appropriate").
The noble Lord said: My Lords, I spoke to this amendment when I moved Amendment No. 20. I beg to move.
On Question, amendment agreed to.
Clause 65 [Preferential liabilities on winding up]:
The Chairman of Committees: My Lords, I should point out that if Amendment No. 151 is agreed to, I cannot call Amendment No. 152.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 151:
Page 38, line 31, leave out from ("liabilities") to end of line 42 and insert ("in respect of pensions and other benefits (including increases in pensions).
(2) The assets of the scheme must be applied first towards satisfying the amounts of the liabilities mentioned in subsection (3) and, if the assets are insufficient to satisfy those amounts in full, then—

(a)the assets must be applied first towards satisfying the amounts of the liabilities mentioned in earlier paragraphs of subsection (3) before the amounts of the liabilities mentioned in later paragraphs, and

(b) where the amounts of the liabilities mentioned in one of those paragraphs cannot be satisfied in full, those amounts must be satisfied in the same proportions.").

The noble Lord said: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 152 to 159 and Amendment No. 178.
Amendments Nos. 151 and 156 appear substantial but a careful reading will show very few changes of real substance. The main effect of the redrafting is to make the clause easier to understand. I am sure that that is something which we can all welcome. The main substantive change is in subsection (4) which has been rewritten to make clear that any assets left after satisfying the statutory priorities set out earlier in the clause should be distributed according to scheme rules.
Subsections (4A) and (4B) provide a mechanism for enforcing the important requirement set out in Clause 65. The reference to prohibition orders is consequential on Amendment No. 6 to which I spoke earlier.
Subsection (4C) merely imports from Clause 107 the power to amend the statutory priority arrangements set out in Clause 65. Amendment No. 178, as a consequence, deletes that power from Clause 107.
Perhaps I should defer my comments on my noble friend's amendments until he has had the opportunity to introduce them, otherwise I shall be looking into my crystal ball. I shall intervene again, if necessary, after my noble friend and other noble Lords have spoken. I beg to move.
The Earl of Buckinghamshire: My Lords, I should like to speak to Amendments Nos. 152, 153, 155 and 158 which stand in my name. I shall deal first with Amendments Nos. 152, 155 and 158 and deal lastly with Amendment No. 153. If the Minister receives favourably those amendments, the good news is that I shall not move Amendments Nos. 154, 157 and 159—and that is good news for everyone.
Amendments Nos. 152 and 155 address the problem of pension increases under the priority clauses. All my amendments deal with priority clauses on wind-up. Currently, existing pensioners usually have priority not only for their own pension at the level currently in payment but also for any future increases which are guaranteed under the scheme and for the contingent pension which may become payable to their spouse if they predecease the spouse, and that includes also any future guaranteed increases on that pension.
Those future increases are not intended to improve the position of the member and his spouse but merely to maintain as far as possible the purchasing power of the pensions at the current level. If a recently retired pensioner were to lose the benefit of his future increases, the purchasing power of his pension might easily halve by the time he is 85.
Under the Bill, future pension increases for existing pensioners come at the bottom of the queue, along with other benefits. That must be wrong. It is not clear where the Government intend the priority for a member's spouse to come. It would appear that a contingent spouse's pension is not a benefit, entitlement to payment of which has already arisen, since it might never become payable if the spouse predeceases the member. Therefore, presumably under the Bill, it ranks at the bottom of the queue along with other benefits. Both future pension increases and spouses' pensions for existing pensioners would, under the Bill as drafted, have a lower priority than the return of contributions to a member who has less than two years' pensionable service. I must ask your Lordships whether that is fair.
I turn now to Amendment No. 158 which really takes a look at the situation for those people who are close to retirement. One of the reasons for moving the amendment on the priority clause that I have just discussed is that a pensioner has absolutely no chance of making good any loss which may arise on a wind up in an insolvent position. Amendment No. 158 takes into account those people who are within five years of retirement. One may ask: why five years? Well, we have to pick a point at which to decide such matters. Anyone within five years of retirement has very little chance of making up any losses that may occur when a scheme is
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wound up. I believe that Amendment No. 158 would give some additional protection which the members would welcome in such difficult situations.
I move on now to Amendment No. 153 which deals with additional voluntary contributions and a slightly different issue. I want to make it clear in primary legislation that, on wind up, all additional voluntary contributions have the highest priority—which I believe is quite right—provided that they are segregated as a separate category under the rules and that separate investment or management is not required to achieve segregation.
12 midnight
Lord Mackay of Ardbrecknish: My Lords, with the leave of the House, perhaps I may respond by saying at the outset that I have some sympathy with Amendment No. 153. It seems right in principle that rights resulting from AVCs should be a first priority of a scheme wind up. However, there is a wide variety of AVC arrangements and we need to ensure that any amendment would cater equally for all variations. We are looking carefully at the matter and will bring forward a suitable amendment at a later stage.
As regards Amendment No. 157, I share my noble friend's view that any benefit payable following a member's death should also attract the same priority as a member's entitlement. I believe that it is clear from the wording of subsection (3), especially the reference to "pensions or other benefits", that contingent benefits such as widows' or widowers' benefits or dependant's benefits should receive the same priority as the member's basic pension entitlement. If necessary, that can be made clear in the valuation basis which will be prescribed in regulations for calculating and verifying those liabilities.
I turn now to Amendment No. 159. I accept the force of my noble friend's concern about schemes which have started to wind up before the commencement of the Act, but have not completed that process. My noble friend will be pleased to hear that it is our intention that the clause should be applicable only to those pension schemes which start to wind up after the Bill comes into force. We intend to frame secondary legislation to achieve that aim. Where a scheme commences to wind up prior to 1997, the priority order set out in the scheme rules will operate even if the eventual wind up is not concluded until 1997 or beyond.
However, I am unable to accept my noble friend's other amendments which would completely overturn the proposal reflected in the Bill to produce a more equitable allocation of assets on scheme wind up as between the different classes of members. The particular theme of my noble friend's amendments is that they would seek to protect the position of some of those pensioners whose pension was in payment before the Bill takes effect. The protection, which would extend to indexation, would be given at the expense of scheme members, including those who become pensioners after the Bill takes effect.
Indexation can be costly. To give it the same priority as pensions in payment when a scheme winds up in deficit would leave fewer assets available to secure the

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accrued rights of other scheme members. We believe that it is more equitable to protect the basic pension entitlement of all scheme members and share out whatever residual assets may then be available to provide pension increases. That does not represent any retrospective worsening of anyone's accrued rights. No one's pension expectations will be reduced by the clause.
I accept that if a scheme winds up underfunded then pensioners may have to share some of the consequences from which they would previously have been insulated. However, I have already explained why I believe that that is more equitable than the present situation. It is also consistent with the principle underlying the minimum funding requirement which is based on an assessment of the assets needed to meet all liabilities under the scheme, whether in payment or not and regardless of when any particular entitlement came into payment. I listened carefully to what my noble friend said. I shall read in Hansard what he said and also the points he has made to me in correspondence. This is a delicate set of issues. We believe we have got it right but, as I have indicated in other parts of the Bill, we are always ready to give due weight to well founded comments and to make any changes which we believe are justified.
On Question, amendment agreed to.
[Amendments Nos. 152 to 155 not moved.]
The Chairman of Committees: My Lords, I should point out that if Amendment No. 156 is agreed to, I cannot call Amendments Nos. 157 or 158. I now call Amendment No. 156.
Lord Lucas Lord Lucas moved Amendment No. 156:
Page 39, leave out lines 3 to 17 and insert:
("(b) any liability for pensions, or other benefits, entitlement to payment of which has arisen,
(c) any liability for—

(i) pensions or other benefits which have accrued, or

(ii) (in respect of members with less than two years pensionable service) the return of contributions,

(d) any liability for increases to pensions referred to in paragraphs (b) and (c);
and, for the purposes of subsection (2), the amounts of the liabilities mentioned in paragraphs (b) to (d) are to be taken to be the amounts calculated and verified in the prescribed manner.
(4) To the extent that any liabilities, as calculated in accordance with the rules of the scheme, have not been satisfied under subsection (2), any remaining assets of the scheme must then be applied towards satisfying those liabilities (as so calculated) in the order provided for in the rules of the scheme.
(4A) If the scheme confers power on any person other than the trustees or managers to apply the assets of the scheme in respect of pensions or other benefits (including increases in pensions), it cannot be exercised by that person but may be exercised instead by the trustees or managers.
(4B) If this section is not complied with—

(a) section (prohibition orders) applies to any trustee who has failed to take all such steps as are reasonable to secure compliance, and

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(b) section 9 applies to any trustee or manager who has failed to take all such steps.

(4C) Regulations may modify subsection (3).").
On Question, amendment agreed to.
[Amendments Nos. 157 to 159 not moved.]
Baroness Dean of Thornton-le-Fylde Baroness Dean of Thornton-le-Fylde moved Amendment No. 160:
After Clause 65, insert the following new clause:
Dependants' pension for unmarried partner
(".—(1) Regulations shall provide that occupational pension schemes, whether constituted under statute or under trust, shall be required to introduce rules stating that, where no widow's or widower's pension is payable but the member has a partner for whom a valid nomination has been received, an equivalent pension shall be paid.
(2) Regulations shall further provide that every scheme shall notify members of this in the first annual report after the amendment has been made, and shall circulate a notice to all members and a nomination form.").
The noble Baroness said: My Lords, the main issues here were discussed in Committee. At that time the Minister said that the amendment as it was then worded took away the discretion of trustees to reach decisions in situations where a scheme member died or was killed. I challenge that point but we have tried to accept some of the reasoning by making clear in the amendment now before the House that we are referring to situations where no widow's or widower's pension is paid. The amendment now covers that situation.
Another point the Minister made in Committee was that if one has nominations they soon become out of date, people forget about them, and they are not relevant at the time the matter is considered by trustees. I do not accept that either. It is a major issue for a member of a pension fund to register with trustees a nominee to whom his benefit should be paid if he passes on or is killed.
On the previous occasion we discussed this matter the Minister expressed considerable concern that what we were dealing with was a public policy area that he wished to discuss with the Treasury. Of course the Pensions Bill does not give exclusions to public sector pension schemes as opposed to private sector pension schemes. It is correct to say that whereas in the private sector a member of a scheme who passes on will find his benefits—either reduced, or at the same level—are paid to the widow or widower, or to the nominated beneficiary, that is not the case in the public sector. We do not seek to hide the fact that this amendment will in future make the anomaly I have discussed not allowable under pension schemes.
At the moment members of the police force pay a not inconsiderable amount of money in the form of contributions into a scheme. In the Civil Service it is assumed that there is a contribution level of some 9 per cent. into a pension fund. This is not a benefit that the Government give to public sector workers: I suggest it is deferred pay. Therefore it is right that the individual beneficiary of a scheme should have the right to nominate rather than see his benefit go by default or, as is the case in some public sector schemes, go to an

711
individual's brother, sister, or indeed his mother or father, but not to his or her permanent partner to whom he would want the benefit to be paid.
Nor indeed is it original to suggest that as regards the public policy area—I recollect the Minister implied this in Committee—a partner is not defined. Indeed the Administration of Justice Act 1982 made amendments to the Fatal Accidents Act 1976 under which, I gather, most claims for death in work are brought. That Act states:
"In this Act 'dependant' means [any person who] was living with the deceased in the same household immediately before the date of the death; … had been living in the same household … was living during … that period as the husband or wife of the deceased".
I believe that the amendment provides a fairer treatment of pension benefits, to which people have either paid or been assessed as having paid in their overall employment package. I beg to move.
Lord Mackay of Ardbrecknish: My Lords, the effect of this amendment would be to remove from individual pension schemes the freedom to decide their own rules regarding the payment of survivors' pensions.
We agree with the conclusion of the PLRC that there is no need for a general change in the law regarding the payment of benefits on death, and I cannot support this amendment.
As noble Lords are aware, employers set up occupational pension schemes voluntarily, usually under trust law. Widows and widowers of members of contracted-out pension schemes have a statutory entitlement to an occupational pension based on a proportion of the deceased member's guaranteed minimum pension or protected rights. In both the private and public sector any pension above this level or to other dependants will depend on the provisions made by the rules of a particular pension scheme. Some schemes already provide for other dependants of the deceased member to receive a pension. It should remain up to individual schemes, both in the private and public sector, to determine whether and in what circumstances a survivor's pension should be paid.
While we do not accept the amendment we are keen to encourage greater transparency and remove obstacles to the payment of survivors' benefits in particular types of case. We believe as a first step that scheme members should be fully aware of conditions relating to the payment of survivors' pensions. We intend to introduce a new requirement in regulations made under Clause 34 and Section 113 of the Pension Schemes Act which will require trustees to include these details in scheme booklets.
We have also accepted that in some cases the wording of trust deeds, particularly older deeds, can be unnecessarily restrictive when it comes to nominations for lump sum death benefits. We agree with the PLRC that schemes should consider amending their deeds where trustees' discretion on the payment of death benefits are restricted. The provisions of Clause 60(2) (a) will enable trustees to modify a scheme by resolution in order to extend the class of persons who may receive death benefits. This avoids the need for the intervention of a third party such as the courts or the authority.
712
These changes go some way towards tackling the concerns which underlie this amendment, but they do so without restricting the freedom of schemes and sponsoring employers to decide their own rules in this area.
I do not know whether I have conceded enough to satisfy the noble Baroness, Lady Dean, but I hope that with that explanation she will agree that it would be wrong to press her amendment and force schemes to make the changes she wishes.
Baroness Dean of Thornton-le-Fylde: My Lords, I do not accept the Minister's point that trustees are in a better position to decide to whom the benefits of a deceased member of a fund will be paid. I should have thought that the individual member of a fund has every right to say whom they want to receive their benefit.
The Minister said that the rules of a particular scheme would determine who receives the benefit. I wonder to what extent that is a legitimate argument and to what extent it is concern about the possible impact on the public purse should the proposal I put forward be extended to public sector pension funds.
The Minister suggested that there will be greater explanation in regulations. While that will in no measure provide the coverage proposed in the amendment, it will be interesting to see how those regulations are worded and when the Government will make them. We must be up to 232 regulations under this Bill. I beg leave to withdraw the amendment.
Clause 66 [Discharge of liabilities by insurance, etc.]:
Lord Lucas Lord Lucas moved Amendment No. 161:
Page 39, line 26, after ("scheme") insert ("in respect of pensions or other benefits (including increases in pensions)").
The noble Lord said: My Lords, in moving Amendment No. 161 I shall speak also to Amendments Nos. 162 and 163.
Amendment No. 161 will make it clear that the discharge of liability provided for by Clause 66 applies only to liabilities in respect of pensions and other benefits.
Amendment No. 162 will make it possible for trustees to complete the wind up of a scheme without necessarily securing the positive consent of every member for the way in which the scheme discharges its liabilities. Many trust bodies seeking to wind up a scheme find it very difficult indeed to track down and consult all members, particularly deferred members. We therefore believe that it is right to give trustees the option of buying annuities for scheme members without having to secure their consent. The trustees' discretion will be restricted. We intend to prescribe in regulations that they should notify all members of the way in which it is proposed that liabilities should be discharged and give them a few months to respond. If a member accepts or chooses an alternative to an annuity, or asks for a different annuity provider to be used, all well and good. But if, having been given sufficient notice, a member fails to respond or cannot be contacted, the effect of Amendment No. 162 will be to enable trustees to buy an appropriate annuity for the member, thus discharging their liability and facilitating the wind up of the scheme.
Amendment No. 163 removes any possible ambiguity about the amount which the trustees would need to use to discharge their liabilities when winding up a scheme. It makes clear that if they cannot meet the scheme liabilities in full, they must apply the assets of the scheme on the basis set out in Clause 65. I beg to move.
On Question, amendment agreed to.
12.15 am.
Lord Lucas Lord Lucas moved Amendments Nos. 162 and 163:
Page 39, line 43, leave out ("chosen by the member and").
Page 39, line 46, at end insert:
("() If the assets of the scheme are insufficient to satisfy in full the liabilities, as calculated in accordance with the rules of the scheme, in respect of pensions and other benefits (including increases in pensions), the reference in subsection (2) to providing for the discharge of any liability in one or more of the ways mentioned in subsection (3) is to applying any amount available, in accordance with section 65, in one or more of those ways.").
On Question, amendments agreed to.
Clause 68 [Surplus on winding up]:
Lord Lucas Lord Lucas moved Amendment No. 164:
Page 42, line 6, leave out (" 3") and insert ("(Prohibition orders)").
On Question, amendment agreed to.
Clause 69 [Assets remaining after winding up: power to distribute]:
[Amendment No. 165 not moved.]
Lord Lucas Lord Lucas moved Amendment No. 166:
Page 43, line 2, leave out (" 3") and insert ("(Prohibition orders)").
On Question, amendment agreed to.
Clause 73 [Cases where compensation provisions apply]:
Lord Lucas Lord Lucas moved Amendment No. 167:
Page 44, line 44, leave out from second ("the") to ("and") in line 46 and insert ("value of the assets of the scheme is less than 90 per cent. of the amount of the liabilities of the scheme").
The noble Lord said: My Lords, this amendment corrects a mathematical inconsistency in the Bill.
Baroness Hollis of Heigham: You made a mistake¡
Lord Lucas: My Lords, I accept that it is a mathematical mistake in the Bill. It ensures that the eligibility criteria for compensation in Clause 73 are in line with the provisions for the calculation of compensation in Clause 75. The need for the amendment has been drawn to our attention by the National Association of Pension Funds, the Association of British Insurers and the Association of Pension Lawyers, and I am grateful to all three organisations for their assistance, as indeed I am to the noble Baroness.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 168:
Page 45, lute 41, leave out (" 3") and insert ("(Prohibition orders)").
On Question, amendment agreed to.
Clause 75 [Amount of compensation]:
Lord Lucas Lord Lucas moved Amendment No. 169:
Page 46, leave out lines 38 to 42 and insert:
("amount ("the deficit in the assets") by which, immediately before the application date—

(i) 90 per cent. of the amount of the liabilities of the scheme,

exceeds

(ii) the value of the assets of the scheme.

so much of that maximum amount as does not exceed the deficit in the assets").
The noble Lord said: My Lords, this amendment sets right another possible mathematical confusion. I beg to move.
On Question, amendment agreed to.
Clause 76 [Payments made in anticipation]:
Baroness Seear Baroness Seear moved Amendment No. 170:
Page 47, line 14, leave out ("the payment") and insert ("so much of the payment as they consider appropriate").
The noble Baroness said: My Lords, in moving this amendment, I speak also to Amendment No. 171. The purpose of the two amendments is simply to give the freedom when assessing the repayments to be made to use discretion and not to demand the full amount which could be charged. I beg to move.
Baroness Hollis of Heigham: My Lords, give in¡
Lord Mackay of Ardbrecknish: My Lords, I wish I could be as brief as the noble Baroness. However, she raises a serious point even at this late hour of the night, and I shall resist the temptation to give in, as has been pressed upon me by those who seem to want to call it a day—or a morning.
The ability of the board to make payments in anticipation of compensation being payable is an essential feature of the compensation provision. It will ensure that, where a scheme is unable to pay pensions in full, scheme members, particularly pensioners, do not suffer undue financial hardship.
As noble Lords will appreciate, it may take some time to determine where a prescribed offence has occurred, but where the payment of the pensions is threatened the board needs to act quickly. The downside is that the board may later determine that compensation is not after all appropriate. Any payment made by the board is, of course, funded by other schemes paying the levy. We believe that it is right that where compensation is not appropriate, the board should be able to recover any payments made.
I can, however, appreciate the noble Baroness's concern, which she also raised in Committee. She does not want to see the compensation board act in a draconian manner. I can assure the noble Baroness that the Bill as drafted means that the compensation board will have discretion over the recoveries it makes, and this includes the discretion to make partial recoveries. Where a scheme has no assets, recoveries cannot be made, and we would not expect the compensation board to pursue the recovery in such cases. Further, it has

715
never been the intention that trustees should be personally liable for payments due to the compensation board.
I gave a commitment in Committee that we would give further consideration to a number of issues surrounding recovery. The issues are wide and varied, covering important areas such as the potential impact on scheme members and the impact on other schemes paying the levy. If any changes are made, they need to strike a balance and ensure that no one has been unduly penalised. We also need to ensure that the board has sufficient flexibility to deal with the situations which may arise.
In these circumstances, we believe that it would be unwise to make hasty changes, particularly if it becomes clear that changes are not, after all, required. I can, however, assure the noble Baroness that we are giving serious and very careful consideration to these issues. If any changes are necessary, we will bring forward an amendment at a later stage in another place. Whatever the outcome, I will certainly write to the noble Baroness once we have completed the work in hand. I suppose that on that basis—which is quite close to giving in, or at least close enough for this time of night—the noble Baroness will withdraw her amendment.
Baroness Seear: My Lords, since the noble Lord has gone as far as he has done, surely it would not be unreasonable to get that degree of flexibility written onto the face of the Bill. We want to encourage trustees, not to discourage them. We want to give the impression that their treatment in cases of this kind will be reasonable and flexible. The Minister has very nearly agreed to it. With just one little push, perhaps he could go the whole way. I ask him to think again and come back at Third Reading with a more generous response to this amendment. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 171 not moved.]
Lord Lucas: My Lords, I beg to move that further consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.

South Africa Bill [H.L.]
Returned from the Commons agreed to.
House adjourned at twenty-three minutes past midnight.

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